G E R D A U S.A. Condensed cons o l i d a t e d i n t e r i m fi n a n c i a l s t a t e m e n t s a s o f J u n e 3 0, 2 0 2 5 E x h i b i t 9 9.1 GERDAU S.A. CONSOLIDATED BALANCE SHEETS In thousands of Brazilian reais (R$) (Unaudited) | | Note | June 30, 2025 | December 31, 2024 | | --- | --- | --- | --- | | CURRENT ASSETS | | | | | Cash and cash equivalents | 4 | 8,500,933 | 7,767,813 | | Short-term investments | 4 | 472,917 | 509,030 | | Trade accounts receivable - net | 5 | 5,799,331 | 5,176,958 | | In ...

Core Viewpoint - Gerdau S.A. has completed its offer to purchase outstanding 4.875% notes due 2027, with all validly tendered notes accepted for purchase [1][3]. Offer Details - The offer was made for cash to purchase all outstanding 4.875% notes due 2027, guaranteed by Gerdau and its subsidiaries [1]. - The offer expired on June 9, 2025, at 5:00 p.m. New York City time [3]. - A total principal amount of US$418,244,000 was outstanding, with US$237,646,000 tendered [2]. - The consideration for the notes accepted was US$1,007.83 per US$1,000 principal amount [2]. Settlement Information - Settlement of the offer is expected to occur within three business days following the expiration date, specifically on June 12, 2025 [4]. Additional Information - Gerdau Trade has engaged several financial institutions, including BofA Securities, Goldman Sachs, J.P. Morgan, and Morgan Stanley, to act as dealer managers for the offer [6]. - Further details regarding the offer can be found in the Offer Documents available through the designated tender agent [5].

Core Viewpoint - Gerdau S.A. is making an offer to purchase any and all outstanding 4.875% notes due 2027 issued by Gerdau Trade Inc. for cash, which is fully guaranteed by Gerdau and its subsidiaries [1][2] Offer Details - The offer is made pursuant to the terms set forth in the offer to purchase dated June 3, 2025, and includes a notice of guaranteed delivery [2] - The total principal amount of the outstanding notes is US$418,244,000 [4] - The consideration payable for each US$1,000 principal amount of notes validly tendered is US$1,007.83, based on a yield of 4.020% [4][5] Expiration and Settlement - The offer will expire at 5:00 p.m. New York City time on June 9, 2025, unless extended or terminated earlier by Gerdau Trade [6] - Settlement of the offer is expected to occur within three business days following the expiration date, anticipated to be June 12, 2025 [10] Conditions of the Offer - Gerdau Trade's obligation to accept the notes is conditioned upon the satisfaction or waiver of several conditions described in the offer to purchase [11] - Gerdau Trade reserves the right to delay acceptance, extend the expiration date, or terminate the offer if conditions are not met [11] Additional Information - Holders of the notes accepted for purchase will receive accrued and unpaid interest from the last interest payment date to the settlement date [7] - The offer is being managed by BofA Securities, Goldman Sachs, J.P. Morgan, and Morgan Stanley [13]

Core Viewpoint - The recommendation for Gerdau S.A. (NYSE: GGB) shares has been raised from hold to buy, indicating a positive outlook for the company's stock performance [1]. Company Summary - Gerdau S.A. is being analyzed based on over 5 years of experience in equity analysis in Latin America, suggesting a strong foundation for the investment recommendation [1].

