Gerdau S A : Notice to the Market - 2Q22 Results Presentation

EARNINGS

RELEASE

2nd quarter | 2022

MACRO-SCENARIO

• Higher inflation in Brazil and worldwide heightens recession risk raises uncertainties, regarding global economic growth;
• China growth below expectation, due to restrictions under its Zero-Covid policy;
• Russia-UkraineConflict, pressuring energy markets;
• Commodity prices correction, reflects deterioration in market confidence.

Turkish rebar(1) & HRC(2)

			End 1Q22	End 2Q22
t	1 year ago	Russia-Ukraine Conflict	960
USD/m
	846	812	879
In				681
		720	741	640
	1 Jul 21 12 Jul 21	21 Jul 21 30 Jul 21 10 Aug 21 19 Aug 21 30 Aug 21 8 Sep 21 17 Sep 21 28 Sep 21	7 Oct 21 18 Oct 21 27 Oct 21 5 Nov 21 16 Nov 21 25 Nov 21 6 Dec 21 15 Dec 21 24 Dec 21 4 Jan 22 13 Jan 22 24 Jan 22 2 Feb 22 11 Feb 22 22 Feb 22 3 Mar 22 14 Mar 22 23 Mar 22 1 Apr 22	12 Apr 22 21 Apr 22 3 May 22 12 May 22 23 May 22 1 Jun 22 10 Jun 22 21 Jun 22 30 Jun 22

	Raw materials(1)	End 1Q22
				End 2Q22
		Russia-Ukraine Conflict
t
USD/m		456	515
	1 year ago
In
	219			304
		138	158	120
	199
	1 Jun 21 11 Jun 21 23 Jun 21 5 Jul 21 15 Jul 21 27 Jul 21 6 Aug 21 18 Aug 21 30 Aug 21 9 Sep 21 21 Sep 21 1 Oct 21	13 Oct 21 25 Oct 21 4 Nov 21 16 Nov 21 26 Nov 21 8 Dec 21 20 Dec 21 30 Dec 21 11 Jan 22 21 Jan 22 2 Feb 22 14 Feb 22 24 Feb 22 8 Mar 22 18 Mar 22 30 Mar 22 11 Apr 22 21 Apr 22	4 May 22 16 May 22 26 May 22 7 Jun 22 17 Jun 22 29 Jun 22

	Scrap & Pig Iron(1)	End 1Q22
			Russia-Ukraine Conflict		End 2Q22
t	1 year ago		950
InUSD/m
	625	570	654	640
		518	543	650	370
		498	508		343
	1 Jul 21	12 Jul 21 21 Jul 21 30 Jul 21 10 Aug 21 19 Aug 21 30 Aug 21 8 Sep 21 17 Sep 21 28 Sep 21 7 Oct 21 18 Oct 21 27 Oct 21	5 Nov 21 16 Nov 21 25 Nov 21 6 Dec 21 15 Dec 21 24 Dec 21 4 Jan 22 13 Jan 22 24 Jan 22 2 Feb 22 11 Feb 22 22 Feb 22	3 Mar 22 14 Mar 22 23 Mar 22 1 Apr 22 12 Apr 22 21 Apr 22 3 May 22 12 May 22 23 May 22 1 Jun 22 10 Jun 22 21 Jun 22 30 Jun 22

HRC FOB China		IODEX 62% CFR China		USA Scrap Turkey CFR
Rebar FOB Turkey		Spot HCC Peak Downs FOB Australia		Scrap East Asia Import CFR
				Pig Iron FOB Brazil Southeastern

Source: (1) S&P Global Commodity Insights. (2) Fastmarkets

PERIOD HIGHLIGHTS

Resilience and Sustainable Values

Shipments (1,000 tonnes)

Net Sales (R$ million)

+0.9%

+20.1%

+6.2%

+13.0%

3,245

22,968

3,216

3,055

19,130

20,330

2Q21

1Q22

2Q22

2Q21

1Q22

2Q22

Adjusted EBITDA Margin(1)

Adjusted Net Income(1)

(R$ million)

-1.7p.p.

+27.6%

+0.4p.p.

+46.2%

4,298

3,370

30.8%

29.1%

2,940

28.7%

2Q21

1Q22

2Q22

2Q21

1Q22

2Q22

Adjusted EBITDA(1) (R$ million)

+13.3%

+14.6%

6,680

5,897 5,827

2Q21 1Q22 2Q22

Safety - Frequency Rate(2)

-16.1%

-12.0%

0.87 0.83

0.73

2020 2021 6M22

1. Adjusted by non-recurring items that impacted 2Q21 result.
2. Number of lost-time injuries for every 1,000,000 hours worked (the lower, the better).

PERIOD HIGHLIGHTS

Strong results delivered confirm resilience of our market sectors in the Americas, with emphasis on the continued good performance of construction and industrial sectors;

In Brazil BD, construction sector remains robust and reinforces positive outlook for next few months, which also is supported by stability of the retail sector at high levels;

North America BD reported 1H22 EBITDA double higher result, compared to those presented in the same period of 2021;

6.3 million tonnes shipped in 1H22, in line with the same period of the previous year;

Gerdau recognized in Mining, Steel & Metallurgy category of the Best of ESG Awards 2022, promoted by Exame magazine;

We have one of the lowest averages emissions in the steel industry, 0.90 tCO2e/t of steel produced, approximately half the global average of the sector;

Fitch Ratings upgraded Gerdau's Long-Term ratings in the Foreign-Currency and Local- Currency (IDRs) from "BBB-" to "BBB".

Gerdau is the official steel of Rock in Rio music festival and steel supplier for World Stage, strengthening the aspects of sustainability, whose the steel recycling process includes thousands of cooperatives and people in its income generation chain.

This content is Public.

PERFORMANCE BY BUSINESS DIVISION