1. 1 Gerdau S.A. May 2006 Global Metals, Mining & Steel Conference

2. 2 Agenda Steel Sector Gerdau Group Operating and Financial Highlights

3. 3 The North American crude steel output for 1Q2006 was 32.1 million metric tons, an increase of 2.0% compared to the previous quarter. Steel Sector – 1 st Quarter 2006 Total output in Brazil reached 7.2 million metric tons in the 1st quarter of 2006, a decrease of 9.8% compared to 4Q2005. In the 1Q2006, the long steel production (including blooms and billets) remained in the same level’s of the last period, reaching 2,7 million metric tons. Domestic sales of long steel products (including blooms and billets) in 1Q2006 reached 1.7 million metric tons, an increase of 9.1% compared to the quarter before. Exports of long steel products (including ingots, blooms and billets) totaled 1.0 million metric tons in the 1Q2006, compared to 894 thousand metric tons in 4Q2005. Source: IBS and IISI World The world’s steel output reached 284.5 million metric tons in the 1 st quarter, a decrease of 1.15% compared to that of the forth quarter of 2005. Brazil North America South America The South American crude steel output for the 1Q06 was 10.6 million metric tons. Brazil is the largest producer, with 67.5% of the total output, followed by Argentina, with 12.8% of the total output in the region.

4. 4 Crude Steel Production – 1Q06 China USA Japan Russia South Korea Germany Ukraine Brazil India Italy Source: IISI Brazil and the Global Steel Industry In million tons Total World Production: 285.2 million tons China accounted for 32.3% of the global steel output Brazil accounted for 2.5% of the global steel output

5. 5 Agenda Steel Sector Gerdau Group Operating and Financial Highlights

6. 6 VISION MISSION TO BE A WORLD-CLASS INTERNATIONAL STEEL COMPANY 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 Philosophy

7. 7 A low cost international steel company with operations in Brazil, Uruguay, Canada, Chile, Argentina, Colombia, Spain and the United States Substantial international profile – foreign exchange generation through subsidiaries abroad and export sales amount approximately 60% of consolidated revenues in the 1Q06 Ranked 14 th globally by steel output in 2005 with an output of 13.7MM tons (including strategic shareholdings) 2 nd 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 30 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 (Gross Debt-to-EBITDA at approximately 1.7x in 1Q06) and strong cash generation Shares of Gerdau S.A. are currently traded at the São Paulo, New York and Madrid stock exchanges Shares of Metalúrgica Gerdau S.A. are traded at the São Paulo stock exchange Gerdau Ameristeel’s shares are traded at the New York and Toronto stock exchanges Investment Considerations

8. 8 Value Builder Company ATKearney Value Growth Revenue Growth Industry average Industry average Stelco Haynes AK Steel Smorgon Carpenter Salzgitter Onesteel 1) Boehler-Uddeholm INI Steel Ipsco Allegheny Rautaruukki Usinas Ispat Kennametal SSAB Voest-Alpine Harsco Nisshin Steel Eregli Demir Wuhan Steel 1) Kobe Dofasco Iscor Tata RIVA 1) SAIL Outokumpu Corus Gerdau CSN US Steel Acerinox Nucor Thyssenkrupp China Steel Arcelor Baoshan 1) Posco JFE Nippon Steel -10% -5% 0% 5% 10% 15% 20% 25% 30% -35%-25%-15%-5%5%15%25%35%45% Note:1) RIVA 98 02, Wuhan Steel & Onesteel 00 03, Baoshan 01 03 Source:ThyssenKrupp (segment), Kobe (segment), RIVA, Haynes: EBIT Growth Growth portfolio (CAGR 1999-2003) benchmarked against industry average

9. 9 Laisa - 1980 (Uruguay) Piratini (Brazil) AZA (Chile) Ameristeel (USA) AZA New Plant (Chile) Additional stake in Açominas (Brazil) Potter Form Gate City & RJ North Star (USA) SACK (Chile) Cambridge (Canada) Usiba (Brazil) Manitoba (Canada) Controll of Açominas (Brazil) Cartersville Drawing Co-Steel (USA) 1,757 3,072 3,934 4,595 7,696 11,076 16,372 Abroad – Crude Steel Installed Capacity TOTAL INVESTED (1981-2005): Brazil = US$ 4.0 billion + Debt North America = US$ 1.4 billion + Debt South America = US$ 468 million + Debt In thousand tons Solid Track Record Brazil – Crude Steel Installed Capacity Diaco (Col.) 16,475 Barão de Cocais (Brazil) 2,611 Stake in Açominas (Brazil) 4,568 18,658 Araçariguama (Brazil) Sidenor (Spain)

10. 10 Brazil 9 million tons of crude steel 5.5 million tons of rolled steel products Abroad 9.7 million tons of crude steel 9.3 million tons of rolled steel products Total Capacity (Includes Strategic Shareholdings) 18.7 million tons of crude steel 14.9 million tons of rolled steel products 11 mills 11 fabrication shops 6 downstream operations and special sections 74 sales points and flat steel service centers 19 mills 38 fabrication shops 15 downstream operations and special sections An International Company Steel mills 12 Strategic Shareholding

