管理層發言
Good morning. Welcome to Gerdau's First Quarter 2026 Results Presentation. This call is being simultaneously translated into English. Please select your preferred language by clicking on the globe icon at the bottom of the screen. Please note that the forward-looking statements contained here are based on the company's beliefs and assumptions and on information currently available. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that may or may not occur.
Good morning. Welcome to Gerdau's First Quarter 2026 Results Presentation. I'm Ariana Pereira, Investor Relations specialist. Joining us on this conference call are our CEO, Gustavo Werneck, and Rafael Japur. Please note that this call is being simultaneously translated into English, and you can choose your preferred language by clicking on the globe icon at the bottom of the screen. We will start with prepared remarks and then proceed to a Q&A session. It is worth noting that the forward-looking statements contained here are based on the company's beliefs and assumptions and on information currently available. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that may or may not occur. And now I'll turn the floor to Gustavo to begin the presentation.
Good afternoon. I hope that you're all well. I thank you very much for this opportunity to join you for another earnings release presentation. We will briefly discuss the highlights of the first quarter of 2026. We will also talk about the outlook for our operations and then we will proceed to our Q&A session. Once more, we posted strong results in North America. Between January and March of this year, we posted the best adjusted EBITDA for the first quarter since 2022 in our North American operations, which accounted for 75% of the company's consolidated EBITDA. This performance results from continued strong local steel demand, driven by consumption in segments such as data centers, infrastructure and solar power, as well as the sound operating performance of our operations in the region. Meanwhile, in Brazil, the domestic market remained under pressure from excessive steel imports, whose volume rose 4.2% in the first quarter of 2026 compared to the same period last year, reaching a penetration rate of 22.7%. Against this backdrop, we continue to closely monitor potential developments in the antidumping investigations regarding long and flat steel products, which are expected to be updated in the coming months. This scenario of unfair imports has impacted the profitability of our operations in the Brazilian market. I reiterate that we are investing in initiatives that strengthen the competitiveness and profitability of our operations in the country. We have even seen a recovery in EBITDA for our Brazilian operation in this first quarter as a result of this strategy. Finally, I would like to highlight that we recently introduced Gerdau NewEco to the market, a low-carbon steel solution developed to support customers seeking to advance their decarbonization journeys and strengthen their competitiveness in the transition to a low-carbon economy. With the launch of this new line, we now offer a complete portfolio of products with a lower carbon footprint for steel-consuming sectors in general, like the automotive and construction industries. I will now turn the floor to Japur, who is next to me, who will give you more details on the financial highlights and the impacts of the current scenario on our results. I will conclude with some brief comments, and then we will move to Q&A.
Thank you, Gustavo. Good day, everyone. It's always a great pleasure to be here with you today in another Gerdau earnings conference call. We started 2026 with BRL 1 billion of consolidated net income, 50% up compared to the previous quarter and 34% above the same period in 2025. These results were driven by sequential growth across all our business segments, particularly our operations in North America, which continues to gain prominence as Gustavo just mentioned. In Brazil, on the other hand, despite a decline in apparent consumption of long steel products, our main market, we achieved a higher EBITDA margin than in the previous quarter, largely thanks to our cost discipline. Therefore, we recorded EBITDA of BRL 3 billion in Q1 2026 with an EBITDA margin of almost 18%. We ended the month of March with a leverage of 0.74x net debt to EBITDA ratio, a level we consider extremely sound and in keeping with our financial strategy and policy. In the first quarter of 2026, we recorded free cash flow of BRL 16 million, even in a period which typically consumes cash due to the replenishment of working capital and also the end-of-year maintenance shutdowns. Compared with the same period of 2025, we generated BRL 1.3 billion more in cash. This reflects not just the substantial improvement in our EBITDA, but also the substantial reduction in the pace of CapEx investments compared to previous years. But this does not mean that we are not investing in our future. Until the end of 2026, I'd like to remind you, again, stressing what we have talked about in our previous earnings calls and Investor Day: Gerdau should complete three very significant projects — the mining expansion in Miguel Burnier, the scrap processing center in Pindamonhangaba, and the first phase of the Midlothian expansion in Texas. Together, these projects have the potential to add nearly BRL 1.5 billion to our annual EBITDA when the ramp-ups are complete. Lastly, we remain steadfast in our commitment to creating value for our shareholders. This quarter, Gerdau S.A. will distribute BRL 0.18 per share in dividends, while Metalúrgica Gerdau will distribute BRL 0.08 per share. In addition, Metalúrgica Gerdau has just approved the launch of a new share buyback program, covering up to 10 million preferred shares, which today amount to approximately BRL 100 million at current market price. Please hold — the call froze at Gerdau earlier, but we are back. I'll wrap up here, and I'll join you again during the Q&A session. Thank you.
