Financial Performance - Adjusted EBITDA reached R$27 billion[12] - Net income grew to R$11 billion, a 26% increase compared to 2Q25[12] - Free cash flow was R$10 billion, primarily due to higher working capital release[12] - Dividends declared for Gerdau S A were approximately R$555 million (R$028/share) and for Metalúrgica S A were approximately R$188 million (R$019/share)[12] - Share buyback program executed 88%, with approximately R$902 million invested, representing 29% of outstanding shares[12] Operational Highlights - Steel shipments reached 30 million tonnes, with YoY growth, including a 10% increase in North America[5] - North America achieved its highest-ever share in consolidated EBITDA at 65%, compared to 61% in 2Q25[8] - The Miguel Burnier Mining project is 90% complete and in the pre-operational phase, with start-up expected in 4Q25[10] Market Dynamics - Steel import penetration in Brazil remains high at 25% for the first nine months of the year[6] - CAPEX guidance for 2026 is R$47 billion, a 22% decrease compared to the 2025 estimate[12]

Financial Performance - Net sales for Q3 2025 reached R$17,983,143, a 3.5% increase from R$17,378,032 in Q3 2024[4] - Net income for Q3 2025 was R$1,089,880, a decrease of 19.7% compared to R$1,356,245 in Q3 2024[5] - Gross profit for the nine-month period ended September 30, 2025, was R$6,119,192, down 14.8% from R$7,183,230 in the same period of 2024[4] - Comprehensive income for the nine-month period ended September 30, 2025, was a loss of R$1,810,061, compared to a gain of R$7,569,992 in the same period of 2024[5] - Net income for the nine-month period ended September 30, 2025, was R$2,712,181, a decrease of 36.7% compared to R$4,276,098 for the same period in 2024[7] - The Adjusted EBITDA for the three-month period ended September 30, 2025, was R$2,736,858, down from R$3,015,962 in the same period of 2024, indicating a decrease of about 9.2%[173] - The total financial expenses for the nine-month period ended September 30, 2025, were R$1,429,577, compared to R$1,074,408 for the same period in 2024, reflecting an increase of approximately 33%[171] Assets and Liabilities - Total assets as of September 30, 2025, amounted to R$87,255,733, slightly up from R$86,814,493 at the end of 2024[3] - Current liabilities increased to R$12,353,460 as of September 30, 2025, from R$10,851,391 at the end of 2024, reflecting a rise of 13.8%[3] - Long-term debt rose to R$10,966,428 as of September 30, 2025, up from R$9,110,972 at the end of 2024, indicating an increase of 20.3%[3] - The company’s equity attributable to the equity holders of the parent decreased to R$54,539,163 from R$57,948,759 at the end of 2024, a decline of 5.5%[3] - Total financing increased to R$14,069,338 as of September 30, 2025, compared to R$9,808,021 as of December 31, 2024, reflecting a rise of 43.3%[63] Cash Flow and Investments - Cash and cash equivalents increased to R$9,389,572 as of September 30, 2025, compared to R$7,767,813 at the end of 2024, representing a growth of 20.8%[2] - Cash provided by operating activities decreased to R$6,395,731, down 39.8% from R$10,538,576 in the previous year[7] - Net cash used in investing activities increased significantly to R$6,034,590, compared to R$2,610,224 in the prior year, reflecting higher capital expenditures[7] - The company made a payment for the acquisition of company control amounting to R$673,272 during the nine-month period[7] Segment Performance - The North America Segment reported net sales of R$27,091,832 for the nine-month period ended September 30, 2025, compared to R$24,395,817 in 2024, reflecting a growth of about 11.1%[179] - The Brazil Segment's net sales for the nine-month period were R$21,719,406, slightly down from R$21,760,539 in 2024, showing a marginal decline of about 0.2%[179] - The South America Segment's net sales for the nine-month period were R$4,072,991, slightly down from R$4,047,756 in 2024, indicating a marginal increase of about 0.6%[179] Shareholder Information - The company reported a balance of R$2,056,535 thousand in financing agreements due by October 2027[140] - The share buyback program resulted in the acquisition of 1,767,911 common shares and 61,156,300 preferred shares at average prices of R$17.78 and R$18.89 respectively[149] - The company credited dividends of R$0.12 per share for both the 1st and 2nd quarters of 2025, totaling R$480,383,000 proposed dividends[158] - The total number of common shares decreased to 718,066,519 as of September 30, 2025, from 719,956,830 at the end of 2024, reflecting a cancellation of treasury stocks[146] Tax and Legal Matters - The company has contingent liabilities related to tax claims totaling R$2,250,113 thousand as of September 30, 2025, up from R$2,137,038 thousand as of December 31, 2024[128] - Gerdau S.A. is involved in lawsuits related to Corporate Income Tax and Social Contribution on Net Income, with an updated amount of R$1,544,833 as of September 30, 2025, compared to R$1,486,615 on December 31, 2024[131] Market and Economic Conditions - Gerdau is monitoring the potential effects of increased U.S. tariffs on Brazilian exports, which could impact domestic steel consumption[23] - The Company will continuously monitor the steel market through 2025 to identify any significant drops in demand from key sectors such as automotive and construction[184]

