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 S e p t e m b e r 3 0, 2 0 2 3 E x h i b i t 9 9.1 GERDAU S.A. CONSOLIDATED BALANCE SHEETS In thousands of Brazilian reais (R$) (Unaudited) | | Note | September 30, 2023 | December 31, 2022 | | --- | --- | --- | --- | | CURRENT ASSETS | | | | | Cash and cash equivalents | 4 | 2,914,529 | 2,475,863 | | Short-term investments | 4 | 3,088,139 | 2,959,135 | | Trade accounts receivable | 5 | 5,738,421 | 4,9 ...

Raw steel 72% ■ High interest rates and a slowdown in sectors such as industry and retail continue to affect domestic demand for steel ■ Concerns related to greater penetration of imported steel in Brazil(including import of machinery and equipment) ■ Appreciation of the real and lower international steel prices putting pressure on the competitiveness of exports 25.7% Consolidated EBITDA ■ A slight resumption of real estate launches, injection of funds from governmental programs (Minha Casa Minha Vida) and ...

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of R$3.8 billion for Q2 2023, reflecting a consistent financial performance despite a challenging macro environment [54][60] - The net debt to EBITDA ratio improved to 0.37x, with gross debt reduced by R$1.6 billion, marking the lowest debt level since September 2007 [61] - Free cash flow for the quarter was R$784 million, indicating positive cash generation [91] Business Line Data and Key Metrics Changes - The North America business operation achieved an adjusted EBITDA of R$1.8 billion, supported by stable order backlogs influenced by non-residential construction activities [43] - The special steel segment in Brazil faced lower demand due to uncertainties in credit access and high interest rates, impacting vehicle demand [56] - The company plans to invest R$3.2 billion in a new sustainable mining platform from 2023 to 2026, enhancing operational competitiveness [63][64] Market Data and Key Metrics Changes - Brazil's steel exports increased by over 43% year-on-year in the first half of 2023, totaling 2.2 million tonnes, with Chinese products dominating the market [45] - The construction sector in Brazil showed a 30% increase in real estate launches in Q2 2023 compared to the previous quarter, indicating a recovery in demand [45] - Political tensions and climate issues in Peru are being monitored, with expectations of economic recovery stimulating steel demand [46] Company Strategy and Development Direction - The company is focused on sustainable growth, with investments aimed at reducing greenhouse gas emissions and improving operational efficiency [65] - The strategic emphasis is on geographic diversification and flexible production routes to navigate the challenging global steel market [53] - The company aims to maintain a conservative approach to capital expenditures while ensuring a balanced debt profile [84] Management's Comments on Operating Environment and Future Outlook - Management highlighted concerns over excess steel production in China and its impact on global markets, particularly in Brazil [35] - There is optimism regarding public and private investments in infrastructure, which are expected to drive growth in the coming years [36] - The company anticipates stable demand levels in the domestic market, with no significant changes expected in the third quarter [83] Other Important Information - The company has initiated a solar farm project in Texas, expected to reduce carbon emissions by 65,000 tonnes annually [38] - The accident frequency rate improved to 0.66, below the previous year's rate, reflecting enhanced safety measures [41] - The company is committed to a sustainable mining initiative that eliminates the need for dams and improves logistics [51][64] Q&A Session Summary Question: Insights on North America margins and future profitability - Management expects flat margins in North America for the next quarter, with a solid backlog supporting stability [99][102] Question: Dividend payout strategy amidst market conditions - The company plans to maintain a conservative dividend payout policy, aligning with its net debt management strategy [104] Question: CapEx outlook for 2024 - Future CapEx is expected to increase significantly in 2024, primarily due to investments in the sustainable mining platform [105]

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 3 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, 2023 | December 31, 2022 | | --- | --- | --- | --- | | CURRENT ASSETS | | | | | Cash and cash equivalents | 4 | 2,556,042 | 2,475,863 | | Short-term investments | 4 | 1,628,600 | 2,959,135 | | Trade accounts receivable | 5 | 5,593,428 | 4,999,004 | | Inve ...

Exhibit 99.1 GERDAU S.A. Condensed consolidated interim financial statements as of March 31, 2023 GERDAU S.A. CONSOLIDATED BALANCE SHEETS In thousands of Brazilian reais (R$) (Unaudited) | | Note | March 31, 2023 | December 31, 2022 | | --- | --- | --- | --- | | CURRENT ASSETS | | | | | Cash and cash equivalents | 4 | 2,581,882 | 2,475,863 | | Short-term investments | 4 | 3,243,455 | 2,959,135 | | Trade accounts receivable | 5 | 5,999,188 | 4,999,004 | | Inventories | 6 | 17,184,069 | 17,817,585 | | Tax cre ...

