1. 1 Gerdau January 2007

2. 2  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 14 th globally by steel output for year 2005 with an output of 13.7m tons  Largest long steel producer in the Americas –2 nd 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 Highlights

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

4. 4 1º Oil Shock World Production WORLD CRUDE STEEL PRODUCTION In million tonnes Source: IISI / IISI apud IBS EVOLUTION OF WORLD CRUDE STEEL PRODUCTION 2º Oil Shock USSR breakup Accelerated increase of China World China Corresponds to 70% of the world production growth from 2001 to 2005 9M05 9M06 828 903 9.1% Production should reach 1,2 billion tonnes in 2006.

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

6. 6 Crude Steel Production – 2005 Source: IISI Brazil and the Global Steel Industry In million tons In million tonnes China USA JapanRussia GermanyUkraine Brazil India Italy Total World Production: 1.1 billion tonnes China represented 31.4% of the global steel production Brazil represented 2.8% of the global steel production South Korea

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

8. 8 THROUGH THE 40’s THE 60’s THE 50’s First steel mill acquisition – Siderúrgica Riograndense (1948) Expansion of Siderúrgica Riograndense Construction of second Riograndense’s mill 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 100+ Years in Business 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) THE 80’s THE 90’s 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 1901 1901 – First operation: nail factory Capacity expansion with acquisition of two mills (Alagoas and Paraná); construction of largest Gerdau mill (Rio de Janeiro) Diversification into reforestation THE 70’s THE NEW MILLENNIUM 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

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

10. 10 Laisa - 1980 (Uruguay) Piratini (Brazil) AZA (Chile) Ameristeel (USA) AZA New Plant (Chile) Additional stake in Açominas (Brazil) North Star (USA) Cambridge (Canada) Usiba (Brazil) Manitoba (Canada) Control of Açominas (Brazil) Co-Steel (USA) 1,757 3,072 3,934 4,595 7,696 11,076 16,372 Diaco (Colombia) 16,709 Barão de Cocais (Brazil) 2,611 Stake in Açominas (Brazil) 4,568 19,230 Araçariguama (Brazil) Sidenor (Spain) Sheffield (USA) Siderperú (Peru) GSB (Spain) Solid Track Record e: estimated In thousand tonnes 21,605 Installed Capacity Expansion Abroad – Installed capacity of Crude Steel Brazil – Installed Capacity of Crude Steel 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. 2009e TOTAL INVESTED (1981- Sep.2006): Brazil = US$ 4.5 billion + Debt North America = US$ 1.8 billion + Debt South America = US$ 590 million + Debt Europe = US$ 235 million + Debt CAGR 1996-2006: 15% p.a.

11. 11 Among the Leaders Crude Steel – Output 2005 Gerdau should have an installed capacity of 21.5 million tonnes of crude steel per year after the investment program in Brazil is completed in 2009. In million tonnes Source: Metal Bulletin 1 GERDAU GROUP (BRA) 2 3 4 5 6 7 8 9 10 11 12 13 14 Rank

12. 12 Value Builder Company ATKearney study 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 Industry Average Revenue Growth Industry Average AK Steel Oregon Steel Mills Worthington Onesteel Hylsamex Neomax Cap Imsa Maanshan Iron Steel Eregli Demir Celik Angang Boehler-Uddeholm Steel Dynamics Carpenter Technology Nisshin Steel Hyundai Steel Tokyo Steel Bluescope 03 05 Rautaruukki Acerinox Salzgitter Ipsco SSAB Voestalpine Corus Tata Steel Severstal US Steel SAIL Usinas Gerdau Baoshan Novolipetsk 1) Thyssenkrupp 1) Nucor Sumitomo Mittal JFE 03 05 Nippon Steel Arcelor 02 05 -10% 0% 10% 20% 30% 40% 50% 60% 70% -40%10%60%110% Equity Value Growth Growth portfolio (CAGR 2001-2005) benchmarked against industry average

13. 13 Shipments Billets, blooms & slabs Merchant bars Rebars Fabricated steel Heavy structural shapes Wire-rod Wires Nails Brazil – Domestic Market (26% in 2005) Brazil – Exports (21% in 2005) South America (6% in 2005) North America (47% in 2005) In thousand tonnes 7,411 9,109 12,560 12,144 13,550 2001 2002200320042005 Europe 83% increase in the last 5 years 9M059M06 10,181 11,143 + 9.5%

14. 14 BRAZIL - 2005 COUNTRY MARKET SHARE MAIN COMPETITORS Gerdau 48% Arcelor Brasil 36% Barra Mansa 5% Other 5% V&M do Brasil 6% CHILE URUGUAY ARGENTINA 51% 20% 84% CAP + Imports Acindar + Bragado + Zapla Imports COLOMBIA37%Acerias Paz Del Rio + Imports * Specialty steel only NORTH AMERICA 15% Nucor + ArcelorMittal + CMC Markets PERU ~44% Aceros Arequipa + Imports SPAIN 36% ArcelorMittal + Imports

