Gerdau (GGBR4) Q4 2024 earnings summary

Executive summary

• Achieved all-time best workplace safety with accident frequency rate at 0.59 in 2024, reinforcing commitment to safety and well-being.

• Adjusted EBITDA for 2024 was R$10.8 billion, down 19.7% year-over-year, supported by cost reductions and financial discipline.

• Net income attributable to shareholders was R$4.6 billion, a 39% decrease from 2023, with EPS at R$2.18.

• Free cash flow totaled R$2.9 billion in 2024.

• Strategic investments in renewable energy, asset optimization, and modernization to enhance competitiveness and reduce CO2 emissions.

Financial highlights

• Achieved R$1.5 billion in cost savings in 2024, meeting guidance.

• CAPEX totaled R$6.2 billion in 2024, with 53% for competitiveness and 47% for maintenance.

• Dividend payout totaled R$1.7 billion, with total shareholder return (including buybacks) reaching R$2.9 billion and a payout ratio of 65.9%.

• Share buyback program completed for 2024 (~3.4% of shares); new 2025 program for up to 64.5 million shares announced.

• Leverage at 0.48x net debt/EBITDA, maintaining a healthy balance sheet.

Outlook and guidance

• CAPEX guidance for 2025 is R$6.0 billion, with R$1.6 billion earmarked for environmental and safety projects.

• New mining investments in Brazil are 55% complete, expected to add 5.5 million tons of iron ore production by late 2025.

• Focus remains on cost efficiency, modernization, and expanding presence in long, flat, and special steels in the Americas.

• North America: Slight margin upturn expected in 2025, with seasonal volume improvement and lower maintenance downtime costs.

• Brazil: Slight margin slowdown anticipated in 2025 due to tougher market and price pressure; export volumes remain relevant.