Gerdau S.A. Global Metals, Mining & Steel Conference May 2006

Agenda Steel Sector Gerdau Group Operating and Financial Highlights

Steel Sector – 1st Quarter 2006 World The world’s steel output reached 284.5 million metric tons in the 1st quarter, a decrease of 1.15% compared to that of the forth quarter of 2005. Total output in Brazil reached 7.2 million metric tons in the 1st quarter of 2006, a decrease of 9.8% compared to 4Q2005. In the 1Q2006, the long steel production (including blooms and billets) remained in the same level’s of the last period, reaching 2,7 million metric tons. Domestic sales of long steel products (including blooms and billets) in 1Q2006 reached 1.7 million metric tons, an increase of 9.1% compared to the quarter before. Exports of long steel products (including ingots, blooms and billets) totaled 1.0 million metric tons in the 1Q2006, compared to 894 thousand metric tons in 4Q2005. Brazil North America The North American crude steel output for 1Q2006 was 32.1 million metric tons, an increase of 2.0% compared to the previous quarter. A produção mundial de aço no 1º trimestre foi 1,2% menor do que no quarto trimestre de 2005, com 284,5 million de toneladas. A China continuou a aumentar sua produção (XXX million de toneladas) e exportou .... No Brasil, após um decepcionante 2005, começamos a ver o mercado recuperar-se. O setor de Construção Civil é o grande alavancador de crescimento, ajudado por diversos fatores, como a MP do Bem, inflação estável, maior nível de renda e empregos e menores taxas de juros. A agropecuária vem recuperando-se ainda de forma lenta (gripe aviária, aftosa, custo da safra, preço das commodities...). Já a indústria continua em crescimento sustentado. A redução do IPI foi repassada imediatamente para o preço do produto (-5%), mantendo-se a mesma margem de contribuição. As distribuidoras, porém, somente repassaram esta redução no final do trimestre, devido à existência de estoques comprados à alíquota antiga. No mercado internacional, a demanda está bastante aquecida na América do Norte e na América Latina e estável na Europa. Com a recuperação das vendas domésticas, o volume exportado deve ficar em linha com o realizado no ano passado, porém caindo proporcionalmente em relação ao total de entregas. No mercado norte-americano, continua-se a observar forte demanda e pouca volatilidade, o que não era visto há bastante tempo. Os spreads seguem elevados, podendo aumentar ainda mais. A concorrência recentemente anunciou aumento de preços (US$ 15/ton), um bom sinal do aquecimento do mercado. Outra prova da força do mercado norte-americano é que não houve a queda sazonal típica desta época do ano. The South American crude steel output for the 1Q06 was 10.6 million metric tons. Brazil is the largest producer, with 67.5% of the total output, followed by Argentina, with 12.8% of the total output in the region. South America Source: IBS and IISI

Brazil and the Global Steel Industry Crude Steel Production – 1Q06 In million tons Total World Production: 285.2 million tons China accounted for 32.3% of the global steel output Brazil accounted for 2.5% of the global steel output China India Japan USA Germany Ukraine Italy Brazil Russia South Korea Source: IISI

Agenda Steel Sector Gerdau Group Operating and Financial Highlights

TO BE A WORLD-CLASS INTERNATIONAL STEEL COMPANY Philosophy VISION TO BE A WORLD-CLASS INTERNATIONAL STEEL COMPANY MISSION Gerdau is an organization focused on the steel business with a mission to satisfy customers` needs and add value to shareholders, committed to the fulfillment of people and to the sustainable development of society

Investment Considerations A low cost international steel company with operations in Brazil, Uruguay, Canada, Chile, Argentina, Colombia, Spain and the United States Substantial international profile – foreign exchange generation through subsidiaries abroad and export sales amount approximately 60% of consolidated revenues in the 1Q06 Ranked 14th globally by steel output in 2005 with an output of 13.7MM tons (including strategic shareholdings) 2nd largest long steel producer in North America and largest long steel producer in the Americas Focused on the production of long steel products Gerdau operates 30 mills incorporating both integrated and mini mills with the latest technologies Relevant market share in every country with operations and diversified product range, with high value-added products Strong low cost strategy as a result of diversified production processes and multiple raw material sourcing Sound balance sheet (Gross Debt-to-EBITDA at approximately 1.7x in 1Q06) and strong cash generation Shares of Gerdau S.A. are currently traded at the São Paulo, New York and Madrid stock exchanges Shares of Metalúrgica Gerdau S.A. are traded at the São Paulo stock exchange Gerdau Ameristeel’s shares are traded at the New York and Toronto stock exchanges

