1

Gerdau S.A.

March 2006

UBS Brazil 2006 – Seventh Annual CEO Conference

2

Agenda

Steel Sector

Gerdau Group

Operating and Financial Highlights

Capital Markets

3

World Steel – Supply and Demand

Source: IISI / World Steel DynamicsF=Forecast

Finished Steel

1985 1990 1995 2000 2005F 2010F

632

1,000

1,153

Production Apparent Consumption

690 698

830

1,117

942

772

641655603

+ 15.3% over 2005

+ 18.6% over 2005

According to a WSD forecast for 2010, 97% of the

world’s production will be consumed.

In million tons

4

Crude Steel – Output 2004

Arcelor (LUX) 2

Mittal Steel (NET) 1

Nippon Steel (JAP) 3

JFE Steel (JAP) 4

Posco (KOR) 5

Shangai Baosteel (CHI) 6

US Steel (USA) 7

Corus Group (UK) 8

ThyssenKrupp (GER) 10

Riva Group (ITA) 11

Nucor (USA) 9

Gerdau Group (BRA) 12

Sumitomo (JAP) 13

46.9

58.9

32.4

31.6

30.2

21.4

20.8

19.0

17.9

17.6

16.7

13.4

13.0

Gerdau should have an installed capacity of

approximately 21 million tons of crude steel per year after the investment program in Brazil is completed in 2007.

Source: IISI

*

* Includes ISG acquired by Mittal Steel in 2004.

Among the Leaders

In million tons

5

The North American crude steel output for 2005 was 127 million metric tons, a decrease of 5.3% compared to the previous year. In the USA, crude steel output reached 93.3 million metric tons in 2005 from 99.7 million metric

tons in 2004 (- 6.4%).

In 2005, the crude steel output reached 31.6 million metric tons, 3.9% less than in the previous year.

Domestic sales of long steel products (including blooms and billets) in 2005 reached 6.3 million metric tons, a decrease of 10.7% compared to 2004.

Exports of long steel products (including ingots, blooms and billets) totaled 4,3 million metric tons in 2005 (+ 25.6% YoY).

In 2005, the long steel production decreased 4.8% compared to 2004, retaking

the levels of 2003.

Source: IBS and IISI

Worl

d The world’s steel output reached 1.1 billion metric tons of crude steel in 2005, an increase of 5.9% compared to 2004. Crude steel production in China reached 349 million metric tons (31.5% of the world’s steel output), an increase of 24.6% compared to 2004.

Bra

zil

Nort

h

Am

eri

ca

Steel Sector – 2005S

ou

th

Am

eri

ca

The South American crude steel output for 2005 was down 1.2% at 45.3 million metric tons. Brazil is the largest producer, with 69.8% of the total output, followed by Argentina, with 11.9% of the total output in the region.

6

Crude Steel Production – 2005

349

113

9366

48 45 39 3832 29

China

USAJapan

Russia

South K

orea

Germany

Ukrain

e

Brazil

India

Italy

Source: IISI

Brazil and the Global Steel Industry

In million tons

Total World Production: 1,108 million tons

China accounted for 31.5% of the global steel output

Brazil accounted for 2.8% of the global steel output

7

Agenda

Steel Sector

Gerdau Group

Operating and Financial Highlights

Capital Markets

8

VISION

MISSION

TO BE A WORLD-CLASSINTERNATIONAL STEEL COMPANY

TO BE A WORLD-CLASSINTERNATIONAL STEEL COMPANY

Gerdau is an organization focused on the steel

business with a mission to satisfy customers` needs

and add value to shareholders, committed to the

fulfillment of people and to the sustainable

development of society

Philosophy

9

A low cost international steel company with operations in Brazil, Uruguay, Canada, Chile, Argentina, Colombia, Spain and the United States

Substantial international profile – foreign exchange generation through subsidiaries abroad and export sales amount approximately 67% of consolidated revenues in 2005

Ranked 12th globally by steel output in 2004 with an output of 13.7MM tons (including strategic shareholdings)

2nd largest long steel producer in North America and largest long steel producer in the Americas

Focused on the production of long steel products Gerdau operates 30 mills incorporating both integrated and mini mills with the latest technologies

Relevant market share in every country with operations and diversified product range, with high value-added products

Strong low cost strategy as a result of diversified production processes and multiple raw material sourcing

Sound balance sheet (Gross Debt-to-EBITDA at approximately 1.6x in 2005) and strong cash generation

Shares of Gerdau S.A. are currently traded at the São Paulo, New York and Madrid stock exchanges

Shares of Metalúrgica Gerdau S.A. are traded at the São Paulo stock exchange

Gerdau Ameristeel’s shares are traded at the New York and Toronto stock exchanges

Investment Considerations

10

THROUGH THE 40’s

THE 60’s

THE 50’s

First steel mill acquisition – Siderúrgica Riograndense (1948)