PART I [Key Information](index=6&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section details Gerdau's significant business, operational, mining, financial, regulatory, and country-specific risks, including steel industry cyclicality, competition, raw material volatility, and financial exposures [Risks Relating to Business and the Steel Industry](index=6&type=section&id=Risks%20Relating%20to%20our%20Business%20and%20the%20Steel%20Industry) Gerdau's performance is highly susceptible to the cyclical nature of steel demand and prices, intense competition, and volatile raw material costs - The steel industry is highly cyclical, exposing the company to significant fluctuations in demand and prices for its products, which can be adversely affected by global economic slowdowns and crises[26](index=26&type=chunk)[27](index=27&type=chunk) - Gerdau faces intense competition from both domestic and foreign steel producers, with China's large production capacity and export levels being a major factor that can depress international steel prices[31](index=31&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) - The company's profitability is vulnerable to price increases or supply shortages of key raw materials, including steel scrap for its mini mills and iron ore and coking coal for its integrated facilities[35](index=35&type=chunk)[36](index=36&type=chunk)[39](index=39&type=chunk) [Risks Relating to Operations](index=9&type=section&id=Risks%20Relating%20to%20our%20Operations) Operational risks include capital project delays, equipment failures, energy shortages, labor disputes, cybersecurity breaches, and health epidemics impacting business continuity and costs - Capital investment projects are subject to risks such as delays, cost overruns, and failure to obtain necessary permits, which could adversely affect growth and profitability[42](index=42&type=chunk) - Unexpected equipment failures, fires, or severe weather can cause material plant shutdowns, leading to increased costs, reduced shipments, and lower earnings[43](index=43&type=chunk) - The company is exposed to cybersecurity risks, including data breaches and system interruptions, which could result in operational disruptions, financial losses, and reputational damage[59](index=59&type=chunk)[60](index=60&type=chunk) - The COVID-19 pandemic continues to pose risks, with potential for production interruptions, reduced demand, and supply chain disruptions that could adversely impact future results[63](index=63&type=chunk)[65](index=65&type=chunk)[67](index=67&type=chunk) [Risks Relating to Mining Operations](index=14&type=section&id=Risks%20Relating%20to%20our%20Mining%20Operations) Mining operations face risks from uncertain mineral resource estimates, lack of proven reserves, and potential structural failure of the tailings dam - Estimates of mineral resources are inherently uncertain and may differ from the quantities that can actually be extracted, as the company has not established any proven or probable mineral reserves under SEC definitions[70](index=70&type=chunk)[72](index=72&type=chunk) - The company operates one mining dam for tailings disposal, the Alemães Dam. An accident affecting its structural integrity could lead to severe consequences, including shutdowns, high expenditures, fines, and environmental impacts[76](index=76&type=chunk)[78](index=78&type=chunk) [Financial Risks](index=16&type=section&id=Financial%20Risks) Financial risks include credit rating downgrades, high indebtedness, foreign exchange rate fluctuations, and adverse outcomes from significant litigation - The company holds an investment-grade rating from S&P and Fitch, and was upgraded by Moody's to Baa3. A loss of these ratings could increase the cost of capital and impair access to financing[80](index=80&type=chunk)[81](index=81&type=chunk) - As of December 31, 2022, debt denominated in foreign currency, mainly U.S. dollars, amounted to **R$ 9.6 billion**, representing **76% of consolidated gross debt**. A significant depreciation of the Brazilian real could adversely affect the company's ability to service this debt[87](index=87&type=chunk) - The company is involved in several significant tax disputes for which no provision has been established, including claims related to ICMS, IPI, PIS/COFINS, and goodwill amortization, with potential liabilities totaling **billions of reais**[89](index=89&type=chunk)[90](index=90&type=chunk) [Regulatory Risks](index=19&type=section&id=Regulatory%20Risks) Regulatory risks encompass trade protectionism, stricter environmental laws, anti-corruption and antitrust compliance, and ongoing Brazilian investigations - The business is exposed to trade protectionism, such as quotas and tariffs, which can increase product costs and reduce export competitiveness[93](index=93&type=chunk) - Increasingly strict environmental laws, especially those targeting greenhouse gas emissions, could lead to higher capital expenditures and operating costs[94](index=94&type=chunk)[96](index=96&type=chunk) - The company is subject to investigations by Brazilian authorities regarding Administrative Board of Tax Appeals (CARF) proceedings and political contributions, the outcome of which is currently unpredictable. The U.S. SEC has closed its inquiry into these matters[101](index=101&type=chunk) [Risks Relating to Brazil](index=20&type=section&id=Risks%20Relating%20to%20Brazil) Brazilian risks include sovereign credit rating downgrades, political instability, and high inflation impacting economic growth and debt servicing costs - Brazil's sovereign credit rating is below investment grade, and any further downgrades could heighten investor risk perception and adversely affect the company's share price[103](index=103&type=chunk)[104](index=104&type=chunk) - Political instability in Brazil has historically affected investor confidence and can lead to economic deceleration and increased volatility in securities[105](index=105&type=chunk) - High inflation in Brazil could slow economic growth, reduce demand for the company's products, and increase the servicing costs of its debt denominated in Brazilian reais[107](index=107&type=chunk) [Risks Related to Corporate Structure and Shares](index=21&type=section&id=Risks%20Related%20to%20our%20Corporate%20Structure%20and%20Shares) Risks include controlling shareholder influence, less stringent foreign issuer disclosure, NYSE governance exemptions, and complexities for ADS holders - The controlling shareholder has the power to elect a majority of the board and establish administrative policy, which may lead to decisions that conflict with the interests of other shareholders[111](index=111&type=chunk) - As a foreign issuer, the company is exempt from certain NYSE corporate governance standards, including the requirement for a majority of independent directors on its board[115](index=115&type=chunk) - U.S. holders of ADSs may be unable to exercise preemptive rights unless a registration statement under the Securities Act is effective, which the company is not obligated to file[116](index=116&type=chunk) [Company Information](index=23&type=section&id=ITEM%204.