Gerdau S.A.

1
Gerdau S.A.
Annual Citigroup Asia Pacific Fixed Income
Investor Conference
January 2006
2
Disclaimer
Statements relative to business perspectives are
based on current expectations of future events
and trends that may affect our business. These
estimates 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.
3
Agenda

• Gerdau Group Overview
• Steel Industry Overview
• Gerdaus Operating and Financial Highlights

All data presented in US Dollar and in metric
tons, except when indicated
4
Philosophy
VISION
TO BE A WORLD-CLASSINTERNATIONAL STEEL COMPANY
MISSION
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
5
Investment Considerations

• A low cost international steel company with
  operations in Brazil, Uruguay, Canada, Chile,
  Argentina, Colombia and the United States
• Substantial international profile foreign
  exchange generation through divisions abroad and
  export sales amount approximately 63 of
  consolidated revenues in 9M05
• Ranked 12th globally by steel output in 2004 with
  an output of 13.4m tons (includes one joint
  venture)
• 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 29 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 (Net Debt/EBITDA 0.6x at
  Sep05) and strong cash generation
• Shares of Gerdau S.A. are currently traded at the
  São Paulo, New York and Madrid exchanges

6
An International Company
Total Capacity (Includes Joint Ventures)
16.8
million tons of crude steel
13.9
million tons of rolled steel products
Brazil
Abroad
7.6
9.2
million tons of
million tons of
crude steel
crude steel
4.8
9.1
million tons of
million tons of
rolled steel products
rolled steel products
Gerdaus installed capacity will reach some 21
million tons of crude steel per year post
completion of the Brazilian investment program in
2007
(29)
Steel mills
(21)
Downstream operations
(49)
Fab shops
Comercial Gerdau stores and Service centers
(75)
Scrap collection and processing units
(24)
(2)
Solid pig iron production units
(3)
Iron ore extraction areas
Private port terminals
(2)
(1)
Joint venture
7
Solid Track Record
In thousand tons
THE NEW MILLENNIUM
16,830

• Expansion abroad reverse takeover of Co-Steel
  and acquisition of North Star Mills
• Acquisition of stake in Açominas controller
  since 2002
• Strategic alliance in Colombia
• Expansion into SBQ - Spain

Potter Form Gate City RJ North
Star(USA) SACK(Chile) DIACO(Colombia)
14,450
CartersvilleDrawingCo-Steel (USA)
7,696
Ameristeel (USA) AZANew Plant(Chile)
TOTAL INVESTED ABROAD (1981-2004) North America
US 1.3 billion Debt South America US 314
million Debt
CartersvilleMillOrrvileDrawing (USA)
SIPSA(Argentina)
4,595
3,934
3,072
Manitoba (Canada)
SIPAR(Arg.)
AZA(Chile)
1,757
Cambridge(Canada)
Laisa - 1980(Uruguay)
8
Value Builder CompanyATKearney
Revenue Growth
30
Gerdau
Outokumpu
Acerinox
25
China Steel
Baoshan1)
Usinas
INI Steel
Nucor
Salzgitter
20
Ipsco
Rautaruukki
Tata
US Steel
15
Voest-Alpine
Smorgon
Industry average
10
Boehler-Uddeholm
Arcelor
SSAB
Corus
Ispat
JFE
5
SAIL
Harsco
Thyssenkrupp
Dofasco
CSN
Nippon Steel
Onesteel1)
Kobe
0
Wuhan Steel1)
Kennametal
RIVA1)
Carpenter
-5
Iscor
AK Steel
Stelco
Nisshin Steel
Haynes
Posco
Allegheny
Eregli Demir
-10
-35
-25
-15
-5
5
15
25
35
45
Industry average
Value Growth
Note 1) RIVA 98 02, Wuhan Steel Onesteel 00
03, Baoshan 01 03 Source ThyssenKrupp (segment),
Kobe (segment), RIVA, Haynes EBIT Growth
9
Agenda
Gerdau Group Overview Steel Industry
Overview Gerdaus Operating and Financial
Highlights
10
World Steel Supply and Demand
Finished Steel
15.3 over 2005
In million tons
18.6 over 2005
1,153
1,000
1,117
According to a WSD forecast for 2010, 97 of the
worlds production will be consumed.
942
830
698
690
632
772
641
655
603
1985
1990
1995
2000
2005F
2010F
Source IISI / World Steel Dynamics
11
Brazil and the Global Steel Industry
Crude Steel Production 2004
In million tons
In million tons
Total World Production 1,057 million tons China
accounted 25.7 of the global steel
production Brazil accounted 3.1 of the global
steel production
Italy
India
Brazil
China
Ukraine
USA
Japan
Russia
Germany
South Korea
Source IISI
12
Among the Leaders
Crude Steel Output 2004
In million tons
Mittal Steel (NET) 1
58.9