Thank you, Japur. To conclude, I'd like to say that in Brazil, we see signs of a gradual recovery in domestic demand, particularly in the construction and infrastructure sectors following a more intense seasonality or slowdown at the beginning of the year. We still face an excessive inflow of imported steel into the local market. In North America, meanwhile, we continue to see steel consumption stable at high levels. With the order backlog above historical averages, we continue to monitor developments regarding Section 232 and the formal review of the U.S.-Mexico-Canada Agreement, USMCA, scheduled for the beginning of the second half of the year. We will now turn the floor back to Ariana. Japur and I will be available to answer your questions and address your concerns.
Thank you, Gustavo and Japur. We will now initiate the Q&A session. Our first question comes from Ricardo Monegaglia with Safra Bank.
分析師問答
It's always nice to talk to you. I don't know if you can see the screen — if you can see me on the screen. Well, first, I would like to congratulate you on the performance in Brazil. It was a very pleasant surprise, both for me and also in my recent conversations with investors. I would like to go on with that topic of productivity in Brazil. You're talking about a new wave of improvement that is not coming from closing capacity but from more efficiency and cost reduction. I would like you to tell us what are the main levers that you see today. Does this include logistics, mining, industrial productivity? This is a broad question, but I think it's very relevant for the current moment. My second question, on capital allocation: I see there are still some differences between what the market expects in terms of CapEx for 2027. Given that you already delivered the mining project and with other very competitive projects being more clearly outlined and CapEx being lower, does it make sense for us to expect that next year's CapEx would be closer to the level of depreciation, mainly considering that the company's priority is to be very disciplined in capital allocation and cash generation?
Ricardo, we cannot see your camera, but we can hear you loud and clear. I'll talk about competitiveness in more general terms and Japur can give you more detailed numbers, and then I can add if necessary. In general, the evolution of our margins this quarter stem from initiatives that we control, but we still see room to seek further cost competitiveness. In Brazil, we serve all corners of the country from the south to the north, and in terms of logistics we have many opportunities because we take materials from the mills to more than 70 locations, delivering to construction stores. Therefore, our maximization of competitiveness versus cost hasn't reached its limit yet and we see opportunities to go further. We will certainly pursue all possible opportunities. On the other hand, looking ahead, there is also pressure on costs, especially in terms of the energy grid, and the conflict between the U.S. and Iran has led our main input providers to constantly ask us to renegotiate prices. At the moment we are negotiating with our customers, trying to find solutions where costs can be partially passed on to several segments. Going forward, we still have benefits coming from capital allocation and investments in CapEx projects that we are doing in Brazil. Maybe Japur can give you more detail on competitiveness in terms of scrap and the investment in the Burnier mining project. There are many things to look forward to. We are very confident in things that we have under our control. For next quarter, we want to continue our cost reduction trajectory, and we are putting all our efforts to accomplish that. We do not expect radical margin cuts; rather, we expect gradual improvement. Even without considering trade defense measures, especially concerning flat steel antidumping measures, we believe that this could bring a new reality to the sector starting in the third quarter of this year. I will now turn the floor to Japur to elaborate further and give you more details, including on CapEx.
To give you more detail, we have two major projects that should be delivered from now until the end of the year. One is the mining project at Miguel Burnier, and this project should generate about BRL 1.1 billion a year in potential additional EBITDA. We are also thinking about cost savings in our project in Ouro Branco; this project contemplates both cost savings and additional revenue. The scrap recycling center is another investment to be concluded by the end of the year in Pindamonhangaba, and this will generate about BRL 100 million in benefits. So we have very robust projects and levers. It's complex to estimate performance, but structurally we expect to increase our competitiveness and see that improvement in Brazil in the next years. Regarding CapEx, it's probably too soon to give formal guidance for 2027 because 2026 is just beginning. Typically, our CapEx guidance for the current year is given in February. Last year we anticipated guidance at Investor Day. The Board already decided to reduce disbursements from BRL 6 billion to something close to BRL 4.7 billion. If you annualize the first quarter, the pace is very much in line with that level of CapEx. For 2027, it's too early to provide information. We have said that maintenance CapEx should be close to BRL 3 billion on average per year for the next five years, with fluctuations depending on shutdowns of blast furnaces or coke plants. Structurally, that is the maintenance level. We also believe it would be unusual for maintenance CapEx to equal total CapEx forever because competitive projects exist to generate additional EBITDA, growth, and competitiveness. We are reaping benefits from investments in Midlothian and the scrap processing center. Analysts often disregard gains from new projects in their models and assume business as usual. Considering current levels, excess capacity in Brazil, and adjusted demand in North America, we don't see room for large projects with large CapEx increases; it would not make much sense at this moment.
