1. Gerdau
March 2007

2. Highlights One of the world’s lowest cost steel companies
Strong cost position as a result of diversified production processes and multiple raw material sourcing
Strong foreign currency generation
Large export base
International subsidiaries
Ranked 14th globally by steel output for year 2005 with an output of 13.7m tons
Largest long steel producer in the Americas
2nd largest long steel producer in North America
32 mills, integrated and mini mills, with state of the art technology
Relevant market share and diversified product range through downstream and service centers
Strong balance sheet, low leverage and strong cash generation
Gerdau S.A. shares are listed on the São Paulo, New York and Madrid Stock Exchanges

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

4. World Production WORLD CRUDE STEEL PRODUCTION
In million tonnes
Production reached more than 1,2 billion tonnes in 2006.
1,217
1,120
8.7%
2005
2006
EVOLUTION OF WORLD CRUDE STEEL PRODUCTION
World
China
2º Oil Shock
Accelerated increase of China
1º Oil Shock
USSR breakup
Corresponds to 70% of the world production growth from 2001 to 2006
Source: IISI / IISI apud IBS

5. World Demand FINISHED STEEL APPARENT DEMAND
In million tonnes
The world steel demand should increase 4.2% p.a. from 2010 to 2015.
1,179
1,121
5.2%
1,029
8.9%
China
NAFTA
Japan
India
South America
FINISHED STEEL APPARENT DEMAND PER CAPITA (KG)
With increasing investments in infrastructure and civil construction, India should have grown 10% in 2006.
Steel consumption in South America should have increased 12% in 2006.
Chinese steel consumption should experience a more moderate growth in 2007.
344
NAFTA
322
295
China
205
World
195
171
Brazil
110
102
e: estimated
Source: IISI

6. Brazil and the Global Steel Industry
Crude Steel Production – 2006
In million tons
In million tonnes
Total World Production: 1.2 billion tonnes
China represented 34.4% of the global steel production
Brazil represented 2.5% of the global steel production
419
116 98 71 48 47 44 41 32 31
South Korea
China
Japan
USA
Russia
Germany
India
Ukraine
Italy
Brazil
Source: IISI

7. Operating and Financial Highlights
Agenda
Industry Overview
Group Overview
Operating and Financial Highlights
All data presented in US Dollar and in metric tons, except when indicated

8. 100+ Years in Business 1901 THE 80’s THROUGH THE 40’s THE 50’s
1901 – First operation: nail factory
Acquisition of three mills (Rio de Janeiro, Minas Gerais and Bahia)
Construction of two new plants (Paraná and Ceará)
Operations abroad begin (Uruguay and Canada)
THROUGH THE 40’s
First steel mill acquisition – Siderúrgica Riograndense (1948)
THE 50’s
THE 90’s
Expansion of Siderúrgica Riograndense
Construction of second Riograndense’s mill
Diversification into specialty steel – acquisition of Piratini
Expansion abroad – acquisition of mills in Chile, Canada, Argentina and the USA
Acquisition of second mill in Minas Gerais and rolling mill in São Paulo
Shareholdings restructuring
Acquisition of stake in Açominas
THE 60’s
Market share increase by the:
- Diversification and verticalization
of product line
- Structuring of distribution network
(today more than 70 sales points)
- Acquisition of mill in Pernambuco
THE NEW MILLENNIUM
THE 70’s
Acquisition of four companies in the US
Acquisition of downstream units and fab shops in North America
Entering the European market
Construction of a steel mill in São Paulo
Capacity expansion with acquisition of two mills (Alagoas and Paraná); construction of largest Gerdau mill (Rio de Janeiro)
Diversification into reforestation

9. An International Company
CANADA
Total Capacity
(Includes Strategic Shareholdings)
19.2
million tonnes of crude steel
17.0
million tonnes of rolled steel products
Brazil
9.2 million tonnes of crude steel
6.3 million tonnes of rolled steel products
11 steel mills
12 fabrication shops
6 downstream operations
74 sales points and flat steel service centers
Abroad
10.0 million tonnes of crude steel
10.7 million tonnes of rolled steel products
21 steel mills
44 fabrication shops
17 downstream operations
2 strategic shareholdings