Growth portfolio (CAGR 1999-2003) benchmarked against industry average Value Builder Company ATKearney Growth portfolio (CAGR 1999-2003) benchmarked against industry average Revenue Growth 30% Gerdau Outokumpu Acerinox 25% China Steel Usinas Baoshan1) Salzgitter Nucor INI Steel 20% Rautaruukki Ipsco Tata 15% US Steel Voest-Alpine Industry average Smorgon 10% Boehler-Uddeholm SSAB Arcelor Ispat Corus JFE 5% Harsco SAIL Thyssenkrupp Dofasco Nippon Steel CSN Kobe Onesteel1) 0% Wuhan Steel1) Kennametal RIVA1) Carpenter -5% Iscor AK Steel Stelco Haynes Nisshin Steel -10% Eregli Demir Posco Allegheny -35% -25% -15% -5% 5% 15% 25% 35% 45% Industry average Value Growth Note: 1) RIVA 98 02, Wuhan Steel & Onesteel 00 03, Baoshan 01 03 Source: ThyssenKrupp (segment), Kobe (segment), RIVA, Haynes: EBIT Growth

Solid Track Record 16,372 18,658 TOTAL INVESTED (1981-2005): In thousand tons Potter Form Gate City & RJ North Star (USA) SACK (Chile) 18,658 TOTAL INVESTED (1981-2005): Brazil = US$ 4.0 billion + Debt North America = US$ 1.4 billion + Debt South America = US$ 468 million + Debt Araçariguama (Brazil) Sidenor (Spain) 11,076 7,696 Controll of Açominas (Brazil) Cartersville Drawing Co-Steel (USA) 16,475 Diaco (Col.) Ameristeel (USA) AZA New Plant (Chile) Additional stake in Açominas (Brazil) 3,072 3,934 4,568 Cambridge (Canada) Usiba (Brazil) Piratini (Brazil) AZA (Chile) 4,595 Stake in Açominas (Brazil) 2,611 1,757 Manitoba (Canada) Barão de Cocais (Brazil) Laisa - 1980 (Uruguay) Brazil – Crude Steel Installed Capacity Abroad – Crude Steel Installed Capacity

An International Company Total Capacity (Includes Strategic Shareholdings) 18.7 million tons of crude steel 14.9 million tons of rolled steel products Brazil 9 million tons of crude steel 5.5 million tons of rolled steel products 11 mills 11 fabrication shops 6 downstream operations and special sections 74 sales points and flat steel service centers Abroad 9.7 million tons of crude steel 9.3 million tons of rolled steel products 19 mills 38 fabrication shops 15 downstream operations and special sections Steel mills Strategic Shareholding 12

Solid Market Share in Long Steel BRAZIL NORTH AMERICA Barra Mansa 5% Other 41,9% Gerdau 48% Mittal 6,8% Other 7% Commercial Metals 5,6% Aços Villares 5% Gerdau Ameristeel 14,8% Nucor 21,8% Belgo 35% COUNTRY MARKET SHARE MAIN COMPETITORS CHILE 51% CAP + Imports URUGUAY 90% Imports ARGENTINA 20% Acindar + Bragado + Zapla COLOMBIA 37% Acerias Paz Del Rio SPAIN 36%* GSB * Specialty steel only

Agenda Steel Sector Gerdau Group Operating and Financial Highlights

Shipments In thousand tons 13,550 12,560 12,144 9,109 Brazil – Domestic Market (27% in 1Q06) Brazil – Exports (17% in 1Q06) South America (9% in 1Q06) North America (45% in 1Q06) Europe (2% in 1Q06) 7,411 3,691 3,374 Billets, blooms & slabs Merchant bars Rebars Fabricated steel Heavy structural shapes Wire-rod Wires Nails

NET REVENUE BREAKDOWN BY REGION EXPORT SHIPMENTS BY REGION Strong Export Business 1Q06 NET REVENUE BREAKDOWN BY REGION South America 9% Europe 3% Brazil (Domestic Market) 35% North America 44% Exports (from Brazil) 9% EXPORT SHIPMENTS BY REGION Central America 12% Africa 13% Europe 12% North America 16% Asia 22% South America 25%

Margin Evolution Gross Margin EBITDA Margin Net Margin Cost of sales remained stable compared to net revenue and gross margin stayed at the same levels as in the fourth quarter of 2005. EBITDA in the quarter reached R$ 1.2 billion (R$ 1.0 billion in the fourth quarter of 2005), and the consolidated EBITDA margin remained at 21%. Net profit in the first quarter reached R$ 832.5 million, 14% greater than that of the fourth quarter while net margin stayed at 15%. Brazil North America South America Consolidated

