Gerdau (NYSE:GGB) Q4 2025 Earnings call February 24, 2026 10:00 AM ET Company ParticipantsAriana de Cesare Pereira - Investor Relations SpecialistCaio Greiner - Equity Research DirectorCaio Ribeiro - Managing Director and Head of Equity ResearchDaniel Sasson - Head of Latam Steel and Mining, Pulp, and Paper and CementGustavo Werneck - CEORafael Japur - CFORaphael Bastos Bezerra - Pricing Data Scientist IIINone - TranslatorConference Call ParticipantsIgor Guedes - Lead Equity Research AnalystNone - AnalystNo ...

Gerdau (NYSE:GGB) Q4 2025 Earnings call February 24, 2026 10:00 AM ET Company ParticipantsAriana de Cesare Pereira - Investor Relations SpecialistCaio Greiner - Equity Research DirectorCaio Ribeiro - Managing Director and Head of Equity ResearchDaniel Sasson - Head of Latam Steel and Mining, Pulp, and Paper and CementGustavo Werneck - CEORafael Japur - CFORaphael Bastos Bezerra - Pricing Data Scientist IIINone - TranslatorConference Call ParticipantsIgor Guedes - Lead Equity Research AnalystNone - AnalystNo ...

Gerdau (NYSE:GGB) Q4 2025 Earnings call February 24, 2026 10:00 AM ET Speaker0Good morning, and welcome to Gerdau's fourth quarter 2025 results presentation. I am Ariana Pereira, specialist with investor relations, and it's a pleasure for me to be joined by CEO Gustavo Werneck and CFO Rafael Japur. Please note that this call is being simultaneously translated into English, and you can choose your preferred language by clicking on the globe icon at the bottom of the screen. During the presentation, all parti ...

4Q25 Earnings Release February 24th, 2026 DISCLAIMER This document may contain forward-looking statements. These statements are based on estimates, information or methods that may be incorrect or inaccurate and that may not occur. These estimates are also subject to risks, uncertainties, and assumptions that include, among other factors, general economic, political, and commercial conditions in Brazil and in the markets where we operate, as well as existing and future government regulations. Potential inves ...

Group 1: Company Overview - Gerdau (NYSE:GGB) is a Brazilian multinational steel producer that closed at $4.35, up 2.59% on Wednesday [1] - The stock has increased by 1,370% since its IPO in 1999 [1] Group 2: Market Performance - Trading volume for Gerdau reached 63 million shares, which is approximately 286% above its three-month average of 16.3 million shares [1] - The broader U.S. markets finished little changed, with the S&P 500 unchanged at 6,941.5 and the Nasdaq Composite easing 0.16% to 23,066 [2] Group 3: Economic Indicators - The U.S. added 130,000 jobs in January, with unemployment falling to 4.3%, influencing expectations for Federal Reserve rate cuts [3] - A strong economy could lead to higher steel prices, providing a favorable environment for steelmakers like Gerdau in 2026 and beyond [4] - Gerdau's stock is trading near a 52-week high, having increased by 45% over the past six months [4]

Core Viewpoint - Kawa Capital Management has completely liquidated its position in Gerdau S.A., selling 2,094,404 shares for an estimated value of $6.49 million, which significantly reduces its exposure to the company from 11.8% to 0% of its 13F AUM [2][3][4]. Company Overview - Gerdau S.A. is a leading steel producer in the Americas, offering a diverse range of steel products including semi-finished billets, long rolled products, special steels, flat products, and iron ore [9][10]. - The company operates a vertically integrated business model that includes steel production, mining, and distribution, generating revenue from direct sales, distributors, and a retail network across the Americas [9]. - Gerdau serves various sectors such as construction, manufacturing, automotive, agricultural, oil and gas, wind energy, and infrastructure, targeting both industrial clients and resellers [9][10]. Financial Performance - As of January 20, Gerdau's share price was $4.16, reflecting a 47% increase over the past year, significantly outperforming the S&P 500's 14% gain during the same period [4]. - The company reported a market capitalization of $8.60 billion, with a trailing twelve months (TTM) revenue of $13.10 billion and a net income of $564.19 million [5]. Recent Developments - The recent transaction by Kawa Capital represents a 15% change in reported 13F AUM, indicating a strategic shift in portfolio management [7]. - Gerdau has demonstrated strong performance due to pricing discipline, resilient North American demand, and a streamlined cost structure, which has positively impacted its financial results [11]. - The company has maintained steady cash generation and continued capital returns, including dividends and buybacks, even as steel markets have normalized [12].