Next question from Rodolfo with JPMorgan.
I would like to hear more about the North American operation. We have been positive on that region for quite some time, and we were surprised by the very high backlog. Could you give us more details on what is happening, what are the strengths you see in the region, and what you expect to see in the second quarter? My second question is similar but refers to Brazil. You mentioned imports; I would like to hear about demand rather than supply. How is construction activity going, and do you anticipate any positive surprises on the demand side?
Rodolfo, it's never all perfect, but broadly demand is very resilient both short and mid-term. The segments where we find main demand for our backlog remain very steady and firm: data centers are a significant strength, with many facilities planned to be built in North America over the next years and they demand significant amounts of steel. Another strength is that we will not see many greenfield mills being built in the coming years, particularly in the areas where we operate. Our business model in North America is focused on merchants and structurals, directly tied to infrastructure and data centers. U.S. trade defense mechanisms are very robust — they have been maintained through successive administrations — and the negotiation of USMCA review could be favorable to North America. Internally, our strengths include being very lean and having executed a strong plan since 2018 to recover our industrial gap in terms of industry; we are operating our mills very well with few maintenance shutdowns. We have been assertive and improved critical spare parts and uptime, so shutdown problems are solved quickly. There is surplus scrap supply in North America, which has affected prices and spreads, and we expect these dynamics to continue positively. We are confident that the results delivered this quarter will continue to be good in the coming quarters. This gives us time to implement what is in our control to improve productivity in Brazil; there is still much to do in the short term and more structural changes in the mid-term.
Rodolfo, regarding Brazil, qualitatively, apparent consumption of long steels declined about 6% compared to last year. Part of this is attributed to reduced consumption of special steels, which are linked to heavy vehicles. January and February were weak months for heavy vehicle production, which impacts sales of SBQ or special steels; these products have higher prices per ton and therefore affect realized net revenue. In March, there was an important rebound in heavy vehicle production, and if this continues, it can boost shipments of special steels and contribute to more constructive margins in Brazil alongside the projects we mentioned earlier. Certain systemic uncertainties remain, such as freight and the cost of metallurgical coal coming to Brazil, but these are industry-wide issues rather than company-specific. Infrastructure activities are steady; the main change in price and cost profile this quarter was driven by the lower volume of heavy vehicles earlier in the year.
Next question from Leonardo Correa with BTG Pactual.
I have two questions. First, about the top line: in the quarter we saw the average price realized in Brazil drop more than we expected, about 5% quarter-on-quarter. I understand there are a number of effects: mix, seasonality, and attempts to pass through 6% increases in the production chain. What's your expectation regarding implementation? Platts is not showing much pass-through — around 2.3% — so is that accurate? Could you give more detail on the top line? Second, Werneck, you have been vocal about equal conditions and trade defense. We see long steel imports and controlled flat steel imports. Antidumpings for galvanized and HRC seem to have moved. In the market there's excitement and people are pricing improvements for the second half. Are you optimistic? Do you see the worst behind us and a consistent recovery in Brazil?
Good questions. When we talk about cost pressures and passing them to prices, the sector where margins are most under pressure is ours. Passing through costs will happen — Japur monitors this daily. If this were related to inefficiency in the sector or at Gerdau, it would be difficult to pass through cost increases, but these are global, well-known cost pressures. Many of our clients have some leeway and higher margins in their balance sheets, and the dynamic of suppliers asking for price adjustments is constant. Passing through cost increases will occur, and we are working on short-term margin improvements such as logistics optimization and other internal measures. Regarding trade defense mechanisms, I am optimistic. The change in people at government and the involvement of knowledgeable public servants has matured the debate. The evidence of damage from imports became clear over the last two years. The quota-tariff system has been effective in recent quarters, and we are confident it will remain in effect and possibly be broadened. Antidumping investigations that took longer than normal are unfolding and the evidence of damage is clear. So I am optimistic that trade defense measures will be strengthened and that this may lead to improvement in the sector in the coming quarters.