Core Viewpoint - Gerdau S.A. has initiated a cash offer to purchase all outstanding 4.875% notes due 2027, totaling approximately US$418.24 million, which are guaranteed by its subsidiaries [1][3]. Offer Details - The offer is set to expire on June 9, 2025, at 5:00 p.m. New York City time, unless extended or terminated earlier by Gerdau Trade [3]. - Holders of the notes who validly tender their notes by the expiration date will be eligible to receive the consideration, which will be determined based on a fixed spread plus the yield of a reference U.S. Treasury security [4][5]. - Settlement of the offer is expected to occur within three business days following the expiration date, anticipated to be June 12, 2025 [6]. Conditions and Rights - The acceptance of the notes is contingent upon the successful pricing of a debt offering by Gerdau Trade, generating sufficient net proceeds to cover the consideration and accrued coupon payments [8]. - Gerdau Trade reserves the right to delay acceptance, extend the expiration date, or terminate the offer if conditions are not met [9][10]. - The offer is not conditioned on a minimum amount of notes being tendered, and if terminated, no payments will be made to holders of the notes [10]. Subsequent Actions - After the expiration date, Gerdau Trade may acquire any remaining notes through various means, including open market purchases or redemptions [11].

Group 1 - The recommendation is to hold Gerdau (NYSE: GGB) shares following the release of Q1 2025 results [1] - This article continues from a previous coverage published on May 7, 2024, maintaining the same recommendation [1] - The analyst has over 5 years of experience in equity analysis in Latin America, providing in-depth research and insights for informed investment decisions [1]

[Condensed Consolidated Interim Financial Statements](index=1&type=section&id=Condensed%20consolidated%20interim%20financial%20statements) This section covers the company's financial position, performance, comprehensive income, equity changes, and cash flows for the interim period [Consolidated Balance Sheets](index=2&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, Gerdau's total assets were BRL 85.58 billion, a slight decrease from BRL 86.81 billion at the end of 2024, while total liabilities increased to BRL 29.36 billion from BRL 28.64 billion, and total equity decreased from BRL 58.17 billion to BRL 56.22 billion Consolidated Balance Sheet Summary (in thousands of BRL) | Account | March 31, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Total Current Assets** | 32,193,864 | 32,669,423 | (1.46%) | | **Total Non-Current Assets** | 53,382,306 | 54,145,070 | (1.41%) | | **Total Assets** | **85,576,170** | **86,814,493** | **(1.43%)** | | **Total Current Liabilities** | 12,193,027 | 10,851,391 | 12.36% | | **Total Non-Current Liabilities** | 17,163,693 | 17,789,316 | (3.52%) | | **Total Liabilities** | **29,356,720** | **28,640,707** | **2.50%** | | **Total Equity** | **56,219,450** | **58,173,786** | **(3.36%)** | | **Total Liabilities and Equity** | **85,576,170** | **86,814,493** | **(1.43%)** | - Cash and cash equivalents decreased from BRL 7.77 billion to BRL 6.48 billion during the quarter[2](index=2&type=chunk) - Short-term debt saw a significant increase from BRL 697.0 million to BRL 2.10 billion[3](index=3&type=chunk) [Consolidated Statements of Income](index=4&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20INCOME) For the first quarter of 2025, Gerdau reported net sales of BRL 17.38 billion, an increase from BRL 16.21 billion in the same period of 2024, but net income attributable to parent owners fell sharply to BRL 749.5 million from BRL 2.04 billion year-over-year, leading to a drop in basic and diluted earnings per share (EPS) to BRL 0.37 from BRL 0.97 Q1 2025 vs. Q1 2024 Income Statement (in thousands of BRL, except EPS) | Metric | Q1 2025 (ended Mar 31, 2025) | Q1 2024 (ended Mar 31, 2024) | Change (YoY) | | :--- | :--- | :--- | :--- | | **Net Sales** | 17,375,336 | 16,210,263 | +7.19% | | **Gross Profit** | 1,946,553 | 2,419,719 | -19.55% | | **Income Before Taxes** | 1,078,018 | 2,276,565 | -52.65% | | **Net Income** | 757,804 | 2,052,872 | -63.09% | | **Net Income (Owners of Parent)** | 749,493 | 2,043,782 | -63.33% | | **Basic/Diluted EPS (R$)** | 0.37 | 0.97 | -61.86% | [Consolidated Statements of Comprehensive Income](index=5&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20COMPREHENSIVE%20INCOME) The company experienced a total comprehensive loss of BRL 1.48 billion for the first quarter of 2025, a stark contrast to the BRL 3.03 billion comprehensive income in Q1 2024, primarily driven by a significant negative cumulative translation adjustment of BRL 1.99 billion - A negative cumulative translation adjustment of **BRL 1.99 billion** was the main driver of the comprehensive loss in Q1 2025, compared to a positive adjustment of BRL 1.33 billion in Q1 2024[5](index=5&type=chunk) Comprehensive Income Summary (in thousands of BRL) | Item | Q1 2025 (ended Mar 31, 2025) | Q1 2024 (ended Mar 31, 2024) | | :--- | :--- | :--- | | Net income for the period | 757,804 | 2,052,872 | | Other comprehensive income (loss) | (2,233,151) | 977,051 | | **Total comprehensive income (loss)** | **(1,475,347)** | **3,029,923** | [Consolidated Statements of Changes in Equity](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CHANGES%20IN%20EQUITY) Total equity decreased from BRL 58.17 billion at the end of 2024 to BRL 56.22 billion as of March 31, 2025, mainly due to a comprehensive loss of BRL 1.48 billion, share buyback effects (BRL 280.9 million), and dividend payments, partially offset by net income of BRL 757.8 million - Equity attributable to parent company holders decreased from **BRL 57.95 billion** to **BRL 56.02 billion** during Q1 2025[6](index=6&type=chunk) - Key activities impacting equity in Q1 2025 included net income of **BRL 749.5 million**, other comprehensive loss of **BRL 2.22 billion**, a share buyback program costing **BRL 280.9 million**, and cancellation of treasury stocks[6](index=6&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the first quarter of 2025, net cash provided by operating activities was BRL 900.9 million, while investing activities used BRL 2.38 billion and financing activities provided BRL 594.4 million, resulting in an overall decrease in cash and cash equivalents of BRL 1.29 billion Cash Flow Summary (in thousands of BRL) | Cash Flow Activity | Q1 2025 (ended Mar 31, 2025) | Q1 2024 (ended Mar 31, 2024) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | 900,860 | 831,290 | | **Net Cash from Investing Activities** | (2,380,308) | 362,635 | | **Net Cash from Financing Activities** | 594,411 | (516,069) | | **Increase/(Decrease) in Cash** | **(1,288,269)** | **737,478** | | **Cash at End of Period** | 6,479,544 | 3,743,123 | - Significant cash outflows in investing activities included **BRL 1.84 billion** for purchases of property, plant, and equipment and **BRL 433.2 million** for the acquisition of company control[7](index=7&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed disclosures on accounting policies, acquisitions, debt, risk management, legal claims, equity, segment performance, and subsequent events [Note 2: Summary of Significant Accounting Practices](index=8&type=section&id=NOTE%202%20-%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20PRACTICES) The company has changed its segment reporting structure starting in Q1 2025, integrating the former Special Steel segment into the Brazil and North America segments to align reporting with regional markets and improve results presentation, with comparative information restated - The company realigned its business segments, merging the former Special Steel operations into the Brazil and North America segments to better reflect the regional nature of the steel industry[14](index=14&type=chunk)[15](index=15&type=chunk) - The new segments are: Brazil Segment (long, flat, special steel, and iron ore in Brazil), North America Segment (long and specialty steel in Canada, US, and a JV in Mexico), and South America Segment (operations in Argentina, Peru, and Uruguay)[17](index=17&type=chunk) [Note 3: Acquisitions and Investments](index=9&type=section&id=NOTE%203%20%E2%80%93%20ACQUISITIONS%20AND%20INVESTMENTS) In Q1 2025, Gerdau completed two key acquisitions: the remaining shares of Gerdau Summit Aços Fundidos e Forjados S.A. for US$32.6 million, making it a wholly-owned subsidiary, and the Garganta da Jararaca Small Hydroelectric Power Plant (PCH) for BRL 244.5 million to supply its Brazilian steel units with renewable energy - On February 10, 