Gerdau S A : 1Q23 Results Presentation

EARNINGS

RELEASE

1st quarter | 2023

DRY STACKING PLANT

Miguel Burnier- Minas Gerais

MACRO SCENARIO

Expectation of moderate economic growth for 2023

• GLOBAL: Inflationary scenario, contractionary monetary policy and geopolitical risks (Russia and Ukraine, trade tensions China and USA) continue to generate uncertainties, however Europe's face resilience due to energy crisis and the improvement in the contraints of the supply chain are positive points
• BRAZIL: High interest rates, household indebtdness and the weakening of the labor market, in addition to fiscal uncertainty bring moderate outlook

• USA: Cautions scenario facing moderate signs of recession, in addition to financial vulnerability (banking, liquidity and credit crisis)
• CHINA: The recovery of the second largest economy in the world is not linear and continues to generate uncertainties in the market and in the commodities prices
• SOUTH AMERICAN: Challenging period due to questionable economic growth prospects

	TURKISH REBAR & HRC				COAL AND IRON ORE
		End of 1Q22			End of 4Q22				End of 1Q22
	Russia-Ukraine	End of 2Q22					Russia-Ukraine	End of 3Q22
					Conflict
USD/mt	Conflict						USD/mt
960		End of 3Q22	End of 1Q23		515	End of 2Q22
		456
	812	879		683	670	710	Em			304
	681
						272
						663		138	158
	741		640	569	590		120
										96

SCRAP & PIG IRON

			End of 1Q22
				End of 2Q22
	Russia-Ukraine	950			End of 4Q22 End of 1Q23
End of 4Q22	Conflict	654		End of 3Q22
End of 1Q23	t
	USD/m	570	650	640			535
302		543
Em			455	445	440
285	508
					430
				395	400
127				370
115				343	368	401

	HRC FOB China		Spot HCC Peak Downs FOB Australia		Scrap Turkey CFR
	Rebar FOB Turkey
		IODEX 62% CFR China		Scrap East Asia import CFR
Source: S&P Global Commodity Insights				Pig Iron FOB Brazil Southeastern

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Frequency Rate

SAFETY

Occupational health and safety management

1.39

1.28

1.17 1.16

1.10	1.10	1.08

0.99	1.01
0.97

0.87 0.85

0.84 0.83 0.83 0.81

0.76

0.65

0.52

2014

2015

2016

2017

2018

2019

2020

2021

2022

1Q23

Gerdau Steel Industry Average¹

Source: ¹ Worlds Steel Association

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HIGHLIGHTS IN THE PERIOD

Better shipments and lower costs, despite a more challenging scenario

Shipments (1,000 tonnes)

Net Sales¹ (R$ million)

-2.5%

3,0552,979

2,672+11.5%

1Q22 4Q22 1Q23

20,330

-7.2%

17,964 18,872

+5.1%

1Q22 4Q22 1Q23

Adjusted EBITDA and Adjusted EBITDA Margin² (R$ million)

-25.8%

5,827

Adjusted Net Income and Adjusted Net Margin² (R$ million)

-18.8%

2,940

28.7%

4,322

2,388 +79.1%

14.5%

3,630+19.1%

									1,333	12.7%
			22.9%					7.4%
			20.2%
	1Q22	4Q22	1Q23				1Q22	4Q22	1Q23
¹ Includes iron ore sales.									4
² Non-accounting measure calculated by the Company. The Company presents Adjusted EBITDA to provide additional information on cash generation in the period.

HIGHLIGHTS IN THE PERIOD

NET SALES OF R$ 18.9 BILLION, 5.1% higher compared to the last quarter of the previous year

Shipments amounted 3 MILLION TONS OF STEEL in the quarter, 11.5% above 4Q22

ADJUSTED EBITDA OF R$ 4.3 BILLION, 19.1% higher compared to 4Q22, the second-bestadjusted EBITDA for the period

GROSS DEBT OF R$12.3 BILLION AND NET DEBT/EBITDA AT 0.31X, reflecting the solid

financial position

POSITIVE CASH FLOW GENERATION of R$

2.7 billion, driven by Company's disciplined capital allocation

NORTH AMERICA BD: EBITDA of R$2.4 billion and EBITDA margin of 30.2% in 1Q23

BRAZIL BD: EBITDA of R$1.1 billion and EBITDA margin of 15.4% in 1Q23

R$ 954 MILLION CAPEX INVESTED IN 1Q23, of which approximately 48.8% was allocated to the State of Minas Gerais in Brazil

BONUS SHARES in the proportion of 1 new share for each 20 shares of the same type credited on 03/24/2023

EARNINGS DISTRIBUTION 1Q23: The Company allocated R$ 892 million (R$ 0.51 per share) in

the form of interest on equity to be paid on 05/29/2023

MINING: Since February 2023, we have been using only the dry stacking method to dispose of 100% of tailings resulting from its iron ore production process in Minas Gerais

CUBO CONSTRULIVING: Announcement of the launch of the first hub focused on creating innovative experiences in the housing and construction journey

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