11

October 2007

Investor Presentation Investor Presentation

22

� Among the most competitive steel companies in the world

• Strong low cost structure as a result of diversified production processes and multiple raw material sourcing

� An international company

• Large export revenues from Brazil

• Operations in 13 countries

� Ranked 14th globally by steel output for year 2006 with an output of 15.6 million tonnes (source: International Iron and Steel Institute - IISI)

� Largest long steel producer in the Americas

• 2nd largest long steel producer in North America

• 41 steel units 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

33

Industry Overview

Group Overview

Operating and Financial Highlights

Agenda

All data presented in US Dollar and in metric tons, except when indicated

44

Supply

Source: IISI / IISI apud IBS

Production

increased 8.9% in

2006 compared to

2005.

Equivalent to 70% of the world’s

production growth from 2001 to 2006

0

200

400

600

800

1000

1200

1400

1950 1960 1970 1980 1990 1996 1998 2000 2002 2004 2006

Accelerated growthin China

1st Oil Shock

2nd Oil ShockUSSR breakup

World

China

423

1,244

WORLD CRUDE STEEL OUTPUT EVOLUTION

55

2006 2007e 2008e

Demand

1,1131,179

1,251

e: estimated

Source: IISI

5.9%6.1%

FINISHED STEEL APPARENT DEMANDIn million tonnes

FINISHED STEEL APPARENT PER CAPITA DEMAND (kg)

The world steel demand should increase 4.2% p.a. from 2010 to 2015.

333298

42

315

94106

146

28

66102

2002 2003 2004 2005 2006e 2007e

NAFTA

China

World

Brazil

India

STEEL USE PER CAPITA GROWTH (2002 – 2007)

NAFTA: +5.7%

China: +104.1%

Brazil: +12.8%

World: +54.5%

India: +50.0%

66

� Total World Production: 1.2 billion tonnes

� China represented 34.0% of the global steel production

� Brazil represented 2.4% of the global steel production

and is the 10th largest crude steel producer in the world

Crude Steel Production – 2006

Source: IISI

Ranking

In million tonnes

423

11698

7148 47 44 41 32 31

UkraineChina USAJapan Russia Germany BrazilIndia ItalySouth Korea

77

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

0%

3%

6%

9%

12%

27%

15%

18%

21%

24%

Production in 1990Production in 1990

770 million tonnes770 million tonnes

Production in 2005Production in 2005

1,129 billion tonnes1,129 billion tonnes

Consolidation Global Steel Market

Source: Prof. Germano de Paula

TOP 5: 12.3% (1990) 16.9% (2005)

TOP 5: 13.4% (1990) 24.4% (2005)

EX-CHINA

WORLD

88

Industry Overview

Group Overview

Operating and Financial Highlights

Agenda

All data presented in US Dollar and in metric tons, except when indicated

99

100+ Years in Business

1900 1940´s 1950´s 1960´s 1970´s 1980´s 1990´s New

Millenium

1901 - First Operation:Nail Factory

1st Steel Mill Acquisition

(Riograndense)

•Expansion of Riograndense (Construction of 2nd

steel mill)

Market Share increase by:•Diversification / Verticalization•Distribution Network•New acquisition (Pernambuco, Brazil)

•Acquisition of a new steel mill (Paraná, Brazil)•Construction of a new mill (Rio de Janeiro, Brazil)

•Acquisition of 3 mills (Rio de Janeiro, Minas Gerais and Bahia, Brazil)•Construction of 2 mills (Paraná and Ceará, Brazil)•International expansion (Uruguay and Canada)

New Acquisitions:• Piratini (Rio Grande do Sul, Brazil) –specialty steel•Second mill in Minas Gerais and rolling mill in São Paulo (Brazil)•Stake in Açominas•International expansion ( Chile, Canada, Argentina and USA)

•New Acquisitions:-USA-Downstream mills

and fab shops in North America•Entering European and Asian market•Expansion in Latammarket•Construction of steel mill in São Paulo (Brazil)