2025, Gerdau acquired the remaining 41.27% of Gerdau Summit for approximately **US$32.6 million**, gaining 100% control, with Gerdau Summit producing cast and forged steel[31](index=31&type=chunk) - On March 21, 2025, Gerdau acquired the Garganta da Jararaca Small Hydroelectric Power Plant (PCH) for **BRL 244.5 million** to increase self-production of clean energy and enhance cost competitiveness[33](index=33&type=chunk) [Note 12: Loans and Financing](index=16&type=section&id=NOTE%2012%20%E2%80%93%20LOANS%20AND%20FINANCING) Total loans and financing increased to BRL 10.56 billion as of March 31, 2025, from BRL 9.81 billion at year-end 2024, with the majority of the debt (BRL 8.44 billion) denominated in U.S. Dollars, and the company maintains an unused US$875 million global credit line Debt Composition by Currency (in thousands of BRL) | Currency | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Brazilian Real (R$) | 1,925,932 | 456,448 | | U.S. Dollar (US$) | 8,439,982 | 9,169,319 | | Other currencies | 191,482 | 182,254 | | **Total** | **10,557,396** | **9,808,021** | - The nominal weighted average cost of debt was **5.55% p.a.** for USD-denominated debt and **102.34% of CDI p.a.** for BRL-denominated debt[57](index=57&type=chunk) - The company has an undrawn **US$875 million** global credit line maturing in September 2027[62](index=62&type=chunk) [Note 14: Financial Instruments and Risk Management](index=18&type=section&id=NOTE%2014%20-%20FINANCIAL%20INSTRUMENTS) Gerdau manages market risks through established policies and derivative instruments for hedging, targeting a Net Debt/EBITDA ratio of 1.5x or less and a gross debt limit of BRL 12 billion, with sensitivity analysis showing a BRL 26.8 million net loss from a 5% BRL appreciation against the Dollar on unhedged positions - The company's capital management targets include a **Net Debt/EBITDA ratio of ≤ 1.5x**, a gross debt limit of **BRL 12 billion**, and an average debt maturity of over **6 years**[77](index=77&type=chunk) Sensitivity Analysis on Statement of Income (Impact of Adverse Change) | Risk Factor | Assumption | Impact (in thousands of BRL) | | :--- | :--- | :--- | | Foreign Currency (Debt) | 5% BRL Depreciation | (10,821) | | Foreign Currency (Trade) | 5% BRL Appreciation | (37,587) | | Interest Rate | 10 bps Increase | (37,312) | | Product Price | 1% Decrease | (173,753) | | Raw Material Price | 1% Increase | (111,417) | - The company uses Ten Years Bonds to hedge part of its net investments in foreign subsidiaries, with exchange rate effects recognized in Other Comprehensive Income[99](index=99&type=chunk) [Note 15: Legal Claims and Contingencies](index=24&type=section&id=NOTE%2015%20%E2%80%93%20TAX%2C%20CIVIL%20AND%20LABOR%20CLAIMS%20AND%20CONTINGENT%20ASSETS) As of March 31, 2025, Gerdau has provisions for probable losses from legal claims totaling BRL 2.36 billion, primarily for tax matters, and faces significant contingent liabilities, assessed as possible but not probable losses, including major tax cases related to goodwill amortization totaling over BRL 8.8 billion Provisions for Probable Losses (in thousands of BRL) | Claim Type | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Tax provisions | 1,963,944 | 1,925,237 | | Labor provisions | 359,138 | 369,041 | | Civil provisions | 35,581 | 34,571 | | **Total** | **2,358,663** | **2,328,849** | - The company has significant contingent liabilities (possible loss) related to the disallowance of goodwill amortization from a 2004/2005 restructuring, with an updated total amount of **BRL 8.27 billion**[119](index=119&type=chunk) - Other major tax contingencies (possible loss) include disputes over withholding tax on export financing (**BRL 1.74 billion**), goodwill amortization from a 2010 restructuring (**BRL 593 million**), and taxes on profits generated abroad (**BRL 1.51 billion**)[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) [Note 17: Equity](index=30&type=section&id=NOTE%2017%20%E2%80%93%20EQUITY) As of March 31, 2025, the company's capital was BRL 24.27 billion, divided into approximately 719 million common and 1.33 billion preferred shares, with a new 12-month share buyback program approved in January 2025 for up to 63 million preferred shares and 1.5 million common shares - On January 20, 2025, the Board approved a new share buyback