11

December 2007

Investor Presentation Investor Presentation

22

� Among the most competitive steel companies in the world

• Strong low cost structure as a result of diversified production processes and multiple raw material sourcing

� An international company

• Large export revenues from Brazil

• Operations in 13 countries

� Ranked 14th globally by steel output for year 2006 with an output of 15.6 million tonnes (source: International Iron and Steel Institute - IISI)

� Largest long steel producer in the Americas

• 2nd largest long steel producer in North America

• 41 steel units with state of the art technology

� 2nd largest SBQ producer in the world

� Relevant market share and diversified product range through downstream and service centers

� Strong balance sheet and strong cash generation

� Gerdau S.A. shares are listed on the São Paulo, New York and Madrid Stock Exchanges

Highlights

33

Industry Overview

Group Overview

Operating and Financial Highlights

Agenda

All data presented in US Dollar and in metric tons, except when indicated

44

728 725750 750

799777 789

848 850

904

970

1,069

1,139

1,230

1,317

90 93 95 101 109 115 124 127151

182222

280

356

423

487

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007*

World China

China Growth

1993 to 1999 = 5.5% p.a.

China Accelerated Growth

2000 to 2007 = 21.2% p.a.

Crude Steel Production

* Annualized Production 9M07

Source: IISI / World Steel Figures 2007

In million tonnes

Growth rate in the last 10 years: + 65%

� China: + 347% WorldGrowth

2000 to 2007 = 6.5% p.a.

World Growth

1993 to 1999 = 1.4% p.a.

55

315333

94 106146

298

28 4266

102

2002 2003 2004 2005 2006 2007e

NAFTA B razil China India Wo rld

2006 2007e 2008e

Demand

1,1131,179

1,251

e: estimated Source: IISI

5.9%6.1%

FINISHED STEEL APPARENT DEMANDIn million tonnes

FINISHED STEEL APPARENT PER CAPITA DEMAND (kg)

The world steel demand should increase 4.2% p.a. from 2010 up to 2015.

STEEL USE PER CAPITA GROWTH (2002 – 2007)

NAFTA: +5.7%

China: +104.1%

Brazil: +12.8%

World: +54.5%

India: +50.0%

66

423

11699

71

49 48 47 4132 31 23 20

230

34%

44%

52%58%

62%66%

69%73%

75%78% 80% 81%

100%

Production

Accumulated Participation

Crude Steel Production – 2006

Source: IISI

Ranking

In million tonnes

UkraineChina USAJapan Russia Germany BrazilItalySouth Korea

Global Production: 1,230 MMt

� China: 34% of global production

� Brazil: 2.5% of global production

Others

10th Largest

Producer

India Turkey Taiwan

77

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

0%

3%

6%

9%

12%

27%

15%

18%

21%

24%

Production in 1990Production in 1990

770 million tonnes770 million tonnes

Production in 2005Production in 2005

1.139 billion tonnes1.139 billion tonnes

Consolidation Global Steel Market

Source: Prof. Germano de Paula

TOP 5: 12.3% (1990) 16.9% (2005)

TOP 5: 13.4% (1990) 24.4% (2005)

EX-CHINA

WORLD

88

Industry Overview

Group Overview

Operating and Financial Highlights

Agenda

All data presented in US Dollar and in metric tons, except when indicated

99

100+ Years in Business

1900 1940´s 1950´s 1960´s 1970´s 1980´s 1990´s 2000

1901 - First Operation:Nail Factory

1948 - 1st Steel Mill Acquisition (Riograndense)

Expansion of Riograndense Mill (Construction of 2nd

steel mill)

Distribution channel arrangements (today: more than 70 sales points)

Market Share increase by:Diversification / Verticalization

Distribution channelNew acquisition

(Pernambuco, Brazil)

Acquisition of a new steel mill (Paraná,

Brazil)Construction of a new mill (Rio de Janeiro, Brazil)Entering in the Reforestation business

