1

Conference Call – 3rd Quarter 2008GERDAU S.A. CONSOLIDATED

André Gerdau JohannpeterPresident and CEO

Osvaldo B. SchirmerCFO and IR Director

November 5th, 2008

2

SHIPMENTS

3Q 2008: 5.1 million tonnes ���� +21.3% compared to 3Q 2007

REVENUES

3Q 2008: R$ 13.9 billion ���� +61.3% compared to 3Q 2007

EBITDA

3Q 2008: R$ 3.8 billion ���� +153,7% compared to 3Q 2007

NET INCOME

3Q 2008: R$ 1.4 billion ���� + 37.2% compared to 3Q 2007

INVESTMENTS (Acquisitions and Capex)

US$ 477 million

Gerdau – Highlights3rd Quarter

3

Steel Market3rd Quarter

Source: World Steel Association, Steel Business Brief ing

WORLD STEEL PRODUCTION

� Growth of 2.4%, reaching 340 million tonnes compare d to 3Q 07

� China: stable production growth levels

PRICES / COSTS

� Prices kept following the upward trend in raw mater ials and other costs

OUTLOOK

� 2008 should prove to be a year of growth for the st eel industry as a whole,

despite the uncertainty about the effects of the wo rld economic crisis.

�4th Quarter should present reduction on raw materia ls and steel prices

4

�Apparent consumption in 3rd Quarter still very robu st, based specially on civil

construction, but also capital goods and automotive

�Shipments for the Brazilian operations up 30% compa red to last year

INVESTMENTS

�Capex: US$ 212 million

OUTLOOK

�Brazilian economy with sustainable growth in the ye ar 2008

�Steel demand in Brazilian domestic markets stable i n the near term

Gerdau – Performance 3Q08 vs. 3Q07Brazil

Source: IBS (Instituto Brasileiro de Siderurgia)

5

North America

� Robust 3rd Quarter: record quarterly EBITDA

� Shipments: growth of 17% compared to 3Q07

� Well capitalized and diversified business

� 40% of scrap consumption is now internally sourced

INVESTMENTS

� Capex: US$ 47 million

OUTLOOK

� Continuous monitoring of the economy

� Steel demand affected by market and seasonality in 4th Quarter

� Scrap and steel products price reduction, but sprea ds above historical averages

Gerdau – Performance 3Q08 vs. 3Q07

6

Latin America (excluding Brazil)

�3rd quarter: sound financial results (higher spot c oke prices – business acquired in

Colombia)

INVESTMENTS

� Capex: US$ 45 million

OUTLOOK

�Seasonal reduction on demand in 4th Quarter

�Focus on infrastructure investments on majority of countries

�Monitoring effects of the financial crisis on the d ifferent economies

Gerdau – Performance 3Q08 vs. 3Q07

7

Specialty Steel

� Brazil: strong quarter - automobile production up by 16%

� Shipments up 51% compared to 3rd Q 2007

INVESTMENTS

� Capex: US$ 61 million

OUTLOOK

� Brazil: stable automobile and equipment/machinery s egments.

� Europe and US: diversification of customer base (en ergy, heavy machinery)

Gerdau – Performance 3Q08 vs. 3Q07

8

Summary

� Strong quarter

� Focus on:

� Cost efficiency

� Synergies

� Best practices

� Alignment with market demand/customer base

� Investment Program: reassessing priorities and sche dules

9

1,51

4

3,84

1

1,61

5

1,98

5

2,74

7

3Q07 4Q07 1Q08 2Q08 3Q08

Gerdau – Consolidated Financials

EBITDAIn millions of R$

In millions of R$ 3Q08 3Q07

MARGINS

(149)37Other operating income (expenses)

1,0351,420NET INCOME

(210)(434)Provision for income tax

57 (1,553)Net financial results

2795Equity in earnings of unconsolidated companies

1,1613,312Operating profit

(606)(815)Sales, General and Administrative Expenses

1,9164,090Gross profit

7,66512,444NET SALES

23.6% 23.8%26.8%

22.2%24.7%

25.0%

32.9%

19.8%

30.9%

20.0%

3Q07 4Q07 1Q08 2Q08 3Q08

GROSS Margin EBITDA Margin

10

Exchange Rate Effects

ASSETS

US$ 4.7 billion

LIABILITIES

US$ 2.8

billion

Gain: directly to equity (IFRS)

3Q08: R$ 1.1 BILLION NEGATIVE FX VARIATION ON INCOME STATEMENT (R$ 700 AFTER TAX)

BALANCES IN BRAZILIAN SUBSIDIARIES DENOMINATED IN FOREIGN CURRENCY:

NET ASSET POSITION: US$ 1.9 billion

Loss: income statement (IFRS)

EXCHANGE RATER$ / US$

20 %

� Effect is non-cash

� Not related to derivatives

� Tax-deductible

3Q08: R$ 1.8 BILLION

POSITIVE FX

VARIATION ON EQUITY

3Q08: R$ 1.1 ECONOMIC GAIN (AFTER TAX)

1.59

1.91

Q208 Q308

11

Gerdau - Performance 3rd QuarterBrazil 1

Note1: Does not include specialty steel operations

NET SALES (R$ Million) & GROSS MARGIN (%)

EBITDA (R$ Million) &

EBITDA MARGIN (%)

736 1,

208

821

629

1,91

7

24.2%

41.1%

33.8%

28.2%27.7%

3Q07 4Q07 1Q08 2Q08 3Q08

4,66

2

2,59

9

2,90

6

3,57

6

2,65

3

36.0%

45.8%

36.4%33.0%

39.9%

3Q07 4Q07 1Q08 2Q08 3Q08

12

Gerdau - Performance 3rd quarterNorth America 1

Note1: Does not include Mexico and MacSteel

Note2: Information above does not include data from asso ciated companies and joint ventures

