1 Gerdau S.A. Annual Citigroup Asia Pacific Fixed Income Investor Conference January 2006

2 Disclaimer Statements relative to business perspectives are based on current expectations of future events and trends that may affect our business. These estimates 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.

3 Gerdau Group Overview Steel Industry Overview Gerdau’s Operating and Financial Highlights Agenda All data presented in US Dollar and in metric tons, except when indicated

4 VISION MISSION TO BE A WORLD-CLASS INTERNATIONAL STEEL COMPANY 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 Philosophy

5 A low cost international steel company with operations in Brazil, Uruguay, Canada, Chile, Argentina, Colombia and the United States Substantial international profile – foreign exchange generation through divisions abroad and export sales amount approximately 63% of consolidated revenues in 9M05 Ranked 12 th globally by steel output in 2004 with an output of 13.4m tons (includes one joint venture) 2 nd 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 29 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 (Net Debt/EBITDA 0.6x at Sep05) and strong cash generation Shares of Gerdau S.A. are currently traded at the São Paulo, New York and Madrid exchanges Investment Considerations

6 Steel mills Downstream operations Fab shops Comercial Gerdau stores and Service centers Scrap collection and processing units Solid pig iron production units Iron ore extraction areas Private port terminals Joint venture Brazil 7.6 million tons of crude steel 4.8 million tons of rolled steel products Abroad 9.2 million tons of crude steel 9.1 million tons of rolled steel products Total Capacity (Includes Joint Ventures) 16.8 million tons of crude steel 13.9 million tons of rolled steel products (29) (21) (49) (75) (24) (2) (3) (2) (1) An International Company Gerdau’s installed capacity will reach some 21 million tons of crude steel per year post completion of the Brazilian investment program in 2007

7 Cartersville Mill Orrvile Drawing (USA) Laisa (Uruguay) AZA (Chile) SIPAR (Arg.) Ameristeel (USA) AZA New Plant (Chile) Potter Form Gate City & RJ North Star (USA) SACK (Chile) DIACO (Colombia) Cambridge (Canada) Manitoba (Canada) SIPSA (Argentina) Cartersville Drawing Co-Steel (USA) 1,757 3,072 3,934 4,595 7,696 14,450 16,830 Abroad – Crude Steel Installed Capacity TOTAL INVESTED ABROAD ( ): North America = US$ 1.3 billion + Debt South America = US$ 314 million + Debt In thousand tons THE NEW MILLENNIUM Expansion abroad – reverse takeover of Co-Steel and acquisition of North Star Mills Acquisition of stake in Açominas – controller since 2002 Strategic alliance in Colombia Expansion into SBQ - Spain Solid Track Record Brazil – Crude Steel Installed Capacity

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

9 Gerdau Group Overview Steel Industry Overview Gerdau’s Operating and Financial Highlights Agenda

10 World Steel – Supply and Demand Source: IISI / World Steel Dynamics Finished Steel F2010F 632 1,000 1,153 ProductionApparent Consumption , % over % over 2005 According to a WSD forecast for 2010, 97% of the world’s production will be consumed. In million tons

11 Crude Steel Production – 2004 China USA Japan Russia South Korea Germany Ukraine Brazil India Italy Source: IISI Brazil and the Global Steel Industry In million tons Total World Production: 1,057 million tons China accounted 25.7% of the global steel production Brazil accounted 3.1% of the global steel production

12 Crude Steel – Output 2004 In million tons Arcelor (LUX) 2 Mittal Steel (NET) 1 Nippon Steel (JAP) 3 JFE Steel (JAP) 4 Posco (KOR) 5 Shangai Baosteel (CHI) 6 US Steel (USA) 7 Corus Group (U.K.) 8 ThyssenKrupp (GER) 10 Riva Group (ITA) 11 Nucor (USA) 9 Gerdau Group (BRA) 12 Sumitomo (JAP) Gerdau should have an installed capacity of approximately 21 million tons of crude steel per year after the investment program in Brazil is completed in Source: IISI * * Includes ISG acquired by Mittal Steel in Among the Leaders

13 COUNTRY MARKET SHAREMAIN COMPETITORS Solid Market Share in Long Steel CHILE URUGUAY ARGENTINA 53% 20% 90% CAP + Imports Acindar + Bragado + Zapla Imports COLOMBIA37%Acerias Paz Del Rio BRAZIL Gerdau 48% Belgo 35% Barra Mansa 5% Other 12% NORTH AMERICA Nucor 27% Gerdau Ameristeel 19% Commercial Metals 7% Imports 18% Other 29%

14 Gerdau Group Overview Steel Industry Overview Gerdau’s Operating and Financial Highlights Agenda

15 Shipments US GAAP - In thousand tons Billets, blooms & slabs Merchant bars Rebars Fabricated steel Heavy structural shapes Wire-rod Wires Nails Brazil – Domestic Market Brazil – Exports South America North America 3, , , , ,874 1,904 2, ,376 3,263 4, ,881 2,830 4, ,577 6,856 8,928 11,453 11, * 2,954 3,547 5, ,906 * 9M05 Annualized BY REGION

