New York – November 17 th, 2003. HIGHLIGHTS 9M03 09.30.2003 Gross SalesUS$ 4.0 billion Net...
Transcript of New York – November 17 th, 2003. HIGHLIGHTS 9M03 09.30.2003 Gross SalesUS$ 4.0 billion Net...
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New York – November 17th, 2003
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HIGHLIGHTS
9M03
09.30.2003
Gross Sales US$ 4.0 billion
Net Sales US$ 3.4 billion
EBITDA US$ 692 million
Net Income US$ 272 million
Output (crude steel) 9.2 million tons
Total Assets US$ 5.0 billion
Shareholders Equity US$ 1.7 billion
Employees 19 thousand
102 years of tradition focused on the production of steel
in market mills and in the distribution of steel products.
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GEOGRAPHICAL DISTRIBUTION
(2) Rolling mill, 38% owned JV
(1) Flat steel mill, 50% owned JV
03
SOUTH AMERICA
2 mills and 1 strategic shareholding (Sipar)
3 fabrication shops
BRAZIL
10 mills
9 fabrication shops
5 downstream operations and special sections
73 sales points (Comercial Gerdau).
5 service centers for flat steel (Comercial Gerdau).
NORTH AMERICA
10 mills and 1 strategic shareholding (Gallatin Steel)
14 fabrication shops
12 downstream operations and special sections
Gerdau AmeriSteel Corp.
Sipar (2)
Laisa
Gerdau S.A.
Açominas
Aza
Gallatin Steel (1)
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MAIN PRODUCTS
BILLETS
REBARS
MERCHANTS
FABRICATED STEEL
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MAIN PRODUCTS
WIRES NAILS
WIRE-RODSTRUCTURAL
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In 1,000 tons
CAPACITY & PRODUCTS
06
Billets, merchant bars, rebars, wire rod,
drawn products, welded meshes, nails,
downstream products, fabricated steel
products and specialty steel.
PRODUCTSCRUDE
STEEL
ROLLED
PRODUCTS
Billets, merchant bars, rebars,slabs, blooms, profiles and structurals.
Billets, merchant bars, rebars, wire rod,
welded meshes and fabricated steel
products
Billets, merchant bars, rebars, wire rod,
drawn products, welded meshes, nails,
downstream products, fabricated steel
products and specialty steel.
Gerdau S.A.
Açominas
South America
North America
TOTAL
4,374 4,071
3,000 740
510 634
6,567 6,187
14,451 11,632
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OUTPUT EVOLUTION
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AVERAGE GROWTH RATE
1980 - 2003Crude Steel 10.2% year
Rolled Products 9.2% year
14th largest world steel producer according to the IISI. Largest long steel producer in the Americas.
Crude Steel Rolled Products
12 million
9 million
AzaChile1992
MRMCanada1995
Part. Açominas
1997AmeriSteel
USA1999
CearenseGuaíra1982
LaisaUruguay
1981
Hime1985
Barão de Cocais1988
CourticeCanada1989
Usiba1989
Piratini1992
Pains1994
Sipsa Argentina
1997
Açominas(control)
2002
Co-Steel2002
2003*1980 1984 199619921988 2000
* 9 months annualized
Part. Sipar
Argentina1998
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COMPETITIVE EDGE
Focus on long steel products manufacturing and distribution
Market mill approach
Up-to-date technology
Competitive production cost
Diversified production processes
Multiple raw materials sourcing
Vertical and horizontal integration
Relevant market share in every country where the company has operations
Financial soundness and access to international capital markets
Tested experience in turning around distressed operations
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Adjusted Net Income
Dividend paid
Payout of 30% of the Adjusted Net Income.
Since March 2003, dividend payments are being made on a quarterly basis.
US$ million
METALÚRGICA GERDAU S.A.
1998 20001999 2001* 2002
8988 91101 117
2928 3053 40
32.8% 32.0% 32.8% 35.6% 34.9%32.0% 33.1% 32.6% 52.5% 33.9%
11.7 % 3.6 % 6.1 % 6.8 % 7.1%16.4 % 6.0 % 7.9 % 17.0 % 12.4 %
2001200019991998 2002
199
71195
64171
55150
49
216
75
GERDAU S.A.US$ million
* Higher amount due to a one-time supplementary dividend payment.