Acquisition of 3 mills (Rio de Janeiro, Minas Gerais and

Bahia, Brazil)Construction of 2 mills

(Paraná and Ceará, Brazil)International expansion (Uruguay and Canada)

New Acquisitions:Piratini (Rio Grande do Sul, Brazil) –specialty steel

Second mill in Minas Gerais and rolling mill in São Paulo

(Brazil)Stake in AçominasInternational

expansion ( Chile, Canada, Argentina

and USA)

New Acquisitions:USA

Downstream mills and fab shops in North America

Entering European and Asian marketExpansion in Latam

marketConstruction of steel mill in São Paulo (Brazil)

1010

19 9 7 19 9 8 19 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 9 e

Installed Capacity Expansion MacSteel(USA)

Sidertul(Mexico)INCA

(Dom. Rep.)Sizuca

(Venezuela)SJK(India)Chaparral(USA)

1980 – Laisa (Uruguay)1988 – Barão de Cocais

(Brazil)1989 – Usiba (Brazil)Cambridge (Canada)1992 – Piratini (Brazil)

AZA (Chile)1994 – Pains (Brazil)Manitoba (Canada)Stake in Açominas

(Brazil)

Ameristeel(USA)AZA

New mill(Chile)Additionalstake in Açominas(Brazil)

North Star(USA)

Control ofAçominas(Brazil)Co-Steel(USA)

7,696 11,076

16,372

Diaco(Colombia)

16,475

4,556

19,870São Paulo(Brazil)

Sidenor (Spain)

Sheffield (USA)

Siderperú(Peru)

GSB(Spain)

Solid Track Record

27,580

23,175

TOTAL INVESTED(1997 – Sep. 2007):

Brazil = US$ 4.2 billion + Debt

North America = US$ 6.1 billion + Debt

Latin America = US$ 1.3 billion + Debt

Europe = US$ 687 million + Debt

Asia = US$ 71 million + Debt

In thousand tonnes (IFRS)

Abroad – Crude Steel Installed Capacity

Brazil – Crude Steel Installed Capacity

e: estimated

In addition to the mills acquired, as related above, Gerdau acquired many fab shops in order to add value to its products and offer services and products to its clients according to their needs.

CAGR 1997-20

07: 18% a.a.

1111

Spain

Dominican Republic

Steel Units

Associated Companies

Joint Ventures

BRAZIL

9.9 million tonnes of crude steel

6.6 million tonnes of rolled steel products

11 Steel Units

12 Fabrication Shops - Armafer

04 Downstream operations and special sections

68 Sales point (Comercial Gerdau)

04 Flat steel service centers

ABROAD

13.3 million tonnes of crude steel

13.9 million tonnes of rolled steel products

30 Steel Units

45 Fabrication Shops

20 Downstream operations and special sections

02 Associated Companies (Spain and DominicanRepublic)

02 Joint ventures (USA and India)

Canada

United States

Mexico

Venezuela

Colombia

Peru

Chile

Brazil

Argentina

Uruguay

India

Location

1212

Growth with ProfitabilityATKearney study

Notes: 1) EBIT-growthNotes: USINAS = USIMINAS; ARCELOR Takeover MITTAL/ SEVERSTAL: The market capitalization of Severstal is 6.8 bn USD

(same as revenue, hence valued above the industry multiple of 0.79)Source: Thyssenkrupp: steel segment

IndustryAverage

Revenue Growth

Industry Average

AK Steel

Oregon Steel Mills

Worthington

Onesteel

Hylsamex

Neomax

Cap

Imsa

Maanshan Iron Steel

EregliDemir Celik

Angang

Boehler-Uddeholm

Steel Dynamics

Carpenter Technology

Nisshin Steel

HyundaiSteel

Tokyo Steel

Bluescope 03 05

Rautaruukki

Acerinox

Salzgitter

Ipsco

SSAB

Voestalpine

Corus

Tata Steel

Severstal

US Steel

SAIL

Usinas

Gerdau

Baoshan

Novolipetsk1)

Thyssenkrupp1)