1010

19 9 7 19 9 8 19 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 9 e

Installed Capacity Expansion

Sidertul(Mexico)INCA

(Dom.Rep.)Sizuca

(Venezuela)SJK

(India)Chaparral(USA)

1980 – Laisa (Uruguay)1988 – Barão de Cocais(Brazil)1989 – Usiba (Brazil)Cambridge (Canada)1992 – Piratini (Brazil)AZA (Chile)1994 – Pains (Brazil)Manitoba (Canada)Stake in Açominas(Brazil)

Ameristeel(USA)AZA

New mill(Chile)

Additionalstake inAçominas(Brazil)

North Star(USA)

Controlof

Açominas(Brazil)Co-Steel(USA)

7,69611,076

16,372

Diaco(Colombia)

16,709

4,568

19,230São Paulo(Brazil)

Sidenor(Spain)

Sheffield (USA)

Siderperú(Peru)

GSB(Spain)

Solid Track Record

25,42522,700

TOTAL INVESTED (1981 – 1H2007):

Brazil = US$ 5.7 billion + Debt

North America = US$ 2.4 billion + Debt

Latin America = US$ 1.1 billion + Debt

Europe = US$ 420 million + Debt

In thousand tonnes (BR GAAP)

CAGR 1997-2007: 17% p.a.

Abroad – Installed capacity of Crude SteelBrazil – Installed Capacity of Crude Steel e: estimatedBesides 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.

1111

Spain

Dominican Republic

Steel Units

Associated Companies

Joint Ventures

BRAZIL

9.3 million tonnes of crude steel

6.2 million tonnes of rolled products

11 Steel Units

12 Fabricated Reinforcing Steel Facilities

04 Downstream Operations

68 Retail Facilities (Comercial Gerdau)

06 Flat Steel Service Centers

ABROAD (including JV in India)

13.4 million tonnes of crude steel

14.0 million tonnes of rolled products

30 Steel Units

44 Fabricated Reinforcing Steel Facilities

11 Downstream Operations

02 Associated Companies (Spain and Dom. Rep.)

02 Joint ventures (USA and India)

Canada

United States

Mexico

Venezuela

Colombia

Peru

Chile

Brazil

Argentina

Uruguay

India

Location

1212

15,6

16,8

17,5

18,2

18,3

19,1

20,3

21,2

22,5

30,1

32,0

32,7

117,2

16,1

Gerdau Group (BRA) 14

EvrazHolding (RUS) 13

ThyssenKrupp (GER) 12

Severstal (RUS) 11

Riva Group (ITA) 10

Corus Group (U.K.) 9

Tangshan (CHI) 8

Nucor (USA) 7

US Steel (USA) 6

Baosteel (CHI) 5

Posco (KOR) 4

JFE Steel (JAP) 3

Nippon Steel (JAP) 2

Arcelor Mittal (LUX) 1

Source: IISI

Crude Steel Production - 2006In million tonnes

Ranking by Company

Gerdau should have an

installed capacity of 26 million

tonnes of crude steel per year

after the investment program

in Brazil is completed in 2009.

Gerdau Group (BRA) 14

1313

Value Builder CompanyATKearney study

Notes: 1) EBIT-growthNotes: USINAS = USIMINAS; ARCELOR Takeover MITTAL/ SEVERSTAL: The market capitalization of Severstal is 6.8 bn USD

(same as revenue, hence valued above the industry multiple of 0.79)Source: Thyssenkrupp: steel segment

IndustryAverage

Revenue Growth

Industry Average

AK Steel

Oregon Steel Mills

Worthington

Onesteel

Hylsamex

Neomax

Cap

Imsa

Maanshan Iron Steel

EregliDemir Celik

Angang

Boehler-Uddeholm

Steel Dynamics

Carpenter Technology

Nisshin Steel

HyundaiSteel

Tokyo Steel

Bluescope 03 05

Rautaruukki

Acerinox

Salzgitter

Ipsco

SSAB

Voestalpine

Corus

Tata Steel

Severstal

US Steel

SAIL

Usinas

Gerdau

Baoshan

Novolipetsk1)

Thyssenkrupp1)