I concur with Gustavo.
Next question from Gabriel Barra with Citi.
Can you hear me now? I have two points of clarification. First, about Miguel Burnier: in the last earnings call (Q4 2025) we spoke about the ramp-up and the expectation of BRL 400 million in EBITDA for this year. I'd like to hear from you, Werneck and Japur, whether that BRL 400 million for this year remains a reasonable expectation. The project seems a little delayed — is it on time to be delivered? Please elaborate on expectations regarding EBITDA contribution this year and impact on next year's EBITDA. Second, about potential one-off actions for cash generation: are you considering monetizing real estate or other assets? The company has a lot of real estate that could be monetized. Can we expect extraordinary dividends or divestments given the more deleveraged balance sheet and strong performance in the U.S.?
Gabriel, regarding Miguel Burnier: in our Investor Day last October we gave soft guidance expecting BRL 400 million in EBITDA from Miguel Burnier this year, anticipating a ramp-up. Operations haven't fully started yet, and we are proceeding with caution. This is the largest investment in BRL in the company's history and it is an investment for the next 40 years, so we will not sacrifice long-term returns for short-term timing. Given the current delay, it will be difficult to achieve the full BRL 400 million this year. We are internally calculating the specific expected contribution from Miguel Burnier for this year. In parallel, we have other initiatives and improvements to offset some of the shortfall in margin: internal efficiency initiatives in Ouro Branco and strategic purchases of more competitive ore in Minas Gerais. Geographically, we are well positioned to buy ore from suppliers in the region to mitigate EBITDA that may not flow this year from the mining project. We expect a more normalized ramp-up in 2027 and thereafter. Regarding real estate and one-off actions for liquidity, we continue to analyze our real estate assets. We prefer to maintain controlled leverage and avoid forced sales that could harm long-term value. In terms of cash allocation, we will continue our policy: distributing dividends above the minimum required, and using share buybacks when we believe the market is undervaluing the company. We will not radically change our capital allocation policy; we prefer predictable, disciplined allocation and will act opportunistically if surplus capital exists and liquidity is not jeopardized.
Next question from Lucas Laghi with XP.
Two points: first, on optimizing Brazil assets — you spoke about focusing investments on high-return projects or reducing investments to optimize returns. How do you view investing versus divesting given the competitive environment and antidumping/protectionist measures? Would that affect decisions to invest more in Brazil or to divest certain assets? Second, a follow-up on Miguel Burnier and capturing incremental EBITDA from projects. Given your CapEx guidance for 2026, how should we think about marginal returns from these projects?
Lucas, thank you. What we will likely see in the future is a different concentration and combination of assets than a few years ago. The traditional mini-mill model, serving a very regional market with small mills buying local scrap, was reviewed in the U.S.: we shut down less competitive plants and concentrated production in fewer, highly competitive mills. In the future, we'll focus investments on winning mills; some mills that were shut down may not be competitive to resume production. We will not accelerate transformation in Brazil by increasing CapEx or leverage. Many resources for transformation will come from operating with fewer commercial assets and reducing maintenance CapEx where possible. Our operation in Ouro Branco has been efficient and healthy, allowing postponement of major reforms. This creates a buffer for disbursements and enables transformational investment without raising leverage. The way we operate in Brazil will change; it may resemble the North American transformation: fewer, more competitive hubs.
Adding to that, we must invest in projects that improve our returns — projects that increase the numerator (EBITDA) more than they increase the denominator (capital base). We have many real estate assets not fully utilized, and those create an implicit cost because capital is tied up. Excess productive capacity is not good. The focus is on having an efficient operation and a healthy balance between liabilities and assets. Regarding the projects, we have three major projects this year entering ramp-up: Miguel Burnier, the Pindamonhangaba recycling center, and the Midlothian investments. The recycling center and mining project are transformational. Given potential delays, we may not see the full BRL 400 million from Miguel Burnier this year as initially anticipated, but we are implementing efficiency initiatives in Ouro Branco to compensate. In 2027 and over the long life of Miguel Burnier, we expect the project to generate significant value.
Lucas, to summarize: rest assured we will not increase the company's debt and we will not disburse materially more CapEx than planned. A significant part of resources for transformation in Brazil will come from operating fewer commercial assets. We are maintaining healthy disbursement levels and keeping leverage under control while pursuing transformation and competitiveness.
Next question from Daniel Sasson.