DIVIDEND POLICY
PAYOUT
YIELD
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CAPITAL MARKETS
Public company since 1947
(Metalúrgica Gerdau at the former Porto Alegre Stock
Exchange)
Gerdau S.A. went public in 1980
Listed companies:
Metalúrgica Gerdau S.A.: ………. Bovespa
Gerdau S.A.: ………………………… Bovespa
Nyse
Latibex
Gerdau AmeriSteel Corp.: ……… Toronto
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Other investors 34%
Foreign Inst. Investors17%
Brazilian Inst. Investors24%
Gerdau ControllingGroup
25%
METALÚRGICA GERDAU S.A.
Other investors16%
Foreign Inst. Investors21%Brazilian Inst. Investors
11%
Gerdau Companies52%
GERDAU S.A.
SHAREHOLDERS STRUCTURESeptember 2003
11
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Source: Economática – Period: Jan 2nd, 2001 to Oct 31st, 2003 (Base 100)
STOCK PRICE PERFORMANCE
12
USA (NYSE)
BRAZIL (Bovespa)
100
200
300
400
2001 2002 2003
Met. Gerdau S.A - GOAU4
Gerdau S.A. – GGBR4
Ibovespa
500
100
200
300
2001 2002 2003
Gerdau S.A – GGB
Dow Jones
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LIQUIDITY
13
Avg / Daily Dollar trading volume – GGBR4 (Bovespa)
Avg / Daily Dollar trading volume – GGB (NYSE)
Avg / Daily number of transactions – GGBR4 (Bovespa)
Jan 0
2
Apr 02
Jun 0
2
Oct 0
2
Jan 0
3
Apr 03
Jun 0
3
Oct 0
3
0
1000
2000
3000
4000
5000
6000
7000
US
$ m
il
0
100
200
300
400
500
600
700
Nu
mber o
f tran
sactio
ns
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Source: Economática - October 31st, 2003
Profitability in US$
APPRECIATION CHART
14
USA (NYSE)
1 YEAR 3 YEARS
GGBR4+123%
Ibov+125%
GGBR4+505%
Ibov+7%
Ibov-19%
GGBR4+129%
5 YEARS
BRAZIL (Bovespa)
GGB+84%
Dow+0,3%
Dow+17%
Dow-11%
GGB+109%
GGB+340%
1 YEAR 3 YEARS 5 YEARS
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COMPLEMENTARY INFORMATIONa) Sources: Economática, Yahoo Finance, Bloomberg and
company websites
b) Belgo and CSN data in lots of thousand shares
c) FX: 06/30/2003: US$ 1.00 = R$ 2.872009/30/2003: US$ 1.00 = R$ 2.923210/31/2003: US$ 1.00 = R$ 2.8562
d) EV = Enterprise Value = Market Capital + Net Debt
COMPARATIVE DATA
15
NOTES:
1) Gerdau, Nucor and Steel Dynamics: on 09/30/03Belgo, CSN and Usiminas: on 06/30/03
2) Gerdau: 9M annualized;Nucor and Steel Dynamics: TTM (Trailing Twelve Months)Belgo, CSN and Usiminas: 6M annualized
3) Gerdau, Nucor and Steel Dynamics: 9M03;Belgo, CSN and Usiminas: 6M03
Base data
10/ 31/ 2003Market Capitalization(US$mm)
2003Avg / Daily Trading Volume (US$ thousand)
Note 1 Enterprise value - EV (US$ mm)
Note 2 EBITDA annualized (US$ mm)
EV/ EBITDA annualized (X)
10/ 31/ 2003 Stock Price (US$)
Note 3 Net Income (US$mm)
Market Capital / EBITDA annualized (X)
GERDAU NUCORSTEEL
DYNAMICS
2,159 4,286 886
2,885 na na
3,936 4,207 1,252
923 502 232
BELGO CSN USIMINAS
1,359 2,951 1,720
444 5,505 3,815
1,407 3,626 3,560
402 1,060 1,148
4.3 8.4 5.4
14.6 54.8 18.6
271.8 42.2 30.4
2.3 8.5 3.8
3.5 3.4 3.1
194.5 41.3 8.0
156.5 178.6 286.9
3.4 2.8 1.5
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OUTLOOK
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Demand pick up in Brazil;
Based interest in a declining trend in Brazil;
International prices trend: stable to upward;
Brazil’s economic and political stability results in a better country risk;
Social security system reform underway;
North American operations pursuing better results;
US economy recovering, but slowly;
South American operations in very good shape and improving.