brazil 2003 ceo conference ubs warburg rio de janeiro april, 2003
TRANSCRIPT
Brazil 2003CEO Conference
UBS Warburg
Rio de JaneiroApril, 2003
102 years of tradition focused on the production of steel in mini-mills and in the
distribution of steel products.
Installed capacity of 14 million metric tons of crude steel.
19th largest world steel producer according to Metal Bulletin.
Largest long steel producer in the Americas.
Gerdau S.A. is listed on the BOVESPA, on the NYSE and on the Latibex (Madrid).
Gerdau Ameristeel Corp. is listed on the Toronto Stock Exchange.
10 units in Brazil, 12 abroad and 2 strategic shareholdings
(Sipar - Rolling mill in Argentina and Gallatin - flat steel in the USA).
67 sales points in Brazil (Comercial Gerdau).
17 downstream operations and special sections (5 in Brazil e 12 in North America).
24 fabrication shops (9 in Brazil and 15 in North America).
4 service centers for flat steel in Brazil (Comercial Gerdau).
Highlights
02
Met. Gerdau S.A.
Gerdau S.A.
Seiva Gerdau Internacional Açominas
Sipar
Laisa
Aza
50%
79%100%96%
67%
38%
100%
100%
Courtice
MRM
AmeriSteel
Gallatin
Gerdau Ameristeel Corp.
100%
100%
100%
50%
Capital Structure
03
Consolidated
9.441
6.952
2.593,0
603,4
231,5
28,6%
23,3%
8,9%
Results 2002
000 tons
Crude Steel Output
Rolled Products Output
US$ million
Net Sales
Ebitda
Net Income
Gross Margin
Ebitda Margin
Net Margin
04
Brazil
5.999
3.660
1.485,3
474,0
192,3
40,1%
31,9%
12,9%
North America
3.130
2.951
994,3
98,3
29,7
11,1%
9,9%
3,0%
South America
312
341
113,3
31,1
9,5
31,3%
27,5%
8,4%
TOTAL DEBT 100%Foreign currency 35%Dometic currency 22%Abroad 43%
EXPOSUREForeign currency debt 718.1
Swap operations 580.0 Cash & equiv. in US$ 263.6 TOTAL HEDGE 843.6
HEDGE / EXPOSURE 1,2X
TOTAL DEBT
SHORT TERMDomestic currencyForeign currencyCompanies abroad
LONG TERMDomestic currencyForeign currencyCompanies abroad
CASH & EQUIVALENTSDomestic currencyForeign currencyCompanies abroad
NET DEBT
Partic. Dec.02
100% 2,028.7
52% 1,049.4 136.1 464.0 449.4
48% 979.2 310.2 254.1 414.9
- 404.9 141.3
- 263.6
- 1,623.7
COST OF DEBT
Brazil - in R$ 4.5%Brazil - in US$ + FX rate 6.8%Abroad 5.4%
US$ million
IndebtednessGERDAU S.A. - CONSOLIDATED
05
North America
Gerdau AmeriSteel Corp. Oct/02: merged Gerdau x Co-Steel
2nd largest long steel producer in North America
10 steel mills
15 fabrication shops
12 downstream operations and special sections
13 scrap recycling operations
1 joint venture (Gallatin Steel)
Consolidation / Synergies
Cambridge, ON (Courtice)
Jacksonville, FL
Cartersville, GA
Charlotte, NC
Knoxville, TNJackson, TN
Perth Amboy, NJ
Sayreville, NJ
Whitby, ON
HO
Gallatin County, KY (1)
MRM Special Section
Whitby, ON
(1) Joint Venture - 50%
Outlook Steel industry restructuring Steel imports declining Cost of inputs x Price increases War in Iraq U.S. economy slowly recovering from 2001 recession GDP growth: USA +2,2%, Canada +2,8% (source: IMF)
06
Outlook
Steel plants in Chile and Uruguay Rolling mill in Argentina
Positive outlook for the Chilean operations
Moderate recovery in Argentina
Slow recovery in Uruguay
GDP growth*
Chile + 3,1% Argentina + 3,0% Uruguay – 2,2% * Source: IMF
South America
SIPAR (1)
LAISA
AZA
(1) Joint Venture - 38%
07
Outlook
Economy recovering: GDP +2,8%
(source: IMF)
Positive startup of the new
government administration
Civil construction and agriculture
incentives – impact in the 2nd half of
2003
Social securities and tax reform
Cost of inputs X Price increases
Specialty steel sector – positive outlook
Açominas back in full speed mode
Brazil
Gerdau S.A.
Açominas
Cearense
Açonorte
Usiba
Cosigua
Barão de Cocais
Açominas
Guaíra
Piratini
Riograndense
Divinópolis
08
Outlook
Integrated steel mill with 3 million
tons per year of liquid steel capacity
Gross sales of US$ 450 million in
2002 of which 54% from exports
Infrastructure to increase capacity
up to 10 million tons per year of
liquid steel
Products: billets, slabs and blooms
Wide flange beams, rebars and
profiles
Nov/03: new wire rod rolling mill
Açominas
09
RJ
MG
ES
SP
VITÓRIA
GOV.VALADARES
OURO BRANCO
BELO HORIZONTE
SÃO PAULORIO DE JANEIRO
CONS.LAFAIETE
JUIZ DE FORA
CONGONHAS
OURO PRETO
EFVMEFVM
CST
ACESITAUSIMINAS
AÇOMINAS
CSN
COSIPA
ATLANTIC OCEAN