NET SALES 2 (R$ Million)

& GROSS MARGIN (%)

EBITDA (R$ Million) &

EBITDA MARGIN (%)

2,67

8 3,50

9

4,17

0

3,09

9 4,14

4

17.0% 17.2%18.4%

20.1%22.4%

3Q07 4Q07 1Q08 2Q08 3Q08

535

875

683

402

990

15.0%

23.9%

21.0%19.4%

17.3%

3Q07 4Q07 1Q08 2Q08 3Q08

13

897 1,11

3

950

890

1,44

7

20.1%

30.2%26.6%

19.1%

13.9%

3Q07 4Q07 1Q08 2Q08 3Q08

Gerdau - Performance 3rd quarterLatin America 1

Note1: Does not include Brazil

Note2: Information above does not include data from asso ciated companies and joint ventures

NET SALES 2 (R$ Million) & GROSS MARGIN (%)

EBITDA (R$ Million) & EBITDA MARGIN (%)

112

289

156

155

403

17.4%

27.9%25.9%

16.4%

12.5%

3Q07 4Q07 1Q08 2Q08 3Q08

14

Gerdau - Performance 3rd quarterSpecialty Steel

NET SALES (R$ Million)

& GROSS MARGIN (%)

EBITDA (R$ Million)

& EBITDA MARGIN (%)

1,49

8

1,57

9 2,24

1

1,42

5 2,19

0

19.6%22.0%

18.7%

26.9%

23.1%

3Q07 4Q07 1Q08 2Q08 3Q08

232

375

325

328

531

16.7%

20.6%

16.3%

21.9%24.2%

3Q07 4Q07 1Q08 2Q08 3Q08

15

Indebtedness

Set. 08In millions of R$

Dec. 07DEBT/EBITDA

LTM EBITDA: Last 12 months EBITDADebt Average Term: 7 years and 3 months

GROSS DEBT/TOTAL CAPITALIZATIONDEBT MATURITY

* Data in IFRS. Others in BRGAAP.

Local currency 3,422 3,718

Foreign currency 6,012 4,862

Companies abroad 9,578 7,323

GROSS DEBT 19,012 15,903

Financial Investments 5,640 5,139

NET DEBT 13,372 10,764

15

10.813.4

1.3 x

1.7x 1.9x

2.5x

Dec.07 Sep.08

Net Debt Net Debt/EBITDALTM

Gross Debt/EBITDALTM

4,421 4,855 7,61314,188

21,0717,168 6,263

6,3777,651

9,878

16,64224,242

10,141

15,90319,01216,483

44%

62%56%

46% 43% 41%49%

44%

2002 2003 2004 2005 2006* 2007* Jun/08* Set/08*

ShareHolders Equity Gross Debt Gross Debt/Total Capitalization

0.40.90.50.82.6

4th Q3rd Q2nd Q1st Q2009PeriodDebt

2.6

1.92.1

3.8 3.9

5.0

1.1

2008 2009 2010 2011 2012 2013 After

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Liquidity�Strong cash position

�Access to credit lines

5,640 Subtotal Cash

1,198 Other

770 Cash North America

3,672 Cash Brazil

R$ Million

11,615Total Estimated Liquidity

3.393Subtotal Best Efforts

5.975Subtotal Credit Lines

249Other

1.884Latin America

302Pre-Export

957ACC

2.582Subtotal Committed

1.816North America (Committed)

766Senior Liquidity Facility (Committed)

R$ Million

17

Dividends

Dividends – 3 rd quarter 2008

�Payment: November 26 th, 2008

�Base date: record at close of business on November 14 th (ex-

dividends on November 17 th).

�Metalúrgica Gerdau S.A. will pay R$ 105.7 million (R$ 0.26 per

share)

�Gerdau S.A. will pay R$ 255.7 million (R$ 0.18 per sh are)

18

Holding Discount

-1331(-) Metalúrgica’s liabilities (debentures exchangeable)

680(+) Santa Felicidade’s interest in Gerdau (2.23%)

-8.5%Metalúrgica Discount regarding Gerdau

12,316 Market Cap Metalúrgica Gerdau

13,464 (=) Theorical market cap of Metalúrgica

861(+) Interest in Aços Villares (28.88%)

157(+) Other investments

13,097Metalúrgica´s interest in Gerdau(42.93%)

30,508Market Cap Gerdau S.A.

R$ millionBase September 30th, 2008:

DISCOUNT BETWEEN THE MARKET VALUE OF METALÚRGIGA G ERDAU S.A. AND THE MARKET VALUE OF ITS INTEREST IN GERDAU S.A.

Quarterly Discount

8.5%

16.5%

12.8%

15.5%

20.0%

16.9%

21.1%

22.5%

24.0%

24.3%

25.1%

23.8%

Dec

-05

Mar-06

Jun-0

6

Sep

-06

Dec

-06

Mar-07

Jun-0

7

Sep

-07

Dec

-07

Mar-08

Jun-0

8

Sep

-08

19

Contact information: +55 (51) 3323 2703inform@gerdau.com.br

www.gerdau.com.br/ing

This presentation may contain forward-looking state ments. These forward-looking

statements rely upon estimates, information or meth ods that may be incorrect or inaccurate

and may not actually occur. These estimates are als o subject to risks, uncertainties and

assumptions, including, among others: general econo mic, political and commercial

conditions in Brazil and in the markets where we op erate and existing and future government

regulations. Potential investors are hereby informe d that these estimates do not constitute a

guarantee of future performance as they involve ris ks and uncertainties. The Company does

not undertake, and specifically denies, any obligat ion to update any estimate, which only

speak as of the date they are made.

Statement