Embed Size (px)
DESCRIPTION
Gerdau. Exane BNP Paribas Basic Materials Seminar 2007. March 28, 2007. Highlights. One of the world’s lowest cost steel companies Strong cost position as a result of diversified production processes and multiple raw material sourcing Strong foreign currency generation Large export base - PowerPoint PPT Presentation
Citation preview
1
Gerdau
March 28, 2007
Exane BNP ParibasBasic Materials Seminar 2007
2
One of the world’s lowest cost steel companies• Strong cost position as a result of diversified production processes and
multiple raw material sourcing
Strong foreign currency generation• Large export base• International subsidiaries
Ranked 14th globally by steel output for year 2005 with an output of 13.7m tons
Largest long steel producer in the Americas• 2nd largest long steel producer in North America • 32 mills, integrated and mini mills, with state of the art technology
Relevant market share and diversified product range through downstream and service centers
Strong balance sheet, low leverage and strong cash generation
Gerdau S.A. shares are listed on the São Paulo, New York and Madrid Stock Exchanges
Highlights
3
CANADA
Brazil
9.2 million tonnes of crude steel
6.3 million tonnes of rolled steel products
Abroad
10.0 million tonnes of crude steel
10.7 million tonnes of rolled steel products
Total Capacity(Includes Strategic Shareholdings)
19.2 million tonnes of crude steel
17.0 million tonnes of rolled steel products
11 steel units
12 fabrication shops
6 downstream operations
74 sales points and flat steel service centers
21 steel units
44 fabrication shops
17 downstream operations
1 associated company (Sidenor)
1 joint venture (Gallatin)
An International Company
4
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2008
e
Laisa - 1980(Uruguay)
Piratini(Brazil)
AZA(Chile)
Ameristeel(USA)
AZANew Plant
(Chile)
Additionalstake in
Açominas(Brazil)
North Star(USA)
Cambridge(Canada)
Usiba(Brazil)
Manitoba(Canada)
Controlof
Açominas(Brazil)
Co-Steel(USA)
1,757
3,072
3,9344,595
7,696
11,076
16,372
Diaco(Colombia)
16,709
Barãode
Cocais(Brazil)
2,611
Stake inAçominas(Brazil)
4,568
19,230Araçariguama
(Brazil)
Sidenor (Spain)
Sheffield (USA)
Siderperú(Peru)
GSB(Spain)
Solid Track Record
e: estimated
In thousand tonnes
21,605Installed Capacity
Expansion
Abroad – Installed capacity of Crude SteelBrazil – Installed Capacity of Crude Steel
Besides 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.
2009
e
TOTAL INVESTED (1981 - 2006):Brazil = US$ 5.2 billion + Debt North America = US$ 2.0 billion + DebtSouth America = US$ 654 million + DebtEurope = US$ 380 million + Debt
CAGR 1996-2006: 15% p.a.
5
BRAZIL - 2006
COUNTRY MARKET SHARE MAIN COMPETITORS
Gerdau 47%
Arcelor Brasil 37%
Barra Mansa5%
Other 5%
V&M do Brasil6%
CHILE *
URUGUAY
ARGENTINA
44%
19%
83%
CAP + Imports
Acindar + Bragado + Zapla
Imports
COLOMBIA 37% Acerias Paz Del Rio + Imports
* Market share of rebars, profiles and wire-rod.** Market share of long products, it doesn’t include flat steel.
