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GERDAU DAY NYSE
June, 2015
Speakers: Andre B. Gerdau Johannpeter
Chief Executive Officer
Agenda
2
Andre Pires de Oliveira Dias
Chief Financial Officer
�SECTOR
�CORPORATE OVERVIEW AND STRATEGY
�NORTH AMERICA BUSINESS OPERATION
�PERFORMANCE AND OUTLOOK
�CLOSING REMARKS
Peter Campo
President, Long Steel North America Operation
Speakers:
Agenda
3
�SECTOR
�CORPORATE OVERVIEW AND STRATEGY
�NORTH AMERICA BUSINESS OPERATION
�PERFORMANCE AND OUTLOOK
�CLOSING REMARKS
Peter Campo
President, Long Steel North America Operation
Andre B. Gerdau Johannpeter
Chief Executive Officer
Andre Pires de Oliveira Dias
Chief Financial Officer
Worldsteel projections revised downward
Source: worldsteel – SRO April 2015.
Apparent steel use
million tonnes growth rates
2014 2015 (f) 2016 (f) 15/14 16/15World 1,537.3 1,544.4 1,565.5 0.5% 1.4%
European Union (28) 146.8 149.9 154.1 2.1% 2.8%
NAFTA 144.6 143.3 145.1 -0.9% 1.3%
Central & South America 48.1 46.5 48.1 -3.3% 3.4%
Asia & Oceania 1,015.6 1,021.5 1,030.4 0.6% 0.9%
China 710.8 707.2 703.7 -0.5% -0.5%Others 182.2 183.2 187.8 0.5% 2.5%
4
5
Source: worldsteel.*forecast
Excess capacity grew, although it seems to be stabilizing
Capacity vs. Apparent Steel Use
2007 2008 2009 2010 2011 2012 2013 2014Jan. - Apr.
2015World steel capacity utilization rate
89.4% 81.6% 70.8% 77.2% 79.3% 77.9% 77.3% 75.5% 71.8%
Source: worldsteel; SBB World Steel Price (Jan 2000 = 100).
6
Global overcapacity continues to affect industry profitability
7
China: production levels are stabilizing at a high level
� Finished Steel Exports Jan-Apr.15 :
34.3 million tonnes, growth of 32.7%*.
� Finished Steel Imports Jan-Apr.15 :
4.4 million tonnes, decrease of 9.5%*.
� Steel Production Jan-Apr.15 :
200 million tonnes, 0.3%* lower.Crude Steel Production(million tonnes)
Source: worldsteel e Platts.* In relation to the same period last year.
6462
66 66 6765 65 66 65 65
61 62
69
62
70 6970 69 68 69 68 68
63
68 69
62
70 6912%
11%
6%
8%
10%
8%
5%
12%12%
10%
3%
9%
7%
0%
6%
4%5%
7%
5%4%
4% 4% 4%
10%
0% 0%-1%
0%
Jan-
13
Feb
-13
Mar
-13
Apr
-13
May
-13
Jun-
13
Jul-1
3
Aug
-13
Sep
-13
Oct
-13
Nov
-13
Dec
-13
Jan-
14
Feb
-14
Mar
-14
Apr
-14
May
-14
Jun-
14
Jul-1
4
Aug
-14
Sep
-14
Oct
-14
Nov
-14
Dec
-14
Jan-
15
Feb
-15
Mar
-15
Apr
-15
China ∆% over the same period of last year
Speakers: Andre B. Gerdau Johannpeter
CEO
Agenda
8
Andre Pires de Oliveira Dias
CFO and IR Director
�SECTOR
�CORPORATE OVERVIEW AND STRATEGY
�NORTH AMERICA BUSINESS OPERATION
�PERFORMANCE AND OUTLOOK
�CLOSING REMARKS
Peter Campo
President, Long Steel North America Operation
9
Steel industry faces challenges in 2015
Current challengesare transforming Gerdau
CAPEX discipline
Asset optimization and divestment of non-core assets
Costs and SG&A reduction
Modernizing the culture, structure and leadership
Main initiatives:
1
2
3
4
1,400
671735
1,159
1,605
1,202
960
209
2008 2009 2010 2011 2012 2013 2014 2015e
10
Continuing to be selective in capital expenditures
CAPEX disbursement (US$ million)
700
e: expected.* Refers to 1Q2015
1
*
Expected approval for 2015: US$ 381 millionExpected approval for 2015: US$ 381 million
11
Adjusting Gerdau’s operations to ensure the sustainability of the business 2
Jun.14 Sep.14 Oct.142014 Jul.14 2015
Sales of real state and property
Sale of a railway in US: US$ 12.4 million
Operating asset optimization: Sorocaba: 23kt (rolled)
Sale of 50% stake in Gallatin: US$ 385 million
Sale of Forjanor: US$ 28 million
Merger with Metaldom – Dominican Republic
Nov.14
Operating assets optimization:Água Funda (SP): 104 kt (rolled);Guaíra (PR): 541kt (crude), 166kt (rolled);Usiba (BA): 495kt (crude).
