Conference Call on 2nd Quarter 2007 Results

GERDAU S.A. CONSOLIDATED

André Gerdau JohannpeterPresident & CEO

Osvaldo B. SchirmerExecutive VP & CFO

Director of Investor Relations

August 8 2007

Steel Market2nd quarter

Sources: IISI (International Iron & Steel Institute) /MEPS

World Demand:

� Demand for steel products continued strong due to worldwide economic growth.

� According to the IISI, apparent demand for steel products for 2007 and 2008 should grow at about

6% annually, reaching 1.2 billion tonnes per year.

Production:

� World output of crude steel grew 3.8% in 2Q07 compared with 1Q07, influenced principally by China

which ramped up production by 7.6%, and output in the USA and Canada,

which reported growth of 6.5% in the period.

Prices:

� Prices remain firm on the international market due to good demand and high costs of raw

materials.

Costs:

� Following a sharp rise in the 1st quarter, scrap prices declined in the 2nd but volatility should

continue.

� Iron ore prices saw an increase of 9.5% early on in the year.

� Maritime freight costs remain very high despite the increase in the ocean-going fleet in 2006.

02

Gerdau – 2nd quarter Performance

Brazil

� Strong domestic demand driven by the industrial and civil construction

sector

� Stable international prices, but export margins squeezed due to

appreciation of the Real

� Trends towards higher prices in the market for scrap and other

inputs

� Rising specialty steel prices

OUTLOOK

� Domestic demand will continue to grow especially in the civil

construction and industrial sectors which have the largest customers

� Prices should remain firm in the domestic market

� In the international market, prices should track raw material price

volatility and the sustainability of demand in the different regions of

the world

� High maritime freight charges

03

Gerdau – 2nd quarter Performance

North America

� Investments in infrastructure and industrial and commercial

construction have continued to grow at a good pace

� Good demand from the industrial sector

� Reduction in sales due to anticipated buying in 1Q07

� Scrap prices lower

� Margins at good levels

� Contribution of the residential construction segment to GNA’s sales is

limited

OUTLOOK

� Demand continues intense

� Product price volatility is a function of scrap prices

� Higher operating costs due to maintenance downtime

� Metal spread stands at record levels

04

Gerdau – 2nd quarter Performance

Latin America

� Demand continues strong in the majority of countries

� Higher costs

� Consolidation of the companies acquired in the quarter (Mexico,

Venezuela and the Dominican Republic)

OUTLOOK

� Economies reporting solid growth

� Investments in infrastructure and good demand from the civil

construction sector

� High costs

� Stable prices

05

Gerdau – 2nd quarter Performance

Europe

� Strong demand from the automotive industry

� Scrap prices stable

� Other costs stabilized at high levels

OUTLOOK

� Seasonal impacts in 3Q07 (annual August vacation period in Spain)

� Demand continues strong

� Stable prices

� Good performance from the specialty steel sector

06

CHAPARRAL STEEL (USA) ACQUISITION AGREEMENT

Value: US$ 4.22 billion (US$ 86.00 per share)

Description of the asset: Chaparral is the second largest manufacturer of structural

steel in North America as well as being a leading producer of steel bars. It operates

two mini mills in Midlothian, Texas, and Dinwiddie County, Virginia

Installed capacity: 2.5 million tonnes of crude steel and 2.4 million tonnes of rolled

products

Synergies: more than US$ 55 million (before tax) up to the end of 2008

Form of payment: cash, following approval of Chaparral’s shareholders and other

procedures inherent to concluding the business, as well as regulatory authority.

Financial Structuring: Gerdau Ameristeel will issue shares to ensure a prudent level of

capitalization and a solid balance sheet. It will also take on a term loan. Gerdau S.A.

will subscribe its part of the equity offering by using its cash position combined with a

long-term bond offer.

Gerdau – 2nd quarter highlights

07

� Strategic alliance with INCA, a rolling mill in the Dominican Republic.

� Acquisition of the assets of Valley Placers through the Pacific Coast Steel

joint venture. Valley Placers is a company specialized in the delivery and

assembly of steel products, located in Las Vegas, Nevada.

� Acquisition of SIZUCA – Siderúrgica Zuliana, a mini mill headquartered in

Ciudad Ojeda, Venezuela.

� Joint venture with the Kalyani Group of India for operating a steel plant in

Tadipatri in the south of the state of Andhra Pradesh.

� Gerdau Ameristeel signed new labor contracts with the United Steelworkers

at five of its units. The new contracts are effective for three to five years.

� Gerdau is rated investment grade by Standard & Poor’s.

08

Gerdau – 2nd quarter highlights

INVESTMENTS - (US$ million) 2Q07 1Q07 1H07

Brazil 213.6 269.7 483.3 Abroad 113.6 112.2 225.8 North America 30.7 54.0 84.7

Latin America 77.7 23.2 100.9

Europe 5.2 35.0 40.2

TOTAL IN FIXED ASSETS 327.2 381.9 709.1 Acquisitions North America 10.0 - 10.0

Latin America 134.5 259.0 393.5

TOTAL IN ACQUISITIONS 144.5 259.0 403.5 TOTAL 471.7 640.9 1,112.6

Investments – 2nd Quarter

� Investments in fixed assets amounted to US$ 327 million in 2Q07.

- Increased installed capacity at the Ouro Branco Mill. New blast furnace is expected to be

commissioned in October.

- Expansion in the capacity of the melt shop at the Jacksonville unit – Florida, USA (May/07)

- Improvements for increasing productivity at various units in Brazil and overseas

� Three acquisitions in the steel-making category were concluded in the 2nd quarter at a

total investment of US$ 145 million.