Expansion of Siderúrgica Riograndense Construction of second Riograndense’s mill

Market share increase by the: - Diversification and verticalization of product line - Structuring of distribution network (today more than 75 sales points) - Acquisition of mill in Pernambuco

100+ Years in Business

Acquisition of three mills (Rio de Janeiro, Minas Gerais and Bahia) Construction of two new plants (Paraná and Ceará) Operations abroad begin (Uruguay

and Canada)

THE 80’s

THE 90’s Diversification into specialty steel –

acquisition of Piratini Expansion abroad – acquisition of mills

in Chile, Canada, Argentina and the USA Acquisition of second mill in Minas

Gerais and rolling mill in São Paulo Shareholdings restructuring Acquisition of stake in Açominas

1901 1901 – First operation: nail factory

Capacity expansion with acquisition of two mills (Alagoas and Paraná);

construction of largest Gerdau mill (Rio de Janeiro) Diversification into reforestation

THE 70’sTHE NEW MILLENNIUM More acquisitions in the US Downstream expansion in North America Entering the European market Presence in São Paulo with a brand new steel mill

11

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Laisa - 1980(Uruguay)

Piratini(Brazil)

AZA(Chile)

Ameristeel(USA)

AZANew Plant

(Chile)

Additionalstake in

Açominas(Brazil)

Potter FormGate City & RJ

North Star(USA)

SACK(Chile)

Cambridge(Canada)

Usiba(Brazil)

Manitoba(Canada)

Controllof

Açominas(Brazil)

CartersvilleDrawingCo-Steel

(USA)

1,757

3,072 3,934

4,595

7,69611,076

16,372

Abroad – Crude Steel Installed Capacity

TOTAL INVESTED (1981-2005):Brazil = US$ 4.0 billion + Debt North America = US$ 1.4 billion + DebtSouth America = US$ 468 million + Debt

In thousand tons

Solid Track Record

Brazil – Crude Steel Installed Capacity

Diaco(Col.)

16,475

Barãode

Cocais(Brazil)

2,611Stake in

Açominas(Brazil)

4,568

18,658Araçariguama

(Brazil)

Sidenor (Spain)

12

Brazil

8.6 million tons of crude steel

5.3 million tons of rolled steel products

Abroad

10.1 million tons of crude steel

9.6 million tons of rolled steel products

Total Capacity (Includes Strategic Shareholdings)

18.7 million tons of crude steel

14.9 million tons of rolled steel products

11 mills

11 fabrication shops

6 downstream operations and special sections

75 sales points and flat steel service centers

19 mills

37 fabrication shops

15 downstream operations and special sections

An International Company

Steel mills

12

Strategic Shareholding

13

BRAZIL

Gerdau 48%

Belgo35%

Barra Mansa5%

Other 7%

NORTH AMERICA

Nucor27%

Gerdau Ameristeel

19%

Commercial Metals

7%

Imports18%

Other29%

COUNTRY MARKET SHARE MAIN COMPETITORS

Solid Market Share in Long Steel

Aços Villares5%

CHILE

URUGUAY

ARGENTINA

53%

20%

90%

CAP + Imports

Acindar + Bragado + Zapla

Imports

COLOMBIA 37% Acerias Paz Del Rio

SPAIN 36%* GSB

* Specialty steel only

14

Value Builder CompanyATKearney

Value Growth

RevenueGrowth

Industryaverage

Industryaverage

StelcoHaynes

AK Steel

Smorgon

Carpenter

Salzgitter

Onesteel1)

Boehler-Uddeholm

INI SteelIpsco

Allegheny

Rautaruukki

Usinas

Ispat

Kennametal

SSAB

Voest-Alpine

Harsco

Nisshin Steel

Eregli Demir

Wuhan Steel1)Kobe

Dofasco

Iscor

Tata

RIVA1)

SAIL

Outokumpu

Corus

Gerdau

CSN

US Steel

Acerinox

Nucor

Thyssenkrupp

China Steel

Arcelor

Baoshan1)

Posco

JFE

Nippon Steel

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

-35% -25% -15% -5% 5% 15% 25% 35% 45%

Note: 1) RIVA 98 02, Wuhan Steel & Onesteel 00 03, Baoshan 01 03Source: ThyssenKrupp (segment), Kobe (segment), RIVA, Haynes:

EBIT Growth

Growth portfolio (CAGR 1999-2003)

benchmarked against industry average

15

Agenda

Steel Sector

Gerdau Group

Operating and Financial Highlights

Capital Markets

16

2000 2001 2002 2003 2004 2005

Shipments

Brazil – Domestic Market (25% in 2005)

Brazil – Exports (20% in 2005)

South America (10% in 2005)

North America (45% in 2005)