Operating asset optimization:Colombia: 300 kt (crude), 186 kt (rolled) and closing of 4 fabshops.
Operating asset optimization:Mogi das Cruzes: 375 kt (crude)Pinda: 200 kt (crude), 500 kt (rolled).
Total crude steel: 1.911 ktTotal rolled steel: 979 kt
Operating asset optimization: Mexico: 150kt* (crude)
* Refers to a joint venture in Mexico (Corsa), capacity is not included in Gerdau’s total capacity.
1,620
1,072
1,340 1,434
1,264 1,209
299 229
1,158
892
7.1%8.1% 7.5%
6.8% 6.5% 6.6% 6.4%
2008 2009 2010 2011 2012 2013 2014 2015 (f)
SG&A (US$) 1st Quarter SG&A / Net Sales (%)
Delivering reduction on costs and SG&A
12
SG&A (US$ million)
3
-23%
4
Management Systems Evolution
1980 1981 1984 1988 1989 1990 1993 1995 1996 1997 1998 1999 2000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
FA Module
Integrated Policy
Technical Assistance with
BadischeStandardization
Technical assistance with Japan
QCCs
PIP
Business Cells
EMSEnvironmental Management
System
Suggestions Program
Rec.of Work Groups
Working Cells
GPP Process Management
Safety in Action
PNQPiratini
Strategic Map
Evolution of Working Cells
Self -Management
1st Gerdau QIS Contest
Seminarwith Falconi
Training in Quality
GSPs (problem solution groups)
Software
PNQ Riograndense
Knowledge Managemen
t (KM)
Certif. IntegradaCearense
GMR Basis Integration
EBITDA Deployment
Innovation Management –
Knowledge : Definition of the
Innovation management
model
2013
Definition of GAPS
for all processes
Innovation management –
Practice: Innovation Pilots
Projects
13
Modernizing the culture, structure and leadership
14
4
Wide range of products
Brazil North America Special Steel
Ready-to-use products
►Housing
► Infrastructure
► Industry and commercial buildings
►Agricultural
►Exports of slabs, blooms and billets
► Infrastructure
►Non-residential
► Industrial
►Automotive
►Shipbuilding
►Energy
Billets, blooms& slabs
Merchant bars
Rebars
Fabricated steel
Heavystructural shapes
Wire-rodWires
NailsSBQ
Latin America
►Housing
► Infrastructure
► Industry and commercial buildings
Innovative initiatives to enhance the preference of our customers
HRC
Iron Ore
►Raw material for
the steel
industry – focus
on self
sufficiency.
Iron Ore
15
32% of Net Sales
49% of EBITDA
33% of Net Sales
21% of EBITDA
13% of Net Sales
9% of EBITDA
20% of Net Sales
20% of EBITDA
Note: Net Sales and EBITDA LTM as of march, 31.
