Slide 1: Earnings Release Third Quarter 2023
EARNINGS RELEASE Third quarter | 2023 This content is RESTRICTED. Hot Roll Coil Capacity Expansion Ouro Branco Plant (MG)
Slide 2: Occupational Safety
OCCUPATIONAL SAFETY SAFETY IS AN INTEGRATED PRIORITY IN OUR DAILY ACTIVITIES, WHICH ENABLES US TO MOVE TOWARD THE GOAL OF BEING ONE OF THE SAFEST COMPANIES IN THE GLOBAL STEEL CHAIN. 1.28 1.16 1.10 1.10 1.08 0.99 0.87 0.83 0.76 0.69 2014 2015 2016 2017 2018 2019 2020 2021 2022 9M23 Gerdau’s Frequenc
Slide 3: Macro Scenario
MACRO SCENARIO CHALLENGING GLOBAL SCENARIO MARKED BY GROWTH BELOW EXPECTATIONS AND INFLATION BRAZIL: Interest rates remain in high level UNITED STATES: The economic activity is SOUTH AMERICAN COUNTRIES: Lower CHINA: economic growth in the third quarter (12.75% in October 2023), impacting the beginni
Slide 4: 3Q23 Highlights
3Q23 HIGHLIGHTS CHALLENGING GLOBAL 2.8 Mt INVESTMENT R$1.5 b SCENARIO PLAN FOR THE STEEL SHIPMENTS IN 3Q23 YEAR ALREADY AT 72% CAPEX IN 3Q23 RESILIENT R$3.3 b RESULTS ADJUSTED EBITDA IN 3Q23 R$822 M DIVIDENDS R$0.47 per share PAYMENTS AS FROM COMFORTABLE Net Debt/EBITDA 0.34x DECEMBER 13, 2023 FINAN
Slide 5: Performance by Business Division
PERFORMANCE BY BUSINESS DIVISION 5 DIEGO BERTOLDO FRANSCISCO – Ouro Branco Plant
Slide 6: North America BD
UTILIZATION ROLLED STEEL 82% 45.7% of RATE Consolidated CRUDE STEEL 76% EBITDA NORTH AMERICA BD ■ Resilient metal spread. above pre-pandemic levels. ■ Orders backlog between 60 and 70 days of coverage, combined with cost control efforts, enabled us to maintain the profitability in the quarter. ■ Inv
Slide 7: Special Steel BD
UTILIZATION ROLLED STEEL 47% 14.8% of RATE Consolidated CRUDE STEEL 49% EBITDA SPECIAL STEEL BD Brazil NORTH AMERICA ■ According to ANFAVEA, daily sales recorded its second-best average in the year, with ■ The strikes of auto workers in Detroit (Ford, GM, and Stellantis), which started in late 9,600
Slide 8: Brazil BD
UTILIZATION ROLLED STEEL 58% 25.5% of RATE Consolidated CRUDE STEEL 65% EBITDA BRAZIL BD ■ Steel imports reached penetration of 23%, up 57.9% YoY between January and September. ■ Challenging external scenario, impacting Brazil's export margins. ■ Limited consumer credit hinders the revitalization of
Slide 9: South America BD
UTILIZATION ROLLED STEEL 84% 14.0% of RATE Consolidated CRUDE STEEL 82% EBITDA SOUTH AMERICA BD ■ ARGENTINA: import restraints, inflationary economy, and presidential election may bring uncertainties in the short to medium term. Domestic steel demand continues to be sustained by the construction, mi
Slide 10: Financial Performance
FINANCIAL PERFORMANCE This content is RESTRICTED. TAYNA LIMA ALVES - Port Terminal, Vitória (ES) 10
Slide 11: 3Q23 Highlights
3Q23 HIGHLIGHTS IN A CONTEXT OF GLOBAL DEMAND DECLINE AND EXCESSIVE PENETRATION OF IMPORTED STEEL IN BRAZIL, GERDAU MANTAINS ITS COST MANAGEMENT DISCIPLINE AND FOCUS ON PROFITABILITY -6.0% -19.3% Shipments Net Sales¹ 2,930 2,933 21,149 (1,000 tonnes) 2,755 (R$ million) -6.1% 18,265 17,063 -6.6% 3Q22
Slide 12: Cash Flow & Working Capital