Nucor

Sumitomo

Mittal

JFE 03 05

Nippon Steel

Arcelor02 05

-10%

0%

10%

20%

30%

40%

50%

60%

70%

-40% 10% 60% 110% Equity Value Growth

Growth portfolio (CAGR 2001-2005)

benchmarked against industry average

1414

LONG STEEL PRODUCTS (Brazil)

� Maintenance of market share

� Improvement of current installed

capacity

SPECIALTY STEEL

� Active role in the steel sector

consolidation process

� Search for new opportunities

AÇOMINAS (Ouro Branco mill)

� New 1.5 MM ton blast furnace

� Growth platform for slabs, blooms

and billets

� Iron Ore Reserves

Growth Opportunities

LATIN AMERICA

� Maintenance of leadership in

the long steel sector

� New markets

NORTH AMERICA

� Efficiency and productivity

gains (Gaps)

� Enhancement of leadership in

the long steel sector through

acquisitions

1515

OutlookBRAZIL

� Domestic demand will continue to grow especially in the civil construction and industrial

sectors which have the largest customers

� Prices should remain firm in the domestic market

� In the international market, prices should track raw material price volatility and the

sustainability of demand in the different regions of the world

� High maritime freight charge

NORTH AMERICA

� Demand continues intense

� Product price volatility is a function of scrap prices

� Higher operating costs due to maintenance downtime

� Metal spread stands at record levels

LATIN AMERICA

� Economies reporting solid growth

� Investments in infrastructure and good demand from the civil construction sector

� High costs

� Stable prices

EUROPE

� Seasonal impacts in 3Q07 (annual August vacation period in Spain)

� Demand continues strong

� Stable prices

� Good performance from the specialty steel sector

Obs.: As of end of June 2007

1616

Industry Overview

Group Overview

Operating and Financial Highlights

Agenda

All data presented in US Dollar and in metric tons, except when indicated

1717

63% inc

rease i

n the la

st 5 yea

rs

Shipments

Billets, blooms& slabs

Merchant bars

Rebars Fabricated steel

Heavystructural shapes

Wire-rod Wires Nails

Brazil – Domestic Market (25% in 1H07)

In thousand tonnes (BR GAAP)

9,109

2002

Brazil – Exports (14% in 1H07)

Latin America (13% in 1H07)

North America (45% in 1H07)

12,56012,144

13,550

2003 2004 2005

Europe (3% in 1H07)

2006

14,819

1H06 1H07

7,4338,212

1818

Europe

Latin America

North America

Brazil - Exports

Brazil - Domestic Market

Foreign Currency Generation – 1H07

9,148

Net sales from the overseas units plus exports from Brazil, represented 69% of consolidated net sales

Net Sales - Currency Breakdown

Historical Net Sales Geographical Distribution

10,940

5,321

6,853

US$ millions (BR GAAP)

34.0%

13.4%

47.0%

5.6%

31.7%

9.1%

45.9%

9.9%

3.4%

31.8%

8.6%

47.5%

8.5%3.6%

30.7%

11.9%

43.1%

9.1%

5.2%

Brazil -Domestic Market 31%

North America43%

Europe5%

Latin America12%

Brazil – Exports 9%

Exports From Brazil (By Region)(35% of Brazilian shipments in tonnes)

Africa 13% Central America

16%

Latin America 21%

North America13%

Europe 13%

Asia 24%

2005 2006 1H06 1H07

1919

0%

10%

20%

30%

40%

2003 2004 2005 2006 1H 07

0%

10%

20%

30%

40%

50%

2003 2004 2005 2006 1H 07

Consolidated

Brazil

North America

Latin America

Europe

GROSS MARGIN

EBITDA MARGIN

Margins

26%

34%

24%

34%

39%

18%

25%22%

19%22%

31%

26%

31%

18%

20%21%

4%

4%

18% 19%

2020

BALANCE SHEET Current assets 6,573 6,150 7,012 Non-current assets 6,022 5,330 7,370 Total Assets 12,596 11,480 14,382 Current liabilities 2,571 2,545 2,870 Non-current liabilities 4,070 3,570 4,263 Minority Interest 1,294 1,075 1,494 Shareholders’ equity 4,661 4,290 5,755 Total Liabilities and Shareholder’s equity 12,596 11,480 14,382 Total debt 4,240 4,002 4,493 Cash & Equivalents 2,791 2,722 2,572 Net debt 1,449 1,280 1,921

