Investor Presentation

March, 2015

Gerdau Investment Highlights

Strategy

Financial and Operational Highlights

Outlook

Agenda

2

Gerdau Investment Highlights

Investor Presentation

► Global player with dominant regional presence and operations in 14 countries

– Largest long steel producer in the Americas and 2ª globally

► Vertically integrated operations with flexible production processes

– A leading low cost producer

► Relevant market share and diversified product offering via downstream and service centers

► Strong balance sheet and cash generation track record

► Over 110 years of profitable operations in the steel market

– Not a single yearly loss during its history

3

► With more than 120,000 shareholders and ADTV of over US$ 70 MM, Gerdau shares are listed on the

São Paulo, New York and Madrid stock exchanges

Nippon Steel

Tata Corus

Evrazholding

Source: Steel on the Net

*Last information available: 2014

Long Steel Producers - Ranking by company (million tonnes)*

► Largest long steel producer in the Americas and 2nd globally

► Operations in 14 countries with relevant market share

Global Player with Dominant Regional Presence

Steel Units

Associated Companies

Joint ventures

USA. &

Canada

Mexico

Colombia

Peru

Chile

Uruguai

Argentina

Brazil

Dominican Republic

Venezuela

India

Spain

Guatemala

4 Investor Presentation

Arcelor Mittal

Nucor Group

JFE Steel Group

Gerdau

Hebei Steel

Riva Group

Celsa Group 8.7

8.7

9.1

10.4

10.9

11.0

11.9

18.1

25.5

54.4

Gerdau Investment Highlights

Strategy

Financial and Operational Highlights

Outlook

Agenda

5

► Relevant level of direct purchase and

captive scrap (50%)

► 6.3 billion tonnes of iron ore resources

– Self-sufficiency at Ouro Branco mill

► Coke unit and coking coal mine in Colombia

► Partial level of energy self generation

Upstream

Vertically Integrated Operations

Billets

Cooling bed

Reheating

furnaceFinishing

unit

Galvanizing

unit

Laying headWire rodDrawing unit

Iron oreConverter

Blast furnace

Continuous casting

LadleScrap

Pig iron

Electric arc furnace

Ladle furnace

Drawn wire

Nail machine

Welding manufacturing

processes

Structural profiles

GG-50

rebar

Bars and profiles

Barbed wire, oval-shaped wire and galvanized wire

Welding wires and wires for electrodes

NailsCA- 60

rebar

Annealed wire

Ribbed reinforcing

mesh

Integrated

mill

Mini - mill

Rolling mill

Billets

Cooling bed

Reheating

furnaceFinishing

unit

Galvanizing

unit

Laying headWire rodDrawing unit

Iron oreConverter

Blast furnace

Continuous casting

LadleScrap

Pig iron

Electric arc furnace

Ladle furnace

Drawn wire

Nail machine

Welding manufacturing

processes

Structural profiles

GG-50

rebar

Bars and profiles

Barbed wire, oval-shaped wire and galvanized wire

Welding wires and wires for electrodes

NailsCA- 60

rebar

Annealed wire

Ribbed reinforcing

mesh

Integrated

mill

Mini - mill

Rolling mill

► Focus of Gerdau’s operations

► Low cost structure

► Mini-mills and integrated mills key to low

cost strategy

► Latest generation technology

Steel

► Reinforcing steel fabrication facilities (Fab

Shops)

► Drawn products

► Multi-product distribution network

► Tailor-made added-value approach (~40%

of sales to civil construction)

Downstream

Combination of vertical business model with mini-mills positions Gerdau

competitively along the cost curve

6

Products

Brazil North America Special Steel

Ready-to-use

products

► Housing

► Infrastructure

► Industry and commercial buildings

► Agricultural

► Exports of slabs, blooms and billets

► Infrastructure

► Non-residential

► Industrial

► Automotive

► Shipbuilding

► Energy

Billets,

blooms

& slabs Merchant

bars Rebars

Fabricated

steel Heavy

structural shapes

Wire-rod Wires

Nails SBQ

Latin America

► Housing

► Infrastructure

► Industry and

commercial

buildings

Consumer Markets

33% of Net Sales

52% of EBITDA

32% of Net Sales

18% of EBITDA

13% of Net Sales

9% of EBITDA

20% of Net Sales

18% of EBITDA

Note: Net Sales and EBITDA LTM.

HRC

Iron Ore

2% of Net Sales

3% of EBITDA

► Raw material for

the steel industry

Iron Ore

7

Gerdau Investment Highlights

Strategy

Financial and Operational Highlights

Outlook

Agenda

8

Geographic diversification reduces volatility in results

Consolidated EBITDA & EBITDA Margin

EBITDA LTM: R$ 4,828 million

1,3701,196 1,170 1,224 1,238

13.3%

11.3% 11.2% 11.4% 11.4%

4Q13 1Q14 2Q14 3Q14 4Q14

EBITDA EBITDA Margin

* Adjusted BITDA and adjusted EBITDA margin

*

EBITDA and EBITDA Margin per BO

9

848

587

738

22,6%

16,5%

20,3%

4Q13 3Q14 4Q14

139

337

199

4,5%

9,1%

5,7%

4Q13 3Q14 4Q14

136 109 109

9,3% 7,6%

7,1%

4Q13 3Q14 4Q14

205 231 254

10,0% 11,0%

12,1%

4Q13 3Q14 4Q14

141

10

- 24

37.7%

4.8%

- 11,7% 4Q13 3Q14 4Q14

EBITDA (R$ million) EBITDA Margin (%)

* *

* Adjusted BITDA and adjusted EBITDA margin

(1) EBITDA LTM.