%20COMPANY%20INFORMATION) This section provides a comprehensive overview of Gerdau's history, global and regional steel industry presence, operational segments, product mix, production processes, and environmental strategies [History and Development](index=23&type=section&id=History%20and%20Development%20of%20the%20Company) Gerdau S.A., incorporated in 1961 and controlled by the Gerdau family, is Brazil's largest steel producer and Latin America's largest recycler - Gerdau is Brazil's largest steel producer, a leading producer of long steel in the Americas, and one of the world's leading suppliers of special steel[123](index=123&type=chunk) - The company is the largest recycler in Latin America, with **73%** of its steel produced from scrap, transforming **11 million tonnes** of scrap into steel products each year[123](index=123&type=chunk) [Business Overview](index=23&type=section&id=Business%20Overview) This section details Gerdau's operational landscape, including its global steel industry position, segment-wise performance, product range, production processes, and key inputs - Gerdau was classified as the world's **30th largest steel producer** in 2021, with a total consolidated installed annual capacity of approximately **16.7 million tonnes** of crude steel as of December 31, 2022[149](index=149&type=chunk)[151](index=151&type=chunk) Consolidated Shipments by Business Segment (in 1,000 tonnes) | Business Segment | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **TOTAL** | **11,902** | **12,722** | **11,461** | | Brazil | 5,394 | 5,755 | 5,129 | | North America | 4,090 | 4,451 | 4,334 | | South America | 1,212 | 1,255 | 962 | | Special Steel | 1,657 | 1,654 | 1,252 | Consolidated Net Sales by Business Segment (in R$ million) | Business Segment | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | **TOTAL** | **82,412** | **78,345** | **43,814** | | Brazil | 32,971 | 34,758 | 17,753 | | North America | 31,099 | 27,838 | 17,458 | | South America | 7,180 | 6,857 | 3,831 | | Special Steel | 13,626 | 10,980 | 6,096 | Annual Production (in million tonnes) | Production Type | 2022 | 2021 | 2020 | | :--- | :--- | :--- | :--- | | Crude Steel | 12.67 | 13.29 | 12.19 | | Rolled Steel | 11.43 | 12.40 | 10.93 | | Iron Ore | 6.42 | 3.86 | 6.67 | [Organizational Structure](index=47&type=section&id=Organizational%20Structure) Gerdau S.A. operates through consolidated subsidiaries and equity-accounted joint ventures across the Americas, including key entities in Brazil, North America, and other regions - The company's operational structure consists of numerous subsidiaries and joint ventures across Brazil, the USA, Canada, Peru, Mexico, Argentina, and other countries[280](index=280&type=chunk)[281](index=281&type=chunk) - Key operating companies that are fully consolidated include Gerdau Aços Longos S.A. and Gerdau Açominas S.A. in Brazil, and Gerdau Ameristeel Corporation in North America[289](index=289&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk) - Significant investments accounted for using the equity method include joint ventures like Gerdau Metaldom Corp. (Dominican Republic), Gerdau Corsa S.A. (Mexico), and Diaco S.A. (Colombia)[283](index=283&type=chunk)[284](index=284&type=chunk) [Property, Plant and Equipment](index=51&type=section&id=Property%20Plant%20and%20Equipment) This section details Gerdau's production facilities, mining assets, investment programs, environmental regulations, and decarbonization strategy, including capital expenditures and eco-efficiency investments - As of December 31, 2022, Gerdau's total installed capacity was approximately **16.0 million tonnes** of crude steel and **15.4 million tonnes** of rolled products across its global operations[296](index=296&type=chunk) - The company announced a new investment plan of **R$ 5.0 billion** for 2023, focusing on maintenance, expansion, technological updating, and ESG practices. This follows a **R$ 4.3 billion** capex disbursement in 2022[303](index=303&type=chunk)[304](index=304&type=chunk) - Gerdau has a decarbonization goal to reduce scope 1 and 2 greenhouse gas emissions from **0.93 t of CO₂e per ton of steel** (2020 baseline) to **0.83 t of CO₂e per ton of steel** by 2031, aiming for carbon neutrality by 2050[329](index=329&type=chunk)[332](index=332&type=chunk) - In 2022, the company invested **R$ 639.31 million** in eco-efficiency practices and environmental protection technologies. Provisions for environmental liabilities totaled **R$ 484.7 million** as of December 31, 2022[308](index=308&type=chunk)[311](index=311&type=chunk) [Operating and Financial Review and Prospects](index=59&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section analyzes Gerdau's financial performance, liquidity, capital resources, and critical accounting estimates, highlighting net sales growth, net income decline, and debt position [Results of Operations (2022 vs. 2021)](index=63&type=section&id=Results%20of%20Operations) In 2022, net sales increased by 5.2% to R$ 82.4 billion, while net income decreased by 26.2% to R$ 11.5 billion due to higher costs and financial expenses Consolidated Income Statement Highlights (in R$ thousands) | Metric | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | **NET SALES** | **82,412,210** | **78,345,081** | **5.2%** | | Cost of sales | (63,661,156) | (57,527,721) | 10.7% | | **GROSS PROFIT** | **18,751,054** | **20,817,360** | **(9.9)%** | | INCOME