Gerdau Group

SMITH BARNEY’s13th Annual

Latin America Conference

New York, March 15-16, 2005

Steel Sector

Gerdau S.A. Consolidated

Consolidated Figures

Capital Markets

All data presented in R$ and in metric tons, except when indicated

0

50

100

150

200

250

300

Chin

a

Japan

US

A

Russ

ia

South

Kore

a

Germ

any

Ukra

ine

Bra

zil

India

Italy

+23.2%

+2.6% +3.5% +4.9% +5.7% +2.7% +5.3%

+2.0%+5.6%

+4.6%

20032004

World OutputCrude Steel

In million tons

3

The world production of crude steel surpassed the1 billion ton mark in 2004, an increase of 8.9% overthe previous year. The growth average has been4.6% year over year if China were not included.

Source: IISI

4Source: Metal Bulletin

8 US Steel (USA) 17.9 10

9 Thyssen Krupp Steel (GER) 17.0 6

10 Riva Group (ITA) 15.7 9

11 Nucor (USA) 15.8 12

12 Sumitomo Metal (J AP) 13.3 13

13 Sail (IND) 12.4 14

14 Grupo Gerdau (BRA) 12.3 19

15 Evraz Holding (RUS) 12.1 nd

1 Arcelor (LUX) 42,8 1

2 Nippon Steel (JAP) 31,8 2

3 LNM Group (NED) 31,1 4

4 JFE Group (JAP) 29,8 nd

5 Posco (KOR) 29,7 3

6 Shanghai Baosteel (CHI ) 19,9 5

7 Corus Group (U.K.) 18,9 7

COMPANYOUTPUT

2003RANKING

2002

After the investment program in Brazil is

completed in 2007, Gerdau will have an installed

capacity of 21 million tons of crude steel per year.

Mittal Steel (Ispat, LNM and ISG) will be

the biggest world steel company with 60 million tons of installed capacity.

World Top ProducersCrude Steel

COMPANYOUTPUT

2003RANKING

2002

In million tons

Steel Sector

Gerdau S.A. Consolidated

Consolidated Figures

Capital Markets

NORTH AMERICA

14 mills and 1 strategic shareholding (Gallatin Steel)

29 fabrication shops

13 downstream operations and special sections

BRAZIL

10 mills

11 fabrication shops

8 downstream operations and special sections

75 sales points (Comercial Gerdau) and flat steel service centers

SOUTH AMERICA

2 mills and 1 strategic shareholding (Sipar)

4 fabrication shops

4 sales pointsSipar**

Laisa

Gerdau Açominas S.A.

Aza

Gerdau Ameristeel Corp.Gallatin Steel*

Units Distribution

** Rolling mill, 38% stake JV

* Flat steel mill, 50% stake JV6

12,970

7,630

610

4,730

ROLLEDPRODUCTS

Billets, merchant bars, rebars, wire rod, drawn products, welded mesh, nails, downstream products, fabricated steel products, flat steel products and grinding balls.

-8,290NORTH

AMERICA

2,610

-

2,610

SLABS, BLOOMS &

BILLETS

16,380TOTAL

Billets, merchant bars, rebars and wire rod.

510SOUTHAMERICA

Billets, slabs, blooms, merchant

bars, rebars, wire rod, drawn

products, welded wire mesh,

structurals, nails, downstream

products, fabricated steel

products and specialty steel.

7,580BRAZIL

MAIN PRODUCTSCRUDESTEEL

7

In thousand tons

Installed Capacity December 2004

0

2.200

4.400

6.600

8.800

11.000

2000 2001 2002 2003 2004

10,274

9,045

6,933

5,9685,836

8

Output Evolution CRUDE STEELIn thousand tons

ROLLED PRODUCTSIn thousand tons

AbroadBrazil

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2000 2001 2002 2003 2004

13,44812,343

9,441

7,2517,065

Utilization rate:

• Abroad: 83.7%

• Brazil: 91.7%

Utilization rate:

• Abroad: 83.9%

• Brazil: 96.2%

0

2,600

5,200

7,800

10,400

13,000

2000 2001 2002 2003 2004-

300

600

900

1,200

1,500

1,800 12,560

12,144

9,151

7,394

7,213

Shipments

In thousand tons

74% increase in sales in the last 5 years

9

AbroadBrazil Average price (Net sales (R$)/ton)

720

796

1,001

1,101

1,560

In R$/ ton

10

ASIA 51%SOUTH

AMERICA6%

NORTHAMERICA

9%

CENTRALAMERICA

11% AFRICA11%

EUROPE12%

ASIA 34%

SOUTHAMERICA

15%

NORTHAMERICA

15%

CENTRALAMERICA

17%AFRICA

8%

EUROPE11%

Exports

2003 2004

EXPORTS 2004

• Shipments from Brazil reached 2.7 million tons in 2004

• Revenues generated by exports reached US$ 1.1 billion in 2004

• Average price 57.9% greater than in 2003 (in US$)