16 Strong Hard Currency Generation 6,602 4,977 4,531 6,952 South America North America Brazil – Domestic Market NET SALES - US GAAP In US$ millions , ,010 2, ,896 2,161 2, Exports and Companies Abroad 63% Brazil 37% Brazil - Exports 752 2,963 1,250 1,811 Currency Breakdown – 9M05 Historical Geographical Distribution

17 Strong Export Business Shipments by Region Asia 44% Central America 12% South America 21% North America 4% Africa 8% Europe 11% Asia 34% Europe 11% Africa 8% South America 17% North America 15% Central America 15% 2004 US$ 1.1 billion 2.7 million tons 9M2005 US$ million 2.1 million tons

18 Cost of Sales Net Sales Revenue and Cost of Sales In US$/ton Costs and Prices North America (US GAAP) Net Sales Cost of Sales 1Q032Q033Q033Q044Q031Q042Q04 4Q04 1Q052Q Q032Q043Q044Q041Q Net Sales Cost of sales Q Q03 1Q042Q031Q03 Group (US GAAP) All data in BR GAAP converted by R$ /US$ Brazil (BR GAAP) Cost of Sales Net Sales Revenue Q032Q033Q033Q044Q031Q042Q044Q041Q052Q05 3Q05 South America (BR GAAP) Net Sales Revenue Q032Q033Q033Q044Q031Q042Q04 4Q04 1Q05 3Q Q Q Q

19 Capital Expenditures INVESTMENTS - 9M ,800 7,580 9,730 11,720 16,380 21, % + 11% + 28% EVOLUTION OF INSTALLED CAPACITY Investment Program 2005 – 2007: US$ 3.2 billion ,240 4,730 8,880 6,610 12,970 15, % + 8% + 19% BraZilAbroad BrazilAbroad Crude Steel Rolled Steel BRAZIL410.4 ABROAD248.2 North America114.4 South Amerca133.8 TOTAL658.6 In thousand tons In US$ millions

20 US GAAP Consolidated Financials In US$ millions Income Statement Net revenue Gross profit Operating income Income before taxes Net income Free Cash Flow EBITDA (-) Net interest expenses (-) Capex (including acquisitions) (-) Taxes (-) Dividends Free cash flow 9M05 3, ,531 1, ,952 2,113 1,628 1,722 1,158 6,602 1,760 1,307 1, , (34) ,

21 US GAAP Consolidated Financials In US$ millions Ratios Gross margin EBITDA margin Total debt / EBITDA Net debt / EBITDA EBITDA / Interest Net debt / Shareholders’ equity Net debt / Total capitalization Short term debt / Total debt 28% 23% 2.8x 2.2x 6.6x 194% 66% 53% 24% 19% 2.4x 2.0x 5.6x 125% 56% 38% 30% 27% 1.2x 0.9x 22.5x 65% 39% 29% Balance Sheet Current assets Non-current assets Fixed assets Total Current liabilities Non-current liabilities Minority interest Shareholders’ equity Total Total debt Cash and cash equivalents Net debt 1,524 2,476 2,085 4,000 1,588 1, ,000 2, ,667 1,760 3,011 2,304 4,771 1,459 1, ,403 4,771 2, ,755 3,323 3,529 2,790 6,852 1,712 1, ,523 6,852 2, ,639 September/05 4,946 4,311 3,525 9,257 1,610 3, ,654 9,257 3,190 2,080 1,110 27% 23% 1.6x 0.6x 30.6x 30% 23% 17%

22 US GAAP In US$ millions Consolidated Debt Profile DEBT STRUCTURE Domestic Currency 24% Foreign Currency 52% Companies Abroad 24% * Includes exchange and monetary variation in the last 9 months GROSS DEBT 3,190100% SHORT TERM 54317% Domestic Currency76 2% Foreign Currency402 13% Companies Abroad 65 2% LONG TERM 2,648 83% Domestic Currency701 22% Foreign Currency1,239 39% Companies Abroad708 22% CASH & CASH AND EQUIV. 2, % Domestic Currency 1,825 61% Foreign Currency % NET DEBT 1,110 Sep./05

23 Consolidated Debt Amortization Securitization: 38.1 BNDES: 60.8 Debentures GNA: 93.3 Imports: Pre-Export: 22 Securitization: 8 Securitization: 40.9 BNDES: 65 Imports: 61.6 Pre-Export: 112 Securitization: 41 Debentures: Bonds GNA: Securitization: 24.4 Perpetual:589 Securitization: 9 Securitization:18 Securitization: 44 In US$ millions – September/05 US GAAP NOTES:a) US$ million equivalent of local bonds maturing from 2011 to 2020 b) US$ million GNA bonds maturing in July/2011 c) US$ million Perpetual Bonds with no final maturity date 1,527

Gerdau S.A.