BEFORE TAXES | 15,859,027 | 20,272,568 | (21.8)% | | **NET INCOME** | **11,479,552** | **15,558,938** | **(26.2)%** | - The **5.2% increase in net sales** was primarily due to a global upcycle in commodity prices, resulting in higher net sales per tonne, which offset a **4.7% decrease in sales volume**[374](index=374&type=chunk) - Cost of goods sold increased by **10.7%** to **R$ 63.7 billion**, driven by rising costs of key raw materials, including a **9% increase in iron ore prices** and a **32% increase in scrap prices**[380](index=380&type=chunk) - Net financial expenses increased significantly, mainly due to an **R$ 866 million** increase in expenses from exchange rate variations compared to 2021[386](index=386&type=chunk) [Liquidity and Capital Resources](index=68&type=section&id=Liquidity%20and%20Capital%20Resources) In 2022, operating cash flow decreased, investing activities increased, and financing activities decreased, while total debt declined and net debt remained stable Consolidated Cash Flow Summary (in R$ thousands) | Cash Flow Activity | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Net cash provided by operating activities | 11,150,338 | 12,516,933 | (10.9)% | | Net cash used in investing activities | (4,459,684) | (2,996,103) | 48.8% | | Net cash used in financing activities | (8,256,287) | (9,982,642) | (17.3)% | Debt Profile (in R$ thousands) | Metric | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | TOTAL DEBT | 12,607,390 | 14,039,693 | | Total cash and short-term investments | 5,434,998 | 6,786,866 | | **NET DEBT** | **7,172,392** | **7,252,827** | - Capital expenditures in 2022 totaled **R$ 4.3 billion**, with **60%** allocated to the Brazil Segment and the remainder to other operations[410](index=410&type=chunk) [Critical Accounting Estimates](index=74&type=section&id=Critical%20Accounting%20Estimates) This section details critical accounting estimates, including goodwill impairment, provisions for legal claims, and deferred tax asset recoverability, all requiring complex management judgments - The annual goodwill impairment test, conducted in December 2022, concluded that the recoverable amount exceeded the book value for all segments, resulting in no impairment charge[434](index=434&type=chunk)[442](index=442&type=chunk) Provisions for Claims (in R$ thousands) | Provision Type | 2022 | 2021 | | :--- | :--- | :--- | | Tax provisions | 1,530,040 | 1,270,473 | | Labor provisions | 463,452 | 435,803 | | Civil provisions | 32,511 | 34,750 | | **Total** | **2,026,003** | **1,741,026** | - The company did not recognize deferred tax assets of **R$ 240 million** in Brazil and **R$ 1.1 billion** abroad due to a lack of expectation for their use[451](index=451&type=chunk) [Directors, Senior Management and Employees](index=81&type=section&id=ITEM%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section outlines Gerdau's Board of Directors and Executive Officers, compensation philosophy, corporate governance structure, and employee workforce statistics - The Board of Directors is chaired by Guilherme Chagas Gerdau Johannpeter, and the Chief Executive Officer is Gustavo Werneck da Cunha[458](index=458&type=chunk)[459](index=459&type=chunk) - Total compensation for management (directors and officers) in 2022 was **R$ 84.3 million**, including salaries, variable pay, benefits, and social charges[497](index=497&type=chunk) - The company has a Board of Auditors (Conselho Fiscal) that is adapted to comply with Sarbanes-Oxley Act requirements, serving in a capacity similar to a U.S. audit committee, with Bolívar Charneski identified as the 'audit committee financial expert'[522](index=522&type=chunk)[524](index=524&type=chunk)[527](index=527&type=chunk) Employee Workforce | Year | Brazil | Other Countries | Total | | :--- | :--- | :--- | :--- | | 2022 | 18,372 | 9,825 | 28,197 | | 2021 | 18,102 | 9,637 | 27,739 | | 2020 | 15,313 | 9,300 | 24,613 | [Major Shareholders and Related-Party Transactions](index=95&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED-PARTY%20TRANSACTIONS) This section identifies Gerdau's major shareholders, including the controlling entity Metalúrgica Gerdau S.A., and details related-party transactions conducted at market conditions Major Shareholders as of December 31, 2022 | Shareholder | Common Shares % | Preferred Shares % | | :--- | :--- | :--- | | Metalúrgica Gerdau S.A | 97.26% | — | | JP Morgan Chase Bank | — | 19.9% | | Capital International Investors | — | 10.4% | - Metalúrgica Gerdau S.A. is the controlling shareholder, holding **97.26%** of the voting capital stock of Gerdau S.A[553](index=553&type=chunk) - Related-party transactions include loans, commercial sales and purchases, and property transactions, which are carried out under market conditions[555](index=555&type=chunk)[556](index=556&type=chunk)[557](index=557&type=chunk) [Financial Information](index=98&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section details Gerdau's legal proceedings, including provisions for probable losses and significant contingent liabilities, alongside its dividend distribution policy Provisions for Contingencies (in R$ thousands) | Contingency Type | 2022 | 2021 | | :--- | :--- | :--- | | Tax | 1,530,040 | 1,270,473 | | Labor | 463,452 | 435,803 | | Civil | 32,511 | 34,750 | - The company has significant contingent liabilities classified as 'possible' losses for which no provisions have been made, including tax claims related to goodwill amortization totaling **R$ 8.7 billion**[994](index=994&type=chunk) - The company's bylaws require a minimum dividend distribution of **30%** of adjusted net income for each fiscal year[577](index=577&type=chunk) [The Offer and Listing](index=101&type=section&id=ITEM%209.