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11
February 2008
Investor Presentation Investor Presentation
22
� Among the most competitive steel companies in the world
• Strong low cost structure as a result of diversified production processes and multiple raw material sourcing
� An international company
• Large export revenues from Brazil
• Operations in 13 countries
� Ranked 14th globally by steel output for year 2006 with an output of 15.6 million tonnes (source: International Iron and Steel Institute - IISI)
� Largest long steel producer in the Americas
• 2nd largest long steel producer in North America
• 51 steel units with state of the art technology (including Joint Ventures and Associated Companies)
� Relevant market share and diversified product range through downstream and service centers
� Strong balance sheet and strong cash generation
� Gerdau S.A. shares are listed on the São Paulo, New York and Madrid Stock Exchanges
Highlights
33
Industry Overview
Group Overview
Operating and Financial Highlights
Agenda
All data presented in US Dollar and in metric tons, except when indicated
44
728 725 750 750799 777 789
848 850904
970
1.0691.139
1.230
1.322
90 93 95 101 109 115 124 127 151182
222280
356423
489
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Mundo China
China Growth
1993 to 1999 = 5.5% p.a.
China
Accel
erated
Grow
th
2000 to 2
007 =
21.2%
p.a.
Crude Steel Production
Source: IISI
In million tonnes
Growth rate in the last 10 years: + 65%
� China: + 349% World
Growth
2000 t
o 2007
= 6.5
% p.a.
World Growth
1993 to 1999 = 1.4% p.a.
55
315333
94 106146
298
28 42
66102
2002 2003 2004 2005 2006 2007e
N A F T A B razil C hina India Wo rld
2006 2007e 2008e
Demand
1,1131,179
1,251
e: estimated Source: IISI
5.9%6.1%
FINISHED STEEL APPARENT DEMANDIn million tonnes
FINISHED STEEL APPARENT PER CAPITA DEMAND (kg)
The world steel demand should increase 4.2% p.a. from 2010 up to 2015.
STEEL USE PER CAPITA GROWTH (2002 – 2007)
NAFTA: +5.7%
China: +104.1%
Brazil: +12.8%
World: +54.5%
India: +50.0%
66
489
12097
7253 51 49 43 34 32 26 21
235
37%
46%
53%59%
63%67%
70%74%
76%79% 81% 82%
100%
Production Accumulated Participation
Crude Steel Production – 2007
Source: IISI
Ranking
In million tonnes
UkraineChina USAJapan Russia Germany Brazil ItalySouth Korea
Global Production: 1,322 MMt
� China: 37% of global production
� Brazil: 3% of global production
Others
9th Largest
Producer
India Turkey Taiwan
77
Industry Overview
Group Overview
Operating and Financial Highlights
Agenda
All data presented in US Dollar and in metric tons, except when indicated
88
100+ Years in Business
1900 1940´s 1950´s 1960´s 1970´s 1980´s 1990´s 2000
1901 - First Operation:Nail Factory
1948 - 1st Steel Mill Acquisition (Riograndense)
Expansion of Riograndense Mill (Construction of 2nd
steel mill)
Distribution channel arrangements (today: more
than 70 sales points)Market Share increase by:
Diversification / Verticalization
Distribution channelNew acquisition
(Pernambuco, Brazil)
Acquisition of a new steel mill (Paraná,
Brazil)Construction of a new mill (Rio de Janeiro, Brazil)Entering in the Reforestation business
Acquisition of 3 mills (Rio de Janeiro, Minas Gerais and
Bahia, Brazil)Construction of 2 mills
