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Gerdau

Gerdau. Exane BNP Paribas Basic Materials Seminar 2007. March 28, 2007. Highlights. 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

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Gerdau

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  1. Gerdau Exane BNP ParibasBasic Materials Seminar 2007 March 28, 2007

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

  3. An International Company CANADA Total Capacity (Includes Strategic Shareholdings) 19.2 million tonnes of crude steel 17.0 million tonnes of rolled steel products Brazil 9.2 million tonnes of crude steel 6.3 million tonnes of rolled steel products 11 steel units 12 fabrication shops 6 downstream operations 74 sales points and flat steel service centers Abroad 10.0 million tonnes of crude steel 10.7 million tonnes of rolled steel products 21 steel units 44 fabrication shops 17 downstream operations 1 associated company (Sidenor) 1 joint venture (Gallatin)

  4. Solid Track Record In thousand tonnes 21,605 TOTAL INVESTED (1981 - 2006): Brazil = US$ 5.2 billion + Debt North America = US$ 2.0 billion + Debt South America = US$ 654 million + Debt Europe = US$ 380 million + Debt Installed Capacity Expansion 19,230 Araçariguama(Brazil) Sidenor (Spain) Sheffield (USA) Siderperú (Peru) GSB(Spain) 7,696 16,372 Ameristeel (USA) AZANew Plant(Chile) Additionalstake inAçominas(Brazil) North Star(USA) 11,076 ControlofAçominas(Brazil) Co-Steel (USA) 16,709 3,072 Diaco(Colombia) Cambridge(Canada) Usiba(Brazil) 3,934 4,568 4,595 Piratini(Brazil) AZA(Chile) Stake inAçominas (Brazil) Manitoba (Canada) 2,611 1,757 BarãodeCocais(Brazil) Laisa - 1980(Uruguay) 2009e Brazil – Installed Capacity of Crude Steel Abroad – Installed capacity of Crude Steel e: estimated 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.

  5. Markets BRAZIL - 2006 Arcelor Brasil 37% Gerdau 47% Other 5% Barra Mansa5% V&M do Brasil6% MARKET SHARE COUNTRY MAIN COMPETITORS NORTH AMERICA Nucor + ArcelorMittal + CMC 17% CHILE * 44% CAP + Imports URUGUAY 83% Imports ARGENTINA 19% Acindar + Bragado + Zapla COLOMBIA 37% Acerias Paz Del Rio + Imports SPAIN 43% Aceralia + Saarsthal PERU ** 45% Aceros Arequipa + Imports * Market share of rebars, profiles and wire-rod. ** Market share of long products, it doesn’t include flat steel.

  6. Historical Financial Performance • FINANCIAL PERFORMANCE 2001 TO 2006 • Group sales have risen strongly in recent years following the global recovery of the steel business and the company’s growth • Brazilian domestic shipments increased 12.6% in 2006, compared to the 2005, reflecting the most improved civil construction sector • 2006 results show Gerdau’s Brazilian operations contributing approximately 41.0% of net sales, North America 45.6%, South America 9.9% and Spain 3.5% HISTORICAL PERFORMANCE * In US$ millions * All data in BR GAAP converted by R$ 2.138

  7. Costs and Prices Net Sales/t Net Sales/t Cost of Sales/t Cost of Sales/t Net Sales and Cost of Sales per tonne (US$/tonne) BRAZIL SOUTH AMERICA CONSOLIDATED Net Sales/t Cost of Sales/t NORTH AMERICA EUROPE All data in BR GAAP converted by R$ 2.138

  8. Investment Plan INVESTMENT PLAN 2007 – 2009:US$ 4.0 billion ACTUAL 2006* In million US$ In million US$ * Including acquisitions in the period. INSTALLED CAPACITY EVOLUTION In thousand metric tons Crude Steel Rolling Products + 12% 21,605 + 8% 19,230 18,435 17,040 11,005 + 10% 9,970 11,985 + 12% Abroad 10,680 Abroad 10,600 + 14% Brazil 9,260 + 1% Brazil 6,450 6,360 2009 2007 2007 2009

  9. European Investment Plan INVESTMENT PLAN 2007 – 2009:US$ 148 million ACTUAL 2006 In million US$ In million US$ MAIN INVESTMENTS: • Acquisition of 40% stake in Corporación Sidenor (Jan./06) Investment of US$ 219.2 million plus US$ 121.0 million in liabilities • Acquisition of 100% of GSB Acero through Corporación Sidenor (Dec./06) Investment of US$ 143.0 million plus US$ 14.0 million in liabilities • Capital expenditures totaled US$ 17.9 million in synergies and improvements in the mills • Gerdau plans to invest more than US$ 30 million in a new bloom caster

  10. Outlook BRAZIL • Growing volumes in the domestic market: 6 to 8% in 2007 • Industrial and residential construction sectors revving up • Recovery of agricultural sector • Prices in reais stable • Costs relatively stable NORTH AMERICA • Demand remains strong for rebars, merchant bars and profiles • Imports falling • Increase in supply of higher value added products SOUTH AMERICA • Strong growth in the economy • Civil construction sector strengthening • Increase in public investments • Demand in line with economic growth EUROPE • Demand continues strong • Price increases • Specialty steel sector performing well • Growing market share

  11. 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.

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

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