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Tenth Annual Latin America Conference

Tenth Annual Latin America Conference. New York - March 2002. Steel Sector Company Overview Recent Facts Operating Performance Financial Performance Growth Strategy. All data contained in this presentation pertains to Gerdau S.A. consolidated - 2001. Steel Sector.

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Tenth Annual Latin America Conference

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  1. Tenth AnnualLatin America Conference New York - March 2002

  2. Steel Sector Company Overview Recent Facts Operating Performance Financial Performance Growth Strategy All data contained in this presentation pertains to Gerdau S.A. consolidated - 2001

  3. Steel Sector USA* Anti-dumping process * Section 201 * Economic recovery World * Excess capacity * Lower prices * Economic slowdown * Long products * Consolidation Brazil* Power rationing * Strong demand • South America* Crisis in Argentina • * Gerdau companies 03

  4. World output In million metric tons 2001 2000 Variation Country As published by Metal Bulletin, Gerdau is the 24thlargest crude steelproducer in the world Source: IISI 04

  5. Apparent consumption in Latin America In million metric tons 2005Estimate Average annual growth % Region 2000 Source: IISI 05A

  6. Brazil MARKET SHARELong products Others 16% Belgo36% GERDAU48% APPARENT CONSUMPTIONBrazil x GDP 10 20% 5.4 3.1 5 2.7 2.4 15% 0 Apparent consumption - Brazil -0.2 -5.1 10% -5 GDP -10 5% Elasticity (multiples) -15 0% Elasticity -20 1994 1995 1996 1997 1998 1999 2000 -5% -25 -23.8 Source: IISI/ IBS -10% -30 05B

  7. Brazil GERDAU’S PARTICIPATION IN THE NATIONAL PRODUCTION Includes stake in Açominas since 1999 % 48% Long rolled 32% 21% 17% 12% Crude steel 9% 80 90 01 LARGEST CRUDE STEEL PRODUCERS 1,000 metric tons 4,784 CST GERDAU 4,662 Usiminas 4,620 CSN 4,048 Belgo 2,668 06 Source: IBS/ Gerdau

  8. Steel Sector Company Overview Recent Facts Operating Performance Financial Performance Growth Strategy

  9. Gerdau * 100 years of tradition focused on the production of steel in mini-mills and in the distribution of steel products. * Installed capacity of 11 million metric tons of crude steel (including 100% of Açominas and the Cartersville unit). * 24th largest world steel producer and the best ranked Brazilian company. * Largest Latin American long steel producer. * Distribution network with 70 sales points, 3 service centers for flat steel and 27 fabrication shops for civil construction. * 10 steel plants in Brazil (including Açominas), 10 abroad and 1 strategic shareholding. 08

  10. Capital structure Met. Gerdau S.A. 51% Gerdau S.A. 96% 100% 56% Seiva Gerdau International Açominas AmeriSteel Aza 85% 100% Courtice Laisa 100% 100% MRM 100% Sipsa 72% Sipar 38% 09

  11. Participation in total capital Gerdau S.A. 14% 16% 16% 54% Metalúrgica Gerdau S.A. 26% Controllers 27% Brazilian Institutional Investors 19% Foreign Institutional Investors Public 27% Date: 12/31/2001 10

  12. Output evolution Açominas 1997 Piratini1992 Usiba1989 Sipsa Argentina1997 AmeriSteel USA 1999 Pains1994 Crude steel Barão de Cocais1988 CearenseGuaíra1982 Part. Sipar 1998 Rolledproducts MRM Canada 1995 Hime1985 Aza Chile 1992 Courtice Canada 1989 Laisa Uruguay 1981 11

  13. Installed capacity 11 MILLION METRIC TONS ABROAD * 3.8 million metric tons of crude steel * 3.6 million metric tons of rolled products BRAZIL * 7.2 million metric tons of crude steel * 4.7 million ** metric tons of rolled products ** Includes the new Açominas’ rolling mill 12

  14. Geographical distribution MRM Cearense Açonorte Courtice Usiba AmeriSteel (with Cartersville) Barão de Cocais Divinópolis Cosigua Açominas Guaíra Piratini Riograndense Gerdau S.A. GERDAU S.A. AÇOMINAS Sipar Açominas Aza Laisa Sipsa 13