15. 15 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 Growth Opportunities 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. 16 Outlook Brazil Domestic v olumes growing around 6 - 8% in 2007 Strengthening of the housing and industrial sectors Price stability in local currency terms Relatively stable costs North America Solid demand for rebars and merchant bars Reduced level of imports Increase in supply of higher value added products South America Solid economic growth Strengthening of the civil construction sector Government spending Demand in line with economic growth Europe Good performance in the specialty steel business Growing market share

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

18. 18 EXPORTS BY REGION (IN TONNES) NET SALES BREAKDOWN BY REGION Exports Brazil 41% North America 46% Europe 3% South America 10% 9M06 Asia 24% Central America 15% South America 27% North America 16% Africa 9% Europe 9% Domestic Market 79% Exports 21% (35% in tonnes)

19. 19 Consolidated Brazil North America* South America* Gross Margin EBITDA Margin Margins 30% 20% 42% 26% 17% 28% 32% 26% 19% 17% 21% 26% 21% 33% 23% * Calculated by hard currency

20. 20 Consolidated Financials In US$ million 2004 2005 Income Statement Net revenue Gross profit Operating income Net income EBITDA 9M05 7,362 1,996 1,424 1,132 1,743 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 5,152 4,159 9,311 1,698 3,267 843 3,503 9,311 3,260 2,111 1,149 Ratios Net debt / Total capitalization Total debt / EBITDA LTM Net debt / EBITDA LTM 21% 1.4x 0.5x 19% 1.6x 0.6x 3,600 3,431 7,031 1,977 2,186 580 2,288 7,031 2,402 769 1,633 36% 1.1x 0.8x 5,182 4,165 9,347 1,790 3,225 896 3,436 9,347 3,269 2,335 934 18% 1.6x 0.4x 9M06 8,088 2,289 1,610 1,237 1,900 6,251 5,656 11,907 2,539 3,652 1,235 4,481 11,907 3,918 2,589 1,329 7,383 2,353 1,678 1,219 2,092 9,077 2,446 1,727 1,387 2,098

21. 21 DEBT STRUCTURE Domestic Currency 25% Foreign Currency 45% Companies Abroad 30% DEBT AVERAGE LIFE 8.8 YEARS US$ MM GROSS DEBT3,918100% SHORT TERM98025% Domestic Currency2176% Foreign Currency2105% Companies Abroad55314% LONG TERM2,93875% Domestic Currency75819% Foreign Currency1,57440% Companies Abroad60616% CASH & CASH AND EQUIV.2,589100% Domestic Currency1,62263% Companies Abroad96737% NET DEBT1,329 COST OF DEBT (per annum) In US$ Brazil Domestic Currency 20.7% Foreign Currency7.1% Companies Abroad7.4% September 2006 Consolidated Debt Profile

22. 22 Pre-Exports: 113 FINIMP: 151 BNDES: 99 Companies Abroad: 64 Securitization: 41 Pre-Exports: 22 FINIMP: 55 In US$ million – Sep/06 Companies Abroad: 55 FINIMP: 59 FINIMP: 32 Companies abroad: 409 Companies Abroad: 110 Pre-Exports: 55 BNDES: 88 Securitization: 44 FINIMP: 139 BNDES: 43 Companies Abroad: 411 FINIMP: 59 Debentures: 55 4Q06 1Q07 2Q07 3Q0720082009 2010 2011 SHORT TERM: US$ 980LONG TERM: US$ 2,938 491 101 206 182 160 473 354 618 76 Consolidated Debt Amortization 2012 After 2012 1,014 Companies Abroad: 32 FINIMP: 37 Perpetual Bond: 600 Debentures: 292 4Q07 243 BNDES: 67 FINIMP: 85 Securitization: 41

23. 23 9M06 Investment Program 2007 – 2009: US$ 3.0 billion BRAZIL484.6 ABROAD588.1 North America270.6 South America100.2 Europe217.3 TOTAL1,072.7 In US$ million 200720082009Total Brazil8066915172,014 Abroad235378356968 TOTAL1,0411,0688732,982 CAPEX 2007 - 2009 INSTALLED CAPACITY EVOLUTION Crude Steel Rolled Products In thousand tonnes Brazil Abroad Brazil Abroad + 12% 2006 2009 9,970 9,260 11,005 10,600 19,230 21,605 + 14% + 10% 2006 2009 10,680 6,360 7,050 17,040 19,035 + 11% + 12% 11,985 In US$ million

24. 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.

25. 25 www.gerdau.com.br inform@gerdau.com.br +55 51 3323 2703 Gerdau S.A.