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JP MORGAN 2002 Latin America Equity Conference November 4-5, 2002 Gerdau.

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Presentation on theme: "JP MORGAN 2002 Latin America Equity Conference November 4-5, 2002 Gerdau."— Presentation transcript:

1 JP MORGAN 2002 Latin America Equity Conference November 4-5, 2002 Gerdau

2 GERDAU S.A. - CONSOLIDATED Açominas Gerdau Ameristeel Corporate Governance Capital Markets * All tonnage expressed in metric tons

3 R$ million FINANCIAL STATEMENTS 03

4 Brazil North America South America R$ million 4Q011Q022Q023Q02 Net Revenue 1,300 1,659 1,978 2,958 Ebitda 4Q011Q022Q023Q02 R$ million Gross Margin 4Q011Q022Q023Q02 42% 34% 13% Ebitda Margin 4Q011Q022Q023Q02 34% 28% 11% 04

5 INDEBTEDNESS R$ million HEDGE 05

6 DEBT BREAKDOWN Short term R$ 4.0 BILLION Long term R$ 3.1 BILLION Companies abroad R$ 2,162 mm Other - R$ 34 mm BNDES – R$ 91 mm Bank loan – R$ 149 mm Import loan – R$ 281 mm Pre-export /ACC – R$ 411 mm Açominas (US$) R$ 842 mm Companies abroad R$ 1,093 mm Debentures R$ 534 mm Eurobonds R$ 289 mm BNDES R$ 286 mm Açominas (R$) - R$ 223 mm Bank loan - R$ 186 mm Import loan - R$ 172 mm Açominas (R$) - R$ 156 mm Pre-export - R$ 114 mm Other - R$ 85 mm 06

7 RATIOS * Last 12 months 07

8 Crude Steel Output 1,000 tons 4Q01 1Q022Q023Q02 1, , , , ,049 2,2271,940 2,334 Rolled Products Output 1,000 tons 4Q01 1Q022Q023Q ,4421,481 1,5911,666 South America North America Brazil 4Q01 1Q022Q023Q02 Sales 1,000 tons 1, , , , ,963 2,124 1,9822,312 South America North America Brazil 08

9 Gerdau S.A. - Consolidated AÇOMINAS Gerdau Ameristeel Corporate Governance Capital Markets 09

10 EVOLUTION OF STAKE IN AÇOMINAS 37%54% 79% 17% ECONÔMICO US$ 180mm 25% NATSTEEL US$ 212mm Stake before Brazilian Central Bank Auction Natsteel buyoutBrazilian Central Bank Auction SEP.00 DEC.01 SEP.02 10

11 FINANCIAL STATEMENTS R$ million 11

12 OUTPUT & SHIPMENTS Output Revamping of blast furnace of Açominas 2Q02 3Q02 1Q024Q01 2Q023Q021Q024Q Domestic market Exports Shipments 3Q2002 (1,000 tons) Crude steel 651 Rolled products 69 1,000 tons 12

13 Gerdau S.A. - Consolidated Açominas GERDAU AMERISTEEL Corporate Governance Capital Markets

14 SYNERGIES Minority shareholders retain a 33% interest in Gerdau Ameristeel and Gerdau S.A. owns 67% of the new company. With 11 mill locations, Gerdau Ameristeel is geographically positioned to service long product costumers and is integrated with 29 downstream steel fabricating and specialty product business, increasing profit margins and reducing the volatility of earnings. Listed in the Toronto Stock Exchange under the ticker symbol GNA. Gerdau AmeriSteel is the 3 rd largest steel producer and the 2 nd largest long steel producer in North America. Estimate of US$ 23 million in near-term cost savings. The Board is comprised of a majority of outside, independent directors: 8 from Co-Steel, including 7 independent directors and 5 Gerdau directors. CO-STEEL + GERDAU NORTH AMERICA = GERDAU AMERISTEEL 14

15 * Jointventure 50% owned. INSTALLED CAPACITY & OUTPUT UTILIZATION – 9 MONTHS 2002: 77% 15

16 PRODUCT MIX Co-Steel Gerdau North America Gerdau AmeriSteel Wire Rod 29% Flat Rolled 28% Bars 21% Rebars 18% Other 4% Wire Rod 2% Special Sections 8% Fab Shops 24% Rebars 32% Bars 34% Fab Shops 14% Flat Rolled 14% Wire Rod 15% Special Sections 4% Bars 28% Rebars 25% 16

17 RESULTS – PRO FORMA 17

18 Gerdau S.A. - Consolidated Açominas Gerdau Ameristeel CORPORATE GOVERNANCE Capital Markets

19 Increase managerial capacity Objectives Meet demand resulting from increased competitiveness in the international market. Ensure the succession process to avoid the loss of accumulated knowledge. CORPORATE STRUCTURE Increase transparency for shareholders and capital market. 19

20 CORPORATE GOVERNANCE Processes Board Executive Commitee Business Operations Clients Estrategy Commitee Excellence Commitee 20

21 BOARD General Business Orientation Jorge Gerdau Johannpeter Germano Gerdau Johannpeter Klaus Gerdau Johannpeter Frederico Gerdau Johannpeter Carlos Petry Affonso Celso Pastore Oscar Bernardes Expedito Luz André Lara Resende Chairman of the Board Vice President Board Member Secretary Board Member 21

22 EXECUTIVE COMMITEE JORGE GERDAU JOHANNPETER – Strategic planning Group & Operations – Public & community relations FREDERICO GERDAU JOHANNPETER – Support and guidance to accounting & auditing – Holding – Legal – Gerdau Forestry. CARLOS JOÃO PETRY – Personnel – Logistics & Freight - Supplies ANDRÉ JOHANNPETER – North America – Global Information Systems CLÁUDIO JOHANNPETER – Long Steel Brazil – Specialty steels - Industrial OSVALDO SCHIRMER – Finance – Investor Relations – Argentina, Chile and Uruguay – Banco Gerdau PAULO VASCONCELLOS – Açominas – Marketing & Sales – Management of quality and technology – Metallic Input EXPEDITO LUZ – Secretary 22

23 Gerdau S.A. - Consolidated Açominas Gerdau Ameristeel Corporate Governance CAPITAL MARKETS

24 COMPARATIVE DATA BRAZIL 24

25 COMPARATIVE DATA NORTH AMERICA 25

26 COMPARATIVE DATA OTHER 26

27 DIVIDEND 1st half 2002MET. GERDAU S.A. GERDAU S.A. Dividends R$ 36.0 million R$ 79.9 million Net income R$ million R$ million METALÚRGICA GERDAU S.A. DividendsNet income GERDAU S.A. The payout in the 1 st half is an advancement of the full year´s dividend. The 2 nd half dividend completes the minimum dividend payout as stated in the by-laws of the Company

28 LIQUIDITY – GERDAU SHARES Trading volume NYSE Bovespa US$ million LTM

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