Nucor

Sumitomo

Mittal

JFE 03 05

Nippon Steel

Arcelor02 05

-10%

0%

10%

20%

30%

40%

50%

60%

70%

-40% 10% 60% 110% Equity Value Growth

Growth portfolio (CAGR 2001-2005)

benchmarked against industry average

1313

LONG STEEL PRODUCTS (Brazil)

� Maintenance of market share

� Improvement of current installed

capacity

SPECIALTY STEEL

� Active role in the steel sector

consolidation process

� Search for new opportunities

AÇOMINAS

� New 1.5 MM tonnes blast furnace

� Growth platform for slabs, blooms

and billets

� Iron Ore Reserves

Growth Opportunities

LATIN AMERICA

� Maintenance of leadership in

the long steel sector

� New markets

NORTH AMERICA

� Efficiency and productivity

gains (Gaps)

� Enhancement of leadership in

the long steel sector through

acquisitions

1414

OutlookBRAZIL

� Strong demand for the 4th quarter 2007 and throughout 2008

� Scrap prices stable; iron ore and coal prices aligned to international market

� Maritime freight should continue to be high, squeezing export margins

NORTH AMERICA

� Government should continue investing in infrastructure

� Prices relatively stable

� Lower volumes during the next quarter due to impending winter period

� Chaparral consolidated since September 14th

� Good prospects for early 2008

LATIN AMERICA

� Demand should continue strong impacted by economic growth in the region

� Government investments should continue

� Costs may increase

EUROPE

� Demand should continue strong

� Increase in production due to investment plan in progress

� Higher costs, mostly energy

1515

Industry Overview

Group Overview

Operating and Financial Highlights

Agenda

All data presented in US Dollar and in metric tons, except when indicated

1616

1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07

Shipments

Billets, blooms& slabs

Merchant bars

Rebars Fabricated steel

Heavystructural shapes

Wire-rod Wires Nails

Brazil – Domestic Market (31% in 3Q07)

In thousand tonnes (IFRS)

Brazil – Exports (11% in 3Q07)

Latin America (15% in 3Q07)

North America (39% in 3Q07)

Europe (4% in 3Q07)

9M07 = 12,544

+12.4%

9M06 = 11,162

3,689 3,770 3,7273,703

4,164 4,168 4,212

1717

36%32% 30% 34% 38%

9%11% 10%

8%7%

38% 38%39% 35%

35%

10% 10%9% 11%

11%

7% 9% 12% 12% 9%

3Q06 4Q06 1Q07 2Q07 3Q07

Europe

Latin America

North America

Brazil - Exports

Brazil - Domestic Market

Net Sales Breakdown

Net sales from the overseas units plus exports from Brazil, represented 66% of consolidated net sales

Net Sales Breakdown by Region - 9M07

Historical Net Sales Geographical Distribution

In US$ millions (IFRS)

Brazil -Domestic Market 34%

North America36%

Europe11%

Latin America11%

Brazil – Exports 8%

Exports from Brazil (t)