In thousand tons

7,302 7,411

9,109

12,56012,144

13,550

Billets, blooms& slabs

Merchant bars

Rebars Fabricated steel

Heavystructural shapes

Wire-rod Wires Nails

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Strong Export Business

Asia44%

Central America13%

South America 19%

North America5%

Africa8%

EXPORT SHIPMENTS BY REGION

Europe 11%

2005

NET REVENUE BREAKDOWN BY REGION

Brazil (Domestic Market) 34%

Exports (from Brazil)13%

North America47%

South America6%

18

37.1%37.9%

12.6% 15.7%

27.1% 30.4%

0%

10%

20%

30%

40%

50%

2001 2002 2003 2004 2005

Margin Evolution

Brazil North America South America

Gross Margin

EBITDA Margin

31.4%28.2%

14.7%

12.1%

24.5%21.6%

0%

10%

20%

30%

40%

2001 2002 2003 2004 2005

19

Costs and PricesNet Revenue and Cost of Sales per ton

Brazil

North AmericaSouth America

Cost of Sales

Net Revenue

Cost of SalesCost of Sales

In US Dollars/ton

Net Revenue Net Revenue

486 475 467 469518

646696709 717

274

294

295

284 321

355

382

404

426

420

682673

423

1Q03 2Q03 3Q03 3Q044Q03 1Q04 2Q04 4Q04 1Q05 2Q05 3Q05

403

521605

557

681 663605

779

477

314

273 348 397

333 400

396 463 549

1Q03 2Q03 3Q03 3Q044Q03 1Q04 2Q04 4Q041Q05 3Q05

484

686

2Q05

694

484 388

477 486

624

822

646710

756

501486

361 459

464 564

616

544

549 638

1Q03 2Q03 3Q03 3Q044Q031Q04 2Q04 4Q041Q05 2Q05

580

677

3Q05

609

511

4Q05

408

626

354

518

4Q05 4Q05

635

528

20

Consolidated FinancialsIn US$ millions

2003 2004

Income Statement

Net revenueGross profitOperating incomeNet incomeEBITDA

2005

4,6271,139

397434929

7,3832,3531,6781,2192,092

9,0772,4461,7271,3862,098

Balance Sheet

Current assetsNon-current assetsFixed assetsTotal

Current liabilitiesNon-current liabilitiesShareholders’ equityTotal

1,846364

2,7214,931

1,5031,7471,6814,931

3,600390

3,0417,031

1,9772,1862,8687,031

5,182377

3,7889,347

1,7903,2254,3329,347

Ratios

Gross marginEBITDA marginTotal debt / EBITDANet debt / EBITDAEBITDA/Net Financial Expenses

24.6%20.1%

2.3x2.0x5.0x

31.9%28.3%

1.1x0.8x

19.8x

26.9%23.1%

1.6x0.4x

27.8x

21

Liquidity Management

Gerdau maintains a policy of strong liquidity to ensure that resources are available in to face

opportunities or downturns in market conditions

Gerdau maintains a policy of strong liquidity to ensure that resources are available in to face

opportunities or downturns in market conditions

Gerdau’s liquidity policy

Cash and liquid investments of at least 25% of total debt

Gerdau export sales not more than 50% leveraged through

export credit and receivable securitization

Liquid funds are held in USD and Brazilian Reais both in

offshore and onshore accounts

22

Indebtedness

Dec. 05

In US$ million

GROSS DEBT 3,269 100%

SHORT TERM 568 17%

Domestic Currency 98 3%

Foreign Currency 149 4%

Companies Abroad 321 10%

LONG TERM 2,701 83%

Domestic Currency 640 20%

Foreign Currency 1,386 42%

Companies Abroad 675 21%

CASH & CASH AND EQUIV. 2,335 100%

Domestic Currency 1,379 59%

Foreign Currency 956 41%

NET DEBT 934

In US$COST OF DEBT IN DEC. 05 (per annum)

DEBT AVERAGE LIFE 9.1 years

Brazil – Domestic Currency

Brazil – Foreign Currency

Companies Abroad

32.5%*

5.9%

7.3%

DEBT STRUCTURE

Domestic Currency23%

Foreign Currency

46%

Companies Abroad31%

*Includes 11.82% of 2005 FX

23

Consolidated Debt Amortization

BNDES: 106Debentures GNA: 97Imports: 108

BNDES: 76Imports: 87Pre-Export: 113

Bonds: 400Perpetual:600Debentures: 336

Euro Commercial Paper: 200

In US$ millions – December/05

1H06 2H06 2007 2008 2009 2010 AFTER 2010

242326

409364

231162

1,535BNDES: 65Pre-Export: 55

BNDES: 48

24

+ 14%

Capital Expenditures

INVESTMENTS - 2005INVESTMENTS - 2005

2006 2008

10,073

8,585

10,675

10,685

18,65821,360

+ 24%

+ 6%

EVOLUTION OF INSTALLED CAPACITY

Investment Program 2006 – 2008: US$ 3.8 billion Investment Program 2006 – 2008: US$ 3.8 billion