20032004

Financials

In R$ million

11

GROSS SALES REVENUE 23,408 15,783

Net sales revenue 19,597 13,367

Cost of sales (13,352) (10,077)

Gross profit 6,245 3,290

SG&A (1,459) (1,212)

Net Financial expenses (176) (647)

Other operating income 188 15

Equity pick-up (343) (299)

Operating profit 4,455 1,147

Non-operating expense (25) (8)

Profit before taxes 4,430 1,139

Provision for income tax (1,154) 141

Other (41) (26)

Net Profit for the period 3,235 1,254

NET SALES REVENUE +46.6%- Better prices in the international market;- Recovery of the domestic demand; - Consolidation of the units acquired in 2004.

NET FINANCIAL EXPENSES -72.8%- Increase in financial investments of the cash generated in the period;

OTHER OPERATING INCOME +1,153.3%- Favorable outcome of a legal suite due to the improper collection of PIS.

EQUITY PICK UP +14.7%- FX variation over investments abroad;- Fiscal incentives reserves; - Goodwill amortization.

MAIN VARIATIONS (YoY):

12

Results by Region 2004

Var. %BRAZIL

NORTH

AMERICA

SOUTH

AMERICA 2004 2003In R$ million

Gross Revenue 12,914 9,453 1,040 23,407 15,783 48%

Net Revenue 9,976 8,857 764 19,597 13,367 47%

Gross Profit 4,307 1,662 276 6,245 3,290 90%

EBITDA 3,705 1,597 251 5,553 2,683 107%

Net Income 2,165 896 174 3,235 1,255 158%

In R$/Ton

Gross Revenue 1,948 1,747 1,996 1,864 1,300 43%

Net Revenue 1,505 1,637 1,466 1,560 1,101 42%

Gross Profit 650 307 530 497 271 83%

EBITDA 559 295 482 442 221 100%

Net Income 327 166 334 258 103 150%

In %

Gross Margin 43% 19% 36% 32% 25%

EBITDA Margin 37% 18% 33% 28% 20%

Net Margin 22% 10% 23% 17% 9%

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04

992 1,0551,195 1,217

1,435

1,7051,830 1,844

US$ million

NET REVENUE

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04

210 225 230 229

304

552582

486

US$ million

EBITDA

Brazil North America South America

0%

10%

20%

30%

40%

50%

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04

GROSS MARGIN EBITDA MARGIN

0%

10%

20%

30%

40%

50%

1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04

2.9%

14.9%

42.0%43.6%

34.1%30.3%

3.6%13.5%

36.2%35.8%

32.1%25.3%

Evolution of Results

13

COST OF DEBT (per annum)

Brazil - Domestic currency 15.2%

Brazil – Foreign currency FX+4.4%

Companies abroad 7.2%

Indebtedness

GROSS DEBT 6,377 100% 6,263

SHORT TERM 1,972 31% 2,418

Domestic currency 202 3% 281

Foreign currency 705 11% 1,343

Companies abroad 1,065 17% 794

LONG TERM 4,405 69% 3,845

Domestic currency 1,211 19% 717

Foreign currency 1,653 26% 1,031

Companies abroad 1,541 24% 2,097

CASH & CASH EQUIV. 2,042 100% 1,017

Domestic currency 649 32% 430

Companies abroad 1,393 68% 587

NET DEBT 4,335 5,246

2004 2003

HEDGE

In R$ million

Foreign currency debt 2,358

Swap operations 225

Exports 2,904

Cash in US$ 1,393

TOTAL HEDGE 4,522

COVERAGE RATIO 1.9x

DEBT AVERAGE LIFE 4.1 years

In R$ million

14

-

200

400

600

800

1,000

1,200

1,400

2004 2005 2006 2007

772

1,140

1,260

770

North Star Assets (USA)Investments in São PauloAcquisition of stakes in Colombia

Melt shop start up in São PauloAcquisition of stakes in ColombiaImprovements at PiratiniImprovements at Cosigua

Rolling mill start up in São PauloImprovements in Colombia

New blast furnace in Ouro BrancoImprovements at Brazilian millsNew Specialty Steel mill in Rio

15

In US$ million

Capital Expenditures

AbroadBrazil Scheduled

CAPEX 2005 - 2007: US$ 3.2 billion

Main Investments

16

Brazil: Expansion: US$ 1,620 mm

Update: US$ 750 mm

Brazil: Expansion: US$ 1,620 mm

Update: US$ 750 mm

TOTAL INVESTMENT: US$ 3.2 BILLIONTOTAL INVESTMENT: US$ 3.2 BILLION

Abroad: Update: US$ 800 mmAbroad: Update: US$ 800 mm

INSTALLED CAPACITYINSTALLED CAPACITY

CRUDE STEEL

Brazil

Current: 7,580 k tons

New: 11,720 k tons

Abroad

Current: 8,800 k tons

New: 9,230 k tons

Consolidated

Current : 16,380 k

tons

New: 20,950 k tons

ROLLED PRODUCTS Brazil

Current : 4,730 k tons

New: 6,610 k tons

Abroad

Current : 8,240 k tons

New: 8,880 k tons

Consolidated

Current : 12,970 k

tons

New: 15,490 k tons

Outlook

In general terms, the expectation is that 2005 will be similar to 2004 both in Brazil and abroad.

