GOAU4

Metalúrgica Gerdau S.A. is a Brazilian corporation founded in 1901 in Porto Alegre, originating from the Pontas de Paris nail factory created by the Gerdau family. Over its history, the company evolved from a metalworking firm focused on nail production into the holding company that directly controls Gerdau S.A., now one of the country’s leading steel groups. The shares of Metalúrgica Gerdau, traded on B3 under the tickers GOAU3 and GOAU4, therefore represent a shareholding structure through which the Gerdau family maintains control of the steel conglomerate. This century-old track record and its role as controlling holding company are central elements for understanding the company’s positioning in the Brazilian capital market.

As a holding company, Metalúrgica Gerdau has Gerdau S.A. as its main operating subsidiary, concentrating the industrial business of steel production and commercialization on a global scale. Gerdau is mainly engaged in the manufacture of steel products through mills located in Brazil, Canada, the United States, Argentina, Peru, Uruguay, and a joint venture in Mexico. The company operates integrated mills, which produce steel from iron ore, and mini-mills, which primarily use scrap metal in electric arc furnaces. On December 31, 2024, Gerdau had 29 steel-producing units, with annual installed capacity of 15.6 million tonnes of crude steel and 15.0 million tonnes of rolled products, which positions it among the largest global producers, ranked by Worldsteel as the 33rd largest steel producer in the world in 2023 based on consolidated production.

Gerdau’s business model, which underpins the consolidated results of Metalúrgica Gerdau, is diversified in terms of products. The portfolio includes crude steel in the form of slabs, blooms and billets, which are inputs for rolling, as well as a wide range of finished products. For the construction industry, the company offers rebar, wire rod, structural shapes, hot-rolled coils and heavy plates; for industry, it supplies commercial rolled bars, light profiles and wire; for agribusiness, it produces posts, smooth and barbed wire, as well as other drawn products such as fences and wire mesh for concrete reinforcement. The company also operates in special steels, aimed at applications with higher mechanical requirements, especially for the automotive chain and segments such as oil and gas, wind energy, machinery and equipment, mining and rail. In addition, it produces iron ore in Minas Gerais, an input that feeds the integrated steel route and enhances the competitiveness of its operations.

Gerdau’s operations are organized into four major business segments: Brazil, North America, South America and Special Steels. In 2024, consolidated net revenue totaled R$ 67.0 billion, broken down into R$ 25.96 billion in the Brazil segment, R$ 25.88 billion in North America, R$ 5.76 billion in South America and R$ 10.99 billion in Special Steels, before intragroup eliminations. This breakdown shows strong geographic revenue diversification, with significant weight from Brazilian and North American operations. In Brazil, in addition to steelmaking, the iron ore operation is included, while the Special Steels segment comprises plants in Brazil and the United States, as well as Gerdau Summit, which in 2025 was transformed from a joint venture into a wholly owned subsidiary after the full acquisition of the interests held by Sumitomo Corporation and The Japan Steel Works Ltd.

In terms of served markets and clients, Gerdau sells to a diversified base of sectors, especially industrial manufacturing, construction and agriculture, both in Brazil and abroad. In 2024, there were no clients individually responsible for more than 10% of net revenue, which reduces risk concentration in a few buyers. In Brazil, 80.8% of the domestic segment’s sales were destined for the domestic market in 2024, with the remainder aimed at exports, which benefited from currency depreciation and contributed to the dilution of fixed costs. In the North America and South America (except Brazil) operations, most sales are directed to the local markets where the mills are located, reflecting a strategy of proximity to customers and primarily meeting regional demand.

From an operational standpoint, Gerdau combines a significant network of mini-mills and integrated mills. It operates 27 mini-mills worldwide, based on electric arc furnaces that mainly use scrap metal, with advantages such as lower greenhouse gas emissions and operational flexibility. In Brazil, the company operates three integrated mills with blast furnaces, with Ouro Branco in Minas Gerais as its main unit, in addition to Divinópolis, which uses charcoal produced on its own farms, and Barão de Cocais, whose production was suspended in 2024. The annual installed capacity of blast furnaces is 4.1 million tonnes of liquid pig iron, which feeds the steelmaking process via the BOF route (basic oxygen converters), followed by continuous casting and rolling. This combination of production routes, together with intensive use of scrap, also supports Gerdau’s claim that it is one of the largest recyclers in Latin America, transforming millions of tonnes of scrap into steel per year.

The company also has a relevant presence in the iron ore value chain, with mines located in Minas Gerais, such as Várzea do Lopes and Miguel Burnier, integrated with its steel operation. The mining rights total 8,837.19 hectares, with concessions valid until the depletion of the deposits, subject to compliance with annual regulatory requirements. A technical report by SRK Consulting certified reserves of 476 million tonnes of iron ore at the Miguel Burnier mine. Mineral products include sinter feed, pellet feed/concentrate, hematitinha and lump ore, largely destined for internal consumption at the Ouro Branco mill. This partial vertical integration into mining complements Gerdau’s industrial strategy and affects its cost structure and raw material supply.

Gerdau’s industrial, mining and forestry activities are subject to extensive government regulation, requiring environmental licenses and authorizations from competent agencies and authorities. The mining operations comply with the Brazilian Mining Code, the Forest Code and the rules of the National Mining Agency (ANM), including obligations related to the Financial Compensation for Mineral Exploitation (CFEM), with a 3.5% rate for iron ore, levied on gross sales revenue or current market price, as applicable. The company also highlights compliance with the National Dam Safety Policy, labor health and safety legislation, and environmental requirements for land restoration and pollution prevention. In addition to the Brazilian regulatory framework, Gerdau’s exports are subject to trade defense measures in markets such as the United States and the European Union, which apply anti-dumping duties and safeguard measures to certain steel products, altering the international competitive dynamics and influencing the allocation of volumes.

In the environmental, social and governance (ESG) field, Gerdau, a subsidiary of Metalúrgica Gerdau, has a Sustainability Policy, Corporate Environmental Guideline and Environmental Management System, which guide the management of impacts, licenses and use of natural resources. The stated focus is to optimize resources and minimize environmental impacts in all regions where it operates. The company publishes an Annual Report with ESG and financial information, aligned with the guidelines of the International Integrated Reporting Council (IIRC), the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB) for iron and steel producers and mining and metals. This report is assured by an independent third party and is available on the Investor Relations website, allowing investors in GOAU3 and GOAU4 shares to access structured information on corporate governance, environment, social responsibility, health, safety and people management, in addition to the economic performance of the group controlled by Metalúrgica Gerdau.

For individual investors analyzing Metalúrgica Gerdau’s shares on B3, it is important to keep in mind that the holding company’s results and outlook are intrinsically linked to the operating and financial performance of Gerdau S.A. in its various business segments. The diversified portfolio of steel products, broad geographic presence, combination of integrated routes and mini-mills, partial integration with iron ore mining, and exposure to different sectors of the economy, such as construction, industry and agribusiness, shape the context in which the company generates its revenue. At the same time, the company is exposed to the steel industry’s cyclical nature, exchange rate fluctuations, international trade policies and evolving environmental and mining regulatory requirements, factors that can affect both operations and the competitive positioning of the group controlled by Metalúrgica Gerdau.