%20THE%20OFFER%20AND%20LISTING) This section details Gerdau's securities listings on the B3, NYSE (as ADSs), and Latibex, along with relevant trading mechanisms and regulatory oversight - Gerdau's shares are listed on the São Paulo Stock Exchange (B3) in the Level 1 Differentiated Corporate Governance segment, the New York Stock Exchange (NYSE) as ADSs (GGB), and the Madrid Stock Exchange (Latibex) as DRs (XGGB)[593](index=593&type=chunk)[606](index=606&type=chunk)[607](index=607&type=chunk) - In 2022, **3.5 billion ADSs** were traded on the NYSE, representing a trading volume of **US$ 19.74 billion**[606](index=606&type=chunk) [Additional Information](index=103&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section covers Gerdau's material financial contracts, Brazilian exchange controls, and a comprehensive summary of Brazilian and U.S. federal income tax implications for non-resident shareholders - As of December 31, 2022, the company had outstanding bonds totaling **US$ 1.59 billion** (**R$ 8.3 billion**) and debentures totaling **R$ 1.4 billion**[399](index=399&type=chunk)[400](index=400&type=chunk)[612](index=612&type=chunk)[613](index=613&type=chunk) - Under Brazilian tax law, dividends paid to non-resident holders are currently exempt from income tax, while payments of interest on shareholders' equity are subject to a **15% withholding tax** (or **25%** for residents of tax-favorable jurisdictions)[636](index=636&type=chunk)[640](index=640&type=chunk) - For U.S. holders, distributions are generally treated as dividends for U.S. federal income tax purposes. These dividends may be considered 'qualified dividends' subject to a preferential tax rate, provided certain conditions are met and the company is not classified as a Passive Foreign Investment Company (PFIC)[673](index=673&type=chunk)[675](index=675&type=chunk) [Quantitative and Qualitative Disclosures Regarding Market Risk](index=115&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20REGARDING%20MARKET%20RISK) This section details Gerdau's exposure to market risks, including exchange rate, interest rate, and commodity price fluctuations, and its strategies for risk mitigation and capital management - The company is exposed to exchange rate risk, with a sensitivity analysis indicating a **5% appreciation** of the Real/Argentinian Peso against the US Dollar would result in a gain of **R$ 113.8 million** as of Dec 31, 2022[695](index=695&type=chunk)[696](index=696&type=chunk) - Interest rate risk sensitivity analysis shows that a **10 basis point change** in floating interest rates would impact financial expenses by **R$ 32.4 million**[699](index=699&type=chunk) - The company manages capital structure risk by monitoring key performance indicators, aiming for a Net Debt/EBITDA ratio of less than or equal to **1.5 times** and an average debt maturity of more than **6 years**[958](index=958&type=chunk) [Description of Securities Other Than Equity Securities](index=117&type=section&id=ITEM%2012.%20DESCRIPTION%20OF%20SECURITIES%20OTHER%20THAN%20EQUITY%20SECURITIES) This section describes Gerdau's Level II ADSs traded on the NYSE, including their representation of preferred shares and associated depositary fees and reimbursements - Gerdau's Level II ADSs trade on the NYSE under the symbol GGB, with each ADS representing one preferred share[710](index=710&type=chunk) - In 2022, the depositary (J.P. Morgan Chase Bank) reimbursed the company **US$ 1.2 million** for expenses related to the maintenance of the ADS program[711](index=711&type=chunk) PART II [Controls and Procedures](index=118&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) Management, including the CEO and CFO, concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2022 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of December 31, 2022[717](index=717&type=chunk) - Management concluded that the company maintained effective internal control over financial reporting as of December 31, 2022, based on the COSO framework[722](index=722&type=chunk) [Other Information](index=119&type=section&id=ITEM%2016.%20OTHER%20INFORMATION) This section covers governance topics including the audit committee financial expert, code of ethics, principal accountant fees, and differences between Brazilian and NYSE corporate governance practices - The Board of Auditors has determined that member Bolívar Charneski is an 'audit committee financial expert' as defined by SEC rules[725](index=725&type=chunk) Principal Accountant Fees (in R$ thousands) | Fee Type | 2022 (PwC) | 2021 (KPMG) | | :--- | :--- | :--- | | Audit fees | 9,612 | 9,443 | | Audit-related fees | 166 | 170 | | **Total** | **9,778** | **9,613** | - The company changed its certifying accountant from KPMG Auditores Independentes to PricewaterhouseCoopers Auditores Independentes for the fiscal year ending December 31, 2022[743](index=743&type=chunk) - As a foreign private issuer, Gerdau follows Brazilian corporate governance practices, which differ from NYSE standards for domestic companies, particularly regarding the requirement for a majority of independent directors on the board and its committees[747](index=747&type=chunk)[749](index=749&type=chunk) PART III [Financial Statements](index=123&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section presents Gerdau's audited consolidated financial statements for 2022, prepared under IFRS, including the independent auditor's report from PricewaterhouseCoopers - The consolidated financial statements were prepared in accordance with IFRS as issued by the IASB[771](index=771&type=chunk)[807](index=807&type=chunk) - The independent auditor's report for the 2022 fiscal year was issued by PricewaterhouseCoopers Auditores Independentes Ltda., which opined that the financial statements present fairly, in all material respects, the financial position of the company and that the company maintained effective internal control over financial reporting[773](index=773&type=chunk)[774](index=774&type=chunk)