2% of Net Sales
1% of EBITDA
Global player with dominant regional presence
16
► Relevant level of direct purchase and captive scrap (50%).
► 6.3 billion tonnes of iron ore resources:
• Self-sufficiency at Ouro Branco mill.
► Coke unit and coking coal mine in Colombia.
► Partial level of energy self generation:
• 40% in Brazil (3 HPPs and thermal power generation in Ouro Branco).
Upstream
Vertically integrated operations – flexible production base
► Focus of Gerdau’s operations.
► Low cost structure.
► Mini-mills and integrated mills key to low cost strategy.
► Flexible cost structure:• 25% fixed costs
► Latest generation technology
Steel
► Reinforcing steel fabrication facilities (Fab Shops).
► Drawn products.
► Multi-product distribution network.
► Tailor-made added-value approach:• ~40% of sales to civil
construction.
Downstream
17
18
Latest generation technology – investments in Mexico
► Construction of a new mill to produce structural shapes, in partnership with Gerdau Corsa
(joint venture).
► Annual installed capacity of 1 million tonnes of crude steel and 700k tonnes of rolled steel.
Construction of the new plant in Ciudad Sahagún in the state of Hidalgo.
► Hot testing in the melt shop
started in the end of 2014 and the
rolling mil started operating on
May 2015.
► Project will meet demand from the
construction and manufacturing
industries in Mexico and other
NAFTA countries.
19
Latest generation technology – special steel rolling mil in Monroe
► New rolling mil with annual capacity of 300k tonnes started operations at the end of 2014.
► New reheating furnace, that will increase productivity at the mil, begun operations in the
1st quarter of 2015.
Reheating furnace. Cooling bed.
�Civil Works for plate
rolling mill completed
3Q
2013
2Q
2015
2Q
2016
4Q
2016
� Plate Machinery Installation
complete
� Capacity: 1,100 mt
Timeline
Latest generation technology - flat products project
� Start of HRC rolling mill
� Start of Plate rolling mill� Capacity: 800 kt
20
5
37 23 27
59
83 81
116
68
5
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
5.6
1.5
4.4
Capacity
Plants from partners
OTP I
OTP II
21
Iron ore project – focus on self sufficiency
CAPEX (US$ million)
11.5
► Self sufficiency brings cost benefits for the Ouro Branco mill:
� Annual iron ore need: 6.5 MMt*.
► Capacity expansion project on hold.
► No long-term commitment (volumes and logistics).
CAPACITY (million t)
CAPEX + Mine Acquisition: US$ 45/t
* Considering 90% capacity utilization.
Total: US$ 503
Ensuring the safety of employees and service providers is a top priority for Gerdau
Accident frequency rate1
1- Lost-time accident (LTA) frequency rates per million hours worked, including employees and service providers. The data also includes restricted work and change of function (OSHA recordable treated as LT accidents).
Gerdau received for the fifth
time the Safety and Health
Excellence Recognition
Award given annually by the
World Steel Association in
recognition of successful
programs in the area
occupational safety .
1.59
1.06 1.11 1.090.89
2011 2012 2013 2014 YTD 2015
22
� Gerdau leadership and employees dedicated their day to promote safety in our locations.
� Checklists of critical risks: in the days following the World Safety Day, leaders went to theshop floor evaluate critical risks, give feedback and talk about safety with our employees.
World Safety Day
Safety, a commitment to life.
23
Corporate Governance
► Independent Board Members
► Sarbanes Oxley Compliant
► Tag Along (100% common and preferred share)
► Bylaw minimum dividend: 30% of adjusted net income
Best Practices
Century-old values guide the search for greater efficiency and business competitiveness.
24
► Bovespa’s level 1 corporate governance listing
► New York Stock Exchange
► LATIBEX – Madri
� Renovation of the Corporate Governance structure, representing another phase in theGerdau Johannpeter family succession process.