Gustavo mentioned antidumping and competition with imported goods. For longs, it's a bit harder for us to understand the impact; can you tell us the status of investigations concerning other products, including long products and wire rod? Will this change the pace of the market? Also, how are long steel players behaving? Last year you decided to lose some market share in rebar to fight unfair imports. How is competitive dynamics shaping up in longs? Second, on CapEx priorities: beyond the BRL 3 billion maintenance guide, what are the priorities by region or type of project for competitiveness and growth? For example, you referenced projects in Mexico previously. How should we think about prioritization going forward?
Daniel, unlike North America where trade defense is broadly accepted, in Brazil debates take longer and the industry can shrink while waiting. The high penetration of imported steel appeared after the pandemic when the sector had high margins, and for two years the topic was not fully addressed. Recently the debate has matured: many analyses show the damage to the sector, and discussions in Brasília indicate that without stronger trade measures the steel industry cannot survive in the long run. There is momentum now for implementing trade defense, and the quota-tariff system has had a positive effect in recent quarters. Antidumping investigations have been taking longer than normal but are progressing and the evidence is clear. I am optimistic that these mechanisms will be broadened and more effectively enforced, which should benefit the domestic industry.
Daniel, adding some color on wire rod: in rough terms, wire rod can represent between 10% and 20% of national production of longs depending on the time of year. The proportion relative to rebar is approximately 3.5:1 or 4:1. Producers often produce both wire rod and rebar. If a lot of dumped wire rod enters the country, it can be sold at depressed margins; producers may shift production to other products like rebar to avoid idle capacity, creating a spillover effect that harms margins across long products. The Ministry of Industry and Trade found dumping margins of about $550 per ton for China and approximately $100 per ton for Russia in certain investigations, which is significant and affects competitiveness. What we ask for is fair trade enforcement: technical analysis showing dumping, injury, and causal link. We expect the conclusion of the wire rod dumping investigation in the second half of the year and potential improvement not only for wire rod but for other long products that are interconnected. Regarding competitive dynamics, market share is relatively stable among major players. The opportunity is to improve how we serve customers — which mill serves which customers, whether via Comercial Gerdau or distributors — and to capture efficiency gains. Once the market share structure stabilized last year, our focus is on serving that share more efficiently.
Our last question comes from Carlos de Alba with Morgan Stanley.
Cash flow generation in the quarter was particularly strong and working capital contributed significantly, as did low cash tax payments. Can you comment on expectations for the second quarter and the second half of the year regarding working capital and cash taxes? Also, a question on projects: on Miguel Burnier, can you give more color on what caused the slight delays this year in terms of EBITDA generation you were expecting? And longer term, as you transform the business strategy in Brazil, is investing to increase third-party shipments of iron ore an option? I recall you mentioned that possibility at Investor Day.
Carlos, regarding working capital and taxes this quarter: there were two effects. First, we did not generate profit in Brazil; we had a loss, so our effective tax rate ended up being lower. Profit was concentrated in the U.S. operation and we had withholding tax on distributions from the U.S. to Brazil that was paid more strongly at the end of last year; that contributed to a tax line that was higher in Q4 than in Q1. Over the year, we expect normalization. Typically we have greater disbursement of taxes in Q4 and tax payments in April for U.S. income taxes, so this should normalize through the year. For working capital, we had almost BRL 1 billion of working capital release in Q1 quarter-on-quarter, and we believe this level is relatively normalized for the second half of the year. Overall, for the full year we expect positive free cash flow generation due to stronger EBITDA and lower CapEx than last year — a double benefit. Regarding Miguel Burnier, the delays are mainly related to civil construction and electromechanical assembly productivity issues. The project schedule was aligned with traditional productivity estimates, but Brazilian companies have been finding it harder to hire skilled labor; this affected civil construction and electromechanical assembly productivity and caused delays. This is a broader issue in Brazil for such projects. We continue to wish to monetize our mining rights in Minas Gerais. The success of this first operation — which has a scale of 5.5 million tonnes — will give us safety and more time to study next steps to increase ore production. We have many mining rights and the sequence of development is under analysis. Once Miguel Burnier is producing successfully, it will enable acceleration to a second stage, and we will provide more detail when appropriate.
We are now ending the Q&A session. I will turn the floor back to Gustavo Werneck.
Thank you, Ari. I'd like to thank everyone for joining us today. On behalf of Japur and myself, I'd like to say goodbye, and I'd like to invite you to our next earnings conference call for the second quarter of 2026, which will be held on August 5. Thank you very much. Warm regards and take care.