BOLSA DE MADRIDLATIBEX
Madrid, BarcelonaEspaña
November 28-29, 2002
Gerdau
STEEL SECTOR
Gerdau S.A. - Consolidated
Açominas
Gerdau Ameristeel
Corporate Governance
Capital Markets
Source: IISI / LAFA / IBS
WORLD - CRUDE STEEL OUTPUTIn million metric tons
Country 9M02 9M01 Variation
1 China 130.5 104.9 +24.4%
2 Japan 79.7 78.1 +2.0%
3 USA 68.3 69.7 -2.0%
4 Russia 43.7 43.3 +0.9%
5 Germany 33.8 34.0 -0.6%
6 Korea 33.6 32.6 +3.1%
7 Ukraine 25.2 25.1 +0.4%
8 Brazil 21.8 19.9 +9.5%
9 India 21.3 20.3 +4.9%
10 I taly 19.3 19.9 -3.0%
Others 177.0 174.6 +1.4%
TOTAL 654.2 622.4 +5.1%
03
AMERICAS - CRUDE STEEL OUTPUT
Source: IISI / LAFA / IBS
In million metric tons
Country 9M02 Contribution
USA 68.3 56.0%
Brazil 21.8 17.9%
Canada 12.1 9.9%
Mexico 10.5 8.6%
Venezuela 3.2 2.6%
Argentina 3.2 2.6%
Others 2.9 2.4%
TOTAL 122.0 100.0%
04
9m02 9m02/ 01 9m02 9m02/ 01 9m02 9m02/ 01
3,789 +37% 3,104 +14% - -
3,643 +1% 1 - - -
3,404 -1% 2,889 -5% - -
2,772 +42% 1,890 +1% - -
2,651 +1% - - 2,440 -3%
2,109 +7% - - 2,041 +2%
1,657 +2% - - 231 +15%
552 -15% 421 -3% 1 -58%
543 +13% - - 320 +4%
370 -8% - - 334 -4%
284 -6% - - 265 -4%
20 -20% - - - -
21,794 +10% 8,305 +3% 5,632 -1%
Crude Steel Flat Rolled Products Long Rolled Products
BRAZILIAN OUTPUT
Growth due to: Conclusion on the refurbishment of the blast furnace at CSN. Increase in capacity of melt shop at Cosipa.Source: IBS
1,000 metric tons
05
1 CSN
2 CST
3 Usiminas
4 Cosipa
5 Gerdau
6 Belgo
7 Açominas
8 Acesita
9 Aços Villares
10 V&M do Brasil
11 Barra Mansa
12 MWL Brasil
TOTAL
-10%
-5%
0%
5%
10%
15%
20%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
(50)
(40)
(30)
(20)
(10)
-
10
20
Apparent consumption
GDPElasticity
Source: IBS / Conjuntura Econômica
APPARENT CONSUMPTION x GDP
MARKET SHARELong products
GERDAU - 48%
Belgo - 36%
Others - 16%
BRAZIL
13,04,2
-42,3
-3,5
2,73,9
-0,13,3
5,3
2,5
Ela
sti
cit
y
(mu
ltip
les)
06
Steel Sector
GERDAU S.A. - CONSOLIDATED
Açominas
Gerdau Ameristeel
Corporate Governance
Capital Markets
101 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 by the IISI ranking.
Largest long steel producer of the Americas and the 2nd largest in the
North America.
Distribution network with 70 sales points, 5 service centers for flat
steel, 25 fabrication shops for civil construction and 17 downstream
and specialty facilities.
10 steel plants in Brazil, 12 abroad, 1 strategic shareholding (Argentina)
and 1 joint venture (USA) in flat steel.
Gerdau S.A. is listed on the Brazilian Stock Exchanges and on the NYSE
and Gerdau Ameristeel Corp. is listed on the Toronto Stock Exchange.