2006 2008

9,609

5,260 6,585

14,86916,908

+ 25%

+ 7%

+ 14%

Brazil Abroad Brazil Abroad

Crude Steel Rolled Steel

BRAZIL 568.8

ABROAD 289.2

North America 135.9

South America 153.3

TOTAL 858.0

In thousand tonsIn thousand tons

In US$ millions

10,323

25

Agenda

Steel Sector

Gerdau Group

Operating and Financial Highlights

Capital Markets

26

Listed Companies

GERDAU S.A.GGBR4 = R$ 51.85Market Cap = US$ 10.9 billion

METALÚRGICA GERDAU S.A.GOAU4 = R$ 61.50Market Cap = US$ 3.6 billion

BOVESPASão Paulo

GERDAU S.A.GGB = US$ 24.33

GERDAU AMERISTEEL CORP.GNA = US$ 9.22

NYSENew York

GERDAU AMERISTEEL CORP.GNA.TO = Cdn$ 10.63Market Cap = Cdn$ 3.3 billion

TSEToronto

GERDAU S.A.XGGB = € 19.95

LATIBEXMadrid

Gerdau’s shares traded a daily volume of US$ 34.3 million during 2005Gerdau’s shares traded a daily volume of US$ 34.3 million during 2005

Stock prices in 03.17.2006

27

30% Stock bonus + 70% Split (GOAU)100% Stock bonus (GGBR)

0

5

10

15

300

600

1,200

900

Jan04Jan04

Jul05Jul05

Mar04

Mar04

May05

May05

May04

May04

Jul04Jul04

Sep04

Sep04

Nov04

Nov04

Sep05

Sep05

Jan05Jan05

Mar05

Mar05

GOAU4:

441 trades

US$ 7.1 MM

GGBR4:

1,020 trades

US$ 17.6 MM

Nov05

Nov05

1,500

20

25

Monthly average # of trades

Monthly average volume

Stock Liquidity

Source: Economática

In US$ million (Volume)

In number of trades

Monthly average # of trades

Monthly average volumeMETALÚRGICA GERDAU S.A.(GOAU4)

GERDAU S.A.(GGBR4)

GGBR4:

595 trades

US$ 8.3 MM

GOAU4:

162 trades

US$ 2.3 MM

METALÚRGICA GERDAU S.A. AND GERDAU S.A. PREFERED SHARES ARE PART OF BOVESPA INDEX

METALÚRGICA GERDAU S.A. AND GERDAU S.A. PREFERED SHARES ARE PART OF BOVESPA INDEX

50% Stock bonus(GGBR e GOAU)

Jan06Jan06

28

30 3055 66

81

118

302334

153153

584253

71

1999 2000 2001 2002 2003 2004 2005

Dividends Policy

30% of the adjusted net income (Pay-out)

Dividend payments are being made on a quarterly basis

In US$ million

DIVIDEND YIELD

1999 2000 2001 2002 2003 2004 2005

GOAU4 6.0% 7.9% 17.0% 11.3% 6.2% 7.8% 6.1%

GGBR4 3.6% 6.1% 6.8% 6.8% 3.9% 6.1% 4.6%

DIVIDENDS DISTRIBUTION*DIVIDENDS DISTRIBUTION*

Metalúrgica Gerdau S.A. (GOAU4)

Gerdau S.A. (GGBR4)

* Dividends related to each period, but not necessarily paid in the same period.

29

Outlook

Brazil Greater economic growth in 2006 – 3 to 3.5% Increase in volumes shipped in the domestic market - 5 to 6% Strengthening of the civil construction sector Price stability in Brazilian currency Inventories adjusted Increase in government spending

North America Consistent economic growth More investments in infrastructure (Highway Bill) Stability in production costs Stability in metal spread

South America Consolidated economic growth Strengthening of the civil construction sector Demand is strong

Europe Consolidation of stake in Sidenor as of the 1Q06

30

Safe Harbor Statement

This presentation can contain statements which constitute forward-looking

statements. Such forward-looking statements are dependent on estimates,

data or methods that may be incorrect or imprecise and that may be

incapable of being realized. These estimates also are subject to risk,

uncertainties and suppositions and include, among other, overall economic,

political and commercial environment, in Brazil and in the markets we are

present in addition to government regulations, present and future.

Prospective investors are cautioned that any such forward-looking

statements are not guarantees of future performance and involve risks and

uncertainties. The Company does not undertake, and specifically disclaims

any obligation to update any forward-looking statements, which speak only

as of the date made.

31

www.gerdau.com.br

inform@gerdau.com.br

+55 51 3323 2703

Gerdau S.A.