Slide 1: Earnings Release First Quarter 2024
EARNINGS RELEASE Steel production at the Jackson (TN) Plant FIRST QUARTER | 2024 Gerdau S.A. This content is Public.
Slide 2: Workplace Safety
WORKPLACE SAFETY Focused on people’s safety, we ended the first quarter of 2024 1 with an Accident Frequency Rate of 0.47 1.28 1.16 1.10 1.10 1.08 0.99 0.87 0.83 0.76 0.70 0.52 0.47 1Q23 // 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1Q24 1. Number of Accidents per Million Hours Worked per Ger
Slide 3: Macro Scenario
MACRO SCENARIO THE ENVIRONMENT WAS MARKED BY GEOPOLITICAL CONFLICTS AND GLOBAL STEEL OVERSUPPLY BRAZIL: The IMF increased its projections for Brazil’s NORTH AMERICA: The IMF raised its forecast for economic SOUTH AMERICAN COUNTRIES: In its latest GDP growth in 2024 from 1.7% (January projection) to
Slide 4: Steel Imports in Brazil
STEEL IMPORTS IN BRAZIL IN THE LAST TWELVE MONTHS: Import volumes: ~25% higher. Apparent consumption: ~2% lower. 18.4% 18.9% 23,8% Average monthly imports: 379 kt (~60% higher 15.3% 19,0% than the historical average). 13.3% 11.5% 10.5% 14,3% 10.3% 9.1% 8.8% Penetration rate: 18.9%. 1.500 9,5
Slide 5: 1Q24 Highlights
1Q24 HIGHLIGHTS STEEL 2.7 Mt R$858 M Global steel oversupply and CAPEX SHIPMENTS high penetration of imports Focus on the Business in Brazil Divisions competitiveness ADJUSTED NET R$1.2 b R$589 M DIVIDENDS R$0.28 per share INCOME Higher operating results Payment date: May 27, 2024 ADJUSTED R$2.8 b B
Slide 6: Performance by Business Division (BD)
PERFORMANCE BY BUSINESS DIVISION (BD) ROMULO JESUINO DA SILVA — Ouro Branco Plant (MG) This content is RESTRICTED. 6
Slide 7: North America BD
94% 54.3% NORTH AMERICA BD Rolled steel UTILIZATION OF 1Q24 RATE Crude steel 85% CONSOLIDATED EBITDA ■ Construction activities boosted by industrial plant and data center projects; ■ Strategic market segmentation and cost control efforts contribute to operating margins above the historical average;
Slide 8: Special Steel BD
52% 15.2% SPECIAL STEEL BD Rolled steel UTILIZATION OF 1Q24 RATE Crude steel 66% CONSOLIDATED EBITDA BRAZIL NORTH AMERICA ■ Light vehicles: high prices and interest rates, as well as higher penetration of imported ■ Light vehicles: Lower volumes in late 2023 due to the United Auto Workers strike in
Slide 9: Brazil BD
62% 20.6% BRAZIL BD Rolled steel UTILIZATION OF 1Q24 RATE Crude steel 69% CONSOLIDATED EBITDA ■ Penetration of imported steel reached 19.6% in March, ~46% higher year on year; ■ The Company’s focus on supplying the domestic market (lower export volume) enabled a higher-value-added product mix; ■ Lea
Slide 10: South America BD
83% 9.9% SOUTH AMERICA BD Rolled steel UTILIZATION OF 1Q24 RATE Crude steel 73% CONSOLIDATED EBITDA ■ Argentina: period of economic adjustments leads to a slowdown in industrial and construction activities and, consequently, in the demand for steel; ■ Peru: the construction and mining sectors, fuele
Slide 11: Financial Performance
FINANCIAL PERFORMANCE Pindamonhangaba unit (SP) — Billets & Bars New Casting Facilities 11 This content is RESTRICTED.