HIGHLIGHTS
08
1,000 metric tons 1980 2002 Variation
Crude steel 1,303 11,500 +8.8 x
Rolled products 1,182 8,800 +7.4 x
OUTPUT EVOLUTIONCONSOLIDADED
2002 includes full year Co-Steel09
AzaChile1992
Part. Sipar
Argentina1998
MRMCanada1995
Part. Açominas
1997AmeriSteel
USA1999
Crudesteel
Rolledproducts
CearenseGuaíra1982
LaisaUruguay
1981
Hime1985
Barão de Cocais1988
CourticeCanada1989
Usiba1989
Piratini1992
Pains1994
Sipsa Argentina
1997
2002annualized
Açominas(control)
2002
Co-Steel2002
1980 1984 199619921988 2000
Met. Gerdau S.A.
Gerdau S.A.
Seiva Gerdau Internacional Açominas
Sipar
Laisa
Aza
51%
79%100%96%
67%
38%
100%
100%
Courtice
MRM
AmeriSteel
Gallatin
Gerdau Ameristeel Corp.
100%
100%
100%
50%
CAPITAL STRUCTURE
10
(1) Flat steel mill, 50% owned JV(2) Rolling mill, 38% owned JV
BRAZIL
7.2 million metric tons of crude steel
4.7 million metric tons of rolled products
ABROAD
7.0 million metric tonsof crude steel
6.8 million metric tons of rolled products
Sipar (2)
Laisa
AmeriSteel
Courtice
MRM
Gerdau S.A.
Açominas
Raritan plant
INSTALLED CAPACITY14,2 million metric tons/year
Aza
Gallatin (1)
Sayreville plant
Lasco plant
11
Gerdau S.A. - Consolidated
Net sales
Cost of sales
Gross profit
SG&A
Other operational revenues
Net financial expenses
Equity pick-up
Operating profit
Non-operational rev./ expenses
Income tax and social contribution
Statutory participation
Net income
Depreciation and amortizations
EBITDA
R$ million
FINANCIAL STATEMENTS
3Q02 2Q02 9M02 9M01
2,958 1,978 6,596 4,589
(2,137) (1,419) (4,718) (3,343)
821 559 1,878 1,246
(302) (233) (729) (537)
52 50 101 0
(730) (286) (1,141) (584)
492 109 588 312
333 199 697 437
(18) 2 (28) (6)
15 (26) (37) (54)
(3) (5) (9) (7)
327 170 623 370
163 113 385 304
682 439 1,534 1,013
12
Brazil North America South America
1,300
1,6591,978
2,958
R$ million
4Q01 1Q02 2Q02 3Q02
Net Revenue Ebitda
4Q01 1Q02 2Q02 3Q02
R$ million
297
412 439
682
4Q01 1Q02 2Q02 3Q02
Gross Margin
42%
34%
13%
Ebitda Margin
4Q01 1Q02 2Q02 3Q02
34%
29%
11%
GERDAU S.A. CONSOLIDATED
13
INDEBTEDNESSR$ million
Cost of Debt Sept.02 Dec.01
Brazil - in R$ 13.6% 15.2%Brazil - in US$ + FX 9.4% 7.7%Abroad 4.4% 6.5%
Gerdau S.A. Consolidated Sept.02 Dec.01
TOTAL DEBT 100% 7,107.3 4,166.8
SHORT TERM 56% 3,969.7 2,106.7
Domestic currency 108.3 471.3
Foreign currency 1,699.6 642.8
Companies abroad 2,161.8 992.6
LONG TERM 44% 3,137.6 2,060.1
Domestic currency 1,128.2 665.2
Foreign currency 916.0 793.0
Companies abroad 1,093.4 601.9
CASH & EQUIVALENTS 28% 1,962.8 1,012.8
Domestic currency 631.9 416.5
Foreign currency - -
Companies abroad 1,330.9 596.3
NET DEBT 72% 5,144.5 3,154.0
HEDGE
TOTAL DEBT
Domestic currencyForeign currencyAbroad
FX EXPOSURE
Foreign currency debt
Swap operationsCash & equivalents in US$TOTAL HEDGE
HEDGE/ EXPOSURE
100%
