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Natural Resources Conference
Gerdau S.A. Third Annual Natural Resources Conference JP Morgan São Paulo February, 2003
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Steel Sector
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Crude Steel Output 2002 1,000 tons Source: IISI 03
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Gerdau is the largest long steel producer in the Americas
Largest Crude Steel Producers IISI Million tons 1 Arcelor 43.1 2 Posco 27.8 3 Nippon Steel 26.2 4 Ispat 19.2 5 Shanghai 19.1 6 Corus 18.1 7 Thyssen Krupp 16.2 Gerdau is the largest long steel producer in the Americas Million tons * OUTPUT OF GERDAU BASED ON 100% OF AÇOMINAS + CO-STEEL + SOUTH AMERICA 2001 OUTPUT Source: IISI e Gerdau 04
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Brazilian Output CRUDE STEEL 2002 1,000 tons Source: IBS 05
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Gerdau S.A.
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Highlights 102 years of tradition focused on the production of steel in mini-mills and in the distribution of steel products. Installed capacity of 14 million metric tons of crude steel. 15th largest world steel producer according to the IISI ranking. Largest long steel producer in the Americas. Gerdau S.A. is listed on the Brazilian Stock Exchanges, on the NYSE and on the Latibex (Madrid Stock Exchange). Gerdau Ameristeel Corp. is listed on the Toronto Stock Exchange. 10 units in Brazil, 12 abroad and 2 strategic shareholdings (Sipar - Rolling mill in Argentina and Gallatin - flat steel in the USA). 72 sales points in Brazil (Comercial Gerdau). 17 downstream operations and special sections (4 in Brazil e 13 in North America). 25 fabrication shops (9 in Brazil and 16 in North America). 4 service centers for flat steel in Brazil (Comercial Gerdau). 07
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Gerdau Ameristeel Corp.
Capital Structure Met. Gerdau S.A. Gerdau S.A. Seiva Gerdau Internacional Açominas Sipar Laisa Aza 50% 79% 100% 96% 67% 38% Courtice MRM AmeriSteel Gallatin Gerdau Ameristeel Corp. 08
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Geographical Distribution
ABROAD 7.0 MILLION TONS OF CRUDE STEEL PER YEAR 6.8 MILLION TONS OF ROLLED PRODUCTS PER YEAR Cambridge, ON (Courtice) Jacksonville, FL Cartersville, GA Charlotte, NC Knoxville, TN Jackson, TN Perth Amboy, NJ Sayreville, NJ Whitby, ON HO Gallatin County, KY MRM Special Sections Gerdau Ameristeel SIPAR LAISA GERDAU AMERISTEEL GERDAU S.A. AÇOMINAS AZA Gerdau S.A. Açominas Cearense Açonorte Usiba Cosigua Guaíra Piratini Riograndense Divinópolis Barão de Cocais BRAZIL 7.2 MILLION TONS OF CRUDE STEEL PER YEAR 4.7 MILLION TONS OF ROLLED PRODUCTS PER YEAR 09
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Capacity & Products 2002 Crude Steel Rolled Products Products
1,000 tons Billets, rebars, merchant bars, profiles, wire-rod, drawn products, nails, specialty steel. Billets, slabs, blooms, rebars, merchant bars, profiles and structurals. Rebars, merchant bars, profiles and wire-rod Rebars, merchant bars, profiles, wire-rod, downstream products, special sections and flat products. 10
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Output Evolution Objectives Strategies Evolution Main Events
Growth Average Rate CRUDE STEEL 10.4% year ROLLED PRODUCTS 9.6% year Aza Chile 1992 Part. Sipar Argentina 1998 MRM Canada 1995 Part. Açominas 1997 AmeriSteel USA 1999 Crude Steel Rolled Products Cearense Guaíra 1982 Laisa Uruguay 1981 Hime 1985 Barão de Cocais 1988 Courtice 1989 Usiba 1989 Piratini 1992 Pains 1994 Sipsa Argentina 1997 2002* Açominas (control) 2002 Co-Steel 1980 1984 1996 1988 2000 * 100% of Co-Steel Objectives Strategies Evolution Main Events Gerdau Ameristeel Corp. Challenges and Forecasts 11
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Business Breakdown 2002 NET REVENUE CRUDE STEEL OUTPUT EBITDA
BRAZIL 57% NORTH AMERICA 38% SOUTH AMERICA 5% 100% CRUDE STEEL OUTPUT BRAZIL 64% NORTH AMERICA 33% SOUTH AMERICA 3% 100% EBITDA BRAZIL 79% NORTH AMERICA 16% SOUTH AMERICA 5% 100% ROLLED PRODUCTS OUTPUT BRAZIL 46% NORTH AMERICA 49% SOUTH AMERICA 5% 100% NET INCOME BRAZIL 83% NORTH AMERICA 13% SOUTH AMERICA 4% 100% 12
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Results 2002 NORTH AMERICA SOUTH AMERICA BRAZIL US$ million
CONSOLIDATED BRAZIL 13
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Results - North America
CURRENT BASIS 14
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Gerdau Ameristeel Pro forma figures
Gerdau Ameristeel Corp. Corporate Law X Pro forma figures Gerdau S.A. Consolidated figures Oct 23 – Dec 31, 2002 Gerdau Ameristeel Pro forma figures Oct 1 – Dec 31, 2002 Net Sales: US$ 391 million 22 days more in October Net Sales: US$ 302 million Net Income: US$ 8,4 million Gerdau Consolidated ,8 Adjustments ,6 Net Income: US$ 3,8 million EBITDA: US$ 17 million EBITDA: US$ 39,6 million Gerdau Consolidated ,0 Adjustments ,6 Non-recurring pretax cash gains 6,1 Equity pick up over Dofasco JV ,5 Depreciation ,4 15
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Indebtedness GERDAU S.A. - CONSOLIDATED US$ million 16
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Outlook 2003 Economic growth in Brazil
U.S. economy slowly recovering from 2001 recession Steel imports declining Slow recovery in Argentina Positive outlook for the Chilean operations New federal administration in Brazil Cost of inputs 17
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Capital Markets STOCK PERFORMANCE 1 YEAR 3 YEARS 5 YEARS 600% 400%
200% 0% -200% +42% -18% -14% +45% -26% -36% +573% +1% +11% 1 YEAR 3 YEARS 5 YEARS Appreciation Chart GERDAU DOW JONES IBOVESPA Source: Economática Date: 01/30/2003 18
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