André B. Gerdau Johannpeter MG Chairman
Claudio Gerdau Johannpeter GSA Chairman
Affonso Celso Pastore
Oscar de Paula Bernardes
Re-elected Members
Jorge JohannpeterGermano Johannpeter
Klaus JohannpeterFrederico Johannpeter
Advisory Board
Guilherme C. Gerdau Johannpeter
Richard C. Gerdau Johannpeter
Expedito Luz
New Members
MG: Metalúrgica Gerdau S.A.GSA: Gerdau S.A.
Speakers:
Agenda
25
�SECTOR
�CORPORATE OVERVIEW AND STRATEGY
�NORTH AMERICA BUSINESS OPERATION
�PERFORMANCE AND OUTLOOK
�CLOSING REMARKS
Peter Campo
President, Long Steel North America Operation
Andre B. Gerdau Johannpeter
Chief Executive Officer
Andre Pires de Oliveira Dias
Chief Financial Officer
26
North America Business Operation� Annual manufacturing capacity of over 9.1 million metric tons of finished steel
products in North America.
� Employs approximately 9,200 people in the United States and Canada at over 104locations – mills, reinforcing steel fabrication and placement, metallics and rawmaterials.
� 2014 revenue of Gerdau Long Steel North America was US$ 6.2 billion.
� We operate in 29 U.S. states and 2 Canadian provinces.
* EBITDA adjusted by gains in joint venture operations.
30.1
126.0
149.4
83.7 79.0
2.1%
7.8%9.1%
5.7% 6.2%
1Q14 2Q14 3Q14 4Q14 1Q15
EBITDA (US$ million) EBITDA Margin
*
27
� Minimill technology in all locations – no blast furnaces in North America.
� Vertical integration across the value stream – metallics, mills, downstream:
► Provides some commercial defense from imported rebar.
� Coast to Coast coverage in the USA for key products:
► Products can be produced in multiple mills – provides customers with a reliable supply chain.
► Assets are operated as one network of mills – customer places an order, it is fulfilled within the network balancing the customer’s requirements with the lowest total delivered cost to fulfill.
North America key differentiators
28
North America Business Operation - Product Mix
Structural25%
MBQ/SBQ Rebar Fabricated
Rebar 31%� Offers a diverse and balanced
product mix of merchant bar
quality (MBQ), special bar
quality (SBQ), rebar and
wire rod.
Wire RodStructural
Rebar17%
Fabricated14%
WireRod7%
Merchants/SBQ36%
29
North America Business Operation - Principal locations
62Reinforcing
Steel Locations
16Steel Mills
23RecyclingLocations
Serve customers throughout the United States and Canada
30
Gerdau Long Steel North America - Mill Locations
Rancho Cucamonga
Midlothian
Beaumont
Jacksonville
Petersburg
Charlotte
Cartersville
KnoxvilleJackson
Calvert City
Manitoba
Cambridge
Whitby
SayrevilleWilton
St. Paul
Tampa
Merchants
Wire Rod/Rebar
Structurals/SBQ
31
Gerdau Long Steel North America:Metallics Raw Materials Locations
Bismarck
Buffalo
Cornwall
Dexter
Fargo
JamestownMinot
TorontoMississauga
London
Oshawa
Sand Springs
Guelph Guelph Fair Rd Division
Manitoba
Midlothian
St. Paul
Jacksonville
Jackson
WiltonPerth Amboy
Tampa
Roanoke
Lynchburg
Covington Waynesborough
Harrisonburg
PetersburgCharlottesville
South BostonMartinsville
32
Gerdau Long Steel North America:Downstream Locations – Western N.A.
Reinforcing Steel West
Construction Products, BB, Wire and Rail
Northern Fabrication Group
Southern Fabrication Group
MFT Light Beams
Draper
Denver
Kansas City
HoustonBeaumont
Lindon
Auburn
San Diego
Henderson Sand Springs
Muskogee
Napa
Fairfield
Glendale
DallasArlington
Carrollton
San Bernardino
Santa Fe Springs
Gerdau Long Steel North America:Downstream Locations – Eastern N.A.