Africa 12% Central America

16%

South America 23%

North America13%

Europe 12%

Asia 24%

3,038 3,030 3,577 3,915 4,168

13% in tonnes

1818

393 343 344 386457

217

145254

243219

74

77

60111

8450

49

84

89 63

3Q06 4Q06 1Q07 2Q07 3Q07

33.7%

25.0%

38.9%

17.0%

19.3% 20.1%

25.2%

28.7%

18.7%18.8%

10%

15%

20%

25%

30%

35%

40%

45%

3Q06 4Q06 1Q07 2Q07 3Q07

GROSS MARGIN* EBITDA MARGIN*

EBITDA and MarginsEBITDA*In US$ millions

* Data in IFRS

North America

Brazil

Latin AmericaEurope

734

614

742829 823

Consolidated Brazil North America Latin America Europe

8%

10%

26%

56%

19.8%

24.5%24.1%

28.7%

18.7%

15.0%

23.1%

17.4%

25.8%

17.7%

10%

15%

20%

25%

30%

35%

3Q06 4Q06 1Q07 2Q07 3Q07

1919

3Q07 3Q06 9M07 9M06

BALANCE SHEETCurrent Assets 8,384 6,560 8,384 6,560

Non-current Assets 13,965 7,146 13,965 7,146

Total Assets 22,349 13,706 22,349 13,706

Current Liabilities 4,682 2,721 4,682 2,721

Non-current Liabilities 8,693 4,499 8,693 4,499

Shareholder's Equity 8,974 6,486 8,974 6,486

Total Liabilities and Shareholder's Equity 22,349 13,706 22,349 13,706

Total Debt 8,906 4,124 8,906 4,124

Cash and Equivalents 2,758 2,757 2,758 2,757

Net Debt 6,149 1,367 6,149 1,367

INCOME STATEMENTNet Sales 4,168 3,038 12,258 8,925

Gross Profit 1,042 872 3,033 2,438

Operating Income 677 540 2,267 1,819

Net Income 563 409 1,827 1,436

EBITDA 823 734 2,520 2,086

EBITDA Margin 19.8% 24.1% 20.6% 23.4%

RATIOSNet Debt / Total Capitalization 40.7% 17.4% 40.7% 17.4%

Total Debt/EBITDA LTM 2.7x - 2.7x -

Net Debt / EBITDALTM 1.9x - 1.9x -

Consolidated FinancialsIn US$ millions (IFRS)

LTM = Last twelve monthsEBITDA = Earnings before interest, taxes, depreciation and amortization

2020

US$ MM

GROSS DEBT 8,906 100%

SHORT TERM 2,304 26%

Domestic Currency 461 5%

Foreign Currency 289 3%

Companies Abroad 1,554 18%

LONG TERM 6,602 74%

Domestic Currency 1,219 14%

Foreign Currency 1,656 18%

Companies Abroad 3,727 42%

CASH & CASH AND EQUIV. 2,758 100%

Domestic Currency 1,315 48%

Companies Abroad 1,442 52%

NET DEBT 6,149

DEBT STRUCTURE

Domestic Currency 19%

Foreign Currency

22%Companies Abroad 59%

DEBT AVERAGE LIFE:7 years and 7 months

September 2007 (IFRS)

Consolidated Debt Profile

7.1%Companies Abroad

FX + 6.4%Foreign Currency

9.6%Domestic Currency

Brazil

COST OF DEBT (p.a.)

2121

1,383

432

140349

214

626 631830

4,301

4Q07 1Q08 2Q08 3Q08 4Q08 2009 2010 2011 A fter 2011

FINIMP: 51

BNDES: 46

Pre-export: 45

BNDES: 319

Companies

Abroad: 83

In US$ millions – September/07 (IFRS)

FINIMP: 55

BNDES: 46

Companies

abroad: 1,259

(BRIDGE)FINIMP: 69BNDES: 48

BNDES: 178

FINIMP: 214

Companies

Abroad: 84

Companies

Abroad: 699

SHORT TERM: US$ 2,304 LONG TERM: US$ 6,602

Consolidated Debt Amortization

Perpetual Bond: 600

Companies Abroad: 2,982

Debentures:

166

BNDES: 154

FINIMP: 127

Companies

Abroad:232

BNDES: 47

2222

ACTUAL 9M07 (IFRS) INVESTMENT PLAN 2007–2009

In US$ millions

CAPEX

In US$ millions

5,9184,8731,045TOTAL

0

49

130

137

316

729

71

25

494

4,283

4,873

0

624Latin America

71Asia

74Europe

4,420North America

5,189ABROAD

729BRAZIL

9M07ACQUISITIONSCAPEX

527142125260Latin America

935315360260North America

148434560Europe

1,610500530580ABROAD

TOTAL200920082007

2,3901,000570820BRAZIL

1,5001,400 1,100 4,000TOTAL

Capacity

Sep/2007

2007 2008 2009 New

Capacity*

Variation

Crude Steel 9,925 1,560 50 - 11,535 16.2%

Rolled Products 6,640 - - 1,350 7,990 20.3%

Crude Steel 9,810 50 230 370 10,460 6.6%

Rolled Products 9,920 30 130 875 10,955 10.4%

Crude Steel 2,290 10 825 50 3,175 38.6%

Rolled Products 2,770 - 270 475 3,515 26.9%

Crude Steel 1,150 - - - 1,210 5.2%

Rolled Products 1,225 - - - 1,225 -

Crude Steel 23,175 1,620 1,105 480 26,380 13.8%

Rolled Products 20,555 30 400 2,700 23,685 15.2%

TOTAL

Brazil

North America

Latin America

Europe

*MacSteel is not included

2323

Quanex Corporation (MacSteel)

� One of the largest SBQ producer in the world and a strong presence in the

North American market

� Possibility in increasing the presence of the Gerdau Group in the automotive

and autoparts industry as a supplier of long specialty steel products (SBQ)

� Annual installed capacity: 1.2 million metric tons of crude steel and 1.1

million tons of rolled products

� Three mini-mills, located in Jackson, Michigan; Monroe, Michigan; and Fort

Smith, Arkansas

� Six downstream operations located in the states of Michigan (two), Ohio,

Indiana (two) and Wisconsin

� 1,600 employees

� Investment: US$1.458 billion – US$39.20 per share – plus the assumption of

liabilities of US$215 million

� The acquisition will be paid through cash available

� Quanex will spin-off its non-steel business

� Quanex Corporation’s Board of Directors has unanimously approved the

transaction on November 18. The shareholders still must to approve the

offer.

2424

Quanex Corporation (MacSteel)

STRENGTHS

� Strong and resilient financial performance

� Cost structure (lowest SBQ producer in North America)

� High productivity

� Good management team

� Long standing customer base

� Plant located close to the main SBQ markets (Midwest, Texas and Mexico)

� State of the art downstream

� Value added processing facilities

� Strong brand recognition

� Common values to Gerdau

OPPORTUNITIES

� Best entry opportunity in the high end SBQ market ( if not the one in the medium term)

� Strategic fit to Gerdau SBQ strategy (be one of the global leaders in the automotive market)

� Synergies with Gerdau

2525

� BOARD OF DIRECTORS

- External members on the board

- Support Committee (Support and Excellence; Corporate Governance; Strategy

and Compensation and Succession)

� EXECUTIVE COMMITTEE

- Vice-presidents responsible for the Operations and Support Areas

- Support Committee ( Disclosure, Financial, Risk Management and Human

Resources and Orgazational Development)

� FISCAL BOARD (AUDIT COMMITTEE)

- Permanent and in accordance to the SOX (Gerdau S.A.)

Gerdau S.A. shares are included in the following São Paulo Stock Exchange indexes:

� Bovespa Index - Ibovespa

� Corporate Sustainability Index - ISE

� Special Tag Along Stock Index - ITAG

� Brazil Index 50 – IBrX 50

� Industrial Sector Index – INDX

HIGHLIGHTS:

� First Brazilian company to submit its Consolidated Financial Statements in conformity

with international accounting standards (IFRS)

� Tag Along (100% common and preferred shares)

� Bovespa Level 1

� Shares are negociated in Bovespa, Nova York Stock Exchange, Toronto Stock Exchange

and LATIBEX Stock Exchange

� Risk Management

� Gerdau Business System

Governance – Best Practices

2626

Disclaimer

This document can contain statements which constitute forward-looking

statements. Such forward-looking statements are dependent on

estimates, data or methods that may be incorrect or imprecise and that

may be incapable of being realized. These estimates also are subject to

risk, uncertainties and suppositions and include, among other, overall

economic, political and commercial environment, in Brazil and in the

markets we are present in addition to government regulations, present

and future. Prospective investors are cautioned that any such forward-

looking statements are not guarantees of future performance and

involve risks and uncertainties. The Company does not undertake, and

specifically disclaims any obligation to update any forward-looking

statements, which speak only as of the date made.

2727

www.gerdau.com.br

inform@gerdau.com.br

+55 51 3323 2703