program for up to **63 million** preferred shares (GGBR4) and **1.5 million** common shares (GGBR3), with a 12-month term[143](index=143&type=chunk) - The Board approved the cancellation of **1,093,011** common shares and **25,000,000** preferred shares on January 20, 2025, and a further cancellation of **517,600** common and **24,000,000** preferred shares on April 28, 2025[142](index=142&type=chunk)[144](index=144&type=chunk) Share Ownership Structure (March 31, 2025) | Shareholder Group | % of Total Shares | | :--- | :--- | | Metalúrgica Gerdau S.A. (Controlling) | 34.1% | | Foreign institutional investors | 50.9% | | Brazilian institutional investors | 6.5% | | Other shareholders | 7.3% | | Treasury stock | 1.2% | [Note 22: Segment Reporting](index=35&type=section&id=NOTE%2022%20%E2%80%93%20SEGMENT%20REPORTING) For Q1 2025, the North America segment was the largest contributor to net sales at BRL 8.77 billion, followed by the Brazil segment at BRL 7.49 billion, with North America's gross profit decreasing significantly to BRL 995 million from BRL 1.54 billion YoY, while Brazil's gross profit increased to BRL 795 million from BRL 642 million Segment Performance Q1 2025 vs Q1 2024 (in thousands of BRL) | Segment | Net Sales Q1 2025 | Net Sales Q1 2024 | Gross Profit Q1 2025 | Gross Profit Q1 2024 | Net Income (Loss) Q1 2025 | Net Income (Loss) Q1 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Brazil** | 7,494,218 | 7,353,937 | 795,135 | 642,077 | 240,892 | 143,850 | | **North America** | 8,768,193 | 7,914,296 | 994,956 | 1,536,057 | 621,079 | 1,081,785 | | **South America** | 1,365,508 | 1,190,598 | 159,722 | 253,598 | 12,296 | (63,243) | - The North America segment, despite higher sales, saw a significant drop in profitability, with gross profit falling by **35%** and net income by **43%** year-over-year[160](index=160&type=chunk) - The Brazil segment showed improved profitability, with gross profit increasing by **24%** and net income by **67%** year-over-year[160](index=160&type=chunk) [Note 24: Subsequent Events](index=36&type=section&id=NOTE%2024%20-%20SUBSEQUENT%20EVENTS) After the reporting period, Gerdau continued its strategic activities, acquiring Kloeckner Metals Brasil Ltda. for BRL 42.9 million on April 11, 2025, proposing a dividend payment of BRL 243.5 million on April 25, and acquiring the Paranatinga II Small Hydroelectric Power Plant for BRL 197.2 million on April 28 - On April 11, 2025, Gerdau acquired 100% of Kloeckner Metals Brasil Ltda. for **BRL 42.9 million**[170](index=170&type=chunk) - A dividend payment of **BRL 243.5 million** (**BRL 0.12 per share**) was proposed, with a record date of May 8, 2025, and payment on May 19, 2025[171](index=171&type=chunk) - On April 28, 2025, the company acquired the Paranatinga II Small Hydroelectric Power Plant for **BRL 197.2 million** to increase its self-production of renewable energy[172](index=172&type=chunk)

Core Points - Gerdau S.A. has filed its Form 20-F for the fiscal year ended December 31, 2024, with the U.S. Securities and Exchange Commission (SEC) and the Brazilian Securities and Exchange Commission (CVM) [1] - The Form 20-F is accessible on the Company's Investor Relations website [1] - Shareholders can request a free copy of the Form 20-F by contacting the Investor Relations team via email [2]

Industry Dynamics - The steel industry is highly cyclical, with demand fluctuations significantly impacting the company's financial condition and results of operations [32]. - In 2024, steel imports in Brazil reached nearly 6 million tonnes, an 18% increase from 2023, adversely affecting the company's competitiveness [48]. - The ongoing geopolitical conflicts, such as the Russian invasion of Ukraine, could adversely affect steel demand and prices, impacting the company's financial condition [41]. - The company faces significant competition from heavily subsidized steel imports, particularly from China, which may affect its market share and profitability [44]. - The Brazilian government has implemented temporary tariff hikes on some steel products, but these measures have proven insufficient to address the competitive imbalance [51]. Production and Capacity - The company's largest mill, Ouro Branco, accounted for 58.1% of total crude steel output in the Brazil Business Segment in 2024 [54]. - Gerdau