Grinding Ball
Construction Products, BB, Wire and Rail
Northern Fabrication Group
Southern Fabrication Group
Technical Resource Center
Atlanta
AlbanySavannah
TrussvilleBirmingham
New Orleans
Duluth
Charlotte
Raleigh
Jacksonville
Fort Lauderdale
Madison
Appleton
Knoxville
Johnson City
St. Louis
Memphis
Nashville
Northern Virginia
Tampa
York
Foxboro
Perth Amboy
Lancaster
MuncieOrrville
Paragould
Cincinnati
Louisville
EldridgeSayrevilleBelvidere
Sterling Decatur
Urbana
33
34
Gerdau Long Steel North America - All Locations
35
North America imports are increasingLong ProductImports
Flat imports significantly higher than longs, surges in rebar / rod.
36
* Residential does not include improvements.Source: US Census Bureau.
Most project categories are recording gains
Total Construction CPIP
37
Better metal spread increases profitability
North America Operation Average Metal Spread (Base 100)
100
84
101
Jan
-12
Fe
b-1
2
Ma
r-1
2
Ap
r-1
2
Ma
y-1
2
Jun
-12
Jul-
12
Au
g-1
2
Se
p-1
2
Oct
-12
No
v-1
2
De
c-1
2
Jan
-13
Fe
b-1
3
Ma
r-1
3
Ap
r-1
3
Ma
y-1
3
Jun
-13
Jul-
13
Au
g-1
3
Se
p-1
3
Oct
-13
No
v-1
3
De
c-1
3
Jan
-14
Fe
b-1
4
Ma
r-1
4
Ap
r-1
4
Ma
y-1
4
Jun
-14
Jul-
14
Au
g-1
4
Se
p-1
4
Oct
-14
No
v-1
4
De
c-1
4
Jan
-15
Fe
b-1
5
Ma
r-1
5
Ap
r-1
5
Average Metal Spread (Base 100; 100 = Jan.12)
Speakers:
Agenda
38
�SECTOR
�CORPORATE OVERVIEW AND STRATEGY
�NORTH AMERICA BUSINESS OPERATION
�PERFORMANCE AND OUTLOOK
�CLOSING REMARKS
Peter Campo
President, Long Steel North America Operation
Andre B. Gerdau Johannpeter
Chief Executive Officer
Andre Pires de Oliveira Dias
Chief Financial Officer
Lower steel shipments impacted results in 1Q15
39
Evolution of EBITDA (R$ million) EBITDA (R$ million) and EBITDA Margin
* Includes net sales from iron ore shipments.¹ EBITDA adjusted by gains in joint venture operations
1,196 1,170 1,224 1,2381,089
11.3% 11.2% 11.4% 11.4%10.4%
1Q14 2Q14 3Q14 4Q14 1Q15EBITDA EBITDA Margin
¹
1,196 1,089(587)
480
(36)
47(11)
EBITDA1Q14
Shipments NetSales/t*
Cost ofSales
SG&A Others EBITDA1Q15
40
Challenging 2015 for Brazil business operation
2015 Outlook
► GDP forecast: -1,1%► Apparent steel consumption: -7,8%
Source: Brazil Central Bank, Brazil Steel Institute – IABr and Criative.
Civil Construction Segment
% of Consolidated Net Sales - LTM
84.4 87.6
106.8
79.4
68.161.3
38.5
7.4 6.9 8.715.2
9.8 10.35.1
1Q09 1Q10 1Q11 1Q12 1Q13 1Q14 1Q15
Residential Commercial
Number of New Starts(thousand units)
-10.0%
-37.2%
+5.1%-50.5%
193.7
39.6 37.224.4
9.6
42.148.962.1
189.9
21.92.1
22.1
Oil&Gas Energy Transport /Urban roads
Industrial Sanitation Other
Ongoing projects Projects scheduled to start
Infrastructure projects(2015 – 2020 in R$ MM)
28%4.0%- Exports
- Domestic
41
Significant growth of the non-residential construction sector in the US
Source: IMF, worldsteel and PCA – Americas’ Cement Manufectures.