Core Insights - The article emphasizes the importance of looking beyond U.S. large caps for investment opportunities, particularly in undervalued international stocks [1][3][9] - The Benzinga Value Ranking is introduced as a systematic, numbers-driven tool to identify the cheapest stocks globally based on multiple valuation metrics [2][5] Investment Strategy - Investors are encouraged to focus on the top decile of the Benzinga Value Ranking, specifically targeting non-U.S. stocks to access the cheapest part of the global market [7][9] - The current market environment is characterized by extreme valuation dispersion outside the U.S., with many profitable companies trading at low earnings multiples [4][6] Company Highlights - **POSCO Holdings (NYSE:PKX)**: A leading steel producer in South Korea, trading at discounted multiples despite controlling high-quality assets [11] - **Sasol Ltd. (NYSE:SSL)**: An integrated energy and chemicals company in South Africa, generating substantial cash flow but heavily discounted due to past operational issues [12] - **Korea Electric Power Corp. (NYSE:KEP)**: The backbone of South Korea's power system, facing extreme low valuation multiples due to government pricing controls [13] - **LuxExperience (NYSE:LUXE)**: A niche luxury travel company in the Netherlands, undervalued due to lack of investor attention rather than demand collapse [14] - **Gerdau (NYSE:GGB)**: Brazil's largest long steel producer, trading at low multiples despite consistent cash flow generation [15] - **Honda Motor (NYSE:HMC)**: A global manufacturing leader in Japan, undervalued due to lack of hype around its steady profits and cash flow [16] - **SK Telecom (NYSE:SKM)**: South Korea's largest wireless carrier, undervalued due to low growth expectations despite reliable cash generation [18] - **Jiayin Group (NASDAQ:JFIN)**: A Chinese fintech company facing regulatory uncertainty, leading to extreme valuation discounts [19] - **FinVolution Group (NYSE:FINV)**: Another Chinese fintech platform, similarly undervalued due to regulatory challenges and investor distrust [20] - **KT Corp. (NYSE:KT)**: A leading telecommunications provider in South Korea, generating stable cash flow but facing compressed valuation multiples [21]

Group 1 - The article does not provide any relevant content regarding company or industry insights [1]

Market Overview - Despite markets hovering near all-time highs, there is a shift from exuberance to cautious optimism, influenced by weak U.S. employment numbers and the potential economic impact of a federal government shutdown [1] - The market has not seen a 10% correction in over six months, leading investors to brace for a potential drawdown instead of a year-end rally [2] Value Stocks - Investors sitting on significant unrealized gains may consider reallocating to value stocks to minimize losses and generate income through dividends [2] - Five value stocks with a market cap of $3 billion or higher and a Benzinga Edge Value score of at least 90 are highlighted for portfolio protection in volatile environments [3] Sasol Ltd. - Sasol Ltd. has a Benzinga Edge Value Score of 99.66, with a market cap of $3.94 billion, trading at 10 times earnings, a P/B value of 0.4, and a P/S ratio of 0.27, indicating it is undervalued compared to U.S. and emerging market peers [4] - The stock has shown volatility but has evidence of upward momentum, with key technical levels to watch for a potential breakout [6] Gerdau SA - Gerdau has a Benzinga Edge Value Score of 97.67, with a market cap of $7 billion, trading at 8 times forward earnings, a P/B value of 0.70, and a P/S ratio of 0.37, along with a 3.27% dividend [7] - The stock has been trending higher since a Golden Cross in August, currently over 10% above its 50-day SMA, indicating bullish momentum [9] Ecopetrol SA - Ecopetrol has a Benzinga Edge Value Score of 97.47, with a market cap of $19 billion and annual sales exceeding $30 billion, showing a nearly 20% increase year-to-date [10] - The stock's fundamentals and technical trends are favorable, with a P/E ratio of 6.55 and a P/S ratio of 0.64, and bullish momentum is building [12] Seaboard Corp. - Seaboard has a Benzinga Edge Value Score of 94.03, with a market cap of $3.5 billion and annual sales over $9 billion, trading at 9 times earnings, a P/S ratio of 0.36, and a P/B ratio of 0.71 [13] - Recent signals indicate a revival in bullish momentum, with a significant rally taking the share price above the 50-day SMA [15] Fluor Corp. - Fluor has a Benzinga Edge Value Score of 91.46, with a market cap of $7 billion and annual sales exceeding $16 billion, trading at just 2 times earnings and a P/S ratio of 0.47 [16] - The stock has seen a 15% increase in the last three months, breaking above its 50- and 200-day SMAs, indicating a potential momentum reversal [18]