is the largest Brazilian producer of steel, with approximately 70% of its steel production derived from scrap, transforming about 10 million tonnes of scrap into various steel products annually [142]. - In 2023, Brazil produced 32 million tonnes of crude steel, with 75.9% produced through integrated processes and 22.8% through mini mills [144]. - The Brazil Business Segment had an annual production capacity of approximately 6.8 million tonnes of crude steel and 6.6 million tonnes of finished steel products [186]. - The North America Business Segment has an annual production capacity of approximately 5.7 million tonnes of crude steel and 4.8 million tonnes of finished steel products [191]. Financial Performance - In 2024, Gerdau's total consolidated net sales were R$ 67.0 billion, a decrease of 2.7% from R$ 68.9 billion in 2023 [176]. - Gerdau's total consolidated net income for 2024 was R$ 4.6 billion, compared to R$ 5.5 billion in 2023 [176]. - The North America Business Segment generated net sales of R$ 25.9 billion in 2024, a decrease from R$ 26.9 billion in 2023 [184]. - In 2024, net sales in Brazil were R$25,962.2 million, a decrease of 3.2% from R$26,830.7 million in 2023 [211]. - North America's net income was R$2,913.9 million in 2024, accounting for 63.4% of its net sales [211]. Market Conditions - The Brazilian GDP increased by 3.4% in 2024, while steel consumption grew by 8.8%, indicating a strong demand for steel products [155]. - Brazilian steel exports in 2024 totaled 9.6 million tonnes, accounting for 31% of total sales [157]. - Gerdau's total exports in 2024 reached 966,000 tonnes, with South America representing 42% and Central America 37% of the exports [203]. - The automotive sector accounted for around 80% of the Special Steel Segment's shipments, with a decline in U.S. demand impacting shipments by approximately 15.3% [200]. Regulatory and Compliance Issues - The SEC approved new rules requiring significant climate-related disclosures, which may increase compliance costs and divert management attention [70]. - The company is subject to potential legal and regulatory actions due to new climate-related regulations, which could adversely affect its financial condition [71]. - Future compliance with stricter environmental regulations may increase operational costs and impact financial performance [107][110]. - Regulatory changes, such as the reinstatement of a 25% tariff on steel imports by the U.S., may impact the company's competitiveness and revenue [104]. Operational Challenges - Rising steel scrap prices or reduced supply could negatively impact production costs and operating margins, affecting profitability [52]. - Unexpected equipment failures may lead to production curtailments, increasing costs and reducing shipments and earnings [60]. - The company is vulnerable to inflationary cost pressures, especially regarding electricity, natural gas, and CO2 prices, which could adversely affect operations [57]. - Energy shortages or higher energy prices could negatively impact Gerdau's financial condition and results of operations, particularly in energy-intensive processes [72]. Strategic Initiatives - The company has invested in expanding iron ore production capacity to mitigate exposure to price volatility [55]. - Gerdau's certified iron ore reserves amount to 476 million dry metric tons, including 138 million tonnes of proven reserves and 338 million tonnes of probable reserves [84]. - Gerdau's logistics strategy includes long-term relationships with logistic suppliers to optimize transportation costs and efficiency [221]. Economic Influences - The Brazilian economy is influenced by international economic conditions, particularly those in the United States, which can affect market prices of Gerdau's shares [125]. - Political instability in Brazil continues to impact investor confidence, potentially leading to economic deceleration and increased volatility in securities [122]. - Inflationary pressures in Brazil may lead to higher interest rates, reducing demand for Gerdau's products and negatively impacting profit margins [124]. Risks and Vulnerabilities - The company faces risks from fluctuations in foreign exchange rates, which can increase the cost of servicing its foreign currency debt and adversely affect financial performance [93]. - The company is