(Paraná and Ceará, Brazil)International expansion (Uruguay and Canada)
New Acquisitions:Piratini (Rio Grande do Sul, Brazil) –specialty steel
Second mill in Minas Gerais and rolling mill in São Paulo
(Brazil)Stake in Açominas
International expansion ( Chile, Canada, Argentina
and USA)
New Acquisitions:Downstream mills and fab shops, Chaparral and Quanex in North
AmericaEntering European and Asian marketExpansion in Latam
marketConstruction of steel mill in São Paulo (Brazil)
99
19 9 7 19 9 8 19 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 10 e
Installed Capacity ExpansionCorsa
(Mexico)MacSteel(USA)
Sidertul(Mexico)INCA
(Dom. Rep.)Sizuca
(Venezuela)SJK
(India)Chaparral(USA)
1980 – Laisa(Uruguay)1988 – Barão de Cocais(Brazil)1989 – Usiba (Brazil)Cambridge (Canada)1992 – Piratini (Brazil)AZA (Chile)1994 – Pains (Brazil)Manitoba (Canada)Stake in Açominas(Brazil)
Ameristeel(USA)AZA
New mill(Chile)
Additionalstake in Açominas(Brazil)
North Star(USA)
Control ofAçominas(Brazil)Co-Steel(USA)
7,696 11,076
16,372
Diaco(Colombia)
16,8574,556
19,870São Paulo(Brazil)
Sidenor (Spain)
Sheffield (USA)
Siderperú(Peru)
GSB(Spain)
Solid Track Record24,805
TOTAL INVESTED (1997 – 2007):
Brazil = US$ 4.5 billion + Debt
North America = US$ 6.1 billion + Debt
Latin America = US$ 1.3 billion + Debt
Europe = US$ 687 million + Debt
Asia = US$ 71 million + Debt
In thousand tonnes (IFRS)
Abroad – Crude Steel Installed Capacity
Brazil – Crude Steel Installed Capacity
e: estimated
In addition to the mills acquired, as related above, Gerdau acquired many fab shops in order to add value to its products and offer services and products to its clients according to their needs.
CAGR 1997-2007
: 18,5% a.a.
* MacSteel and Corsa operations haven’t been concluded yet.
29,810
1010
Spain
Dominican Republic
Steel Units
Associated Companies
Joint Ventures
BRAZIL
Capacities:
11.4 million tonnes of crude steel
6.8 million tonnes of rolled steel products
Units:
13 Steel Units
12 Fabrication Shops - Armafer
05 Downstream operations and special sections
68 Sales point (Comercial Gerdau)
04 Flat steel service centers
ABROAD
Capacities:
13.4 million tonnes of crude steel
14.2 million tonnes of rolled steel products
Units:
38 Steel Units
52 Fabrication Shops
28 Downstream operations and special sections
07 Associated Companies (Spain and DominicanRepublic)
Canada
United States
Mexico
Venezuela
Colombia
Peru
Chile
Brazil
Argentina
Uruguay
India
Location
1111
LONG STEEL PRODUCTS (Brazil)
� Maintenance of market share
� Improvement of current installed
capacity
SPECIALTY STEEL
� Active role in the steel sector
consolidation process
� Search for new opportunities
AÇOMINAS
� New 1.5 MM tonnes blast furnace
� Growth platform for slabs, blooms
and billets
� Iron Ore Reserves
Growth Opportunities
LATIN AMERICA
� Maintenance of leadership in
the long steel sector
� New markets
NORTH AMERICA
� Efficiency and productivity
gains (Gaps)
� Enhancement of leadership in
the long steel sector through
acquisitions
1212
Outlook
BRAZIL
� High demand in the domestic market in 2008, mainly from the civil construction and
infrastructure segments
� Increase in costs in view of the estimated increases in the price of the iron ore and coke.
