Slide 1: 3Q24 Earnings Release
3Q24 Earnings Release November 6, 2024
Slide 2: Disclaimer
DISCLAIMER This document may contain forward-looking statements. These statements are based on estimates and information 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, general ec
Slide 3: Highlights
HIGHLIGHTS PEOPLE’S SAFETY STEEL SHIPMENTS Continuous 0.60 0.58 2.8 Mt reduction in the frequency QoQ and YoY growth, rate¹ of amidst steel oversupply injuries or and a challenging accidents 1H24 3Q24 macroenvironment ADJUSTED EBITDA Steelie Awards R$3.0 b Gerdau won the main global Result of the as
Slide 4: Steel Imports and the Low Effectiveness of the Current Trade Defense Mechanism (Quota-Tariff)
STEEL IMPORTS AND THE LOW EFFECTIVENESS OF THE CURRENT TRADE DEFENSE MECHANISM (QUOTA-TARIFF) APPARENT STEEL CONSUMPTION BREAKDOWN STEEL PRODUCT IMPORTS — QUOTA-TARIFF SYSTEM3 18.3% 18.5% 2023 full-year volume was 15.3% imported in 9M24 13.3% 11.5% 229.8 10.5% 10.3% 130.2 8.8% 9.1% 250.2 451.1 450.7
Slide 5: Financial Highlights
FINANCIAL HIGHLIGHTS ADJ. NET INCOME: EPS: FREE CASH FLOW: R$1,432 M R$0.64 R$3.0 b Growth vs. Growth vs. Benefited by the release of the judicial deposit, 2Q24: 52% 2Q24 56% higher EBITDA, and working capital release. LEVERAGE: RATINGS: 0.32x Moody’s and S&P Ratings Lowest level in the last 12 mont
Slide 6: Commitment with Cost Discipline and Continuous Pursuit of Increased Efficiency
COMMITMENT WITH COST DISCIPLINE AND CONTINUOUS PURSUIT OF INCREASED EFFICIENCY Brazil BD: Other BDs: ~R$1.0 billion/year ~R$0.5 billion/year -150 2024 Initiatives -190 -210 -1,000 ◼ North America BD − Initiatives to control and optimize personnel, maintenance -450 and third-party hiring; − Whitby co
Slide 7: Outlook
OUTLOOK NORTH AMERICA BRAZIL 4Q24: Pressured margins 4Q24: Margins maintenance ▪ Typical seasonality of the period ▪ Typical seasonality of the period (shipments) (shipments and scrap costs) and and scheduled maintenance shutdowns; scheduled maintenance shutdowns; ▪ Preparation for the start-up of h
Slide 8: Appendices
Appendices
Slide 9: Workplace Safety
WORKPLACE SAFETY Continuous focus on people’s safety Accident Frequency Rate of 0.58 in 3Q24 1.28 1.16 1.10 1.10 1.08 0.99 0.87 0.83 0.76 0.70 0.60 0.58 // 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 1H24 3Q24 Number of Accidents per Million Hours Worked per Gerdau Employee 9
Slide 10: Brazil BD Quarterly Overview
UTILIZATION Rolled steel 70% Crude steel 83% BRAZIL BD RATE QUARTERLY OVERVIEW EBITDA EBITDA Shipments Net Sales (1,000 tonnes) (R$ million) (R$ million) Margin ◼ The imported steel penetration rate reached 20.3% in +113.5% September and continues to be the industry’s main +8.9% +9.7% problem; 1,260
Slide 11: North America BD Quarterly Overview
