Slide 1: Earnings Release Second Quarter 2024
Statue of the Laçador in the City of Porto Alegre (Rio Grande do Sul, Brazil) EARNINGS RELEASE SECOND QUARTER | 2024 GERDAU S.A.
Slide 2: Workplace Safety
WORKPLACE SAFETY Continuous focus on people’s safety: Accident Frequency Rate of 0.67 in 2Q24 1.28 1.16 1.10 1.10 1.08 0.99 0.87 0.83 0.76 0.70 0.67 0.47 // 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1Q24 2Q24 Number of Accidents per Million Hours Worked by Each Gerdau Employee LESLYE DOS SAN
Slide 3: Aid to Rio Grande do Sul
AID TO RIO GRANDE DO SUL • Donation of basic necessity items. • Support in structuring temporary housing with ACNUR/UN. • Support in the operation of a mobile water treatment unit. Mobile Water Treatment Unit Basic Necessity Itens Donations • Renovation of housing for employees impacted by the rains
Slide 4: Macro Scenario
MACRO SCENARIO STABILIZATION OF GLOBAL ECONOMIC GROWTH AND STEEL OVERSUPPLY BRAZIL: The International Monetary Fund reduced its NORTH AMERICA: The IMF downgraded its projection of SOUTH AMERICA: The Argentine economy should projection of Brazil’s economic growth for 2024 to 2.1% economic growth in N
Slide 5: Steel Imports in Brazil
STEEL IMPORTS IN BRAZIL IN THE LAST TWELVE MONTHS: 23,8% ❑ Penetration rate: 19.2%. 19,0% 18.4% 19.2% ❑ Average monthly imports: 396 kt 15.3% (~66% higher than the historical average). 13.3% 11.5% 10.5% 10.3% 14,3% 1.5 00 1.3 25 8.8% 9.1% ❑ Volume of imported material: ~4.8 Mt (~60% higher than the
Slide 6: 2Q24 Highlights
2Q24 HIGHLIGHTS STEEL SHIPMENTS 2.7 Mt Stable vs. 1Q24, amidst a backdrop of steel oversupply. ADJUSTED EBITDA A result of geographic diversification and a balanced product portfolio. R$2.6 b CAPEX R$1.4 b ~38% of total Capex planned for the year invested in 6M24. DIVIDENDS R$0.12 per share, to be p
Slide 7: North America BD
81% 51.8% NORTH AMERICA BD Rolled steel UTILIZATION OF 2Q24 RATE Crude Steel 77% CONSOLIDATED EBITDA ■ Construction activities continue to be boosted by industrial plant, health care center, and AI data center projects. ■ The order backlog has remained stable since the beginning of the year, reflect
Slide 8: Special Steel BD
57% SPECIAL STEEL BD Rolled steel 20.0% UTILIZATION OF 2Q24 RATE Crude Steel 73% CONSOLIDATED EBITDA BRAZIL NORTH AMERICA ■ Light vehicles: Production slowed down in the quarter, reflecting lower exports ■ Light vehicles: The sector continues to recover, despite challenging interest rates and high p
Slide 9: South America BD
56% 8.4% SOUTH AMERICA BD Rolled steel UTILIZATION OF 2Q24 RATE Crude Steel 63% CONSOLIDATED EBITDA ■ Argentina: Economic measures should gradually impact the recovery in the industrial and civil construction sectors. ■ Peru: The result was boosted by the civil construction sector and the recovery i
Slide 10: Brazil BD