The prices of the scrap will not present significant fluctuations
� Adjustments in the domestic prices should balance operating margins. The prices should
continue high in the foreign market
NORTH AMERICA
� Adjustment in prices to offset the increase in costs
� Increase in production costs
� Prospect of solid demand due to the renewal of the infrastructure in the region an low
level of imports
LATIN AMERICA
� Demand should continue to be strong
� Maintenance of investments in infrastructure
� Increase in costs
� Prices may also be adjusted to balance the margins
EUROPE
� Demand for specialty steels should continue to be strong
� Recovery of margins in view of the industrial reorganization
� Increase in costs, mainly electric energy costs
1313
Industry Overview
Group Overview
Operating and Financial Highlights
Agenda
All data presented in US Dollar and in metric tons, except when indicated
1414
1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07
Shipments
Billets, blooms& slabs
Merchant bars
Rebars Fabricated steel
Heavystructural shapes
Wire-rod Wires Nails
Brazil – Domestic Market (28% in 4Q07)
In thousand tonnes (IFRS)
Brazil – Exports (13% in 4Q07)
Latin America (13% in 4Q07)
North America (41% in 4Q07)
Europe (5% in 4Q07)
2007 = 17,159
+15.2
%2006 = 14,890
3,689 3,770 3,7273,703
4,157 4,160 4,204
4,637
1515
32% 30% 34% 38%
11% 10% 8%7% 8%
38% 39% 35% 35% 38%
10% 9% 11% 11% 11%
9% 12% 12% 9% 8%
36%
4Q06 1Q07 2Q07 3Q07 4Q07
Europe
Latin America
North America
Brazil - Exports
Brazil - Domestic Market
Net Sales Breakdown
Net sales from the overseas units plus exports from Brazil, represented 66% of consolidated net sales
Net Sales Breakdown by Region - 2007
Historical Net Sales Geographical Distribution
In US$ millions (IFRS)
Brazil -Domestic Market 34%
North America37%
Europe10%
Latin America11%
Brazil – Exports 8%
Exports from Brazil (t)
Africa 12% Central America
15%
South America 24%
North America13%
Europe 10%
Asia 26%
3,030 3,577 3,915 4,168
13% in tonnes
4,558
1616
357 344 386 457 506151
254 243219
302
8160
111 84
63
5184
89 63
40
4Q06 1Q07 2Q07 3Q07 4Q07
GROSS MARGIN* EBITDA MARGIN*
EBITDA and MarginsEBITDA*In US$ millions
* Data in IFRS
North America
Brazil
Latin AmericaEurope614
742829 823
Consolidated Brazil North America Latin America Europe
8%
10%
26%
56%
33.2%
23.6%
33.3%
17.2%14.9% 13.9%
19.2%
23.8%
17.3%
21.4%
10%
15%
20%
25%
30%
35%
40%
45%
4Q06 1Q07 2Q07 3Q07 4Q07
20.0%
26.4%
20.3%
26.3%
12.5%
17.3%
25.2%
12.5%
18.3%
10.5%10%
15%
20%
25%
30%
35%
4Q06 1Q07 2Q07 3Q07 4Q07
912
1717
4Q07 4Q06 2007 2006
BALANCE SHEETCurrent Assets 8,645 7,055 8,645 7,055
Non-current Assets 14,771 7,754 14,771 7,754
Total Assets 23,416 14,809 23,416 14,809
Current Liabilities 3,719 2,896 3,719 2,896
Non-current Liabilities 10,302 4,990 10,302 4,990
Shareholder's Equity 9,395 6,923 9,395 6,923
Total Liabilities and Shareholder's Equity 23,416 14,809 23,416 14,809
Total Debt 8,978 4,620 8,978 4,620
Cash and Equivalents 2,901 2,984 2,901 2,984
Net Debt 6,077 1,636 6,077 1,636
INCOME STATEMENTNet Sales 4,558 3,030 17,283 12,107
Gross Profit 1,075 722 4,224 3,201
Operating Income 619 559 2,972 2,409
Net Income 537 533 2,433 1,993
EBITDA 921 614 3,528 2,735
EBITDA Margin 20.0% 20.3% 20.4% 22.6%
RATIOSNet Debt / Total Capitalization 38.0% 19.6% 38.0% 19.6%
Total Debt/EBITDA LTM 2.5x 1.7x 2.5x 1.7x
Net Debt / EBITDALTM 1.7x 0.6x 1.7x 0.6x
Consolidated FinancialsIn US$ millions (IFRS)
LTM = Last twelve monthsEBITDA = Earnings before interest, taxes, depreciation and amortization
1818
US$ MM
GROSS DEBT 8,978 100%
SHORT TERM 1,433 16%
Domestic Currency 657 7%
Foreign Currency 280 3%
Companies Abroad 496 6%
LONG TERM 7,545 84%
Domestic Currency 1,443 16%
Foreign Currency 1,451 16%
Companies Abroad 4,651 52%
CASH & CASH AND EQUIV. 2,901 100%
Domestic Currency 1,143 39%
Companies Abroad 1,758 61%
NET DEBT 6,077
DEBT STRUCTURE
Domestic Currency
19%
Foreign Currency 24%
Companies Abroad 57%
DEBT AVERAGE LIFE:6 years and 4 months
December 2007 (IFRS)
Consolidated Debt Profile
7.4%Companies Abroad
FX + 6.0%Foreign Currency
10.2%Domestic Currency
Brazil
COST OF DEBT (p.a.)
