Gerdau S.A.

Bom dia a todos e obrigada por aguardarem. Sejam muito bem-vindos à videoconferência de divulgação dos resultados do terceiro trimestre de 2022 da Gerdau. Destaco àqueles que precisarem de tradução simultânea que temos essa ferramenta disponível na plataforma. Para isso, basta clicar no botão Interpretation através do ícone do globo na parte inferior da tela e escolher o seu idioma de preferência, português ou inglês. Para aqueles ouvindo a videoconferência em inglês, há a opção de botar o áudio original em português clicando em New to Original Audio. Informamos que esta videoconferência está sendo gravada e será disponibilizada no site GRI da companhia, onde se encontra disponível o material completo da divulgação de resultados. É possível também fazer o download da apresentação no ícone de chat. Durante a apresentação da companhia, todos os participantes estarão com o microfone desabilitado. Em seguida, daremos início à sessão de perguntas e respostas. To ask questions, click on the icon that ENEM on the bottom of your screen, write your question to enter the queue and if you wish, also indicate that you would like to ask the question through the video that we will open the cameras. When announced, a request to activate your microphone appears on the screen, so you must activate your microphone to ask the questions. We advise that they be done all at once. We highlight that the information contained in this presentation and eventual statements that can be made during the videoconference related to business perspectives, projections and operational and financial goals of Gerdau constitute beliefs and premises of the company's administration, as well as information currently available. Future considerations are not guarantees of performance. They involve risks, uncertainties and premises, as they refer to future events and, therefore, depend on circumstances that may or may not occur. Investors must understand that general economic conditions, market conditions and other operational factors can affect the future performance of Gerdau and lead to results that differ materially from those expressed in such future considerations. We have with us today the CEO of Gerdau, Gustavo Werneck, and the CFO of Relations with Investors and Director of Relations with Investors, Rafael Japur. I will pass the floor to Gustavo Werneck to start the presentation. Please, Werneck.

Renata, thank you very much for the introduction. I would like to wish everyone a good afternoon. I would also like to welcome each one of you to this Gerdau's video conference on the promotion of Gerdau's results. a reference to the third quarter of 2022, hoping that everyone is well and healthy. As Renata mentioned, our CFO, Rafael Japur, who is here with me, participates here with me. And for the two of us, it is always a satisfaction to talk to you about our performance. And in the end, we will debate the points of doubts and be able to clarify those questions that you have and appear throughout the presentation. I'm going to start by talking about the international scenario, about the highlights of the overall results. Then I'm going to take a look at the performance of our business operations, especially in the quarter. I'll jump in to share some information about our financial performance. And at the end, I highlight some relevant points on our agenda and SD. And then we'll move on to the Q&A session that Renata will lead us through. Bom, mas antes de prosseguir, eu gostaria, mais uma vez, como eu tenho feito rotineiramente, fazer um enorme agradecimento às nossas milhares de colaboradoras e colaboradores nos vários países onde a gente tem operação, onde a gente tem negócio, por terem construído, nesses primeiros nove meses de 2022, os nove melhores primeiros meses da história da Gerdau em 121 anos. Last year was a historical record for us in terms of financial results, 2021. But when we compare the first nine months of this year, 2022, with last year, we are better. The next level, a little below, we will be at the result of last year. It will now depend on the results of the fourth quarter, which has already started. So there is this very special thanks to our collaborators for their performance and for everything they delivered over the nine months. I'm going to skip to episode 2, to start this video conference talking about the macroenvironment that Gerdau is in. And then I put some highlights, and I start by saying that we continue to closely monitor the uncertainties in relation to the growth of the global economy, the impacts that the inflationary scenario, especially here in Brazil and the United States, They may have a high demand in our markets. We also continue to monitor this possible deceleration of the Chinese market, especially due to restrictions caused by the COVID-0 policy implemented by the Chinese government. In addition, we closely monitor the impacts of the conflict between Russia and Ukraine, these impacts on the global market, especially with regard to our case, the pressure of production costs and, in particular, the cost of energy. Let's jump to the next slide. In these next two slides, I briefly bring some highlights that reflect the performance recorded by Gerdão in the third quarter, without wanting to go ahead of Japur, who, in his presentation, will detail our financial performance a little more. We ended the third quarter of 2022 with an adjusted EBITDA of R$ 5.4 billion. an adjusted margin of 25.4, which is the second highest historical value for the period between July and September. This result, as you will see in the sequence, was influenced by high demand levels for steel in the construction and industrial sectors, as well as by record results in North America, which we will talk about in more detail soon. Our liquid profit amounted to R$ 3 billion in the third quarter of this year, while the liquid revenue reached R$ 21.2 billion. The physical steel sales, in turn, totaled 2.9 million tons in this period. Outside of the result reported by Guernon this quarter, he contributed to the registration, as I commented in my introduction, in the first nine months of 2022, the best EBITDA adjusted in the history of the company, adding R$ 17.9 billion. And this performance reflects the company's resilience in the face of the uncertainties of the macroeconomic scenarios, but it is also the result, I would say, of the consolidation of the transformations that we have been experiencing in recent years and that have made Gerdau a more agile, simpler, more innovative organization and generating more and more value for our stakeholders. Here I highlight, especially, our shareholders and our clients. I'll go to the next slide to highlight, in addition to the financial results, the approval by the Council of Economic Defense Administration, called CADE, in our joint venture between Gerdau and the companies of Sandom, for the service of truck rental, semi-revox and other transport-related products, reinforcing Gerdau Next's strategy to develop new businesses, thinking about the future of mobility. 20 years of experience in logistics and allocation.