Arcelor (LUX) 2
46.9
32.4
Nippon Steel (JAP) 3
JFE Steel (JAP) 4
31.6
Posco (KOR) 5
30.2
Shangai Baosteel (CHI) 6
21.4
20.8
US Steel (USA) 7
Corus Group (U.K.) 8
19.0
Nucor (USA) 9
17.9
ThyssenKrupp (GER) 10
17.6
Riva Group (ITA) 11
16.7
Gerdau Group (BRA) 12
13.4
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.
Sumitomo (JAP) 13
13.0
Includes ISG acquired by Mittal Steel in 2004.
Source IISI
13
Solid Market Share in Long Steel
NORTH AMERICA
BRAZIL
Other29
Imports18
Gerdau 48
Barra Mansa5
Commercial Metals7
Other12
Nucor27
Gerdau Ameristeel19
Belgo35
MARKET SHARE
MAIN COMPETITORS
COUNTRY
CHILE
53
CAP Imports
URUGUAY
90
Imports
ARGENTINA
20
Acindar Bragado Zapla
COLOMBIA
37
Acerias Paz Del Rio
14
Agenda
Gerdau Group Overview Steel Industry
Overview Gerdaus Operating and Financial
Highlights
15
Shipments
US GAAP - In thousand tons
BY REGION
12,906
11,873
11,453
531
438
348
8,928
6,856
309
5,874
6,577
4,466
4,724
339
2,841
311
2,311
2,830
2,353
3,263
2,954
1,904
790
541
3,874
3,881
3,376
3,547
3,416
3,372
2000
2002
2003
2001
2004
2005
South America
Brazil Domestic Market
North America
Brazil Exports
9M05 Annualized
16
Strong Hard Currency Generation
NET SALES - US GAAP
In US millions
Currency Breakdown 9M05
Exports and Companies Abroad63
Brazil 37
Historical Geographical Distribution
6,952
6,602
4,531
319
4,977
248
South America
168
3,010
North America
122
2,963
2,161
1,811
Brazil - Exports
1,250
950
521
752
Brazil Domestic Market
1,896
2,441
2,077
2,373
17
Strong Export BusinessShipments by Region
2004US 1.1 billion2.7 million tons
Europe11
Asia34
9M2005US 949.7 million2.1 million tons
Africa8
South America17
Central America 15
Africa8
Europe 11
North America15
Central America12
North America4
Asia44
South America 21
18
Costs and Prices
Net Sales Revenue and Cost of Sales In US/ton
Brazil (BR GAAP)
Group (US GAAP)
755
747
718
733
707
680
692
682
673
674
625
568
546
507
498
493
490
476
447
403
387
501
496
504
483
342
449
425
443
444
402
374
414
371
364
338
316
339
309
314
293
295
304
263
1Q03
2Q03
3Q03
3Q04
4Q03
1Q04
2Q04
4Q04
1Q05
2Q05
3Q05
2Q05
4Q03
3Q03
2Q04
3Q04
4Q04
1Q05
1Q04
2Q03
1Q03
3Q05
Net Sales
Cost of sales
Net Sales Revenue
Cost of Sales
South America (BR GAAP)
North America (US GAAP)
820
723
731
717
699
729
637
637
689
685
674
586
655
630
549
5650
502
579
509
633
510
510
425
606
487
583
558
407
397
557
516
374
422
494
418
417
461
367
351
392
331
376
368
288
4Q04
3Q05
1Q03
2Q03
3Q03
3Q04
4Q03
1Q04
2Q04
1Q05
2Q05
4Q04
3Q05
2Q05
1Q03
2Q03
3Q03
3Q04
4Q03
1Q04
2Q04
1Q05
Net Sales
Cost of Sales
Cost of Sales
Net Sales Revenue
All data in BR GAAP converted by R 2.2222/US
19
Capital Expenditures
Capital Expenditures
INVESTMENTS - 9M2005
In US millions
BRAZIL 410.4
ABROAD 248.2
North America 114.4
South Amerca 133.8
TOTAL 658.6
Investment Program 2005 2007 US 3.2 billion
EVOLUTION OF INSTALLED CAPACITY
In thousand tons
Rolled Steel
Crude Steel
28
19
21,450
15,490
12,970
16,380
11
9,730
8,880
8
8,240
8,800
11,720
55
40
6,610
7,580
4,730
2004
2007
2004
2007
20
Consolidated Financials
US GAAP
In US millions
2002
2003
2004
9M05