Financial Performance and Key Metrics - Gerdau reported the highest net sales in its history, totaling BRL 82.4 billion, and the second-best adjusted EBITDA of BRL 21.5 billion with an EBITDA margin of 26.1% [3][36] - The company ended 2022 with a record cash flow of BRL 10.5 billion, which is nearly 50% of EBITDA for the period [37] - Gerdau's net debt over EBITDA ratio stood at a healthy 0.33x, with a slight increase in net debt due to record dividends paid [51] Business Line Performance - The North America business operation achieved an adjusted EBITDA of BRL 10 billion with a historical EBITDA margin of 32% [11] - The Special Steel operation saw a 40% increase in adjusted EBITDA compared to the previous year, driven by high profitability levels [29] - The Brazilian operation experienced a drop in demand due to seasonal factors and external events, but the construction sector is expected to grow, positively impacting steel demand [23][32] Market Insights - Steel shipments in North America reached the highest levels since 2015, with a strong order backlog of around 60 days [13] - The infrastructure investment package in the U.S. is expected to generate additional steel demand, with significant government funding announced for projects [14] - In Brazil, the construction sector is projected to grow by 2.5% in GDP, supported by reforms in housing programs aimed at low-income segments [32] Company Strategy and Industry Competition - Gerdau is focusing on digital transformation and innovation through initiatives like Gerdau Next, which includes partnerships in high technology and renewable energy [4][54] - The company is committed to maintaining a disciplined capital allocation strategy, with planned CapEx of BRL 5 billion for 2023, split between maintenance and expansion projects [40][41] - Gerdau's operations are characterized by geographic diversification and a focus on specialty steels, which are competitive in the global market [21][22] Management Commentary on Operating Environment and Future Outlook - Management highlighted resilience against macroeconomic challenges, including geopolitical tensions and inflationary pressures, while maintaining a positive outlook for 2023 [8][20] - The company anticipates a recovery in demand for steel in Brazil, aligning with the levels seen in 2022, despite concerns about inventory levels and new launches [31] - Management emphasized the importance of adapting to market conditions and leveraging investments in technology to enhance competitiveness [10][27] Other Important Information - Gerdau achieved its lowest accident frequency rate of 0.76, underscoring its commitment to safety [73] - The company received B Corp certification for its operations, recognizing its sustainability practices [74] - Gerdau is investing in renewable energy projects to reduce greenhouse gas emissions and improve production cost competitiveness [54] Q&A Session Summary Question: What are the expectations regarding long steel prices in Brazil? - Management noted that profitability for long steel is recovering, with demand returning to normal levels after a seasonal drop [79] Question: How will infrastructure investments impact long steel demand in the U.S.? - The outlook for the U.S. market is positive, with significant infrastructure investments expected to drive steel demand [81] Question: What is the magnitude of CapEx for the renovation of the blast furnace in Ouro Branco? - Management indicated that the CapEx for maintenance and upgrades is planned and will not surprise the market, with investments already underway [89][104] Question: Can we expect a higher level of CapEx in the coming years? - The current level of CapEx is expected to remain stable, focusing on maintenance and competitiveness without major surprises [104][140]

Gerdau S.A. (NYSE:GGB) Q3 2022 Results Conference Call November 9, 2022 12:00 PM ET Company Participants | --- | |-----------------------------------------------------------------------------------------------| | | | | | Renata Battiferro - IR | | Gustavo Werneck - CEO | | Rafael Japur - VP, IR | | Conference Call Participants | | Leo Correa - BTG Pactual | | Danielle Sasson - Itaú BBA | | Gabriel Simmons - Goldman Sachs Thiago Lofiego - Bradesco BBI Carlos de Alba - Morgan Stanley | | Guilherme Rosito - Am ...

[Condensed Consolidated Interim Financial Statements](index=1&type=section&id=Condensed%20consolidated%20interim%20financial%20statements) [Consolidated Balance Sheets](index=2&type=section&id=Consolidated%20Balance%20Sheets) Gerdau's total assets grew to R$79.8 billion by September 2022, driven by higher inventories, while lower liabilities boosted total equity to R$49.4 billion Consolidated Balance Sheet Summary (in thousands of R$) | Account | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total Current Assets** | 37,557,578 | 32,640,477 | | **Total Non-Current Assets** | 42,214,747 | 41,174,136 | | **Total Assets** | **79,772,325** | **73,814,613** | | **Total Current Liabilities** | 16,667,208 | 14,036,814 | | **Total Non-Current Liabilities** | 13,726,460 | 16,962,150 | | **Total Liabilities** | **30,393,668** | **30,998,964** | | **Total Equity** | **49,378,657** | **42,815,649** | | **Total Liabilities and Equity** | **79,772,325** | **73,814,613** | - The increase in current assets was mainly due to higher inventories, which rose to **R$18.8 billion from R$16.9 billion**, and an increase in trade accounts receivable to **R$6.7 billion from R$5.4 billion**[2](index=2&type=chunk) - The decrease in non-current liabilities was primarily driven by a reduction in long-term debt from **R$10.9 billion to R$8.2 billion**[3](index=3&type=chunk) [Consolidated Statements of Income](index=4&type=section&id=Consolidated%20Statements%20of%20Income) Net sales grew 13.5% to R$64.4 billion for the nine-month period, but net income fell to R$10.3 billion due to higher costs and the absence of prior-year one-time gains Nine-Month Income Statement Highlights (in thousands of R$) | Account | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | **Net Sales** | 64,448,165 | 56,790,157 | | **Gross Profit** | 15,822,787 | 15,630,245 | | **Income Before Taxes** | 13,872,022 | 16,374,089 | | **Net Income** | **10,261,130** | **11,998,954** | | Net Income Attributable to Owners | 10,217,898 | 11,945,709 | | **Basic EPS (R$)** | 1.79 | 3.27 | - The third quarter of 2022 showed a significant decline in net income to **R$3.0 billion compared to R$5.6 billion in Q3 2021**, with net sales remaining relatively flat[4](index=4&type=chunk) - The 2021 results included a one-time Eletrobras compulsory loan recovery of **R$1.39 billion**, which was not present in 2022, contributing to the year-over-year decline in income[4](index=4&type=chunk) [Consolidated Statements of Comprehensive Income](index=5&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income) Total comprehensive income for the nine-month period decreased to R$10.1 billion from R$12.5 billion year-over-year, impacted by lower net income and negative currency translation effects Comprehensive