NORTH AMERICA 17% Nucor + ArcelorMittal + CMC
Markets
PERU ** 45% Aceros Arequipa + Imports
SPAIN 43% Aceralia + Saarsthal
6
Historical Financial Performance
In US$ millionsHISTORICAL PERFORMANCE *
FINANCIAL PERFORMANCE 2001 TO 2006
Group sales have risen strongly in recent years following the global recovery of the steel business and the company’s growth
Brazilian domestic shipments increased 12.6% in 2006, compared to the 2005, reflecting the most improved civil construction sector
2006 results show Gerdau’s Brazilian operations contributing approximately 41.0% of net sales, North America 45.6%, South America 9.9% and Spain 3.5%
10,01510,999
613 997 1,255
9,166
6,252
4,285
2,754 2,597 2,374 2,502
22%23%
20%
28%
24%23%
2001 2002 2003 2004 2005 2006
Net Sales
EBITDA
EBITDA Margin
* All data in BR GAAP converted by R$ 2.138
7
585 545 514 499 525 524 539 562
818 746704 689 721 739 766 743
1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06
CONSOLIDATED
Cost of Sales/t
Net Sales/t
560681
578559635
698613 589
827741
667 696 689763
797733
1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06
NORTH AMERICA
Costs and Prices
BRAZIL
467 460 463 447 473395
460 427
805 749 739 707 739 693788
668
1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06
601530 530
387494 491
543 564
856756 766
573671 679
732 721
1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06
SOUTH AMERICA
Net Sales and Cost of Sales per tonne (US$/tonne)
All data in BR GAAP converted by R$ 2.138
1.2211.123
9971.013
1.277 1.3401.438 1.509
1Q06 2Q06 3Q06 4Q06
EUROPE
Cost of Sales/t
Net Sales/t
Cost of Sales/t
Net Sales/t
8
ACTUAL 2006*ACTUAL 2006*INVESTMENT PLAN 2007 – 2009:
US$ 4.0 billionINVESTMENT PLAN 2007 – 2009:
US$ 4.0 billion
BRAZIL 694.4
ABROAD 1,308.2
North America 537.6
South America 255.5
Europe 515.1
TOTAL 2,002.6
In million US$
2007 2008 2009 TOTAL
BRAZIL 820 570 1,000 2,390
ABROAD 580 530 500 1,610
North America 260 360 315 935
South America 260 125 142 527
Europe 60 45 43 148
TOTAL 1,400 1,100 1,500 4,000
In million US$
Investment Plan
* Including acquisitions in the period.* Including acquisitions in the period.
INSTALLED CAPACITY EVOLUTION
Crude Steel Rolling ProductsIn thousand metric tonsIn thousand metric tons
Brazil
Abroad
Brazil
Abroad
+ 12%
2007 2009
9,260
9,97011,005
10,600
19,23021,605
+ 14%
+ 10%
2007 2009
10,680
6,360 6,450
17,04018,435
+ 1%
+ 12%
+ 8%
11,985
9
European Investment Plan
ACTUAL 2006ACTUAL 2006INVESTMENT PLAN 2007 – 2009:
US$ 148 millionINVESTMENT PLAN 2007 – 2009:
US$ 148 million
EUROPE 515.1
CAPEX 17.9
ACQUISITIONS 497.2
In million US$
2007 2008 2009 TOTAL
EUROPE 60 45 43 148
In million US$
MAIN INVESTMENTS:
Acquisition of 40% stake in Corporación Sidenor (Jan./06) Investment of US$ 219.2 million plus US$ 121.0 million in liabilities
Acquisition of 100% of GSB Acero through Corporación Sidenor (Dec./06) Investment of US$ 143.0 million plus US$ 14.0 million in liabilities
Capital expenditures totaled US$ 17.9 million in synergies and improvements in the mills
Gerdau plans to invest more than US$ 30 million in a new bloom caster
10
OutlookBRAZIL
Growing volumes in the domestic market: 6 to 8% in 2007 Industrial and residential construction sectors revving up Recovery of agricultural sector Prices in reais stable Costs relatively stable
NORTH AMERICA Demand remains strong for rebars, merchant bars and profiles Imports falling Increase in supply of higher value added products
SOUTH AMERICA Strong growth in the economy Civil construction sector strengthening Increase in public investments Demand in line with economic growth
EUROPE Demand continues strong Price increases Specialty steel sector performing well Growing market share
11
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.