10. Solid Track Record 21,605 TOTAL INVESTED (1981 - 2006):
In thousand tonnes
21,605
TOTAL INVESTED ( ):
Brazil = US$ 5.2 billion + Debt
North America = US$ 2.0 billion + Debt
South America = US$ 654 million + Debt
Europe = US$ 380 million + Debt
Installed Capacity Expansion
19,230
Araçariguama (Brazil)
Sidenor (Spain)
Sheffield (USA)
Siderperú
(Peru)
GSB (Spain)
7,696
16,372
CAGR : 15% p.a.
Ameristeel
(USA)
AZA New Plant (Chile)
Additional stake in Açominas (Brazil)
North Star (USA)
11,076
Control of Açominas (Brazil)
Co-Steel
(USA)
3,072
16,709
Diaco (Colombia)
Cambridge (Canada)
Usiba (Brazil)
3,934
4,568
Piratini (Brazil)
AZA (Chile)
4,595
Stake in Açominas
(Brazil)
Manitoba
(Canada)
2,611
1,757
Barão de Cocais (Brazil)
Laisa (Uruguay)
2009e
Brazil – Installed Capacity of Crude Steel
Abroad – Installed capacity of Crude Steel
e: estimated
Besides the mills acquired, as related above, Gerdau acquired many fab shops in order to add value to its products and offer services and products to its clients according to their needs.

11. Among the Leaders Crude Steel – Output 2005 14 Rank 1 2 3 4 5 6
In million tonnes
Rank 1 2 3 4 5 6
Gerdau should have an installed capacity of 21.6 million tonnes of crude steel per year after the investment program in Brazil is completed in 2009. 7 8 9 10 11 12 13 14
GERDAU GROUP (BRA)
Source: Metal Bulletin

12. Growth portfolio (CAGR 2001-2005) benchmarked against industry average
Value Builder Company ATKearney study
Growth portfolio (CAGR ) benchmarked against industry average
Revenue Growth
70%
Eregli Demir Celik
60%
Mittal
Severstal
Baoshan
Angang
Bluescope 03 05
50%
Maanshan Iron Steel
Ipsco
Steel Dynamics
Gerdau
Nucor
40%
Novolipetsk1)
Acerinox
Tata Steel
30%
Usinas
Industry
Average
Voestalpine
Onesteel
Tokyo Steel
Cap
20%
US Steel
Boehler-Uddeholm
SSAB
Salzgitter
SAIL
Oregon Steel Mills
Hylsamex
10%
Hyundai Steel
JFE 03 05
Rautaruukki
Corus
Imsa
Neomax 0%
Arcelor 02 05
Worthington
Nisshin Steel
AK Steel
Thyssenkrupp1)
Sumitomo
Nippon Steel
Carpenter Technology
-10%
-40%
10%
Industry Average
60%
110%
Equity Value Growth
Notes: 1) EBIT-growth
Notes: USINAS = USIMINAS; ARCELOR Takeover MITTAL/ SERVERSTAAL: The market capitilization of Severstaal is 6.8 bn USD (same as revenue, hence valued above the industry multiple of 0,79)
Source: Thyssenkrupp: steel segment

13. Shipments
In thousand tonnes
100% increase in the last 6 years
14,819
13,550
12,560
12,144
South America (10% in 2006)
9,109
North America (45% in 2006)
7,411
Brazil – Exports (16% in 2006)
Brazil – Domestic Market (27% in 2006)
Europe (2% in 2006)
2001
2002
2003
2004
2005
2006
Billets, blooms & slabs
Merchant bars
Rebars
Fabricated steel
Heavy structural shapes
Wire-rod
Wires
Nails

14. Markets BRAZIL - 2005 COUNTRY MARKET SHARE MAIN COMPETITORS Gerdau 48%
Arcelor Brasil 36%
Gerdau 48%
Other 5%
Barra Mansa 5%
V&M do Brasil 6%
COUNTRY
MARKET SHARE
MAIN COMPETITORS
NORTH AMERICA
15%
Nucor + ArcelorMittal + CMC
CHILE
51%
CAP + Imports
URUGUAY
84%
Imports
ARGENTINA
20%
Acindar + Bragado + Zapla
COLOMBIA
37%
Acerias Paz Del Rio + Imports
SPAIN
43%
Aceralia + Saarsthal
PERU
~44%
Aceros Arequipa + Imports
* Specialty steel only

15. Growth Opportunities LONG STEEL PRODUCTS (Brazil)
Maintenance of market share
Improvement of current installed capacity
São Paulo mill expansion
SPECIALTY STEEL
Active role in the steel sector consolidation process
Search for new opportunities
AÇOMINAS (Ouro Branco mill)
New 1.5 MM ton blast furnace
Growth platform for slabs, blooms and billets
LATIN AMERICA
Maintenance of leadership in the long steel sector
New markets
NORTH AMERICA
Efficiency and productivity gains (Gaps)
Enhancement of leadership in the long steel sector through acquisitions