Slide 12: 1Q24 Highlights: EBITDA growth in all business divisions
1Q24 HIGHLIGHTS GERDAU ENDED THE FIRST QUARTER OF 2024 WITH EBITDA GROWTH IN ALL BUSINESS DIVISIONS Adjusted EBITDA +38% Net Sales¹ +10.2% and Adjusted (R$ million) EBITDA Margin² 2,813 (R$ million) 17.4% 16,210 151 401 864 100 14,716 +507 MI 28 83 489 -105 ME 2,039 435 6,416 13.9% 1,570 5,927 1,135
Slide 13: Cash Flow & Working Capital
CASH FLOW & WORKING CAPITAL CASH CONVERSION QUARTERLY CYCLE (DAYS) ADJUSTED FREE WORKING CAPITAL 1 CASH FLOW (R$ billion) (R$ million) 78 81 84 87 86 16.3 16.4 15.8 15.4 14.2 17.2 17.0 15.8 16.0 1,650 15.2 1,114 715 6.0 5.6 5.7 4.9 5.5 -6.9 -6.2 -5.7 -5.9 -6.1 -392 1Q23 2Q23 3Q23 4Q23 1Q24 -567 -610
Slide 14: New Free Cash Flow Model
NEW FREE CASH FLOW MODEL R$ million -1,078 IN PREVIOUS FCF -2,813 CONCEPT: -1,083 + R$ 85 MILLION NEW LINES AND ADJUSTMENTS IN THE CONCEPT OF INTEREST -569 -121 -188 -133 -610 -251 4Q23 Working CAPEX ¹ Income Tax Debt JVs Intangibles Other 1Q24 Free Adjusted Capital Interests proportional & Leasing
Slide 15: Liquidity & Indebtedness
LIQUIDITY & INDEBTEDNESS CASH, DEBT AND LEVERAGE LIQUIDITY POSITION AND DEBT AMORTIZATION² (R$ BILLION) (R$ BILLION) 0.31x 0.37x 0.34x 0.40x 0.40x 10.3 12.3 10.7 11.5 10.9 11.0 4.4 5.8 4.2 6.0 5.3 5.9 • ISSUE OF UNSECURED DEBENTURES (CVM 160) • VOLUME AND TERM: R$1.5 BILLION/ 5 YEARS 2,6 5.9 6.4 6.5
Slide 16: Shareholder Returns
SHAREHOLDER RETURNS PAYOUT ABOVE THE MINIMUM MANDATORY DIVIDEND PAYMENT AND BONUS SHARE DIVIDENDS BONUS SHARES 69.1% 34.3% 37.3% 43.7% 41.6% One new share for 2,408 13,879 11,595 1,073 6,855 5,712 Payout¹ 20% every five shares of the same type Adjusted Net Income (R$ million) Dividends distributed (
Slide 17: Strategic CAPEX (2021–2026)
STRATEGIC CAPEX (2021–2026) +700 kt crude steel and ADDITIONAL PRODUCTION CAPACITY: +1,400 kt rolling steel INVESTMENTS IN GROWTH AND COMPETITIVENESS OF OUR BUSINESS 1Q24 STRATEGIC ~R$ 327 million CAPEX: Unspent 500 Spent to date 1,000 11,900 250 1,750 (R$ million, cumulative) Capacity addition1 (kt
Slide 18: Strategic CAPEX — Brazil BD
STRATEGIC CAPEX — BRAZIL BD PROGRESS OF THE PROJECTS IN MINAS GERAIS SUSTAINABLE MINING HOT-ROLLED COIL EXPANSION DRY PROCESSING | HIGH-GRADE ORE (65%) EFFICIENCY GAINS AND COST REDUCTION On schedule On schedule Startup expected for 4Q25 Startup expected for 4Q24 Main Motor and Rolling Mill at the C
Slide 19: Strategic CAPEX — North America BD
STRATEGIC CAPEX — NORTH AMERICA BD MODERNIZATION OF THE UNIT IN JACKSON (TN) Startup in 1Q24 Higher competitiveness, driven by an expanded product mix (one-stop shop) Rolling and storage process updates, leading to greater operational flexibility ~R$335 million in CAPEX Fulfilled To be fulfilled 19
Slide 20: ESG: Environmental, Social and Governance
ESG ENVIRONMENTAL, SOCIAL AND GOVERNANCE Forestry Unit, Três Marias (MG) 20
Slide 21: B2B industrial company with the best reputation in Brazil
MERCO RANKING CORPORATE REPUTATION IN BRAZIL (2023) B2B industrial company with the best reputation in Brazil Up 10 positions, The only steel Leadership in the ranking 24th among the producer “Mining, Steel, and 100 Brazilian in the overall ranking Metallurgy” category organizations assessed 21 This
Slide 22: 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 23: Thank You!
THANK YOU! SAVE THE DATE MARIA PEGORARO – Pindamonhangaba Plant (SP) SECOND QUARTER OF 2024 EARNINGS RELEASE JULY 31, 2024 (After market close) VIDEOCONFERENCE AUGUST 1, 2024 inform@gerdau.com | www.ri.gerdau.com
Slide 24: 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