UTILIZATION Rolled steel 76% Crude steel 72% NORTH AMERICA BD RATE QUARTERLY OVERVIEW EBITDA EBITDA Shipments Net Sales (1,000 tonnes) (R$ million) (R$ million) Margin ◼ Demand from non-residential construction remains -1.1% +1.1% resilient; 6,587 6,657 -17.4% 987 6,632 943 976 ◼ Shipment volume was
Slide 12: Special Steel BD Quarterly Overview
UTILIZATION Rolled steel 61% Crude steel 72% SPECIAL STEEL BD RATE QUARTERLY OVERVIEW EBITDA Shipments Net Sales EBITDA (1,000 tonnes) (R$ million) (R$ million) Margin BRAZIL +1.3% +2.3% -0.4% ◼ Higher shipment volume, boosted by growth in truck 381 2,919 376 2,771 2,853 and light vehicle production
Slide 13: South America BD Quarterly Overview
UTILIZATION Rolled steel 66% Crude steel 52% SOUTH AMERICA BD RATE QUARTERLY OVERVIEW EBITDA EBITDA Shipments Net Sales (1,000 tonnes) (R$ million) (R$ million) Margin ARGENTINA +3.3% +5.6% 290 1,566 ◼ Economic measures with a slower effect 263 1,405 1,452 502 on the recovery of the industrial and c
Slide 14: 3Q24 Highlights
3Q24 HIGHLIGHTS FOCUS ON COMPETITIVENESS THROUGH OPTIMIZATION OF ASSETS IN BRAZIL ADJUSTED EBITDA (R$ million) NET SALES¹ and ADJUSTED EBITDA MARGIN² (R$ million) +14.9% +4.6% 3,016 17,378 17.4% 16,616 596 66 47 2,624 -171 -2 3 70 15.8% 606 -243 6,657 1,156 6,587 1,399 1,140 6,142 6,738 534 541 539
Slide 15: Cash Flow & Net Cash Variation
CASH FLOW & NET CASH VARIATION CASH FLOW (R$ billion) +349 -61 2,974 -1,658 +1,753 3,016 -110 -162 -153 3Q24 Working Income Tax² CAPEX³ Interest JVs Intangibles Other 3Q24 Free Adjusted Capital¹ Proportional & Leasing Cash Flow EBITDA EBITDA NET CASH VARIATION (R$ billion) -99 -602 8.832 -36 -44 +2,
Slide 16: Liquidity & Indebtedness
LIQUIDITY & INDEBTEDNESS CASH, DEBT, AND LEVERAGE LIQUIDITY POSITION AND DEBT AMORTIZATION1 (R$ billion) (R$ billion) 0.34x 0.40x 0.40x 0.53x 0.32x 13.6 12.5 12.5 11.5 10.9 11.0 4.8 6.6 6.0 5.3 5.9 8.8 8.8 5.5 5.5 5.1 5.9 3.7 0.2 2.7 3.0 2.3 1.5 0.8 1.0 0.8 3Q23 4Q23 1Q24 2Q24 3Q24 Liquidity 2024 20
Slide 17: Shareholder Returns
SHAREHOLDER RETURNS PAYOUT ABOVE THE MINIMUM MANDATORY DIVIDEND PAYMENT DIVIDENDS SHARE BUYBACK PROGRAM 69.1% 54.8% GGBR GOAU 34.3% 37.3% 41.2% 7,156 ◼ Program total: up to 33 million shares. ◼ Program total: up to 69.8 million shares. 1,073 ◼ Invested by Oct/2024: R$729.4 M ◼ Invested by Oct/2024:
Slide 18: Strategic Capex — 3Q24
STRATEGIC CAPEX — 3Q24 3Q24 STRATEGIC ~R$705 million INVESTMENTS IN BUSINESS GROWTH AND COMPETITIVENESS CAPEX: (R$ million, cumulative) NORTH AMERICA SPECIAL BRAZIL TOTAL STEEL 500 1.750 350 9.200 250 1.550 5.120 3.200 250 450 400 1.500 4.080 Midlothian Downstream New Scrap Itabiritos HRC Rolling Mi
Slide 19: Next Earnings Release 4Q24 and Contact
inform@gerdau.com | ri.gerdau.com Earnings Videoconference Release — 4Q24 February 20, 2025 February 19, 2025 Follow Gerdau on social media.