exposed to risks from tax, environmental, civil, and labor disputes, which could negatively affect its financial condition and results of operations [100]. - The company is exposed to risks from information technology system failures, which could disrupt operations and result in significant financial losses [76]. - The company’s financial condition may be adversely affected by potential defaults from clients or financial institutions [101][102]. Workforce and Management - The company experienced workforce labor contract suspensions lasting up to five months and laid off approximately 600 employees due to increased predatory steel imports in Brazil [74]. - The company faces risks related to the loss of senior management, which could adversely affect its operational strategy and financial condition [130]. - Gerdau's corporate structure allows the controlling shareholder to make decisions that may conflict with the interests of non-controlling shareholders, potentially impacting financial outcomes [128].

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of BRL10.8 billion for 2024, reflecting improved competitiveness through strategic cost reduction initiatives, particularly in Brazil [9][12] - The company achieved savings of BRL1.5 billion in controllable expenses, leading to a new level of operating efficiency compared to 2023 [12] - A total of BRL6.2 billion was invested in CapEx in 2024, with a guidance of BRL6 billion for 2025, split equally between competitiveness and maintenance efforts [13][15] Business Line Data and Key Metrics Changes - The company plans to report results using three segments: Brazil, North America, and South America, starting Q1 2025, to better reflect market dynamics [15] - The company is focusing on increasing its share of flat steel in its product mix, moving away from rebar due to competitive pressures [45][46] Market Data and Key Metrics Changes - The Brazilian market faced challenges from high penetration rates of imported steel, which reached almost 20% by the end of 2024 [9] - In North America, shipments and backlog recovered to historical levels, with a positive outlook for non-residential demand and infrastructure [19][31] Company Strategy and Development Direction - The company is committed to enhancing competitiveness through investments in renewable energy and strategic acquisitions, such as the purchase of two hydroelectric plants [10] - The focus remains on growth and competitiveness of assets with the greatest potential for long-term value generation [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the construction industry in Brazil, citing a record number of property launches, but acknowledged potential challenges from rising inflation and high interest rates [18] - The company is monitoring the impact of new trade defense measures in the U.S. and their potential to improve competitiveness [20][22] Other Important Information - The company distributed almost BRL2.9 billion to shareholders in 2024, representing a payout of approximately 66% of profits [14] - The company is transitioning to a new reporting format to provide clearer insights into its operations and market exposure [15][16] Q&A Session Summary Question: Insights on U.S. market recovery and Brazilian demand - Management noted a recovery in backlog and shipments in North America, with expectations for a positive scenario in 2025, while cautioning about potential declines in Brazilian demand due to economic conditions [28][31][42] Question: Strategic view on the Brazilian market and rebar capacity - Management indicated that while there is still demand for rebar, competitiveness remains a challenge, and future investments will focus on segments with higher margins [41][45] Question: CapEx guidance and energy investments - The CapEx guidance for 2025 includes investments in energy generation assets, with a flatter disbursement curve expected throughout the year [62][66] Question: Special steel margins and outlook - Management acknowledged that special steel margins in North America may recover faster than traditional operations, influenced by scrap prices [109][110] Question: Working capital expectations - Management anticipates some investment in working capital due to increased demand in North America and Brazil, with a significant release noted in Q4 2024 [136][138]