62% BRAZIL BD Rolled steel 19.8% UTILIZATION OF 2Q24 RATE Crude Steel 70% CONSOLIDATED EBITDA ■ Steel import penetration reached 18.4% in 2Q24, up 1.6 p.p. year over year. ONE-OFF COSTS ASSOCIATED WITH THE ADJUSTMENT OF PRODUCTION CAPACITY IN THE ■ The import quota system should produce results in 2
Slide 11: Cost Reduction Initiatives
COST REDUCTION INITIATIVES Estimate: Start 2025 with a ~R$ 1.5 billion cost and expenses base lower vs FY23. Brazil BD: Other BDs: ~R$ 1.0 billion/year ~R$ 0.5 billion/year Controllable costs & expenses -150 (R$ million) 1H24 Initiatives ◼ Units idling; ◼ North America BD ◼ Volumes -400 − Initiative
Slide 12: 2Q24 Highlights: Adjusted EBITDA and Net Sales
2Q24 HIGHLIGHTS FOCUS ON COMPETITIVENESS THROUGH THE OPTIMIZATION OF ASSETS IN BRAZIL Adjusted EBITDA (R$ million) and Net Sales¹ Adjusted EBITDA Margin² -6.7% (R$ million) +2.5% 2,813 17.4% 2,624 16,210 16,616 -171 15.8% 171 -293 245 214 -61 102 -59 6,416 6,587 1,570 1,399 6,435 6,142 595 534 439 5
Slide 13: Cash Flow & Net Cash Variation
CASH FLOW & NET CASH VARIATION 2,624 CASH FLOW -259 (R$ million) -725 -1,171 -716 Maintenance -455 Competitiveness -357 +89 -224 +367 -166 2Q24 Working Income Tax² CAPEX³ Debt JVs Intangibles Other 2Q24 Free Adjusted Capital¹ Interests Proportional & Leasing Variations Cash Flow EBITDA EBITDA NET CA
Slide 14: Liquidity & Indebtedness
LIQUIDITY & INDEBTEDNESS CASH, DEBT, AND LEVERAGE LIQUIDITY POSITION AND DEBT AMORTIZATION1 (R$ BILLION) (R$ BILLION) 0.37x 0.40x 0.40x 0.53x 11.5 0.34x 12.5 10.7 11.5 10.9 11.0 4.9 6.6 4.2 6.0 5.3 5.9 6.6 6.5 5.5 5.9 5.5 5.1 0.2 2.3 2.8 3.0 0.8 1.1 0.8 1.5 2Q23 3Q23 4Q23 1Q24 2Q24 Liquidity 2024 20
Slide 15: Strategic Capex (2021–2026)
STRATEGIC CAPEX (2021–2026) +700,000 t crude steel and ADDITIONAL PRODUCTION CAPACITY: +1.4 M t rolling steel INVESTMENTS IN BUSINESS GROWTH AND COMPETITIVENESS 2Q24 STRATEGIC ~R$685 million CAPEX: Unspent Spent to date 500 1,000 11,900 (R$ million, cumulative) 250 1,750 Capacity addition1 (kt/year)
Slide 16: Shareholder Returns
SHAREHOLDER RETURNS PAYOUT ABOVE THE MINIMUM MANDATORY DIVIDEND PAYMENT DIVIDENDS SHARE BUYBACK PROGRAM 69.1% 34.3% 37.3% 43.7% 40.8% 13,879 11,595 GGBR GOAU 6,855 4,501 2,408 ◼ Up to 69.8 million of ◼ Up to 33 million 1,073 shares, of which: GOAU4 shares (~5% ◼ Up to 68 million GGBR4 of the free fl
Slide 17: 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, type in your name on the #Q&A# icon, then wait for your name to be announced to ask your question. At that time, a request to turn on your microphone will app
Slide 18: Save the Date: Investor Day
GERDAU Investor Day 10.3.2024 2024 SAVE THE DATE More details coming soon
Slide 19: Thank You!
Statue of the Laçador in the THANK YOU! City of Porto Alegre (Rio Grande do Sul, Brazil) EARNINGS RELEASE 3Q24 NOVEMBER 5, 2024 (After market close) VIDEOCONFERENCE NOVEMBER 6, 2024 inform@gerdau.com | www.ri.gerdau.com
Slide 20: 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