Financial Data and Key Metrics Changes - Gerdau ended 2025 with an EBITDA of BRL 10.1 billion, a decrease of 7% compared to 2024, primarily due to a challenging environment in Brazil marked by increased competition [7] - Adjusted net income for 2025 was BRL 3.4 billion, down 21% year-on-year, reflecting operational performance [8] - The company achieved a free cash flow generation of BRL 1.4 billion in Q4 2025, resulting in a positive annual cash flow of BRL 394 million for the year [10] - Gerdau's leverage stood at 0.76 times net debt over EBITDA, indicating a sound financial position [10] Business Line Data and Key Metrics Changes - North American operations showed strong performance with record shipments in December 2025, benefiting from resilient demand and reduced import levels [5] - Brazilian operations faced challenges with a 7.5% increase in steel imports impacting profitability, despite trade defense measures [5] - The company invested BRL 6.1 billion in CapEx for 2025, with a guidance of BRL 4.7 billion for 2026, indicating a reduction to enhance free cash flow flexibility [9] Market Data and Key Metrics Changes - North America experienced stable steel consumption at high levels, with order backlogs above historical averages, particularly in sectors like solar energy and infrastructure [12] - In Brazil, the market faced excessive imports affecting local operations, although there is optimism regarding trade defense measures [12] Company Strategy and Development Direction - Gerdau's strategy focuses on geographic diversification and production flexibility to navigate varying market conditions [4] - The company is optimistic about the Miguel Burnier sustainable mining project, which is expected to reduce production costs significantly [6] - Management is cautious about capital allocation, emphasizing the importance of maintaining a sound balance sheet while exploring growth opportunities [10][76] Management's Comments on Operating Environment and Future Outlook - Management expects moderate growth in demand in Brazil for 2026, despite challenges from imported steel [12] - The outlook for North America remains positive, with expectations of continued strong demand and operational performance [12] - Management expressed confidence in the company's ability to improve margins in Brazil, contingent on successful project execution and market dynamics [25][39] Other Important Information - Gerdau paid out BRL 2.4 billion in dividends and share buybacks throughout 2025, reflecting a commitment to returning value to shareholders [10] - The company announced a new buyback program for approximately 2.9% of outstanding shares, valued at BRL 1.2 billion [11] Q&A Session Questions and Answers Question: Outlook for Brazil business margins - Management indicated expectations for stability in margins in Q1 2026, with potential for improvement in the second half of the year depending on market conditions and project execution [14][25] Question: Details on impairment losses - Management explained that impairment losses were due to conservative assumptions regarding future cash flows and underutilization of certain assets in Brazil [15][22] Question: Capacity adjustments in Brazil - Management confirmed that there are no plans to close additional capacity in 2026, focusing instead on optimizing operations without further reductions [26] Question: South America and U.S. market expectations - Management expects a recovery in South America margins and continued strong performance in North America, with no substantial reduction in profitability anticipated [31][34] Question: Protectionism and investment in Brazil - Management expressed optimism about trade defense measures and indicated a commitment to continue investing in Brazil to enhance competitiveness [48][54] Question: Non-core asset divestments - Management is exploring options for divesting non-core assets, including forest and real estate holdings, but emphasized that any divestment would be aimed at generating value for the company [56][60]

Financial Data and Key Metrics Changes - Gerdau ended 2025 with an EBITDA of BRL 10.1 billion, down 7% compared to 2024, primarily due to a challenging environment in Brazil marked by increased competition [4][5] - The adjusted net income for 2025 was BRL 3.4 billion, down 21% year-on-year, excluding non-recurring impairment losses of BRL 2 billion [5][6] - The company achieved a free cash flow generation of BRL 1.4 billion in Q4 2025, resulting in a positive annual cash flow of BRL 394 million for the last 12 months [6][7] - Gerdau's leverage ratio stood at 0.76 times net debt over EBITDA, indicating a sound financial position [7] Business Line Data and Key Metrics Changes - North American operations showed strong performance with record shipments in December 2025, benefiting from resilient demand and reduced import levels [3][4] - Brazilian operations faced challenges with a 7.5% increase in steel imports, impacting profitability despite trade defense measures [3][4] - The new sustainable mining platform in Miguel Burnier is expected to significantly reduce production costs at the Ouro Branco unit [4] Market Data and Key Metrics Changes - The North American market demonstrated strong steel consumption and order backlogs above historical averages, with positive outlooks for sectors like solar energy and infrastructure [9][10] - In Brazil, moderate growth in demand is expected for 2026, despite the influx of imported steel [9][10] Company Strategy and Development Direction - Gerdau's strategy focuses on geographic diversification and productivity flexibility to navigate varying market conditions [2][3] - The company plans to reduce CapEx to BRL 4.7 billion in 2026, allowing for greater flexibility in cash flow generation [6][7] - There is an emphasis on optimizing operations rather than closing down capacity, with no plans to shut down additional mills in 2026 [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding trade defense measures in Brazil, which could improve market conditions [39][42] - The outlook for North America remains strong, with no anticipated deterioration in profitability [28][31] - The company is cautious about capital allocation, focusing on investments that enhance competitiveness rather than merely expanding capacity [58][60] Other Important Information - Gerdau paid out BRL 2.4 billion in dividends and share buybacks throughout 2025, reflecting a commitment to returning value to shareholders [7][8] - The company is exploring the potential divestment of non-core assets, including forest and real estate holdings, to generate value [45][48] Q&A Session Summary Question: Outlook for Brazil business margins - Management expects stability in margins for Q1 2026, with potential for improvement in the second half due to the Miguel Burnier project [12][21] Question: Details on impairment losses - Impairment was driven by conservative cash flow projections and underutilization of assets in Brazil [13][19] Question: South America and U.S. market expectations - South America is expected to recover margins in 2026, while North America shows strong profitability with stable order books [26][28] Question: Growth avenues in the U.S. segment - Gerdau is focused on organic growth and exploring M&A opportunities, particularly in smaller players [58][60] Question: Impact of anti-dumping measures - Management is optimistic about the expansion of trade defense measures, which could enhance competitiveness in Brazil [36][39] Question: Non-core asset divestments - The company is evaluating non-core assets for potential divestment, focusing on generating value rather than simply selling off assets [45][48]

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

Financial Performance - Gerdau's adjusted EBITDA reached R$26 billion, with North America's improved results offsetting performance in Brazil and South America[16] - Net income was R$864 million, with earnings per share at R$043, a 14% increase compared to 1Q25[16][17] - Gerdau S A issued US$650 million in bonds and R$14 billion in debentures to bolster cash and lengthen the company's debt profile[17] - Gerdau S A executed 68% of its share buyback program, investing approximately R$686 million, representing 22% of outstanding shares[17] Regional Performance - North America achieved its highest all-time share in consolidated EBITDA at 61%, compared to 48% in 1Q25[10] - North America's net sales increased by 42% to R$9139 million, with EBITDA increasing by 365% to R$1635 million[36] - Brazil's shipment volume decreased by 52% from 1Q25[33] - South America's shipments increased by 218% to 288000 tonnes[45] Market Dynamics - The import penetration rate in Brazil reached a critical 26%, a 39 percentage point increase compared to 2Q24[12][33] - Steel imports continue at a record pace despite trade defense measures in place[14] Strategic Investments - Approximately 50% of the total estimated CAPEX for the year, amounting to R$16 billion, has already been invested[16] - The Sustainable Miguel Burnier Mining project is 72% complete and is under pre-operational planning for start-up in 4Q25[16]