*Forecast
% of Consolidated Net Sales - LTM
2015 Outlook (US)
► GDP forecast: +3.1%► Apparent steel consumption: -0.4%
175.3189.7
206.5223.6
237.6
10,572
13,048
15,232
17,256
19,220
2013 2014 2015* 2016* 2017*
Nonresidential Construction (US$ billion)
Portland Cement Consumption (000 tonnes)
212.5
208.5
213.4
218.9
225.3
34,39936,657
38,00239,426
40,925
2013 2014 2015* 2016* 2017*
Public Construction (US$ billion)
Portland Cement Consumption (000 tonnes)
Non-residential Construction vs. Portland Cement Consumption
Public Construction vs. Portland Cement Consumption
+8.9%
+2.4%
33%
42
►Access to US market►New structural shapes plant
Mexico
►Coal resources and coke production
Colombia
►Excellent logistics
►Strong growth
Peru
►Mature market
►Good distribution network
Chile
Source: worldsteel and IMF.
13%
% of Consolidated Net Sales - LTM
Steel consumption in Latin America should follow the economic growth in the region
2014 2015 (f) 2016 (f)
Others
Mexico
Venezuela
Peru
Colombia
Chile
Argentina
Apparent Steel UseSRO Apr.2015
(million tonnes)
45.9 46.9 48.7
2015 Outlook
► Apparent steel consumption: +2.2%
► GDP forecast: Mexico: +3.8%; Peru: +4.5%; Colombia: +4.3%; Chile: +3.9%
+2.2% +3.9%
8.79.1 9.3
5.7 6.05.4
3.3 3.7 3.9
1.4 1.21.0
2013 2014 2015f
Europe North America India Brazil
43
Good outlook for the automotive sector in USA and India
Source: ANFAVEA, ACEA, IHS, LCA.
2015 Vehicle Production Growth
• Light vehicles: +2.7%
• Heavy vehicles: +7.1%
North America
• Light vehicles: 0%
• Heavy vehicles: +2.1% Europe
• Light vehicles : -10%
• Heavy vehicles: -30%Brazil
• Light vehicles: +7.5%
• Heavy vehicles: +5.5%India
Special steel market size(million tonnes)
-16.7%
+5.4%
-10.0%
+ 2.2%
► One of the largest special steel producer globally, being the main supplier to
the automotive industry.
► Global coverage, with operations in Brazil, USA, Spain and India.
20%
% of Consolidated Net Sales - LTM
16.4 16.418.1
19.2
22.9
3.5 4.0 4.75.8 5.8
2.5x 2.4x 2.7x
2.4x
3.2x
mar.14 jun.14 sep.14 dec.14 mar.15Gross Debt Principal (R$ billion)
Cash (R$ billion)
Net Debt/EBITDA¹
(1) EBITDA LTM.
44
R$ billion
Debt and Leverage ratio
Debt impacted by exchange variation
Brazillian real 4,062 17.4%
U.S. dollar 17,776 76.4%
Euro 282 1.2%
Other currencies 1,162 5.0%
Gross debt (principal + interest) by currency ($ million)
03.31.2015 % of total
Main covenants:• EBITDA¹ / Net financial Expense ≥ 3 • Net debt / EBITDA¹ < 4x
Debt with covenant agreement on March 31, 2015: US$ 1.6 billion (22% of total debt)
Short Term 2,366 2,038
Long Term 20,916 17,484 Gross Debt (principal + interest) 23,282 19,522
Interest on debt (400) (344)
Gross Debt (principal) 22,882 19,178 Cash, cash equivalents and short-term investments 5,847 5,849
Net Debt¹ 17,035 13,329 1 - Net debt = gross debt (principal) - cash, cash equivalents and short-term investments
Debt composition(R$ million)
03.31.2015 12.31.2014
1.2 1.5
4.0
0.8 0.9
5.4
9.1
2015 2016 2017 2018 2019 2020 2021andafter
(1) EBITDA LTM.