11. 11 BRAZIL Gerdau 48% Belgo 35% Barra Mansa 5% Other 7% NORTH AMERICA Nucor 21,8 % Gerdau Ameristeel 14,8% Commercial Metals 5,6% Mittal 6,8% Other 41,9% COUNTRY MARKET SHAREMAIN COMPETITORS Solid Market Share in Long Steel Aços Villares 5% CHILE URUGUAY ARGENTINA 51% 20% 90% CAP + Imports Acindar + Bragado + Zapla Imports COLOMBIA37%Acerias Paz Del Rio SPAIN36%*GSB * Specialty steel only

12. 12 Agenda Steel Sector Gerdau Group Operating and Financial Highlights

13. 13 Shipments In thousand tons 3,374 7,411 9,109 12,560 12,144 13,550 Billets, blooms & slabs Merchant bars Rebars Fabricated steel Heavy structural shapes Wire-rod Wires Nails 3,691 Brazil – Domestic Market (27% in 1Q06) Brazil – Exports (17% in 1Q06) South America (9% in 1Q06) North America (45% in 1Q06) Europe (2% in 1Q06)

14. 14 Strong Export Business Asia 22% Central America 12% South America 25% North America 16% Africa 13% EXPORT SHIPMENTS BY REGION Europe 12% 1Q06 NET REVENUE BREAKDOWN BY REGION Brazil (Domestic Market) 35% Exports (from Brazil) 9% North America 44% South America 9% Europe 3%

15. 15 Margin Evolution Gross Margin Net MarginEBITDA Margin Brazil North America South America Consolidated

16. 16 Consolidated Financials In US$ millions 1Q05 4Q05 Income Statement Net revenue Gross profit Operating income Net income EBITDA 1Q06 2,187 605 439 304 531 2,088 551 375 312 443 2,584 681 532 383 538 Balance Sheet Current assets Non-current assets Fixed assets Total Current liabilities Non-current liabilities Shareholders’ equity Total 3,725 409 3,075 7,209 1,742 2,307 3,160 7,209 5,182 377 3,788 9,347 1,790 3,225 4,332 9,347 5,684 503 4,432 10,619 1,976 3,628 5,015 10,619 Ratios Gross margin EBITDA margin Total debt / EBITDA Net debt / EBITDA 27.6% 24.3% 1.1x 0.7x 26.4% 21.2% 1.6x 0.4x 26.3% 20.8% 1.7x 0.5x

17. 17 Indebtedness Mar. 06 In US$ million In US$ COST OF DEBT IN MAR. 06 (per annum) DEBT AVERAGE LIFE 8.8 years Brazil – Domestic Currency Brazil – Foreign Currency Companies Abroad 14.2%* 7.3% 7.8% DEBT STRUCTURE Domestic Currency 25% Foreign Currency 46% Companies Abroad 29% *Includes (7.19%) of 2006 FX

18. 18 2006 – US$ 1.7 billion 2007 – US$ 1.4 billion 2008 – US$ 0.7 billion NEW CAPACITY US$ 2.0 billion MAINTENANCE US$ 1.8 billion BrazilUS$ 674 MM North AmericaUS$ 977 MM South AmericaUS$ 129 MM Expansion Program 2006 - 2008 + 14% 2006 2008 10,073 8,585 10,675 10,685 18,658 21,360 + 24% + 6% INSTALLED CAPACITY EVOLUTION 2006 2008 9,610 5,260 6,585 14,870 17,471 + 25% + 13% + 17% Brazil Abroad Brazil Abroad Crude Steel Rolled Products In thousand tons 10,886 Investment Program 2006 – 2008: US$ 3.8 billion

19. 19 Dividends Policy 30% of the adjusted net income (Pay-out) Dividend payments are being made on a quarterly basis In US$ million DIVIDEND YIELD 1999200020012002200320042005 GOAU46.0%7.9%17.0%11.3%6.2%7.8%6.1% GGBR43.6%6.1%6.8% 3.9%6.1%4.6% DIVIDENDS DISTRIBUTION* Metalúrgica Gerdau S.A. (GOAU4) Gerdau S.A. (GGBR4) * Dividends related to each period, but not necessarily paid in the same period.

20. 20 Outlook Brazil Greater economic growth in 2006 – around 3.5% Growing volumes – Domestic market from 8 to 10% Strengthening of the civil construction sector Price stability in Brazilian currency Inventories adjusted North America Consistent economic growth Greater investments in infrastructure Production costs stability Prices rising Growing metallic spread South America Consolidated economic growth Strengthening of the civil construction sector Demand is strong Europe Consolidation of the specialty steel operations at Sidenor

21. 21 Safe Harbor Statement This presentation can contain statements which constitute forward-looking statements. Such forward-looking statements are dependent on estimates, data or methods that may be incorrect or imprecise and that may be incapable of being realized. These estimates also 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. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The Company does not undertake, and specifically disclaims any obligation to update any forward-looking statements, which speak only as of the date made.

22. 22 www.gerdau.com.br inform@gerdau.com.br +55 51 3323 2703 Gerdau S.A.