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Gerdau S.A. Third Annual Natural Resources Conference JP Morgan São Paulo February, 2003.

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Presentation on theme: "Gerdau S.A. Third Annual Natural Resources Conference JP Morgan São Paulo February, 2003."— Presentation transcript:

1 Gerdau S.A. Third Annual Natural Resources Conference JP Morgan São Paulo February, 2003

2 Steel Sector

3 Crude Steel Output 2002 Source: IISI 1,000 tons 03

4 Largest Crude Steel Producers IISI * OUTPUT OF GERDAU BASED ON 100% OF AÇOMINAS + CO-STEEL + SOUTH AMERICA 2001 OUTPUT Gerdau is the largest long steel producer in the Americas Source: IISI e Gerdau Million tons 04 1Arcelor43.1 2Posco27.8 3Nippon Steel26.2 4Ispat19.2 5Shanghai19.1 6Corus18.1 7Thyssen Krupp16.2

5 Brazilian Output CRUDE STEEL 2002 Source: IBS 1,000 tons 05

6 Gerdau S.A.

7 102 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. 15th largest world steel producer according to the IISI ranking. Largest long steel producer in the Americas. Gerdau S.A. is listed on the Brazilian Stock Exchanges, on the NYSE and on the Latibex (Madrid Stock Exchange). 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). 72 sales points in Brazil (Comercial Gerdau). 17 downstream operations and special sections (4 in Brazil e 13 in North America). 25 fabrication shops (9 in Brazil and 16 in North America). 4 service centers for flat steel in Brazil (Comercial Gerdau). Highlights 07

8 Met. Gerdau S.A. Gerdau S.A. Seiva Gerdau Internacional Açominas Sipar Laisa Aza 50% 79%100%96% 67% 38% 100% Courtice MRM AmeriSteel Gallatin Gerdau Ameristeel Corp. 100% 50% Capital Structure 08

9 Barão de Cocais BRAZIL 7.2 MILLION TONS OF CRUDE STEEL PER YEAR 4.7 MILLION TONS OF ROLLED PRODUCTS PER YEAR ABROAD 7.0 MILLION TONS OF CRUDE STEEL PER YEAR 6.8 MILLION TONS OF ROLLED PRODUCTS PER YEAR SIPAR LAISA GERDAU AMERISTEEL GERDAU S.A. AÇOMINAS AZA Geographical Distribution Gerdau S.A. Açominas Cearense Açonorte Usiba Cosigua Açominas Guaíra Piratini Riograndense Divinópolis 09

10 Billets, rebars, merchant bars, profiles, wire-rod, drawn products, nails, specialty steel. Billets, slabs, blooms, rebars, merchant bars, profiles and structurals. Rebars, merchant bars, profiles and wire-rod Products Rebars, merchant bars, profiles, wire-rod, downstream products, special sections and flat products. Crude Steel Rolled Products Capacity & Products ,000 tons 10

11 Output Evolution Objectives Strategies Evolution Main Events Gerdau Ameristeel Corp. Challenges and Forecasts Growth Average Rate CRUDE STEEL 10.4% year ROLLED PRODUCTS 9.6% year Aza Chile 1992 Part. Sipar Argentina 1998 MRM Canada 1995 Part. Açominas 1997 AmeriSteel USA 1999 Crude Steel Rolled Products Cearense Guaíra 1982 Laisa Uruguay 1981 Hime 1985 Barão de Cocais 1988 Courtice Canada 1989 Usiba 1989 Piratini 1992 Pains 1994 Sipsa Argentina * Açominas (control) 2002 Co-Steel * 100% of Co-Steel 11

12 Business Breakdown 2002 CRUDE STEEL OUTPUT BRAZIL 64% NORTH AMERICA 33% SOUTH AMERICA 3% 100% ROLLED PRODUCTS OUTPUT BRAZIL 46% NORTH AMERICA 49% SOUTH AMERICA 5% 100% NET REVENUE BRAZIL57% NORTH AMERICA38% SOUTH AMERICA 5% 100% EBITDA BRAZIL79% NORTH AMERICA16% SOUTH AMERICA 5% 100% NET INCOME BRAZIL 83% NORTH AMERICA 13% SOUTH AMERICA 4% 100% 12

13 Results 2002 BRAZIL NORTH AMERICA SOUTH AMERICA CONSOLIDATEDUS$ million 13

14 Results - North America CURRENT BASIS 14

15 Gerdau Ameristeel Corp. Corporate Law X Pro forma figures Gerdau S.A. Consolidated figures Oct 23 – Dec 31, 2002 Gerdau Ameristeel Pro forma figures Oct 1 – Dec 31, 2002 Net Sales: US$ 302 million Net Sales: US$ 391 million 22 days more in October Net Income: US$ 3,8 million Net Income: US$ 8,4 million Gerdau Consolidated 3,8 Adjustments 4,6 EBITDA: US$ 17 million EBITDA: US$ 39,6 million Gerdau Consolidated 17,0 Adjustments 4,6 Non-recurring pretax cash gains 6,1 Equity pick up over Dofasco JV 4,5 Depreciation 7,4 15

16 Indebtedness GERDAU S.A. - CONSOLIDATED US$ million 16

17 Outlook 2003 Economic growth in Brazil U.S. economy slowly recovering from 2001 recession Steel imports declining Slow recovery in Argentina Positive outlook for the Chilean operations New federal administration in Brazil Cost of inputs 17

18 Capital Markets STOCK PERFORMANCE 600% 400% 200% 0% -200% +42% -18% -14% +45% -26% -36% +573% +1% +11% 1 YEAR3 YEARS5 YEARS GERDAUDOW JONESIBOVESPA Source: EconomáticaDate: 01/30/2003 Appreciation Chart 18

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