Consolidated Financials In US$ millions 1Q05 4Q05 1Q06 Balance Sheet Current assets Non-current assets Fixed assets Total Current liabilities Non-current liabilities Shareholders’ equity 3,725 409 3,075 7,209 1,742 2,307 3,160 5,182 377 3,788 9,347 1,790 3,225 4,332 5,684 503 4,432 10,619 1,976 3,628 5,015 Income Statement Net revenue Gross profit Operating income Net income EBITDA 2,187 605 439 304 531 2,088 551 375 312 443 2,584 681 532 383 538 26.4% 21.2% 1.6x 0.4x 26.3% 20.8% 1.7x 0.5x Ratios Gross margin EBITDA margin Total debt / EBITDA Net debt / EBITDA 27.6% 24.3% 1.1x 0.7x

Indebtedness DEBT STRUCTURE Mar. 06 Companies Abroad 29% In US$ million COST OF DEBT IN MAR. 06 (per annum) Mar. 06 In US$ Brazil – Domestic Currency Brazil – Foreign Currency Companies Abroad 14.2%* 7.3% 7.8% DEBT AVERAGE LIFE 8.8 years *Includes (7.19%) of 2006 FX DEBT STRUCTURE Companies Abroad 29% Of the main indicators that help monitor the Gerdau companies’ indebtedness, the Gross debt/EBITDA was a meager 1.6X. Net debt can, theoretically, be settled in less than 5 months of operating cash generation. EBITDA, compared to net financial expenses excluding monetary and FX variations, provides an interest coverage ratio of 21X. Debt’s average life remains greater than 9 years. On December 31st, cash and cash equivalents totaled R$ 5.5 billion, of which R$ 2.2 billion (41.0%) were pegged to foreign currencies, mainly to the US dollar. Foreign Currency 46% Domestic Currency 25%

Expansion Program 2006 - 2008 Investment Program 2006 – 2008: US$ 3.8 billion 2006 – US$ 1.7 billion 2007 – US$ 1.4 billion 2008 – US$ 0.7 billion NEW CAPACITY US$ 2.0 billion MAINTENANCE US$ 1.8 billion Brazil US$ 674 MM North America US$ 977 MM South America US$ 129 MM INSTALLED CAPACITY EVOLUTION Rolled Products Crude Steel In thousand tons + 14% + 17% 21,360 17,471 18,658 14,870 + 6% Brazil Abroad + 13% Brazil Abroad 10,073 10,675 10,886 9,610 + 24% + 25% 10,685 6,585 8,585 5,260 2006 2008 2006 2008

DIVIDENDS DISTRIBUTION* Dividends Policy 30% of the adjusted net income (Pay-out) Dividend payments are being made on a quarterly basis DIVIDENDS DISTRIBUTION* In US$ million Metalúrgica Gerdau S.A. (GOAU4) Gerdau S.A. (GGBR4) DIVIDEND YIELD 1999 2000 2001 2002 2003 2004 2005 GOAU4 6.0% 7.9% 17.0% 11.3% 6.2% 7.8% 6.1% GGBR4 3.6% 6.8% 3.9% 4.6% * Dividends related to each period, but not necessarily paid in the same period.

Outlook Brazil North America South America Europe Greater economic growth in 2006 – around 3.5% Growing volumes – Domestic market from 8 to 10% Strengthening of the civil construction sector Price stability in Brazilian currency Inventories adjusted North America Consistent economic growth Greater investments in infrastructure Production costs stability Prices rising Growing metallic spread South America Consolidated economic growth Demand is strong Europe Consolidation of the specialty steel operations at Sidenor The general outlook for international markets for long common steel is positive. This is the result of the balance between supply and demand and inventory levels around the world. Global discipline is yet another factor that has contributed to maintain competitive environment stable. In Brazil there are indications that the worst is over and that the country will take off in 2006 at a pace that should lead to economic recovery. From the domestic market’s perspective with interest rates falling and perhaps an increase in government spending, the economy may show some confidence. Civil construction is already signaling recovery and may play a relevant role in economic growth. We should see recovery also in the industrial sector such as agricultural equipment and power transmission towers. It’s worthy The US GDP should continue to grow at healthy rates and the highway bill, along with the reconstruction efforts in the Gulf area should maintain demand for rebars, merchant bars and profiles strong. In broad terms, it is fair to assume that the world economy will experience a favorable environment in 2006. On the other hand, in the long run, there is the threat of the excess capacity in China, which brings uncertainty not only to the American market but to international prices too. The Chinese economy should continue to grow and it is reasonable to expect that domestic demand will continue to absorb a significant portion of this added capacity.

Safe Harbor Statement This presentation can contain statements which constitute forward-looking statements. Such forward-looking statements are dependent on estimates, data or methods that may be incorrect or imprecise and that may be incapable of being realized. These estimates also are subject to risk, uncertainties and suppositions and include, among other, overall economic, political and commercial environment, in Brazil and in the markets we are present in addition to government regulations, present and future. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The Company does not undertake, and specifically disclaims any obligation to update any forward-looking statements, which speak only as of the date made.

Gerdau S.A. www.gerdau.com.br inform@gerdau.com.br +55 51 3323 2703