Income Summary (in thousands of R$) | Item | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | **Net income for the period** | 10,261,130 | 11,998,954 | | **Other comprehensive income for the period, net of tax** | (201,951) | 517,736 | | *Cumulative translation adjustment* | *(507,926)* | *945,601* | | *Unrealized Gains (Losses) on net investment hedge* | *303,928* | *(447,163)* | | **Total comprehensive income for the period, net of tax** | **10,059,179** | **12,516,690** | [Consolidated Statements of Changes in Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Equity) Shareholders' equity grew to R$49.4 billion by September 2022, as R$10.3 billion in net income more than offset R$2.2 billion in dividends and R$935 million in share buybacks Key Changes in Equity - 9 Months Ended Sep 30, 2022 (in thousands of R$) | Description | Amount | | :--- | :--- | | **Balance as of January 1, 2022** | **42,815,649** | | Net income | 10,261,130 | | Other comprehensive income (loss) | (201,951) | | Effects of the share buyback program | (934,768) | | Dividends/interest on equity | (2,210,276) | | **Balance as of September 30, 2022** | **49,378,657** | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations doubled to R$9.4 billion, driving a R$2.0 billion increase in total cash, despite higher spending on investments, dividends, and share buybacks Cash Flow Summary - 9 Months Ended (in thousands of R$) | Cash Flow Activity | September 30, 2022 | September 30, 2021 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **9,425,997** | **4,695,182** | | **Net cash used in investing activities** | **(2,726,184)** | **(1,896,608)** | | **Net cash used by financing activities** | **(4,832,663)** | **(3,444,588)** | | Increase (Decrease) in cash and cash equivalents | 2,024,997 | (641,127) | | Cash and cash equivalents at end of period | 6,185,651 | 3,976,077 | - Key uses of cash in financing activities included **R$2.4 billion for dividends** and interest on capital, and **R$916 million for the purchase of treasury stocks**[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) [Note 1 - General Information](index=8&type=section&id=NOTE%201%20-%20GENERAL%20INFORMATION) Gerdau S.A. is a leading global steel producer and the largest recycler in Latin America, with listings on the São Paulo, New York, and Madrid stock exchanges - Gerdau S.A. is a leading producer of long steel in the Americas and one of the largest suppliers of special steel in the world[8](index=8&type=chunk) - The company is also a major producer of flat steel and iron ore in Brazil and is described as the largest recycler in Latin America[8](index=8&type=chunk) [Note 2 - Summary of Significant Accounting Practices](index=8&type=section&id=NOTE%202%20-%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20PRACTICES) The interim financials comply with IAS 34, maintain consistent accounting policies with the 2021 annual report, and identify the war in Ukraine as a key macroeconomic risk - The financial statements are prepared in accordance with IAS 34 and should be read with the 2021 annual financial statements[10](index=10&type=chunk) - The company identifies the Russian invasion of Ukraine as a significant risk that could have a material adverse effect on the macroeconomic environment, steel demand, prices, and energy costs[20](index=20&type=chunk) [Note 3 – Investments in Subsidiaries, Joint Ventures, and Associates](index=9&type=section&id=NOTE%203%20%E2%80%93%20CONDENSED%20CONSOLIDATED%20INTERIM%20FINANCIAL%20STATEMENTS) The company details its interests in other entities, including the sale of its Venezuelan subsidiary and its rationale for not consolidating certain majority-owned joint ventures - In March 2022, the company sold its **100% interest** in the Venezuelan subsidiary, Sizuca - Siderúrgica Zuliana C.A[21](index=21&type=chunk) - The company does not consolidate Gerdau Corsa S.A.P.I. de C.V. (75% ownership) and Gerdau Summit (58.73% ownership) because **joint control agreements prevent it from controlling their business decisions**[23](index=23&type=chunk) Combined Net Sales of Joint Ventures (in thousands of R$) | Period | Net Sales | | :--- | :--- | | **Nine-month period ended Sep 30, 2022** | 11,559,656 | | **Nine-month period ended Sep 30, 2021** | 8,827,737 | [Note 6 - Inventories](index=12&type=section&id=NOTE%206%20-%20INVENTORIES) Inventories rose to R$18.8 billion by September 2022 from R$16.9 billion at year-end 2021, with a notable increase in the allowance for adjustments to net realizable value Inventory Breakdown (in thousands of R$) | Category | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Finished products | 8,097,722 | 7,209,379 | | Work in progress | 4,821,906 | 3,453,948 | | Raw materials | 3,785,135 | 3,994,655 | | **Total Inventories** | **18,811,541** | **16,861,488** | [Note 9 – Property, Plant and Equipment (PPE)](index=14&type=section&id=NOTE%209%20%E2%80%93%20PROPERTY,%20PLANT%20AND%20EQUIPMENT) Capital expenditures on PPE for the first nine months of 2022 increased significantly to R$2.61 billion, with R$20.5 million in borrowing costs capitalized during the period - Acquisitions of PPE for the nine-month period ended September 30, 2022, amounted to **R$2,607,753 thousand**, compared to R$1,811,078 thousand for the same period in 2021[41](index=41&type=chunk) - Borrowing costs capitalized during the nine-month period of 2022 were **R$20,452 thousand**[42](index=42&type=chunk) [Note 12 – Loans and Financing](index=15&type=section&id=NOTE%2012%20%E2%80%93%20LOANS%20AND%20FINANCING) Total debt decreased to R$9.8 billion from R$11.1 billion, with the majority denominated in U.S. Dollars, and the company renewed an undrawn US$875 million credit line Loans and Financing by Currency (in thousands of R$) | Currency | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Brazilian Real (R$) | 487,650 | 461,187 | | U.S. Dollar (US$) | 8,890,445 | 10,535,532 | | Other currencies | 427,087 | 113,067 | | **Total** | **9,805,182** | **11,109,786** | - The company renewed a Global Credit Line of **US$875 million** in September 2022, with a maturity in September 2027; as of the reporting date, no amount of this credit line was used[50](index=50&type=chunk) [Note 14 – Financial Instruments and Risk