Increase in cost of coking coal and iron ore brings repercussions to the steel products international prices.

In the short term there is a decline in scrap and pig iron prices.

In Brazil the trend is to see margins in the 1Q05 at the same levels as those of the 4Q04.

In the 1Q05, volumes in Brazil seasonally low, compensated by exports.

In Brazil GDP should grow around 4% leading to an increase in the demand for steel products.

Investments in infrastructure in Brazil are expected to grow sharply in 2005.

The increase in interest rates in North America brings uncertainties.

The role of China. 17

Steel Sector

Gerdau S.A. Consolidated

Consolidated Figures

Capital Markets

0

50

100

150

200

Jan-04 Apr-04 Jul-04 Oct-04 Jan-050

50

100

150

200

Jan-04 Apr-04 Jul-04 Oct-04 Jan-05

0

50

100

150

200

250

J an-04 Apr-04 J ul-04 Oct-04 J an-05

0

50

100

150

200

J an-04 Apr-04 J ul-04 Oct-04 J an-05

GGBR4 – GERDAU S.A.GGBR4 – GERDAU S.A.

GNA – GERDAU AMERISTEEL CORP.GNA – GERDAU AMERISTEEL CORP.GGB – GERDAU S.A. ADRsGGB – GERDAU S.A. ADRs

GOAU4 – METALÚRGICA GERDAU S.A.GOAU4 – METALÚRGICA GERDAU S.A.

Stock Performance

Source: Economática/Bloomberg - Period: 01.01.2004 to 03.03.2005 (Base 100).

Metalúrgica Gerdau S.A.

Ibovespa

Market Cap: US$ 2.0 biMarket Cap: US$ 2.0 bi

+116% +116%

+28% +28%

ADRs - Gerdau S.A.

Dow Jones

Market Cap: US$ 4.5 biMarket Cap: US$ 4.5 bi

+86% +86%

+4% +4%

Gerdau Ameristeel Corp.

S&P TSX

Market Cap: US$ 2.6 biMarket Cap: US$ 2.6 bi

+84% +84%

+20% +20%

+77% +77%

+28% +28%

Gerdau S.A.

Ibovespa

Market Cap: US$ 5.6 biMarket Cap: US$ 5.6 bi

19

37240,1

30% Stock bonus + 70% Split (GOAU)100% Stock bonus (GGBR)

3

6

9

12

15

300

600

1,200

900

Dec03

Dec03

Jan04Jan04

Feb04

Feb04

Mar04

Mar04

Apr04

Apr04

May04

May04

Jun04Jun04

Jul04Jul04

Aug04

Aug04

Sep04

Sep04

Oct04

Oct04

Nov04

Nov04

Dec04

Dec04

Jan05Jan05

GOAU4:

384 trades

US$ 5.7mm

GGBR4:

1,420 Trades

US$ 21.1mm

Feb05

Feb05

1,500

18

21

Monthly daily average # of trades

Monthly daily volume

20

Stock LiquidityBovespa

Source: Economática

In US$ million (Volume)

In number of trades

Monthly daily average # of trades

Monthly daily volumeMETALÚRGICA GERDAU (GOAU4)GERDAU (GGBR4)

GGBR4:

492 Trades

US$ 5.4mm

GOAU4:

109 trades

US$ 1.6mm

-

50

100

150

200

18-Oct-04 21-Nov-04 25-Dec-04 28-Jan-05 3-Mar-05

LIQUIDITY OF SHARES: Monthly daily average 9M04: GNA.TO = Trades: 217 thousand shares/dayGNA.TO = Volume: US$ 871 thousand/day

Monthly daily average since 10.18.2004: GNA.TO + NY= : 1,057 mil thousand/dayGNA.TO + NY = Volume: US$ 5.9 million/day

SHARE APPRECIATION FROM 10.18.2004 TO 03.03.2005:

Source: Bloomberg – Base 100

GNA.TO+ 47%

GNA+ 48%

Stock LiquidityGNA

21

-

50

100

150

200

18-Oct-04 21-Nov-04 25-Dec-04 28-Jan-05 3-Mar-05

+55 (51) 3323 2703

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