Brazil 2003
CEO Conference
UBS Warburg
Rio de Janeiro
April, 2003
Highlights
 102 years of tradition focused on the production of steel in mini-mills and in the
distribution of steel products.
 Installed capacity of 14 million metric tons of crude steel.
 19th largest world steel producer according to Metal Bulletin.
 Largest long steel producer in the Americas.
 Gerdau S.A. is listed on the BOVESPA, on the NYSE and on the Latibex (Madrid).
Gerdau Ameristeel Corp. is listed on the Toronto Stock Exchange.
 10 units in Brazil, 12 abroad and 2 strategic shareholdings
(Sipar - Rolling mill in Argentina and Gallatin - flat steel in the USA).
 67 sales points in Brazil (Comercial Gerdau).
 17 downstream operations and special sections (5 in Brazil e 12 in North America).
 24 fabrication shops (9 in Brazil and 15 in North America).
 4 service centers for flat steel in Brazil (Comercial Gerdau).
02
Capital Structure
Met. Gerdau S.A.
50%
Gerdau S.A.
96%
100%
Seiva
79%
Açominas
Gerdau Internacional
100%
Aza
100%
Laisa
38%
Sipar
Gerdau Ameristeel Corp. 67%
100%
Courtice
100%
MRM
Gallatin
50%
100% AmeriSteel
03
Results
2002
Brazil
North
America
South
America
Consolidated
000 tons
Crude Steel Output
5.999
3.130
312
9.441
Rolled Products Output
3.660
2.951
341
6.952
1.485,3
994,3
113,3
2.593,0
Ebitda
474,0
98,3
31,1
603,4
Net Income
192,3
29,7
9,5
231,5
Gross Margin
40,1%
11,1%
31,3%
28,6%
Ebitda Margin
31,9%
9,9%
27,5%
23,3%
Net Margin
12,9%
3,0%
8,4%
8,9%
US$ million
Net Sales
04
Indebtedness
GERDAU S.A. - CONSOLIDATED
US$ million
TOTAL DEBT
Partic.
Dec.02
100%
2,028.7
SHORT TERM
Domestic currency
Foreign currency
Companies abroad
52%
1,049.4
136.1
464.0
449.4
LONG TERM
Domestic currency
Foreign currency
Companies abroad
48%
CASH & EQUIVALENTS
Domestic currency
Foreign currency
Companies abroad
-
NET DEBT
-
979.2
310.2
254.1
414.9
404.9
141.3
263.6
TOTAL DEBT
Foreign currency
Dometic currency
Abroad
100%
35%
22%
43%
EXPOSURE
Foreign currency debt
718.1
Swap operations
Cash & equiv. in US$
TOTAL HEDGE
580.0
263.6
843.6
HEDGE / EXPOSURE
1,2X
COST OF DEBT
Brazil - in R$
Brazil - in US$ + FX rate
Abroad
4.5%
6.8%
5.4%
1,623.7
05
North America
Gerdau AmeriSteel Corp.
 Oct/02: merged Gerdau x Co-Steel

2nd
largest long steel producer in
North America
MRM Special
Section
Cambridge, ON
(Courtice)
 10 steel mills
 15 fabrication shops
Whitby, ON
 12 downstream operations and
special sections
Perth Amboy, NJ
Sayreville, NJ
 13 scrap recycling operations
 1 joint venture (Gallatin Steel)
Gallatin County, KY (1)
HO
Charlotte, NC
Whitby, ON
Cartersville, GA
 Consolidation / Synergies
Outlook
 Steel industry restructuring
Jacksonville, FL
Jackson, TN
Knoxville, TN
 Steel imports declining
(1) Joint Venture - 50%
 Cost of inputs x Price increases
 War in Iraq
 U.S. economy slowly recovering from 2001 recession
 GDP growth: USA +2,2%, Canada +2,8% (source: IMF)
06
South America
Outlook
 Steel plants in Chile and Uruguay
Rolling mill in Argentina
 Positive outlook for the Chilean operations
 Moderate recovery in Argentina
AZA
LAISA
 Slow recovery in Uruguay
 GDP growth*
Chile
+ 3,1%
Argentina + 3,0%
Uruguay
– 2,2%
* Source: IMF
SIPAR (1)
(1) Joint Venture - 38%
07
Brazil
Outlook
 Economy recovering: GDP +2,8%
(source: IMF)
 Positive startup of the new
Cearense
Açonorte
government administration
Usiba
 Civil construction and agriculture
Barão de Cocais
Divinópolis
Açominas
incentives – impact in the 2nd half of
2003
 Social securities and tax reform
 Cost of inputs X Price increases
Cosigua
Guaíra
Riograndense
Piratini
Gerdau S.A.
Açominas
 Specialty steel sector – positive outlook
 Açominas back in full speed mode
08
Açominas
Outlook
 Integrated steel mill with 3 million
GOV.VALADARES
tons per year of liquid steel capacity
USIMINAS
ACESITA
BELO HORIZONTE
 Gross sales of US$ 450 million in
2002 of which 54% from exports
MG
OURO PRETO
CONGONHAS
ES
CST
VITÓRIA
OURO BRANCO
AÇOMINAS
CONS.LAFAIETE
 Infrastructure to increase capacity
up to 10 million tons per year of
liquid steel
SP
CSN
JUIZ DE FORA
RJ
 Products: billets, slabs and blooms
Wide flange beams, rebars and
profiles
SÃO PAULO
RIO DE JANEIRO
ATLANTIC OCEAN
COSIPA
 Nov/03: new wire rod rolling mill
09
www.gerdau.com.br
[email protected]