Debt Maturity Schedule

Average Debt Term: 7.1 years

R$ billion R$ billion

Debt and Leverage Ratio

Average Debt Cost: 6.5%

Debt impacted by exchange variation

Higher cash position reduces the Net Debt/EBITDA ratio to 2.4x

16,3 16,4 16,4

18,119,2

4,23,5 4,0

4,75,8

2.5x 2.5x 2.4x2.7x

2.4x

dec.13 mar.14 jun.14 sep.14 dec.14

Gross Debt Principal (R$ billion) Cash (R$ billion) Net Debt/EBITDA¹

10

1.7 0.9

3.1

0.8 0.7 2.4

9.6

2015 2016 2017 2018 2019 2020 2021 and after

Investments amount to R$2.3 billion in 2014

In 2015, Gerdau plans to invest R$1.9 billion in fixed assets (CAPEX)

Main projects

Installation of a heavy plates rolling mill at the Ouro Branco mill in Minas Gerais

Construction of a new mill in Mexico to produce structural profiles

Installation of a new continuous casting unit at the St. Paul mill in Minnesota (USA)

Installation of new special steel rolling mill and reheating furnace in Monroe (USA)

40%

14%

14%

25%

7%

Brazil

North America

Latin America

Special Steel

Iron Ore

11

Gerdau Investment Highlights

Strategy

Financial and Operational Highlights

Outlook

Agenda

12

R$ 45 Bn

R$ 91 Bn (R$ 56 Bn in

5 years and R$ 35 Bn in

25 years)–10,000 Km

R$ 5.5 Bn (PAC 2)*

+ concessions R$ 55 Bn (until 2020)

R$ 42 Bn (R$ 24 Bn in 5

years and R$ 19 Bn in

20 years)–7,5 thousand Km

R$40 Bn (R$ 25 Bn

already invested and

R$15 Bn until 2020)

Brazil Business Operation

13

Key Investments in Infrastructure

► Concession of Guarulhos, Viracopos, Galeão

and Confins airports

► Privatization and construction of roads, railways,

ports and airports aiming to upgrade the

country’s infrastructure

► High investments in energy generation to supply

increasing consumption demand

PORTS

AIRPORTS

ROADS

RAILROADS

HPP’s

WIND FARMS

*Programa de Aceleração do Crescimento II (Brazil Federal Government package of infrastructure investments)

HPP’s: outlook for demand in the sector (tonnes)

Main projects in progress

89.03498.033 99.488 97.111

78.294

2012 2013 2014 2015 >2016

1,5% - 2,4%

ENTERPRISE ST VOLUME PERIOD

UHE TELES PIRES MT 45,000 2011 - 2015

UHE BELO MONTE RO 68,000 2012 -2018

98,033 99,488 97,111

1.5% -2.4%

North America Business Operation

Source: FMI, S&P Case-Shiller (prices), RealtyTrac (foreclosures) and ISM.

Manufacturing Index Institute of Supply Management (ISM): jan.97 through jan.15

Home Foreclosures

14

► US GDP forecasted growth for 2015: +3.6%

Latin America Business Operation

15

► Latin America GDP forecasted growth for 2015: +1.3%

Apparent finished steel use (Mt)

Source: FMI and worldsteel (SRO oct.14).

+2.6% +4.6%

► 2 plants

► Access to the U.S.

market

► New structural profile

rolling mill (2015)

Mexico

► Coal resources and coke

production

Colombia

► Excellent logistics

► Strong growth

Peru

► Mature market

► Good distribution network

Chile 5.1 4.7 4.8

2.7 2.6 2.6

3.5 3.9 4.0

2.9 3.0 3.12.8 2.7 3.4

19.7 21.021.8

5.8 5.96.0

42.6 43.745.7

2013 2014 (f) 2015 (f)

Others

Mexico

Venezuela

Peru

Colombia

Chile

Argentina

Special Steel Business Operation

16

► Global Coverage ► Second largest producer worldwide

1,500 kg

150 kg

NAFTA: Total Light Vehicle Production

NAFTA: Automotive Production

Source: Wards Automotive .

Units (thousand) Growth

Units (thousand) Growth

NAFTA 3,906 4.8% 16,894 4.8%

US 2,579 3.0% 11,367 4.9%

Canada 573 2.3% 2,315 -2.4%

Mexico 753 13.9% 3,211 10.2%

Total Autos

and Light

Trucks

3 months through January 12months through January

5,6

1,5

4,4

Capacity

Plants from partners

OTP I

OTP II

Iron Ore Business Operation

CAPEX (US$ MM)

CAPEX + Mine Acquisition: US$ 44/t

481.0

110.9

Done

Ongoing

CAPACITY (million t)

11.5

► Self sufficiency brings cost benefits for the Ouro Branco mill:

Annual iron ore need: 6.5 MMt*.

► Capacity expansion project under revision.

► No long term commitment (volumes and logistics).

* Considering 90% capacity utilization.

17

This presentation may contain forward-looking statements. These forward-looking

statements rely upon estimates, information or methods that may be incorrect or

inaccurate and may not actually occur. These estimates are also subject to risks,

uncertainties and assumptions, including, among others: general economic, political

and commercial conditions in Brazil and in the markets where we operate and existing

and future government regulations. Potential investors are hereby informed that these

estimates do not constitute a guarantee of future performance as they involve risks and

uncertainties. The Company does not undertake, and specifically denies, any obligation

to update any estimate, which only speak as of the date they are made.

Statement

Investor Presentation 18

www.gerdau.com

inform@gerdau.com.br

+55 51 3323 2703

Investor Presentation