17%37%46%
R$ bi
2.6
1.81.33.1
1.2x
14
DEBT BREAKDOWN
Short termR$ 4.0 BILLION
Long termR$ 3.1 BILLION
Companies abroad
R$ 2,162 mm
Other - R$ 34 mm
BNDES – R$ 91 mmBank loan (res. 2770) – R$ 149 mm
Import loan (Firce) – R$ 281 mm
Pre-export /ACC – R$ 411 mm
Açominas (US$)
R$ 842 mm
Companies abroadR$ 1,093 mm
DebenturesR$ 534 mm
EurobondsR$ 289 mm
BNDESR$ 286 mm
Açominas (R$) - R$ 223 mm
Bank loan (res. 2770) - R$ 186 mm
Import loan (Firce) - R$ 172 mm
Açominas (US$) - R$ 156 mm
Pre-export - R$ 114 mm
Other - R$ 85 mm
15
RATIOS
Gerdau S.A. Consolidaded Sept.02 Dec.01
Total debt/ Total capitalization 64.5% 51.6%
Net debt/ Total capitalization 56.8% 44.6%
Total debt/ EBITDA* 3.9X 3.2X
Net debt/ EBITDA* 2.8X 2.4X
Ebitda/ Net financial expenses 4.8X 5.7X(minus monetary & exchange rate var.)
EV/ EBITDA* 4.4X 4.3X
* Last 12 months
16
Crude Steel Output1,000 metric tons
4Q01 1Q02 2Q02 3Q02
1,430
542
77
1,496
662
69
1,198
687
72
1,61469%
64628%
743%
2,0492,227
1,957
2,334
Rolled Products Output1,000 metric tons
4Q01 1Q02 2Q02 3Q02
832
526
84
798
612
71
885
633
81
98258%
62137%
845%1,442 1,481
1,5991,687
South AmericaNorth AmericaBrazil
4Q01 1Q02 2Q02 3Q02
Sales
1,000 metric tons
1,352
521
90
1,412
625
84
1,212
695
76
1,58168%
64728%
864%
1,9632,121
1,9832,314
South AmericaNorth AmericaBrazil 17
Steel Sector
Gerdau S.A. - Consolidated
AÇOMINAS
Gerdau Ameristeel
Corporate Governance
Capital Markets
EVOLUTION OF STAKE IN AÇOMINAS
37% 54% 79%
US$ 212mm
Stake before auction by the Brazilian
Central Bank
Acquisition of Natsteel´s 25%
in Açominas
Brazilian Central Bank Auction of 17% of former
Banco Econômico
SEPT.00 DEC.01 SEPT.02
US$ 180mm
19
FINANCIAL STATEMENTS
Açominas 3Q02 2Q02
Net sales 351 173
Cost of sales (228) (125)
Gross profit 123 48
SG&A (29) (23)
Other operational rev./ expenses 41 43
Net financial expenses (130) (130)
Equity pick-up 2 1
Operating profit 7 (61)
Income tax and social contribution (3) 18
Net income 4 (43)
Depreciation and amortizations 26 15
EBITDA 161 83
9M02 9M01
819 711
(583) (509)
236 202
(80) (69)
79 (16)
(271) (226)
4 3
(32) (106)
20 -
(12) (106)
69 55
304 172
R$ million
* Source: Açominas´ Balance Sheet – sept/02
20
OUTPUT & SHIPMENTSOutputRevamping of blast furnace of Açominas
2Q02 3Q021Q024Q01
331
184
515
102
156
258462
159
621
397
120
517Domestic market
Exports
Shipments
3Q02 (1,000 metric tons)
Crude steel 651
Rolled products 91
1,000 metric tons
1,000 metric tons
2Q021Q024Q01 3Q02
21
Steel Sector
Gerdau S.A. - Consolidated
Açominas
GERDAU AMERISTEEL
Corporate Governance
Capital Markets
SYNERGIES
Gerdau S.A. owns 67% of Gerdau Ameristeel and the minority
shareholders the remaining 33% stake.
With 11 mill locations (one Joint Venture – Gallatin), Gerdau
Ameristeel is geographically positioned to service its costumers.
