Gerdau(US:GGB)2025-02-20 22:22Financial 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]