Income Statement Net revenue Gross
profit Operating income Income before taxes Net
income
4,531 1,085 696 526 510
3,265 915 563 229 232
6,952 2,113 1,628 1,722 1,158
6,602 1,760 1,307 1,482 925
Free Cash Flow EBITDA (-) Net interest
expenses (-) Capex (including acquisitions) (-)
Taxes (-) Dividends Free cash flow
1,501 47 297 411 301 446
1,869 83 772 407 276 331
760 116 464 7 74 99
880 157 343 (34) 122 292


21
Consolidated Financials
US GAAP
In US millions
2002
2003
September/05
2004
Balance Sheet Current assets Non-current
assets Fixed assets Total Current
liabilities Non-current liabilities Minority
interest Shareholders equity Total Total
debt Cash and cash equivalents Net debt
1,524 2,476 2,085 4,000 1,588 1,239 309 864 4,0
00 2,100 423 1,667
1,760 3,011 2,304 4,771 1,459 1,644 265 1,403 4
,771 2,086 331 1,755
3,323 3,529 2,790 6,852 1,712 1,975 642 2,523 6
,852 2,298 659 1,639
4,946 4,311 3,525 9,257 1,610 3,059 934 3,654 9
,257 3,190 2,080 1,110


Ratios Gross margin EBITDA margin Total debt /
EBITDA Net debt / EBITDA EBITDA / Interest Net
debt / Shareholders equity Net debt / Total
capitalization Short term debt / Total debt
24 19 2.4x 2.0x 5.6x 125 56 38
27 23 1.6x 0.6x 30.6x 30 23 17
30 27 1.2x 0.9x 22.5x 65 39 29
28 23 2.8x 2.2x 6.6x 194 66 53


22
Consolidated Debt Profile
US GAAP In US millions
Sep./05
GROSS DEBT
3,190
100
DEBT STRUCTURE
SHORT TERM
543
17
Domestic Currency
76

2
Foreign Currency
402


13
Companies Abroad24
65
2
Companies Abroad


Foreign Currency52
LONG TERM
2,648

83
Domestic Currency
701

22
Domestic Currency24
Foreign Currency
1,239

39
Companies Abroad
708

22
2,080
CASH CASH AND EQUIV.
100
Domestic Currency

61
1,825
Foreign Currency
255

39
NET DEBT

1,110
Includes exchange and monetary variation in the
last 9 months
23
Consolidated Debt Amortization
US GAAP
Debentures 328.7 Bonds GNA 398.9 Securitization
24.4 Perpetual589
In US millions September/05
Securitization 38.1 BNDES 60.8 Debentures GNA
93.3 Imports 107.6 Pre-Export 22
1,527
Securitization 40.9 BNDES 65 Imports
61.6 Pre-Export 112
Securitization 8
Securitization18
Securitization 41
Securitization 9
Securitization 44
NOTES a) US 328.7 million equivalent of local
bonds maturing from 2011 to 2020 b) US 398.9
million GNA bonds maturing in July/2011 c) US
589.0 million Perpetual Bonds with no final
maturity date
24
Gerdau S.A.
www.gerdau.com.br inform_at_gerdau.com.br 55 51
3323 2703