Metalurgica Gerdau (GOAU4) investor relations material

Executive summary

• Achieved record low workplace accident rates and published a sustainability report with CO2 emissions at 0.85 tons per ton of steel, less than half the global average.

• North American operations delivered record results, contributing 61.4% of consolidated EBITDA in Q2, offsetting weaker results in Brazil and South America.

• Strategic focus is shifting to North America due to favorable market conditions and persistent import pressures in Brazil.

• Net sales totaled R$17.5 billion, up 0.9% sequentially and 5.5% year-over-year, driven by higher North American volumes.

• Dividend distribution of R$239 million and 68% completion of the 2025 share buyback program.

Financial highlights

• Adjusted EBITDA reached R$2.6 billion, up 6.6% year-over-year, driven by North America.

• Net income was R$864 million (R$0.43/share), a 14% increase sequentially.

• Leverage ratio (net debt/EBITDA) at 0.85x, below policy limits, reflecting new bond and debenture issuances.

• CapEx for the quarter was R$1.6 billion, mainly allocated to Brazil and the Miguel Bernier/Itabiritos mining projects.

• Free cash flow was negative R$773 million, improved over 1Q25 but lower than 2Q24 due to higher CapEx and interest payments.

Outlook and guidance

• North America expected to maintain strong demand, especially in nonresidential construction, with healthy order backlogs.

• Brazil's steel market remains under pressure from imports; further import records possible if trade defense is not strengthened.

• CapEx to be reduced globally from 2026 onward, with future investments focused on North America and maintenance in Brazil.

• Strategic focus remains on geographic diversification, operational efficiency, and sustainable growth.

• Positive cash generation and improved free cash flow anticipated in the second half of the year.