CASH FLOW & WORKING CAPITAL FREE CASH FLOW (R$ MILLION) Fourth consecutive FINANCIAL CYCLE quarter of 3,349 (IN DAYS) declining inventory levels 501 & WORKING CAPITAL¹ 2,246 (R$ BILLION) -1,486 74 -192 81 81 84 78 70 16.3 16.2 16.3 16.4 3Q23 Working CAPEX Debt Income tax 3Q23 Free 15.8 Adjusted EBIT
Slide 13: Liquidity & Indebtedness
LIQUIDITY & INDEBTEDNESS CASH, DEBT, AND LEVERAGE LIQUIDITY AND DEBT AMORTIZATION² (R$ BILLION) 0.33x 0.31x 0.37x 0.34x (R$ BILLION) 0.16x 10.4 12.9 12.6 12.3 11.5 10.7 4.4 5.4 5.8 8.6 4.2 6.0 7.2 6.0 5.2 2,6 6.4 6.5 5.5 0.2 4.3 2.1 0.4 1.3 1.2 0.8 3Q22 4Q22 1Q23 2Q23 3Q23 Liquidez 2023 2024 2025 20
Slide 14: Shareholder Return
SHAREHOLDER RETURN PAYOUT ABOVE THE STIPULATED MINIMUM, EVEN AMID A CHALLENGING SCENARIO DIVIDENDS SHARE BUYBACK PROGRAM2 3 58% 69% (MILLION) 33% 37% 39% 100% of 100% of 39% 1,073 30% repurchased repurchased shares canceled shares canceled3 Up to Up to Up to 5,355 6,083 892 752 822 Up to 55 69 2,466
Slide 15: Strategic Capex (2021-2026)
Capacidade de Potential to add capacity produção of: adicional: +700 kt crude +700 steelbruto kt aço e e +1,400+1.400 kt rolling steel kt laminação STRATEGIC CAPEX (2021-2026) INVESTMENTS IN THE GROWTH AND PERPETUITY OF THE BUSINESS 3Q23 Strategic Capex: ~R$ 588 million Unspent Spent to date 1,000 1
Slide 16: ESG
ESG Environmental Social Governance This content is RESTRICTED.
Slide 17: Arinos Solar Park Minas Gerais
ARINOS SOLAR PARK MINAS GERAIS ~R$1.4 billion investment* Installed capacity of 420 MWp 30% offtake of renewable energy (34 MWm), equivalent to: ~7% of the Company’s annual energy consumption in Brazil Steel plant with capacity of ~400,000 t/year a 22,000 tCO2e annual reduction for the Company Arino
Slide 18: Focus on Promoting Sustainability and Circular Economy
FOCUS ON PROMOTING SUSTAINABILITY AND CIRCULAR ECONOMY WE ARE THE LARGEST METAL SCRAP RECYCLER IN LATIN AMERICA The Town São Paulo – 300 t in steel for entertainment and infrastructure of scrap are recycled in our operations annually Recycling of in the past few years, fostering Scrap Yard at the Pl
Slide 19: Awards and Recognition
AWARDS AND RECOGNITION Promoting the construction of an even more sustainable future in the steel value chain The B2B industrial company with the best reputation in Brazil The only steel producer among the 100 most admired companies in the country VALOR 1000 AWARD VALOR 1000 AWARD ÉPOCA NEGÓCIOS 360
Slide 20: Q&A Instructions
Q&A INSTRUCTIONS To ask questions, click on the #Q&A# icon, using the button at the bottom of your screen. If you want to ask questions live, click on the #Q&A# icon to inform your name, then wait for your name to be announced to ask your question. At that time, a request to turn on your microphone
Slide 21: Thank You!
SAVE THE DATE FOURTH QUARTER OF 2023 EARNINGS RELEASE FEBRUARY 20, 2024 (after market close) VIDEOCONFERENCE FEBRUARY 21, 2024 inform@gerdau.com ri.gerdau.com/en/ THANK YOU! JOSE PAULO DA SILVA - Açonorte Plant
Slide 22: Disclaimer
Disclaimer This document may contain forward-looking statements. These statements are based on estimates, information, or methods that may be incorrect or inaccurate and that may not occur. These estimates are also subject to risks, uncertainties, and assumptions that include, among other factors, g