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

2. Agenda
Steel Sector
Gerdau Group
Operating and Financial Highlights

3. Steel Sector – 1st Quarter 2006
World
The world’s steel output reached 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 1Q 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 million metric tons in the 1Q2006, compared to 894 thousand metric tons in Q2005.
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

4. Brazil and the Global Steel Industry
Crude Steel Production – 1Q06
In million tons
Total World Production: 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

5. Agenda
Steel Sector
Gerdau Group
Operating and Financial Highlights

6. 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

7. 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

8. Growth portfolio (CAGR 1999-2003) benchmarked against industry average
Value Builder Company ATKearney
Growth portfolio (CAGR ) 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

9. 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 ( ):
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 (Uruguay)
Brazil – Crude Steel Installed Capacity
Abroad – Crude Steel Installed Capacity

10. 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

11. 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

12. Agenda
Steel Sector
Gerdau Group
Operating and Financial Highlights

13. 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

14. 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%

15. 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$ million, 14% greater than that of the fourth quarter while net margin stayed at 15%.
Brazil
North America
South America
Consolidated

16. 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

17. 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 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%

18. Expansion Program
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

19. 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.

20. 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.

21. 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.

22. Gerdau S.A.