Integrated with 29 downstream steel fabricating and specialty
product businesses, aiming at better profit margins and less
volatility of earnings.
Listed in the Toronto Stock Exchange under the ticker symbol GNA.
Gerdau AmeriSteel is the 3rd largest crude steel producer and the 2nd
largest long steel producer in North America.
Estimates of US$ 23 million in short term cost savings.
The Board is comprised of 13 members of which 7 are independent.
CO-STEEL + GERDAU NORTH AMERICA = GERDAU AMERISTEEL
23
* Joint Venture 50% owned.
INSTALLED CAPACITY & OUTPUT
CAPACITY UTILIZATION – 9 MONTHS 2002: 78%
Units
Charlotte, NCJ ackson, TNJ acksonville, FLKnoxville, TNCartersville, GA
Selkirk, MB (MRM)Courtice, ON (Courtice)
Whitby, ON (Lasco)
Perth Amboy, NJ (Raritan)Sayreville, NJ
Gallatin County, KY*
Total
Crude steel
Rolled products
Crude steel
Rolled products
417 363 231 227607 544 341 311580 558 425 422413 454 283 282780 544 261 197
349 299 227 216326 295 228 212
871 998 449 435
816 907 426 476
726 544 454 332
680 680 502 496
6,565 6,186 3,827 3,606
Installed Capacity Production 9M02
Merchant bars and rebarMerchant bars, rebar and stucturalRebar and wire-rodRebarMerchant bars and structurals
Special sectionsMerchant bars and rebar
Merchant bars, rebar and stuctural
Wire-rod
Merchant and rebar
Flat products
Products
24
1,000 metric tons
PRODUCT MIX - 2001
Co-Steel Gerdau North America
Gerdau Ameristeel
Wire Rod29%Flat Rolled
28%
Bars21%
Rebars18%
Other4%
Wire Rod2%
Special Sections8%
Fab Shops24%
Rebars32%
Bars34%
Fab Shops14%
Flat Rolled14%
Wire Rod15%
Special Sections4%
Bars28%
Rebars25%
25
RESULTS – PRO FORMA
Gerdau Ameristeel 3Q02 9M02
SHIPMENTS (1,000 metric tons)
Mill finished steel 1,164 3,572
Fabricated steel products 157 465
INCOME STATEMENT (US$mm)
Net Sales 442 1,285
Operating profit 22 63
Net income 12 22
EBITDA 46 133
BALANCE SHEET (US$mm)
Net working capital 330
Cash 15Debt* 633Book Value 541
Shares outstanding (1,000 shares) 198,092Market capitalization 330
* Debt includes convertible debentures
26
Steel Sector
Gerdau S.A. - Consolidated
Açominas
Gerdau Ameristeel
CORPORATE GOVERNANCE
Capital Markets
Objectives
Increase managerial capacity
Meet demand resulting from increased
competitiveness in the international market.
Ensure the succession process to avoid the loss of accumulated knowledge.
Increase transparency for shareholders and capital market.
CORPORATE GOVERNANCE
28
Processes
Board
ExecutiveCommittee
Business Operations
Clients
Strategy Committee
Excellence Committee
CORPORATE STRUCTURE
29
BOARD
General Business Orientation
Jorge Gerdau Johannpeter
Germano Gerdau Johannpeter
Klaus Gerdau Johannpeter
Frederico Gerdau Johannpeter
Carlos João Petry
Affonso Celso Pastore
Oscar Bernardes
Expedito Luz
André Lara Resende
Chairman of the Board
Vice President
Vice President
Vice President
Board Member
Board Member
Vice President
Secretary
Board Member
30
EXECUTIVE COMMITTEEJORGE GERDAU JOHANNPETER – global orientation of Strategic Planning – Corporate and
Operations, Organizational Development, Corporate Communications and Community
Relations Processes.
FREDERICO GERDAU JOHANNPETER – business operation and global orientation of the
following processes: Legal, Accounting, Audit and Holdings in addition to the Gerdau Forestry
business.