16. Outlook Brazil North America South America Europe
Growing volumes in the domestic market: 6 to 8% in 2007
Industrial and residential construction sectors revving up
Recovery of agricultural sector
Prices in reais stable
Costs relatively stable
North America
Demand remains strong for rebars, merchant bars and profiles
Imports falling
Increase in supply of higher value added products
South America
Strong growth in the economy
Civil construction sector strengthening
Increase in public investments
Demand in line with economic growth
Europe
Demand continues strong
Price increases
Specialty steel sector performing well
Growing market share
The 4th quarter in Brazil shouldn’t be as good as that of the 3rd quarter, nonetheless still a good quarter. The increase in sales through September reached 13%, compared to the same period in The expectation is that the year will close with an 11 to 12% increase. This growth is strongly influenced by the civil construction sector which should grow 18% in housing, commercial and industrial buildings are up. Investments in infrastructure, however, are still slow due to the lack of projects and government funding. The PPPs are still an expectation. The industrial sector should present a 7% growth in 2006, with the machinery and agricultural equipment sectors presenting a reassuring pace of growth. Long steel inventories at distribution centers are at normal levels.
In North America the expectation is that the good performance and fundamentals of the market should prevail although the 4th quarter is traditionally a weaker quarter. There is cautious optimism with regards to 2007, although it should be a good year. In the short term we could see a slight weakening of demand and the industry ought to compensate with discipline its levels of output and reduction of inventories. The high volume of imports continues to pose the most serious threat to the sustainability of margins. In the long term and in this particular issue, the role played by China is pivotal for the reasons we all know. Gerdau has enhanced its focus on higher value added products by acquiring downstream units such as is the case of the joint venture we just talked about.
In South America we expect to see the prevailing good conditions throughout the ensuing quarters. In this scenario, we are investing in the recently acquired mills to enhance their productivity and to obtain the benefits resulting form current market conditions.
In specialty steels in Europe, the market remains demanding and a good 2007 is expected. Some improvements are forecast for our operations in the region which include a new continuous bloom casting to increase the product line. We also expect to conclude this process to acquire GSB by the end of the year.

17. Operating and Financial Highlights
Agenda
Industry Overview
Group Overview
Operating and Financial Highlights
All data presented in US Dollar and in metric tons, except when indicated

18. NET SALES BREAKDOWN BY REGION EXPORTS BY REGION (IN TONNES)
2006
Domestic Market 78%
NET SALES BREAKDOWN BY REGION
Europe 3%
South America 10%
North America 46%
Brazil 41%
Exports
22%
(37% in tonnes)
EXPORTS BY REGION (IN TONNES)
Central America 15%
North America 16%
Africa 9%
Europe 8%
South America 29%
Asia 23%

19. Margins Gross Margin EBITDA Margin 40% Consolidated 36% Brazil 38%
North America*
South America*
36%
38%
24%
24%
22%
15%
10%
EBITDA Margin
38%
31%
Margins reflect variations in costs and prices in the main Gerdau markets.
The cost of scrap presented a slight increase in the domestic market of about US$10 per ton. The international scrap markets have abundant supplies, but prices present greater volatility.
In the USA, Gerdau is capable of supplying its needs with 30% of scrap provided by its own shredders and scrap yards. This duplicates, albeit to a smaller scale, the vertical integration achieved in the Brazilian market.
Where pig iron is concerned, international markets have been recovering prices and this has had an impact in the domestic market in Brazil. As a consequence the Company has limited its action to the occasional opportunity purchase.
Inventories of metallic inputs in general remain in balance. As a result of increases in the price of coal, pig iron and iron ore there has been an increase in the demand for obsolescence steel scrap.
Margins in the different markets reflect the structural and market conditions not always symmetrical. Gerdau’s geographical diversification on the other hand is a key component for greater sustainability of the consolidated margin as shown in the following charts.
28%
21%
19%
15%
13%
10%
* Calculated by hard currency

