Gerdau (GGBR4) investor relations material

Executive summary

• North America contributed 75% of consolidated Adjusted EBITDA, driving resilience and record Q1 results, while Brazil faced profitability pressure from high steel imports and South America showed mixed trends.

• Adjusted EBITDA reached R$ 3.0 billion, up 25% quarter-over-quarter and 23% year-over-year, with margin improving to 17.7%.

• Adjusted net income was R$ 1.0 billion, up 51% from Q4 2025 and 34% year-over-year, with free cash flow positive at R$ 16 million despite higher working capital consumption.

• Sustainability advances included the launch of Gerdau NewEco, a low-carbon steel solution, and the inauguration of the Barro Alto Solar Complex, now supplying 13% of Brazil's electricity needs.

• Dividend of R$ 354 million (R$ 0.18/share) and share buyback program for up to 10 million preferred shares were approved, with 21% of authorized shares repurchased.

Financial highlights

• Net sales were R$ 16.7 billion in Q1 2026, down 1.5% from Q4 2025 and 3.8% year-over-year, mainly due to lower volumes in Brazil.

• Adjusted EBITDA margin improved to 17.7%, up 3.7 p.p. quarter-over-quarter and 3.9 p.p. year-over-year.

• Net debt/Adjusted EBITDA ratio stood at 0.74x at Q1 2026 end, reflecting a strong balance sheet.

• Free cash flow was R$ 16 million, positive despite seasonal working capital needs.

• CAPEX for Q1 2026 was R$ 1.1 billion, with 84% allocated to Brazil and representing 23–27% of the annual plan.

Outlook and guidance

• CAPEX guidance for 2026 remains at R$ 4.7 billion, focused on maintenance, competitiveness, and growth.

• North America expected to remain resilient with robust order backlogs, while Brazil faces ongoing import pressure and South America shows mixed recovery.

• Monitoring trade defense measures, anti-dumping actions, and regulatory changes in key markets.

• Start-up of Miguel Burnier Mining Project and Midlothian expansion expected in the second half of 2026.