Apresentao do PowerPoint

1
Brazil VisitsBANCO PACTUAL
Rio de Janeiro, February 18th, 2004
2
(No Transcript)
3
World Production Crude Steel
In million tons
In 2003, the world produced945.1 million
tonsof steel. Brazil contributed with 3.3 of
this tonnage.
03
Sources IISI and MEPS
4
Largest Producers Crude Steel 2002
Production
In million tons
04
Source IISI
5
North America
End-use demand is improving for all long steel
products, although cost pressures remain the
dominant influence on prices everywhere December
shipments were up by 10 YoY. While one month of
positive data is not enough to confirm that an
upward trend in demand has set in, Decembers
growth marks a significant turnaround after one
year of uninterrupted contraction.
05
Source MEPS/Metal Bulletin
6
Brazilian Steel Sector 2003
CRUDE STEEL PRODUCERS IN BRAZIL
In thousand tons
TOTAL 2003 31,150 thousand tons
LONG STEEL PRODUCERS IN BRAZIL
TOTAL 2003 7,855 thousand tons
Source IBS
06
7
Exports of Long Steel Products 9M2003 Brazil
In million tons
Domestic SalesSep.2003/2001- 11
Monthly Average 517.2 thousand tons
Monthly Average 528.2 thousand tons
Monthly Average 461.5 thousand tons
700
600
500
Exports Sep.2003/2001 85
400
300
Monthly Average 156.3 thousand tons
Monthly Average 99.2 thousand tons
Monthly Average 84.4 thousand tons
200
100
2001
2002
2003
Exports of long steel products reached 2.2
million tons in 2003, an increase of 78 YoY.
Source IBS
07
8
Brazilian Steel Sector Competitiveness
EBITDA MARGIN - 2002
35
In
40
35
30
25
20
15
10
5
Brazil
Asia
Japan
EU
North America
Others (World)
Does not include Japan

• Despite increases in the prices of main inputs,
  Brazil has the highest operating margin in the
  world.
• The mills operate with up-to-date technology due
  to a permanent investment program.

Source IBS
08
9
Investments in the Brazilian Steel Sector
INVESTMENT SCHEDULE
In US million
INSTALLED CAPACITY X PRODUCTION X APPARENT
CONSUMPTION
Source IBS
09
10
Steel SectorGerdau S.A. Consolidated Stock
Market
11
Main Products
MERCHANTS AND STRUCTURALS
BILLETS
REBARS
FABRICATED STEEL
11
12
Installed Capacity
In thousand tons
CRUDE STEEL
ROLLED PRODUCTS
Billets, slabs, blooms, merchant bars, rebars,
wire rod, drawn products, welded wire meshes,
structurals, nails, downstream products,
fabricated steel products and specialty steel.
Gerdau Açominas 7,374 4,811
South 510 634 America North 6,567 6,187 America
TOTAL 14,451 11,632
Billets, merchant bars, rebars and wire rod.
Billets, merchant bars, rebars, wire rod, drawn
products, welded meshes, nails, downstream
products and fabricated steel products.
12
13
Output Evolution
AVERAGE GROWTH RATE 1980 - 2003 Crude Steel 10.2
per year Rolled Products 9.2 per year
Co-Steel 2002
Part. Açominas 1997
Usiba1989
Piratini1992
AmeriSteel USA 1999
12.3 million
Pains1994
Sipsa Argentina1997
Barão de Cocais1988
CearenseGuaíra1982
9.0 million
Part. Sipar Argentina 1998
MRM Canada 1995
Hime1985
Aza Chile 1992
Courtice Canada 1989
Laisa Uruguay 1981
Açominas (control) 2002
1980
1984
1996
1992
1988
2000
2003

• 14th largest world steel producer according to
  the IISI.
• Largest long steel producer in the Americas.

13
14
Geographical Distribution

• NORTH AMERICA
• 10 mills and 1 strategic shareholding (Gallatin
  Steel)
• 14 fabrication shops
• 12 downstream operations and special sections

• BRAZIL
• 10 mills
• 11 fabrication shops
• 6 downstream operations and special sections
• 73 sales points (Comercial Gerdau).
• 5 service centers for flat steel (Comercial
  Gerdau).