09

Investment Plan 2007-2009

10

Actual

Capacity

2007 2008 2009 New

Capacity

Variation

Crude Steel 20,110 1,500 1,055 420 23,085 14.8%

Rolled Products 17,520 30 400 1,390 19,340 10.4%

1,400 1,100 1,500 4,000

TOTAL - In thousand tonnes

TOTAL - In US$ million

� Of the amount to be invested over the next three years, about 40% will be allocated to

maintenance and operational improvements (replacement of depreciation) and the remaining 60%

for expanding installed capacity.

� The main features of the investment plan for the next three years are:

� Gerdau Açominas – enhancement of installed capacity and improvements in several areas of

the mill;

� Electric energy – Caçu and Barra dos Coqueiros hydroelectric power complex in the southeast

region of the state of Goiás;

� Technological modernization and improvements (depreciation of US$ 500 million/year).

� In Mexico, investments in progress will result in more installed capacity from 2008.

� Investments in Colombia and in Peru will increase steel and rolled products output over the next

two years.

Gerdau – The Big Picture

11

GROSS SALES REVENUE: R$ 7.8 billion ���� + 4% compared to 1st quarter/2007

(46% Brazil / 54% Abroad)

EBITDA: R$ 1.4 billion ���� + 4% against 1st quarter/2007

(50% Brazil / 50% Abroad)

NET PROFIT: R$ 856 million ���� slight fall (1.5%) compared with

1st quarter/2007 (50% Brazil / 50% Abroad)

SALES: 4.1 million tonnes ���� in line with 1st quarter/2007 sales

(40% Brazil / 60% Abroad)

EXPORTS: 655.5 thousand tonnes ���� 7% lower in relation to exports for the 1st

quarter/2007

Gerdau Performance – 2nd QuarterBrazil

SHIPMENTSIn thousands of tonnes

1,6301,475 1,504

1,673

2Q06 3Q06 4Q06 1Q07 2Q07

1,591

MARGINS

42.5%

34.0%35.3%

26.2%

20%

25%

30%

35%

40%

45%

2Q06 3Q06 4Q06 1Q07 2Q07

12

Gross Margin

EBITDA Margin

Exports

Domestic Market

19.6% 19.5%

16.6%17.8%

8%

12%

16%

20%

24%

2Q06 3Q06 4Q06 1Q07 2Q07

Gro ss M argin EB IT D A M argin

Gerdau Performance – 2nd QuarterNorth America

* Brazilian GAAP

MARGINS*

1,7591,8491,714

1,507

SHIPMENTSIn thousands of tonnes

2Q06 3Q06 4Q06 1Q07 2Q07

1,933

13

Gerdau Performance – 2nd QuarterLatin America

MARGINS*

602

348

438 426

SHIPMENTSIn thousands of tonnes

2Q06 3Q06 4Q06 1Q07 2Q07

456

23.9%

27.4%

17.8%

22.0%

10%

15%

20%

25%

30%

2Q06 3Q06 4Q06 1Q07 2Q07

Gro ss M argin EB IT D A M argin

* Brazilian GAAP

14

22.4%

25.6%

18.9%17.3%

10%

15%

20%

25%

30%

2Q06 3Q06 4Q06 1Q07 2Q07

Gro ss M argin EB IT D A M argin

Gerdau Performance – 2nd QuarterEurope

SHIPMENTSIn thousands of tonnes

108

76

54

69

MARGINS*

2Q06 3Q06 4Q06 1Q07 2Q07

113

* Brazilian GAAP

15

1H07

2Q06 3Q06 4Q06 1Q07 2Q07

Gerdau Performance - Consolidated

MARGINS

4,099

3,748 3,710 3,675

SHIPMENTSIn thousand tonnes

In million R$ 1Q072Q07 2Q06 1H06

4,093

26.1%28.9%

21.3%24.0%

10%

15%

20%

25%

30%

2Q06 3Q06 4Q06 1Q07 2Q07

Gross Margin EBITDA Margin

16

GROSS SALES REVENUE 7,820 7,507 6,864 15,327 13,481

Net sales revenue 6,714 6,487 5,901 13,201 11,515

Gross Profit 1,753 1,640 1,705 3,393 3,184

SG&A (585) (528) (530) (1,114) (1,092)

Net Financial Result 195 213 (18) 409 356

Other Operating Results 9 6 23 15 84

Equity pick-up (225) (184) 12 (410) (185)

Operating Profit 1,147 1,146 1,192 2,294 2,347

Non-operating Result (4) (2) 15 (6) 26

Provision for income tax (284) (271) (225) (555) (554)

Other (3) (4) (6) (8) (11)

Net profit 856 869 976 1,725 1,808

In R$ In US$GROSS DEBT 8,654 100% 8,675

SHORT TERM 1,943 22% 1,677

Domestic Currency 828 9% 536

Foreign Currency 492 6% 490

Companies Abroad 623 7% 651

LONG TERM 6,711 78% 6,998

Domestic Currency 1,988 23% 2,014

Foreign Currency 3,265 38% 3,638

Companies Abroad 1,458 17% 1,346

CASH & CASH EQUIV. 4,954 100% 5,238

Domestic Currency 2,550 51% 3,084

Foreign Currency 2,404 49% 2,154

NET DEBT 3,700 3,437

Indebtedness

Mar.07Em million R$

COST OF DEBT (per annum)

AVER. DEBT MATURITY : 8 years 1 month

Brazil – Domestic cur.

Brazil – Foreign cur.

Companies Abroad

10.1%

FX + 6.6%

-

22.2%

6.6%

8.0%

Jun.07

RATIOS

Gross Debt/EBITDA* 1.6x

Net Debt/EBITDA* 0.7x

Net debt/Net Capitalization 21.0%

* Last twelve months

17

Contact: (51) 3323 2703

inform@gerdau.com.br

www.gerdau.com.br

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.

Disclaimer