CARLOS JOÃO PETRY – guidance and support to the other members of the Corporate Executive
Committee with their Business and Processes and global orientation of the following
processes: Human Resources, Procurement and Logistics & Transportation.
ANDRÉ JOHANNPETER – business operations in North America and global orientation of the
Information Technology Process.
CLÁUDIO JOHANNPETER – Long common and specialty Steel Operations in Brazil and global
orientation of the Industrial Process (Production, Engineering, Health & Safety and
Environment).
OSVALDO SCHIRMER – operations in South America, global orientation of the Finance-related
and Investors Relations Processes and Banco Gerdau.
PAULO B. VASCONCELLOS – operations of Açominas and global orientation of the following
processes: Marketing & Sales, Scrap Purchase and Quality Management Systems.
EXPEDITO LUZ – Secretary of the Corporate Executive Committee and legal support to this
Committee. 31
Steel Sector
Gerdau S.A. - Consolidated
Açominas
Gerdau Ameristeel
Corporate Governance
CAPITAL MARKETS
Metalúrgica Gerdau S.A.
25%
19%
29%
27%Controllers
Brazilian Institutional Investors
Public
Foreign Institutional InvestorsDate: 10/30/2001
54%
13%18%
15%
Gerdau S.A.
PARTICIPATION IN TOTAL CAPITAL
33
METALÚRGICA GERDAU S.A.
2000 200119991998
106
163 174
234
1235754
34
DIVIDENDS
1ST HALF 2002 MET. GERDAU S.A. GERDAU S.A.
Dividends R$ 36.0 million R$ 79.9 million
Dividends Adjusted Net Income
53%
33%33%
32%
GERDAU S.A.
2000 200119991998
181
306382
461
59
98125
16436%
33%32%
33%
R$ million
Distribution of dividends based on net income adjusted twice a year.
34
LIQUIDITY – GERDAU S.A.*
Trading volume
NYSE Bovespa
US$ million
20001999 2001 LTM
250
10 423
282
54
82
140
484
700
500
300
100
+70%Bovespa
+440%Nyse
-33Bovespa
+52%Nyse
+72%Bovespa
+71%Nyse
* Preferred shares and ADRs35
RETURN TO SHAREHOLDERSBOVESPA
Gerdau S.A.GGBR4
IbovespaMetalúrgica Gerdau S.A.GOAU4
20012000 2002
100
R$ 173.0
R$ 66.2(9,860 points)
R$ 198.1
Source: Economática Reference: 05/17/2002 a 11/13/2002
36
Source: Economática
RETURN TO SHAREHOLDERSNYSE
Gerdau S.AGGB
Dow Jones
20012000 2002
100
US$ 77.9(8,399 points)
US$ 86.5
Reference: 05/17/2002 a 11/13/2002
37
10-YEAR TRACK RECORD
Reference: 11/13/2002Source: Economática
Gerdau S.A. Ibovespa Dow JonesMetalúrgica Gerdau S.A.
-100%
0%
100%
200%
300%
400%
3 years 5 years 10 years
38
INVESTOR RELATIONS AND CAPITAL MARKET
Tag Along 100% to all shareholders
New Corporate Governance structure
Board External Members
Fiscal Committee
Disclosure Policy and compliance with Instruction CVM 358
Inclusion in Bovespa’s Corporate Governance Index Level I
New Corporate Governance Practices:
39
New features:
Shareholders Service section on the web site
Quarterly Releases published in the web site
Electronic mailing list service
Toll Free Service for shareholders (Brazil only)
Satisfaction research based on market analysts opinion
Quarterly releases in quarter-over-quarter format
Specific investor relations section on the web site
Visits and presentations (non-deal road shows) to investors
Interactive charts and key ratios on the web site (under construction)
INVESTOR RELATIONS AND CAPITAL MARKET
40
INVESTOR RELATIONS SITE
On our site you
will find: Schedule
of events,
complete texts on
results and
complementary
data, transcription
and audio of
conference calls,
Q & A sessions in
addition to
information and
documentation for
shareholders.
41
www.gerdau.com.br