Management](index=16&type=section&id=NOTE%2014%20%E2%80%93%20FINANCIAL%20INSTRUMENTS) The company details its management of financial risks, capital management targets like a Net Debt/EBITDA ratio of 1.0-1.5x, and its use of derivatives for hedging - The company's capital management targets include a **Net Debt/EBITDA ratio of 1.0 to 1.5 times**, a gross debt limit of R$12 billion, and an average debt maturity of over 6 years[61](index=61&type=chunk) - The company designates its **Ten/Thirty Years Bonds (US$1.1 billion)** as a hedge of its net investments in foreign subsidiaries, with exchange rate effects recognized in Other Comprehensive Income[79](index=79&type=chunk) Sensitivity Analysis on Statements of Income (Impacts) | Assumption | Change | Impact on Sep 30, 2022 (R$) | | :--- | :--- | :--- | | Foreign currency sensitivity | 5% | 116,385 | | Interest rate sensitivity | 10 bps | 31,138 | | Product price sensitivity | 1% | 211,492 | | Raw material price sensitivity | 1% | 138,900 | [Note 15 – Provisions and Contingencies](index=22&type=section&id=NOTE%2015%20%E2%80%93%20PROVISIONS%20FOR%20TAX,%20CIVIL%20AND%20LABOR%20CLAIMS) The company has provisioned R$1.86 billion for probable legal losses while disclosing over R$13 billion in significant contingent liabilities deemed possible, mainly from tax disputes - Provisions for probable losses from tax, civil, and labor claims totaled **R$1,856,351 thousand** as of September 30, 2022[90](index=90&type=chunk) - The company faces significant tax contingencies classified as 'possible loss' and not provisioned, including **R$8.6 billion related to goodwill amortization** from a 2004/2005 corporate restructuring[102](index=102&type=chunk) - Investigations by Brazilian authorities into CARF proceedings and political contributions are ongoing, and while the **U.S. SEC has closed its related inquiry**, the company cannot predict the outcome or need for a provision[105](index=105&type=chunk) [Note 18 – Equity](index=30&type=section&id=NOTE%2018%20%E2%80%93%20EQUITY) A share buyback program for up to 55 million preferred shares was approved, with R$934.8 million spent to acquire 39.2 million shares by September 30, 2022 - On May 4, 2022, the Board approved a new Share Buyback Program for up to **55,000,000 preferred shares** over 18 months[148](index=148&type=chunk) - As of September 30, 2022, the company had acquired **39,162,900 preferred shares** under the new program for a total cost of **R$934,768 thousand**[148](index=148&type=chunk) Dividends and Interest on Equity Credited in 2022 (in thousands of R$) | Period | Nature | Amount | | :--- | :--- | :--- | | 1st Quarter | Interest on income | 973,542 | | 2nd Quarter | Dividends | 1,199,713 | | **Total** | | **2,173,255** | [Note 19 – Earnings Per Share (EPS)](index=32&type=section&id=NOTE%2019%20%E2%80%93%20EARNINGS%20PER%20SHARE%20(EPS)) For the nine months ended September 30, 2022, basic EPS decreased to R$6.02 and diluted EPS fell to R$5.98, down from R$7.01 and R$6.97 in the prior year Earnings Per Share (in R$) | EPS Type | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | **Basic EPS** | 6.02 | 7.01 | | **Diluted EPS** | 5.98 | 6.97 | [Note 22 – Net Financial Result](index=35&type=section&id=NOTE%2022%20%E2%80%93%20FINANCIAL%20INCOME) The net financial expense for the nine-month period increased tenfold to R$1.4 billion, driven by higher interest costs, negative exchange variations, and no repeat of prior-year tax credit updates Net Financial Result Breakdown (in thousands of R$) | Item | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | | Financial income total | 388,360 | 162,120 | | Financial expenses total | (1,200,114) | (1,011,606) | | Exchange variations, net | (603,439) | (94,074) | | Tax credits monetary update | - | 788,741 | | Gains and Losses on derivatives, net | 20,536 | 19,562 | | **Financial result, net** | **(1,394,657)** | **(135,257)** | [Note 23 – Segment Reporting](index=35&type=section&id=NOTE%2023%20%E2%80%93%20SEGMENT%20REPORTING) The North America Operation's gross profit doubled to R$7.0 billion, offsetting a sharp decline in the Brazil Operation and driving overall sales growth Gross Profit by Business Segment - 9 Months Ended (in thousands of R$) | Business Segment | September 30, 2022 | September 30, 2021 | | :--- | :--- | :--- | | Brazil Operation | 5,285,744 | 9,734,039 | | North America Operation | 7,042,298 | 3,586,415 | | South America Operation | 1,328,323 | 1,114,805 | | Special Steels Operation | 2,026,773 | 1,157,836 | Total Assets by Geographic Area (in thousands of R$) | Geographic Area | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Brazil | 32,185,295 | 31,740,469 | | Latin America | 10,904,027 | 8,959,237 | | North America | 36,683,003 | 33,114,907 | | **Consolidated** | **79,772,325** | **73,814,613** | [Note 25 – Subsequent Events](index=37&type=section&id=NOTE%2025%20%E2%80%93%20SUBSEQUENT%20EVENTS) Post-period end, the company proposed a R$3.6 billion dividend payment, approved the cancellation of over 46 million treasury shares, and finalized a leasing partnership with Randon - On November 7, 2022, the company proposed dividend and interest on equity payments totaling **R$3.58 billion** (R$2.88 billion in dividends and R$0.70 billion in interest on equity), to be paid on December 14, 2022[182](index=182&type=chunk) - On November 8, 2022, the Board approved the cancellation of **1,697,538 common shares and 44,564,000 preferred shares** held in treasury, without reducing the capital value[183](index=183&type=chunk) - On November 3, 2022, the company's subsidiary Gerdau Next S.A. finalized a strategic partnership with Randon to create a new company focused on leasing services for trucks and semi-trailers[181](index=181&type=chunk)

Gerdau SA (NYSE:GGB) Q2 2022 Earnings Conference Call August 3, 2022 1:00 PM ET Company Participants Renata Battiferro - IR Gustavo Werneck - CEO & Director Rafael Japur - EVP, CFO & IR Officer Conference Call Participants Rafael Barcellos - Santander Daniel Sasson - Itaú BBA Thiago Lofiego - Bradesco BBI Renata Battiferro [Technical Difficulty] Gerdau's conference call to discuss the results of the second quarter of 2022. [Operator Instructions]. We inform that this video conference is being recorded and w ...