Group 1 - The event is Gerdau's Investor Day, welcoming attendees and highlighting the presence of familiar faces [1] - The agenda includes a presentation by the CEO, followed by a discussion on CapEx and financial management by the CFO [2] - For the first time, Gerdau Brazil Officer will present, concluding with a presentation from the leader of North America operations [3]

Core Insights - The article discusses the importance of enabling Javascript and cookies in browsers to ensure proper functionality and access to content [1] Group 1 - The article emphasizes that users may face access issues if they have an ad-blocker enabled, suggesting the need to disable it for a better experience [1]

Gerdau Investor Day Summary Company Overview - **Company**: Gerdau (NYSE:GGB) - **Event**: 2025 Investor Day - **Date**: October 01, 2025 Key Points Industry Context - The steel industry is facing challenges from high levels of imports, particularly from China, which is perceived as unfair competition due to subsidies [12][13] - Brazil is experiencing a significant deficit in engineering talent, with a projection of a shortage of 1,000,000 engineers by 2030 [10] - The Brazilian steel market is currently dealing with record levels of steel imports, which have reached 6.3% of total consumption, impacting profitability [60] Financial Management and Capital Allocation - Gerdau announced a reduction in CapEx disbursement by 22% for 2026, totaling BRL 4.7 billion, with BRL 2.9 billion allocated for maintenance and BRL 1.8 billion for competitive edge [21][19] - The company has maintained a strong financial position with a net debt to EBITDA ratio of 1.5x, indicating low leverage and financial health [40] - Gerdau has consistently returned more than 30% of net income to shareholders, with 75% of free cash flow returned through dividends and share buybacks [42][43] Operational Highlights - Gerdau is focusing on three main projects for the next three years: expansion in Midlothian, Texas, a new recycling center in Pindamonhangaba, and investments in mining operations [22][24][66] - The mining project is expected to ramp up by early next year, with an investment of BRL 3.6 billion, providing a significant competitive advantage [66][72] - The company is also investing in self-generation of electricity to reduce costs, which currently account for 4% of production costs in Brazil [30][33] Market Trends and Demand - The Brazilian market is expected to see moderate growth aligned with GDP, with specific segments like civil construction showing resilience despite high-interest rates [53][54] - Demand for steel in the automotive sector remains strong, although there are concerns about the inflow of imports affecting growth [56][59] - Gerdau is adapting to tariffs imposed on steel imports, which have led to a decline in imports and increased domestic prices, benefiting profitability [86][90] Strategic Initiatives - Gerdau is implementing a vertical integration strategy to secure its supply chain, particularly in iron ore, which is crucial for maintaining competitive production costs [64][66] - The company is enhancing its product portfolio, particularly in flat steel, to cater to high-demand sectors like oil and gas [74] - Gerdau is focusing on optimizing its mini-mill operations to improve scrap recovery and reduce dependency on external ore sources [80][81] Conclusion - Gerdau is positioning itself to navigate the challenges in the steel industry through strategic investments, operational efficiencies, and a strong focus on financial discipline, while also addressing the need for talent development in Brazil [11][10][15]

CAPEX and Investments - Gerdau expects to invest R$6 billion in 2025 and R$47 billion in 2026, focusing on maintenance, coking plants, blast furnaces, and competitiveness[13] - Approximately 45% of the total estimated CAPEX for 2026 is allocated to three main projects: Midlothian Expansion, Scrap Processing in Pindamonhangaba, and Miguel Burnier Mining[18] - The Miguel Burnier sustainable mining platform has a CAPEX of R$36 billion between 2023 and 2026 and a potential EBITDA gain of approximately R$11 billion per year[99] Financial Management and Liquidity - Gerdau's average debt term is 72 years, with a gross debt of R$181 billion and cash reserves of R$90 billion, resulting in a net debt of R$91 billion and a net debt/EBITDA ratio of 085x[37] - The company has strong liquidity in US dollars, with 59% of its cash held in USD[40, 41] - Approximately 75% of free cash flow generated from 1Q18 to 2Q25 was allocated to shareholders through dividends and buybacks, with shareholder remuneration totaling R$174 billion and buybacks at R$33 billion[59, 60] Brazil Operations - Gerdau's Brazil operations have a crude steel capacity of approximately 78 million tons per year and a rolling capacity of approximately 82 million tons per year[76] - The company anticipates moderate growth prospects in Brazil for the segments in which it operates, including automotive (+14%), industry, agriculture, and other (+17%), and civil construction (+05%) in 2026[80] - Gerdau is investing in a new hot coil rolling capacity in Brazil, expecting a total available capacity of 1080kt/year in 4Q25 and a potential EBITDA of R$400 million per year[93, 98] North America Operations - Gerdau has re-balanced its operational footprint in North America to minimize shipments between countries and has captured additional business from import declines due to tariffs[149] - The company has increased SBQ new sales quoting in the US by 60%, indicating new local investment activity[149] - Gerdau is well-positioned in high-growth end-markets in North America, such as renewable energy and data centers, and is increasing capacity at its Midlothian mill with a R$12 billion investment and a potential EBITDA of R$275 million per year[159, 166, 172]

