Gerdau reports 2nd quarter adjusted EBITDA of R$ 3.8 billion

09/08/2023

Despite the challenging global macroeconomic scenario, Gerdau continues to deliver solid financial results, reflecting its business model based on geographic diversification of assets and flexible production

– Adjusted net income of R$ 2.1 billion in the second quarter of 2023.

– Adjusted EBITDA from the North America Business Division of R$ 1.8 billion from April to June 2023.

– Gerdau will invest R$ 3.2 billion from 2023 to 2026 in a new sustainable mining platform in Minas Gerais, which is part of a cycle of investments made in the state in recent years in modernization, technological upgrades, better environmental practices and expanding local operations.

São Paulo, August 9, 2023 – Gerdau, Brazil’s largest steel producer, ended the second quarter of 2023 with adjusted EBITDA (earnings before interest, tax, depreciation and amortization) of R$ 3.8 billion and adjusted EBITDA margin of 20.8%. Adjusted EBITDA from the North America Business Division came to R$ 1.8 billion in the period.

Meanwhile, adjusted net income was R$ 2.1 billion in the period from April to June. During the period, Gerdau registered net sales of R$ 18.3 billion on steel shipments of 2.9 million tonnes.

“Despite the challenging global macroeconomic scenario, which reduced steel consumption, Gerdau delivered yet another quarter of solid financial results, with its third-highest adjusted EBITDA for a second quarter, of R$ 3.8 billion. This performance reflects Gerdau’s ongoing sustainable growth strategy, which focuses on creating value for stakeholders and meeting clients’ needs,” said Gustavo Werneck, CEO of Gerdau.

“Gerdau has found a solid balance, with its lowest gross debt of the last 15 years, 90% of which is due in the long term, which gives us the serenity to take decisions that will create even more value for our shareholders in the future. We remain focused on an austere policy of controlling expenses and costs and preparing the Company for its next growth cycle,” said Rafael Japur, CFO of Gerdau.

Capex of R$ 1.2 billion in the 2nd quarter of 2023

During the second quarter of 2023, Gerdau invested R$ 1.2 billion, of which R$ 761 million was allocated to maintenance and R$ 468 million to expansion and technological upgrades. The CAPEX plan for 2023 is estimated at R$ 5 billion, which encompasses the investment projects in maintenance, expansion and technological modernization of its operations.

Mining Activities

Gerdau will invest, as announced in June, R$ 3.2 billion between 2023 and 2026 in a new sustainable mining platform in Minas Gerais. The amount is part of a cycle of investments made in the state in recent years in modernization, technological upgrade, improving environmental practices and expanding local operations. Note that the aforementioned portion of the investment for 2023 is already included in the projected disbursement of R$ 5 billion announced in March 2023.

Gerdau’s new annual iron ore production capacity of 5.5 million tonnes at the Miguel Burnier mine, located in the Ouro Preto district, is expected to start operations in late 2025. The project will enable the Company to increase the competitiveness of its operations and expand its steel production in Minas Gerais in the future.

The investment in equipment and processes that employ cutting-edge technologies will adopt the best mining practices, as well as a dry stacking method to dispose of 100% of tailings from mining operations, eliminating the need for tailings dams. The use of a pipeline to carry iron ore also reinforces Gerdau’s commitment to sustainable mining practices.

Dividends to be paid on August 29 and 30, 2023

Gerdau S.A. and Metalúrgica Gerdau S.A. will pay dividends on August 29 and 30, respectively. Gerdau S.A. will pay R$ 752.1 million (R$ 0.43 per share) and Metalúrgica Gerdau S.A. will pay R$ 268.5 million (R$ 0.26 per share) to shareholders of record on August 18, 2023.

About Gerdau

With a history spanning 122 years, Gerdau is Brazil’s largest steel producer and one of the leading producers of long steel in the Americas and special steel in the world. In Brazil, Gerdau also produces flat steel and iron ore for its own use. It also has a new business division, Gerdau Next, which fosters entrepreneurship in segments adjacent to the steel industry. Guided by its purpose of empowering people who build the future, the company operates in nine countries and has over 36,000 direct and indirect employees. Gerdau is the largest recycling company in Latin America and uses scrap as an important input: 71% of its steel is produced from scrap. Every year, Gerdau transforms 11 million tonnes of scrap into a variety of steel products. The Company is also the world’s largest charcoal producer, with over 250 hectares of planted forests in the state of Minas Gerais. As a result of its sustainable production matrix, Gerdau currently has one of the industry’s lowest average greenhouse gas emissions (CO₂e) of 0.89 t/CO₂e per tonne of steel, which is about half the global industry average of 1.91 t/CO₂e per tonne of steel (worldsteel). Gerdau’s target is to reduce its carbon emissions to 0.83 t/CO₂e per tonne of steel by 2031. Gerdau’s shares are listed on the São Paulo (B3), New York (NYSE) and Madrid (Latibex) stock exchanges.

São Paulo, August 9, 2023

canal.etica@gerdau.com.br

For more information contact:

Corporate Communication

Pedro Torres – pedro.torres@gerdau.com.br

Ana Paula Camargo – ana.camargo@gerdau.com.br