  15. Steel Sector Company Overview Recent Facts Operating Performance Financial Performance Growth Strategy

  16. Recent facts ** In December 2001, through an auction organized by the Brazilian Central Bank, Gerdau acquired an additional 17.67% of Açominas' total capital.** Also in December 2001, Gerdau acquired the operating assets of Birmingham Southeast, through AmeriSteel, its subsidiary in the United States. ** In February 2002, Gerdau signed contracts to acquire 24.8% of Natsteel's stake in Açominas’ total capital. This agreement must be implemented by September 9th , 2002. 15

  17. Açominas • INSTALLED CAPACITY (metric tons): • Crude Steel 3.0 million • Rolled Products 740 thousand • YEAR 2001: • NET SALES: R$ 1,025 million • EBITDA: R$ 265 million • NET INCOME: R$ 93 million • PRODUCTS: • Billets Blooms Slabs • Rebars Merchants Structurals • Shapes and Profiles Source: Açominas 16

  18. Steel Sector Company Overview Recent Facts Operating Performance Financial Performance Growth Strategy

  19. Output CRUDE STEEL 7,058 3,661 5,066 7,242 1,000 metric tons 260 285 186 2,348 2,295 132 1,005 555 3,875 4,450 4,662 2,974 98 99 00 01 ROLLED PRODUCTS 5,901 3,398 4,272 6,059 1,000 metric tons 338 316 243 South America 160 2,195 2,193 918 North America 485 3,111 3,390 3,528 Brazil 2,753 98 99 00 01 18

  20. Sales IN METRIC TONS 7,213 3,811 5,094 7,394 351 376 285 2,264 2,294 260 927 South America 505 North America 3,046 3, 882 4,598 4,724 Brazil 98 99 00 01 NET SALES 5,196 5,888 2,178 3,310 In R$ million 271 247 2,060 1,800 216 741 3,557 3,149 2,353 2,178 19 98 99 00 01

  21. Sales SALES BY PRODUCT LINEIn metric tons Specialty 4% Drawn 10% Flat 6% Semi-finished 13% Common long rolled 67% SALES BY MARKET SEGMENTSGerdau S.A. non-consolidated Industry 51% Agriculture 3% Civil construction 46% 20

  22. Steel Sector Company Overview Recent Facts Operating Performance Financial Performance Growth Strategy

  23. Highlights 2001 22

  24. Ebitda & Net income R$ million EBITDA NET INCOME 546 1,310 398 1,060 961 3 352 59 31 2 445 50 191 249 8 31 22 53 255 291 374 512 191 291 445 640 755 1,002 98 99 00 01 98 99 00 01 Brazil North Am. South Am. Brazil North Am. South Am. Gross Margin EBITDA Margin Net Margin 1999 2000 2001 1998 23

  25. Investments US$ million 703 600 390 260 304 217 200 171 Average 1991 - 2001 83 96 97 98 99 00 01 02 03 2002 investments include the payments of: Açominas’ auction (17.7%) US$ 180 Natsteel’s stake in Açominas (24.8%) US$ 210 24

  26. Indebtedness SHORT TERM R$ 2.1 Bi Companiesabroad R$993M BNDES R$102M Brazilian Central Bank R$333M LONG TERM R$ 2.1 Bi Others R$ 12M Açominas (R$) R$46M BNDES R$316M Companiesabroad R$602M Açominas (US$) R$391M Others R$ 15M ACC / Pre Export R$ 71M FIRCE R$159M Debentures R$ 219 M Açominas (R$) R$148M Pre Export R$104M FIRCE R$142M Açominas (US$) R$227M Eurobonds R$287M 25

  27. Amortization 26

  28. Ratios 1998 1999 2000 2001 Total debt/ Total capitalization 36.74% 57.53% 56.55% 51.55% Net debt/Total Capitalization 25.93% 50.87% 50.35% 44.61% Total debt/ EBITDA 2.4X 3.5X 3.0X 3.2X Net debt/ EBITDA 1.4X 2.7X 2.3X 2.4X EBITDA/ Net financial expenses (minus monetary & exchange rate var.) - - 3.9X 5.7X 27

  29. Cash flow R$ million 28

  30. Steel Sector Company Overview Recent Facts Operating Performance Financial Performance Growth Strategy

  31. Growth strategy * Mini-mills* Acquisitions* Internationalization* Standing out between peers* Barriers to entry* Market Segments (Civil Construction, Industrial and Agriculture) 30

  32. www.gerdau.com.brinform@gerdau.com.br

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