1919
BNDES: 323
Companies
Abroad: 145
FINIMP: 219
BNDES: 83
Companies
Abroad: 60
In US$ millions – December/07 (IFRS)
BNDES: 84
Companies
Abroad: 71
Companies
abroad: 232BNDES: 378
BNDES: 289
Debentures: 152
FINIMP: 129
Companies
Abroad: 140
Companies
Abroad:
1,055
SHORT TERM: US$ 1,433 LONG TERM: US$ 7,545
Consolidated Debt AmortizationPerpetual Bond: 600
Companies Abroad: 1,126
Companies
Abroad: 501
BNDES: 143Companies
Abroad: 134
BNDES: 91
Companies
Abroad:
1,685
663
216 227327
751 732866
1,895
1,292
2,009
1Q08 2Q08 3Q08 4Q08 2009 2010 2011 2012 2013 A fter2013
2020
ACTUAL 2007 (IFRS) INVESTMENT PLAN 2008–2010
In US$ millions
CAPEX
In US$ millions
6,3154,7741,541TOTAL
140
165
190
495
1,046
25
466
4,283
4,774
0
631Latin America
165Europe
4,473North America
5,269ABROAD
1,046BRAZIL
2007ACQUISITIONSCAPEX
859301416141Latin America
785264338183North America
2951169981Europe
1,939681853405ABROAD
TOTAL201020092008
4,4351,3751,9551,105BRAZIL
2,0561,510 2,808 6,374TOTAL
Capacity
Dec/2007
2008 2009 2010 New
Capacity*
Variation
Crude Steel 11,435 105 20 1,105 12,665 10.8%
Rolled Products 6,800 100 325 2,195 9,420 38.5%
Crude Steel 9,955 0 0 225 10,180 2.3%
Rolled Products 10,350 0 0 90 10,440 0.9%
Crude Steel 2,265 630 165 955 4,015 77.3%
Rolled Products 2,610 265 225 580 3,680 41.0%
Crude Steel 1,150 0 150 100 1,400 21.7%
Rolled Products 1,220 0 95 0 1,315 7.8%
Crude Steel 24,805 735 335 2,385 28,260 13.9%
Rolled Products 20,980 365 645 2,865 24,855 18.5%
TOTAL
Brazil
North America
Latin America
Europe
*Does not include acquisitions
2121
� BOARD OF DIRECTORS
- External members on the board
- Support Committee (Support and Excellence; Corporate Governance; Strategy
and Compensation and Succession)
� EXECUTIVE COMMITTEE
- Vice-presidents responsible for the Operations and Support Areas
- Support Committee ( Disclosure, Financial, Risk Management and Human
Resources and Orgazational Development)
� FISCAL BOARD (AUDIT COMMITTEE)
- Permanent and in accordance to the SOX (Gerdau S.A.)
Gerdau S.A. shares are included in the following São Paulo Stock Exchange indexes:
� Bovespa Index - Ibovespa
� Corporate Sustainability Index - ISE
� Special Tag Along Stock Index - ITAG
� Brazil Index 50 – IBrX 50
� Industrial Sector Index – INDX
HIGHLIGHTS:
� First Brazilian company to submit its Consolidated Financial Statements in conformity
with international accounting standards (IFRS)
� Tag Along (100% common and preferred shares)
� Bovespa Level 1
� Shares are negociated in Bovespa, Nova York Stock Exchange, Toronto Stock Exchange
and LATIBEX Stock Exchange
� Risk Management
� Gerdau Business System
Governance – Best Practices
2222
Disclaimer
This document 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.
2323
www.gerdau.com.br
inform@gerdau.com.br
+55 51 3323 2703
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