Gerdau S.A. Q4 FY2025 earnings call

• North America: Market had strong steel consumption, reduced import levels, and robust operating performance with record shipments in December 2025. • Brazil: Market saw record steel imports in 2025, and unfair import scenario impacted profitability; new sustainable mining platform in Miguel Burnier, Minas Gerais, near operation and to reduce costs at Ouro Branco unit. • Investments: 2025 CapEx was BRL 6.1 billion, 2026 guidance is BRL 4.7 billion, a reduction of BRL 1.4 billion. • Free cash flow: Fourth quarter 2025 had strong free cash flow generation of BRL 1.4 billion, annual cash flow for last 12 months was positive at BRL 394 million. • Dividends and buybacks: Paid BRL 2.4 billion in dividends and share buybacks in 2025, and announced new share buyback program. • Brazil outlook: Expected moderate growth in demand in 2026 despite excessive imported steel, optimistic about trade defense measures. • North America outlook: Stable steel consumption at high levels with order backlogs above historical averages, positive outlook for sectors like solar, data centers, and infrastructure.

In North America, the market saw strong steel consumption, reduced import levels, and robust operating performance. In December 2025, North America posted record shipments. The North American operations significantly contributed to the group's consolidated results. For Brazil, 2025 marked a new record for steel imports with a 7.5% year - on - year increase. This unfair import scenario impacted the profitability of Brazilian operations. In terms of financials, 2025 ended with EBITDA of BRL 10.1 billion, down 7% from 2024. North American operations supported the group's results while Brazilian operations were affected by import competition.

• 2026 CapEx guidance is BRL 4.7 billion, a reduction of BRL 1.4 billion from 2025. • Expected moderate growth in Brazil demand in 2026 despite imported steel influx, optimistic about trade defense measures. • North America sees stable steel consumption at high levels with positive outlook for certain sectors.

• Brazil: Excessive influx of imported steel impacts profitability. • Cost pressures: Coal costs in Brazil increased, affecting variable costs. • Mexico investment: USMCA renegotiation may impact decision to proceed with investment.

Q: My first question has to do with the outlook of the Brazil business margins...

A: Rafael Japur addressed Brazil margin outlook, talking about factors like fewer business days, rainfall, vehicle manufacturing data, and coal cost pressures; Gustavo Werneck added about Miguel Burnier impact and no plan to close more capacity in 2026.

Q: My first question, we have seen the United States posting very strong results...

A: Rafael Japur talked about South America exports impact on margins and North America's different situations, product dynamics, and order book; Gustavo Werneck added about North America's strong position and Brazil's improvement potential.

Q: I have two questions. I would also like to revisit something you briefly mentioned during your last answer...

A: Gustavo Werneck talked about trade defense measures in Brazil and Rafael Japur talked about noncore assets like forests, farms, and real estate.

Q: Just maybe following up a little bit to recent discussions...

A: Gustavo Werneck talked about shareholder returns, noncore asset proceeds, and CapEx; Rafael Japur added about North America growth through downstream segments and upstream investments.

Q: My first question is regarding avenues for growth in the U.S. segment...

A: Gustavo Werneck talked about organic growth, micro mills, M&A, and Mexico investment; Rafael Japur added about North America's downstream growth and upstream investments.

Q: Looking at the level of exports...

A: Rafael Japur talked about eliminations related to Brazil - South America business and modernization of Maracanau mill.

Q: I have just two very quick questions...

A: Rafael Japur talked about working capital outlook and Brazil margin outlook; Gustavo Werneck added about Miguel Burnier's impact.

Q: I would like to review the U.S. profitability level...

A: Gustavo Werneck talked about scrap price trends and Rafael Japur talked about antidumping and product portfolio impact