Gerdau (GGBR4) Q4 2024 earnings summary

Executive summary

• Achieved the lowest accident frequency rate in 124 years, with a rate of 0.59 in 2024, reinforcing commitment to safety and well-being.

• Adjusted EBITDA for 2024 reached R$10.8 billion, supported by financial discipline, cost reductions, and a solid balance sheet.

• Adjusted net income was R$4.3 billion and EPS R$2.18; free cash flow totaled R$2.9 billion.

• Concluded 2024 cost-savings program, achieving R$1.5 billion in annual savings and completing a share buyback of ~3.4% of shares.

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

Financial highlights

• Adjusted EBITDA for 2024: R$10.8 billion; adjusted net income: R$4.3 billion; free cash flow: R$2.9 billion.

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

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

• Distributed R$2.9 billion to shareholders via dividends and buybacks, with a payout ratio of 65.9%.

• Leverage at 0.48x net debt/EBITDA, maintaining a low level despite challenging results.

Outlook and guidance

• 2025 CAPEX guidance is R$6.0 billion, focused on modernization, competitiveness, and sustainability.

• Expect a flatter CAPEX disbursement curve in 2025 due to ongoing major projects.

• 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.

• Strategic CAPEX projects, including Ouro Branco and Itabirito mining, expected to drive competitiveness and results into 2026.