45
Debt maturity schedule
Average debt term: 6.9 years
R$ billion
Average maturity term
Investment grade Moody’s: Baa3 (stable); Standard & Poors: BBB- (stable); Fitch: BBB- (stable)
Local currency 10.1%
Foreign currency 6.0% + FX
Companies abroad 5.9%Average 6.6%
Cost of Debt 03.31.2015
Capital markets 69.5%
Commercial banks 17.5%
BNDES 8.8%Export and credit agencies 4.2%
Debt by origin 03.31.2015
Trade accounts receivable (+) 4,492 4,439 5,272 Inventories (+) 8,689 8,867 10,190 Trade accounts payable (-) 3,183 3,236 3,745 Working Capital 9,998 10,070 11,717
Working Capital(R$ million)
03.31.2014 12.31.2014 03.31.2015
FX effect on working capital increased the cash conversion cycle by approximately 10 days
46
10.0 9.9 10.2 10.1
11.7
85 85 85 84
101
mar.14 jun.14 sep.14 dec.14 mar.15
Working Capital (R$ billions) Cash Conversion Cicle (days)
Positive free cash flow generation
47
4,784
1,408
(407) (810)
866
(2,598)(427)
EBITDA 2013 Income Tax Net FinancialExpenses
Change in WK -cash effect
CAPEX Dividends & IOCS Free Cash Flow
4,828
969
637
(452)
(860)(462)
(2,267)(455)
EBITDA 2014 Gains with JVoperations
Income Tax Net FinancialExpenses
Change in WK -cash effect
CAPEX Dividends &IOCS
Free Cash Flow
FY2013
FY2014
R$ billion
R$ billion
Speakers:
Agenda
48
�SECTOR
�CORPORATE OVERVIEW AND STRATEGY
�NORTH AMERICA BUSINESS OPERATION
�PERFORMANCE AND OUTLOOK
�CLOSING REMARKS
Peter Campo
President, Long Steel North America Operation
Andre B. Gerdau Johannpeter
Chief Executive Officer
Andre Pires de Oliveira Dias
Chief Financial Officer
Strengths:
• Experienced, qualified and tested management team
• Diversified portfolio:
• Wide product range
• Geographic diversification
• Flexible production base (mini-mill/integrated)
• Focus on customer service (value creation)
• Balance sheet discipline
Searching for greater competitiveness in a challenging environment
49
• Gerdau’s strategy of geographic diversification, combined withmanagement’s efforts at all operations, minimized the impacts on Gerdau’sperformance of this challenging period in the global steel industry.
• Cautious monitoring of all market developments in this scenario of globalovercapacity and economic uncertainties in Brazil.
• Strong level of imports in the markets where we operate.
• Ongoing efforts to improve operational efficiency and optimize workingcapital.
• New compositions of the Board of Directors of Gerdau S.A. and MetalúrgicaGerdau S.A, marking a new phase in the succession process of the GerdauJohannpeter family.
• Confidence in the management experience and in the flexibility of Gerdau’soperations.
Closing remarks
50
This presentation may contain forward-looking statements. These forward-looking
statements rely upon estimates, information or methods that may be incorrect or
inaccurate and may not actually occur. These estimates are also subject to risks,
uncertainties and assumptions, including, among others: general economic, political
and commercial conditions in Brazil and in the markets where we operate and existing
and future government regulations. Potential investors are hereby informed that these
estimates do not constitute a guarantee of future performance as they involve risks and
uncertainties. The Company does not undertake, and specifically denies, any obligation
to update any estimate, which only speak as of the date they are made.
Statement
51
Q & A
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