Slide 1: Earnings Release 2nd Quarter 2023
EARNINGS RELEASE 2nd quarter | 2023 Miguel Burnier Mine Dry stacking of iron ore tailings This content is Public.
Slide 2: Macro Scenario
MACRO SCENARIO LOWER-THAN-EXPECTED GLOBAL GROWTH TRIGGERS DROP IN COMMODITY PRICES ▪ GLOBAL ENVIRONMENT: restrictive monetary policy in most economies begins ▪ UNITED STATES: good levels of economic activity since the beginning of the year have to show an effect, leading to a reduction in inflation
Slide 3: Occupational Health and Safety Management
OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT SAFETY IS A NON-NEGOTIABLE VALUE FOR GERDAU AND PLAYS A MAJOR ROLE IN THE COMPANY’S ORGANIZATIONAL CULTURE 1.28 1.16 1.10 1.10 1.08 0.99 0.87 0.83 0.76 0.66 2014 2015 2016 2017 2018 2019 2020 2021 2022 6M23 Gerdau Frequency Rate MANOEL BENEDITO DA SILVA SANT
Slide 4: Highlights in the Period
HIGHLIGHTS C IN THE PERIOD ONSISTENT RESULTS DRIVEN BY GEOGRAPHIC DIVERSIFICATION OF ASSETS IN THE AMERICAS AND FLEXIBLE PRODUCTION ROUTES EVEN AMID A CHALLENGING MACROECONOMIC ENVIRONMENT Shipments (1,000 tonnes) Net Sales¹ (R$ million) -9.6% -20.5% 3,245 22,968 2,979 2,933 -1.5% 18,872 18,265 -3.2
Slide 5: Highlights in the Period
HIGHLIGHTS IN THE PERIOD Shipments of 2.9 MILLION TONNES OF 2Q23 SHAREHOLDER REMUNERATION: Gerdau STEEL in 2Q23, in line with 1Q23 allocated R$752.1 million (R$0.43 per share) and Metalúrgica Gerdau allocated R$268.5 million ADJUSTED EBITDA OF R$3.8 BILLION, one (R$0.26 per share) for distribution a
Slide 6: Performance by Business Division (BD)
PERFORMANCE BY BUSINESS DIVISION (BD) 6 6
Slide 7: North America BD
Utilization rate Rolled steel 89% Raw steel 76% NORTH AMERICA BD ■ Resilient metal spread and maintenance of the backlog of orders at approximately 60 days of inventory 46.1% ■ Energy sector and non-residential construction remain at high levels Consolidated ■ Shutdowns at the plants in Whitby (Cana
Slide 8: Special Steel BD
Utilization rate Rolled steel 59% Raw steel 66% SPECIAL STEEL BD BRAZIL NORTH AMERICA ■ A tax reduction program targeted at economy cars and the gradual reopening of some ■ The light vehicle sector continues to be boosted by supply chain and inventory 15.7% automotive factories led a slight rebound
Slide 9: Brazil BD
Utilization rate Rolled steel 63% Raw steel 72% BRAZIL BD ■ High interest rates and a slowdown in sectors such as industry and retail continue to affect domestic demand for steel ■ Concerns related to greater penetration of imported steel in Brazil(including import of machinery and equipment) 25.7%
Slide 10: South America BD
Utilization rate Rolled steel 94% Raw steel 86% SOUTH AMERICA BD ■ ARGENTINA: The construction, energy and mining sectors remain resilient. However, inflation, drought effects, and the presidential election demand attention 12.5% Consolidated ■ Uruguay: Demand remains stable, and the announcement of
Slide 11: Financial Performance
FINANCIAL PERFORMANCE This content is Public. TAYNA LIMA ALVES – Tport Terminal, Vitória (ES) 11
Slide 12: Free Cash Flow & Working Capital
FREE CASH FLOW & FREE CASH FLOW WORKING CAPITAL 81 78 81 (R$ MILLION) 70 3,792 64 FINANCIAL -569 16.4 16.3 CYCLE (DAYS) 16.2 16.3 16.4 784 -1,229 -175 & -1,035 WORKING CAPITAL¹ 18.5 18.8 (R$ BILLION) 17.8 17.2 17.0 2Q23 Working CAPEX Interest Income tax 2Q23 Free Adjusted Capital net debt Cash Flow
Slide 13: Liquidity & Indebtedness
LIQUIDEZ & Lowest level ENDIVIDAMENTO since Sep/2007 0.37 0.33 0.31 LIQUIDITY POSITION 8.4 AND DEBT AMORTIZATION CASH, DEBT AND 0.18 0.16 (R$ BILLION) LEVERAGE (R$ BILLION) 12.4 12.9 12.6 12.3 4.2 92% in long term 10.7 5.4 5.8 2Q23 settlements 7.8 8.6 4.2 2023 Bond + Debenture R$ 1.6 B 5.0 4.2 7.2 6
Slide 14: Sustainable Mining
SUSTAINABLE MINING This content is Public. Miguel Burnier Mine Ouro Preto, Minas Gerais
Slide 15: New Sustainable Mining Platform
NEW SUSTAINABLE MINING PLATFORM 5.5¹ Mtpa of high-grade ore (65%) 200,000 tonnes of CO2 reduction per year CAPEX of R$3.2 billion between 2023 and 2026 Integrated logistics (slurry and tailings pipelines) 40 years of certified reserves 100% dry processing (without using dams) CRUSHING FACILITIES AND
Slide 16: Main Investments
MAIN INVESTMENTS 138 kV Line Filtration and YIELD = SUSTAINABILITY + COMPETITIVENESS Competitive and reliable Tailings pile Crushing facilities energy for the complex and OTP2 100% dry stacking ▪ Competitive Ore²: US$ 190 M Ore Treatment Plant por ano Cold Raw Material Rationale: 5.5 Mt with cash co
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 a question live, type in your name on the #Q&A# icon and wait for your name to be announced so that you can ask your question. At that time, a request to turn on your micropho
Slide 18: Thank You! Save the Date
SAVE THE DATE 3rd QUARTER OF 2023 EARNINGS RELEASE November 06, 2023 (after market close) VIDEOCONFERENCE November 07, 2023 STAKEHOLDER DAY September 28, 2023 inform@gerdau.com www.ri.gerdau.com THANK YOU! JOSE PAULO DA SILVA - Açonorte Mill
Slide 19: 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 general economic, polit