So now in the next slides. We'll talk a little bit more about the highlights of each one of our business operations and the outlook for the markets in which Gerdau operates so that later on we can talk more about it during the Q&A. On slide six, I would like to begin by talking about North America. I would like to highlight that the adjusted beta of our North American business operation totaled 2.6 billion reals with an adjusted margin of 32.9%, both historical records for a third quarter and above the margins achieved by our local competitors, confirming that our strategy and positioning in North America has been successful over the last few years. when the bulk, well, I think you remember that you had margins that were single-digit margins. I also highlight that the metallic spread remains at a historically high level, and that's the trend for the coming months. Volumes remained at high levels in the third quarter, reflecting strong demand from the non-residential and manufacturing and energy sectors. the outlook for the fourth quarter remains very positive, even despite seasonality of the period, since our order backlog remains at normal levels and very positive. Considering this scenario, we will continue to operate our mills in the region at capacity utilization levels above 90%. We also remain optimistic about the demand for steel in North America, especially from the construction sector. We follow some indicators like the Architectural Billing Index, which measures the activity of the non-residential construction sector in the country, and the Institute for Supply Management Index, which monitors the performance of the manufacturing sector, remain accommodated at positive levels above the 50-point line. Data from the U.S. Census Bureau show that the total spending on domestic non-residential construction reached a record high of almost $80 billion in August this year. I would also stress the reassuring phenomenon that has continually brought in new customer orders. and also infrastructure investment package valued at $1 to $2 trillion, which should begin to generate additional steel demand of up to 5 million tons in the U.S. market through 2023 as states move forward with their projects. In this context, we continue investing in digital transformation and improving the productivity and profitability of our units in North America, making our steel even more competitive and generating more value to our customers. For the next cycle, I'd like to highlight investment in the Whitby Mill in Canada, whose new melt shop will start operating the first half of next year and the expansion of the product mix offer in our Jackson unit in Tennessee, meeting the new needs of our local customers. Other points of attention that Japuri is monitoring very closely in North America, they include labor shortages, which is still an issue for us, and inflation and interest rates, energy costs, the pace of the economy in general, and the logistical challenges of global value chains, which have impacted not only Gerdau, but many other companies and organizations in the region.