• SOUTH AMERICA
• 2 mills and 1 strategic shareholding (Sipar)
• 3 fabrication shops

14
15
Competitive Edge

• Focus on long steel products manufacturing and
  distribution
• Market mill approach
• Up-to-date technology
• Competitive production costs
• Diversified production processes
• Multiple raw materials sourcing
• Vertical and horizontal integration
• Relevant market share in every country in which
  the Company has operations
• Financial soundness and access to international
  capital markets
• Confirmed experience in turning around distressed
  operations

15
16
Results
In R million
16
17
Main Variations
NET SALES
The great performance of exports in the period as
well as the incorporation of the new North
American units in October 2002 and the recovery
of full productive capacity of Gerdau Açominas
allowed for the 45.9 increase in net sales
revenues.
COST OF GOODS SOLD
The increase of 54.1 YoY was due to the price
increases in the main inputs of Gerdau such as
scrap and pig iron in Brazil, and scrap, energy
and natural gas in North America.
17
18
Main Variations
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Operating expenses (SGA) increased by 21
resulting mainly from the greater costs involved
in exporting (port services and freight) and the
increase in Gerdau Ameristeel's expenses.
PROVISION FOR INCOME TAX AND SOCIAL CONTRIBUTION
As a consequence of the integration of the
operating assets of Gerdau S. A. into Gerdau
Açominas, the latter was able to create a
positive income tax and social contribution
provision, in the year , of R 140.9 million
based on the recognition of R 333.7 million in
tax credits resulting from fiscal losses.
18
19
Results by Region 2003
19
20
Sales Track Record
In 1,000 tons
3,156
TOTAL SHIPMENTS
3,123
2,889
2,976
99
109
101
107
South America
1,295
1,290
North America
1,284
1,271
Brazil (exports)
869
892
657
793
Brazil (domestic sales)
850
875
854
798
1Q03
2Q03
3Q03
4Q03
TOTAL SHIPMENTS IN 2003 12,144 thousand tons
(32.7)
20
21
Exports
DESTINATION OF EXPORTS 2002
DESTINATION OF EXPORTS 2003

• EXPORTS IN 2003 3.2 MILLION TONS (69.9)
• Export revenues US 787.3 (125)
• Strong demand in the international markets
• Very attractive prices
• Average price increase of 30.9

21
22
Output
CRUDE STEEL
In 1,000 tons
3,123
3,166
3,085
2,968
94
83
85
85
1,250
1,321
1,254
1,195
TOTAL 2003 12,343 thousand tons (30.7)
1,790
1,679
1,688
1,818
ROLLED PRODUCTS
In 1,000 tons
2,366
2,299
2,246
2,135
107
90
90
92
1,241
1,197
1,216
1,122
TOTAL 2003 9,045 thousand tons (30.5)
921
1,018
1,012
940
22
23
Indebtedness
In R million
Considers the average SELIC interest rate in
2003 (23 p.y.). For 2004 the estimated rate is
15 p.y.
23
24
Investments 2003
NEW WIRE-ROD MILL Installed capacity 550
thousand tons/year Total investment US 66 mm
TOTAL IN 2003 US 295 MM FORECAST FOR 2004 US
300 MM
24
25
Operational Integration

• Combination of strengths of both companies
  greater competitiveness
• Project developed in partnership between Gerdau
  and CEA (partner-contributor)
• Headquarters in Ouro Branco - MG

NEW CORPORATE GOVERNANCE
25
26
Outlook

• Demand picking up in Brazil
• Declining trend in interest rates in Brazil
• Brazils economic and political stability results
  in an improved country risk
• International prices trend stable to upward
• North American operations pursuing better
  results
• US economy recovering
• South American operations in very good shape and
  improving.

26
27
Steel SectorGerdau S.A. Consolidated Stock
Market
28
Shareholders Structure
28
29
Dividend Policy

• Payout of 30 of the Adjusted Net Income.
• Since March 2003, dividend payments are being
  made on a quarterly basis.

TOTAL AMOUNT PAID IN 2003 WAS R 172.1 MILLION.
TOTAL AMOUNT PAID IN 2003 WAS R 351.3 MILLION.
29
Higher amount due to a one-time supplementary
dividend payment.
30
Stock Price Performance
BRAZIL (São Paulo Stock Exchange)
GGBR4 152 - GOAU4 161
GGB 195
Source Economática/Bloomberg
30
GNA 149
31
Appreciation Chart Returns in US
BRAZIL (Bovespa)
31
Source Economática December 31st, 2003
32
www.gerdau.com.br inform_at_gerdau.com.br
www.gerdau.com.br inform_at_gerdau.com.br