20. Consolidated Financials
In US$ million
2004
2005
2006
Balance Sheet
Current assets
Non-current assets
Total Assets
Current liabilities
Non-current liabilities
Minority Interest
Shareholders’ equity
Total Liabilities and Shareholder’s equity
Total debt
Cash & Equivalents
Net debt
3,600
3,431
7,031
1,977
2,186
580
2,288
2,402
769
1,633
5,182
4,165
9,347
1,790
3,225
896
3,436
3,269
2,335
934
6,573
6,022
12,595
2,570
4,070
1,294
4,661
4,240
2,791
1,449
Income Statement
Net revenue
Gross profit
Operating income
Net income
EBITDA
7,383
2,353
1,678
1,219
2,092
9,148
2,517
1,727
1,387
2,169
10,999
3,038
2,055
1,633
2,502
36%
1.1x
0.8x
18%
1.5x
0.4x
20%
1.7x
0.6x
Ratios
Net debt / Total capitalization
Total debt / EBITDA
Net debt / EBITDA

21. DEBT AVERAGE LIFE: 9 years and 2 months
Consolidated Debt Profile
December 2006
US$ MM
GROSS DEBT
4,240
100%
SHORT TERM
917
22%
Domestic Currency
235 6%
Foreign Currency
270
Companies Abroad
412
10%
LONG TERM
3,323
78%
940
1,723
40%
660
16%
CASH & CASH AND EQUIV.
2,791
1,773
64%
1,018
36%
NET DEBT
1,449
COST OF DEBT (per annum)
In US$
Brazil
Domestic Currency
22.8%
Foreign Currency
7.3%
Companies Abroad
8.0%
DEBT AVERAGE LIFE: 9 years and 2 months
DEBT STRUCTURE
Companies Abroad 26%
Foreign Currency 46%
Domestic Currency 28%

22. Consolidated Debt Amortization
In US$ million – Dec./06
FINIMP: 90
Perpetual Bond: 600
Debentures: 115
FINIMP: 196
BNDES: 134
Companies Abroad: 401 Debentures: 111
FINIMP: 82
Companies Abroad: 207
FINIMP: 147 Pre-export: 118
875
Companies Abroad: 176
730
BNDES: 112
FINIMP: 109
Companies abroad: 201
665
Working Capital: 99
FINIMP: 24
Debentures: 110
447
BNDES: 55
330
278
300
227
165
141 82
1Q07
2Q07
3Q07
4Q07
2008
2009
2010
2011
2012
2013
After 2013
SHORT TERM: US$ 917
LONG TERM: US$ 3,323

23. Investment Plan INSTALLED CAPACITY EVOLUTION Crude Steel
INVESTMENT PLAN 2007 – 2009: US$ 4.0 billion
ACTUAL 2006*
In million US$
In million US$
BRAZIL
694.4
ABROAD
1,308.2
North America
537.6
South America
255.5
Europe
515.1
TOTAL
2,002.6
2007
2008
2009
TOTAL
BRAZIL
820
570
1,000
2,390
ABROAD
580
530
500
1,610
North America
260
360
315
935
South America
125
142
527
Europe 60 45 43
148
1,400
1,100
1,500
4,000
* Including acquisitions in the period.
INSTALLED CAPACITY EVOLUTION
In thousand metric tons
Investments in the fourth quarter of 2006 totaled US$ 605 million of which half was used for acquisitions and the balance in the improvement of several industrial units and enhancing the existing capacity at other mills.
CAPEX in 2006 totaled US$ 2.0 billion, and as in the fourth quarter, 50% for acquisitions and 50% for the technological update and capacity expansion, with the spotlight going to Açominas and the new mill in São Paulo. Where acquisitions are concerned, we set foot in Europe by way of Sidenor at the beginning of 2006 and GSB in December, and in Peru, with Siderperú in the second half of last year. In North America we continue to be a player in the steel sector’s consolidation process with the acquisition of Sheffield Steel and several downstream and fabrication shops as well as with steel scrap collection and processing units.
For the period between 2007 through 2009 plans call for approximately US$ 4 billion in expansions and improvements in mills in Brazil and abroad. Of this total, 60% will be invested in mills in Brazil and the balance in mills abroad. Most of the investments will be made in the expansion of the integrated mill at Ouro Branco (Açominas), in which the installed capacity will go from 3 to 4.5 million metric tons. This increase in capacity should be available in the second half of 2007.
Crude Steel
Rolling Products
+ 12%
21,605
19,230
+ 8%
18,435
17,040
+ 10%
11,005
9,970
+ 12%
11,985
Abroad
Abroad
10,680
10,600
9,260
+ 14%
Brazil
Brazil
+ 1%
6,360
6,450
2007
2009
2007
2009 23

24. Disclaimer
This document 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.
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25. Gerdau S.A.