Group 1 - Gerdau S.A. is scheduled to release its Q3 2025 earnings on October 30, 2025, with Wall Street projecting adjusted earnings per share of $0.57 and revenue of approximately $3.37 billion [1] - In Q2 2025, Gerdau reported revenue of $3.13 billion, missing estimates by $60.68 million, and adjusted earnings of $0.08 per share, below the expected $0.10 [2] - The Brazilian market faced challenges due to excessive steel imports, with an import penetration rate of 23.4%, impacting Gerdau's domestic operations [2] - Despite challenges in Brazil, Gerdau's North American operations achieved the highest all-time share in results, contributing 61% to EBITDA [3] - Gerdau's Q2 net income was approximately $161.22 million, reflecting a 14% increase from Q1 2025 [3] - The company is concerned about a reduction in production pace in Brazilian operations due to ongoing capital expenditure (CapEx) projects [3] - Gerdau anticipates a reduction in global CapEx disbursement starting in 2026, which may affect future investments in Brazil [3] Group 2 - The majority of analysts rate Gerdau S.A. as a Buy, with an average price target of $4, indicating an upside potential of nearly 27.33% from current levels [4] - Gerdau operates as a steel producer with segments in Brazil, North America, South America, and Special Steel [5]

Project Development - Gerdau is considering restarting a $600 million special steel project in Mexico [1] Trade & Policy - The decision to resume the project depends on the evolution of US trade talks [1]

Group 1 - The investment thesis of Brazilian steelmaker Gerdau (NYSE: GGB) highlights two significant high-risk factors: the cyclical nature of the steel market and its exposure to the Brazilian market, which constitutes one-third of its EBITDA [1] Group 2 - The analyst focuses on undercovered stocks primarily in Brazil and Latin America, occasionally covering global large caps, indicating a niche investment strategy [2] - The analyst's work is featured on platforms like TipRanks and TheStreet, suggesting a broad reach in investment analysis [2] Group 3 - There is no disclosed stock or derivative position in any mentioned companies, indicating an unbiased perspective in the analysis [3] - The article expresses personal opinions and is not influenced by compensation from companies mentioned, reinforcing the independence of the analysis [3]

Financial Performance and Key Metrics - The company's adjusted EBITDA for the quarter was BRL 2.6 billion, a 6.6% increase compared to the previous year, with North America being the standout segment [6] - Net income reached BRL 864 million, or BRL 0.43 per share, reflecting a 14% increase year-over-year [6] - The company's leverage ratio, defined as net debt over EBITDA, ended the period at 0.85 times, significantly below the established debt policy level [7] Business Line Performance - North American operations contributed 61% of consolidated EBITDA, marking the highest share in the company's history [4] - Brazilian operations faced challenges due to excessive steel imports, with an import penetration rate of 23.4% in the first half of the year, prompting a reduction in investments in Brazil [5][6] Market Data and Key Indicators - The North American market is experiencing high steel demand, particularly from the non-residential construction sector, with order backlogs above historical levels [10][11] - In Brazil, despite good demand for steel, the market is adversely affected by high levels of imports, leading to concerns about future import records if trade defense mechanisms are not improved [12] Company Strategy and Industry Competition - The company is focusing on internationalization and geographic diversification, operating autonomously in seven countries across the Americas [4] - A strategic decision has been made to reduce future investments in Brazil while maintaining investments in North America, where the outlook is more favorable [20][23] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment over the lack of effective trade defense measures in Brazil, which has led to a competitive imbalance [38] - The company anticipates a resilient civil construction market in the coming months, while closely monitoring the automotive and agricultural sectors affected by high interest rates [12] Other Important Information - The company approved a dividend distribution of BRL 239 million, equating to BRL 0.12 per share, and continues its share buyback program, which has reached 68% completion [9] - The Miguel Bernier sustainable mining project is 72% complete and is expected to generate BRL 1.1 billion in annual EBITDA once fully operational [8][26] Q&A Session Summary Question: CapEx expectations and mining project details - Management indicated that an annual CapEx of BRL 5 billion to BRL 6 billion is sustainable, with a shift towards competitiveness and cost reduction projects rather than solely increasing production capacity [17][18] - The mining project is expected to generate significant incremental EBITDA, with a ramp-up planned for 2026 [26] Question: Concerns about increasing net debt and cash flow - Management acknowledged the increase in net debt but emphasized that a significant portion was allocated to shareholder returns through dividends and buybacks [35] - The company expects to generate positive cash flow in the second half of the year, which should help reduce leverage [46] Question: Strategy regarding rebar pricing and market share - Management confirmed that they are not willing to lose market share in rebar and are monitoring the competitive landscape closely [59][62] - The company believes there is room for price recovery in rebar, despite current challenges [42] Question: Future investments and structural measures in Brazil - Management is considering long-term adjustments in Brazil due to the current competitive environment and is focused on maintaining production capacity [56][58] - The company is committed to ongoing maintenance investments to ensure competitiveness [66]