Gerdau S.A.

Good morning, and welcome to Gurdon's fourth quarter 2025 results presentation. I am Adriana Pereira, Specialist with Ambassador Relations, and it's a pleasure for me to be joined by CEO Gustavo Wernicke and CFO Rafael Jotor. Please note that this call is being simultaneously translated into English, and you can choose your preferred language by clicking on the globe icon at the bottom of the screen. During the presentation, all participants will be in listen-only mode, and then we will begin the Q&A session. Analysts and investors can join the queue by clicking on the raise hand button. It is worth noting that the forward-looking statements contained herein are based on the company's beliefs and assumptions based on information currently available. Forward-looking statements are no guarantee of future performance and are subject to risks and uncertainties that may or may not occur. I will now turn the floor over to Gustavo to begin the presentation.

Hello, good afternoon, everyone.

I hope you're all well, and thank you for joining us again for another earnings release presentation. We will briefly comment on the highlights of the last quarter and also the year 2025, as well as the outlook for our operations, and then we will move on to the Q&A session. The year of 25 was marked by distinct scenarios in the main regions where we operate, North America and Brazil. In light of this, I would like to emphasize that Gerdau has greatly benefited from its business model based on geographic diversification and production flexibility. Moreover, I would like to highlight the resilience of the North American market, which has seen strong steel consumption and the reduction in input levels, as well as the robust operating performance of our operations in the region. Even in the fourth quarter, when there is a typical year-end seasonality, we achieved solid results in December 2025, We even posted record shipments in North America. Meanwhile, in Brazil, the market reached a new record for steel imports in 2025, with a 7.5% increase in shipments year on year. despite important advances in trade defense measures, such as the recent inclusion of new NCMs in the list of products covered by the 25% import tariff and the implementation of anti-dumping tariffs on coal-roled steel. Unfair import scenario has impacted the profitability of our operations in the Brazilian market. On the other hand, I would like to highlight the progress of our new sustainable mining platform in Miguel Burnier in the city of Ouro Preto, in Minas Gerais. The project is about to go into operation and will contribute to a significant reduction in production costs at our Ouro Branco unit. I will now turn the floor to Japur, who will elaborate on the financial highlights and the impacts of this current scenario on our results. Thank you, Gustavo. Hello and good morning, everyone. It's also a great pleasure to be here with you in the presentation of the fourth quarter of 2025. We ended 2025 with EBITDA of 10.1 billion BILs, down 7% when compared to 2024 results, mainly reflecting a still challenging environment in Brazil marked by increased competition. On the other hand, our operations in North America continued to gain relevance. supported by resilient demand and excellent operating performance, significantly contributing to the group's consolidated results and the overall results of Gerdau. Having said that, I would like to highlight four points related to this quarter's results. First, in the fourth quarter, our net income was impacted by non-recurring items related to impairment losses in Brazil units in the amount of 2 billion BRLs. It's also important to note that these write-offs have no cash effect. Excluding these effects, Perdao's adjusted net income in 2025, you know, in our view, that accurately reflects the operating performance for the period, stood at 3.4 billion barrels, down 21% when compared to the previous year. Regarding Gerdau's investments, we carried out CAPEX in 2025 on 6.1 billion BRLs. Now, for 2026, as already disclosed, our guidance is 4.7 billion BRLs. representing an important reduction of 1.4 billion barrels. And we understand that this will bring more flexibility to our free cash flow generation in 2026. And this is the third topic, by the way, that I would like to highlight. even with a very strong pace of investments in Miguel Bonier with our expansion mining project. Even then, in this fourth quarter, we achieved a very strong free cash flow low generation of 1.4 billion barrels. And as a result, the annual cash flow generation for the last 12 months, which was negative until then, is now positive and stood at 394 million barrels in 2025. Part of this cash generation earmarked was earmarked for reducing our debt, and as a result, we ended the year with leverage of 0.76 times net debt over EBITDA, a level that we consider to be extremely sound. Our resilient business model continued to be very resilient, combined with caution in capital allocation, and all of that allowed us to grow significantly without sacrificing shareholders' returns. As evidence of this, throughout 2025, we paid out 2.4 billion BRLs in dividends and share buybacks. And finally, in addition to completing our buyback program initiated in December 2025, which we already announced last December, yesterday we announced the launch of a new program for Gerdau SA. It will be for approximately 2.9% of outstanding shares of the company. And if we think about today's numbers of the last, you know, exchange floor, this would be the equivalent to 1.2 billion bureaus. So I'll end here, and I'll join Gustavo for the Q&A session. Thank you, Japor. And still speaking about Brazil, we expect... moderate growth in demand in 2026, even despite the excessive influx of imported steel in the local market. I would like to point out that we are more optimistic about the progress of the trade defense measures recently announced by the federal government to combat unfair competition from imported materials, and as well as the transparent and ongoing dialogue that the steel industry has maintained with pertinent agencies. Meanwhile, in North America, we continue to see stable steel consumption at high levels, with order backlogs above historical averages. The outlook for steel demand from sectors such as solar energy, data centers, and infrastructure remains positive. I'll now hand over to Arianna, and Jafur and I will be available to answer your questions. Thank you, Gustavo.