Financial Data and Key Metrics Changes - The company reported an EBITDA of BRL 2.7 billion for Q3 2025, which is a 7% increase quarter on quarter [6] - Free cash flow generated during the quarter was BRL 1 billion, converting 37% of EBITDA into cash, reversing previous cash consumption trends [7] - The net debt/EBITDA ratio improved to 0.81 times due to cash generation in Q3 [7] - Capital expenditures totaled BRL 1.7 billion, with a 22% reduction in CapEx guidance for 2026 compared to 2025 [8] Business Line Data and Key Metrics Changes - North America segment accounted for 65% of consolidated EBITDA, with over a 10% increase in total shipments compared to previous periods [4][5] - The South American segment showed recovery, which offset declines in Brazil, where the local market was heavily impacted by imported steel [6] Market Data and Key Metrics Changes - In North America, steel demand remains stable with healthy order backlogs, while Brazil's market is affected by over 6 million tons of imported steel, representing 29% of domestic sales [5][10] - The import penetration rate in Brazil continues to be a concern, necessitating protective measures for the local steel industry [5] Company Strategy and Development Direction - The company emphasizes internationalization and geographic diversification as strategic differentiators [5] - The sustainable mining project in Miguel Burnier is nearing completion, with operations expected to start in early 2026 [5] - The company is focusing on internal operating efficiency and cost management initiatives in response to market challenges [11] Management's Comments on Operating Environment and Future Outlook - Management expressed a positive outlook for North American steel demand driven by sectors like solar power and infrastructure, while the Brazilian market outlook remains uncertain [10][11] - There is cautious optimism regarding trade defense measures being adopted by the Brazilian government [11] - The company plans to enhance competitiveness through operational adjustments and potential consolidation of production routes if necessary [46][48] Other Important Information - The company approved a dividend distribution of BRL 0.28 per share at Gerdau S.A. and BRL 0.19 per share at Metallurgica Gerdau [8] - Share buybacks have reached 88% of the 2025 program, returning BRL 902 million to shareholders [9] Q&A Session Summary Question: What strategies are needed to improve the challenging scenario in Brazil? - Management indicated that further competitiveness measures have been exhausted, and trade defense is crucial for survival [28][30] Question: What is the outlook for U.S. prices and market dynamics? - Management noted that the metal spread has reached a level with limited room for further increases, and demand remains strong [33][34] Question: What is the impact of anti-dumping measures in the U.S.? - Management is monitoring the situation, noting that while rebar accounts for a small portion of the product mix, it could affect competition dynamics [41][42] Question: How will the company approach capital allocation in light of strong cash generation? - The focus will be on share buybacks over dividends, with a robust cash position allowing for strategic investments [43] Question: What are the implications of potential tariff renegotiations with Canada and Mexico? - Management believes that any agreements would optimize operations and sales across borders, enhancing profitability [80]