Gerdau (GGBR4) Q3 2025 earnings summary

Executive summary

• North America delivered record EBITDA and shipment growth, contributing 65% of consolidated EBITDA, while Brazil faced margin pressure from high steel imports and oversupply.

• Steel shipments reached up to 3.1 million tonnes, with net sales rising to R$18.0 billion and net income at R$1.1 billion, up 26% year-over-year.

• Free cash flow was R$1.0 billion, supported by a R$300 million working capital release and improved cash conversion cycle.

• The sustainable mining project in Miguel Burnier reached 90% completion, with integrated operations set for early 2026.

• Dividends of R$0.28/share (R$555 million) were approved, and 88% of the buyback program was completed, representing 2.9% of shares and R$902 million.

Financial highlights

• Adjusted EBITDA reached R$2.7 billion, up 7% year-over-year, with margin improving to 15.2% and North America and South America offsetting Brazil.

• Earnings per share increased to R$0.54; net income margin was 6.1%.

• Net debt/EBITDA improved to 0.81x, with gross debt expected to fall to around R$14 billion by year-end.

• CapEx for Q3 was R$1.7 billion, with 60%–77% allocated to competitiveness projects, especially mining; 2026 guidance is R$4.7 billion, a 22% reduction from 2025.

• Free cash flow conversion was 37%, and payout (dividends + buybacks) was 75% of net income.

Outlook and guidance

• North America is expected to maintain strong steel demand, with healthy order backlogs and positive outlook for 2026, especially in solar, data centers, and infrastructure.

• Brazil faces continued challenges from imports and seasonality, with slight optimism for trade defense measures and sector recovery in 2026.

• Ongoing focus on operational efficiency, cost management, and disciplined capital allocation.