Gerdau S.A.

Overview Key strengths Key risks Record high EBITDA will allow Gerdau to deleverage to below 1.0x, which along with debt reduction will make the capital structure more resilient. Cyclical industry trends and heightened exposure to commodities could pressure margins. One of the largest global long steel producers, with sizable presence in the U.S. and Brazil. Inflationary pressure could hinder margins. Proven ability to quickly adjust operations amid economic slowdowns. Volatile economic conditions in Brazil, which represents about 45% of Gerdau?s revenues. Management?s commitment to preserve credit quality and sustain strong liquidity throughout industry cycles. . Gerdau and its peers in the steel industry are enjoying unparallel favorable industry momentum across all its divisions. We see robust demand in Brazil even

...Solid demand amid soaring prices in Brazil and healthy metal spread in the U.S. drove record high EBITDA. Gerdau and its peers in the steel industry are enjoying unparallel favorable industry momentum across all its divisions. We see robust demand in Brazil even amid soaring prices (the average revenue per ton in third quarter 2021 was 97% higher than in third quarter 2020); the metal spread remains healthy in the U.S., keeping gross margins above 20% despite rising cost inflation; its special steel operation also posted record high EBITDA despite the supply chain issues in light vehicle production....

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