INCOME STATEMENT Net sales 10,999 5,321 6,853 Gross profit 3,038 1,471 1,762 Operating income 2,055 1,084 1,191 Net income 1,347 836 896 EBITDA 2,502 1,194 1,455 EBITDA Margin 22.3% 22.4% 21.2%

RATIOS Net debt / Total capitalization 19.6% 19.6% 21.0%

Total debt / EBITDALTM

1.7X 1.8x 1.6x

Net debt / EBITDALTM

0.6X 0.6x 0.7x

Consolidated FinancialsIn US$ millions (BR GAAP)

1H071H062006

LTM = Last twelve monthsEBITDA = Earnings before interest, taxes, depreciation and amortization

2121

DEBT STRUCTURE

Domestic Currency 33%

Foreign Currency

43%

Companies Abroad 24%

DEBT AVERAGE LIFE:8 years and 1 month

US$ MM

1,921

1,248

1,324

2,572

757

1,695

1,032

3,484

323

256

430

1,009

4,493

9%Domestic Currency

22%SHORT TERM

100%GROSS DEBT

78%LONG TERM

7%Companies Abroad

6%Foreign Currency

17%Companies Abroad

38%Foreign Currency

23%Domestic Currency

51%Domestic Currency

100%CASH & CASH AND EQUIV.

NET DEBT

49%Companies Abroad

8.0%Companies Abroad

6.6%Foreign Currency

22.2%

Brazil

Domestic Currency

InUS$

COST OF DEBT (per annum)

June 2007 (BR GAAP)

Consolidated Debt Profile

ALL DATA IN BR GAAP

2222

FINIMP: 209

BNDES: 152Working

Capital: 265

Companies

Abroad: 251

In US$ millions – Jun/07 (BR GAAP)

Companies

Abroad: 289

FINIMP: 80

Pre-export: 83

BNDES: 79Companies

abroad: 101FINIMP: 90

BNDES: 79

BNDES: 129

FINIMP: 122

BNDES: 61

FINIMP: 44

2H07 1H08 2H08 2009 2010 2011 2012

SHORT TERM: US$ 1,009 LONG TERM: US$ 3,484

301

708

535498

395

174

Consolidated Debt Amortization

After 2012

1,174

Perpetual Bond: 600

Debentures: 273

FINIMP: 172

708

Companies

Abroad: 426

BNDES: 100

FINIMP: 95

2323

ACTUAL 1H07 (BR GAAP) INVESTMENT PLAN 2007–2009

In US$ millions

CAPEX

Current

Capacity*

2007 2008 2009 New

Capacity

Variation

Crude Steel 9.340 1.560 50 - 10.950 17,2%

Rolled Products 6.160 - - 350 6.510 5,7%

Crude Steel 10.490 50 230 370 11.140 6,2%

Rolled Products 10.630 30 130 875 11.665 9,7%

Crude Steel 2.290 10 825 50 3.175 38,6%

Rolled Products 2.970 - 270 475 3.715 25,1%

Crude Steel 460 - - 60 520 -

Rolled Products 490 - - - 490 -

Crude Steel 22.580 1.620 1.105 480 25.785 14,2%

Rolled Products 20.250 30 400 1.700 22.380 10,5%

TOTAL

Brazil

North America

Latin America

Europe

In US$ millions

709.1

40.2

100.9

84.7

225.8

483.3

403.5

0

393.5

10.0

403.5

0

494.4Latin America

1,112.6TOTAL

40.2Europe

94.7North America

629.3ABROAD

483.3BRAZIL

527142125260Latin America

935315360260North America

148434560Europe

1,610500530580ABROAD

TOTAL200920082007

2,3901,000570820BRAZIL

1,5001,400 1,100 4,000TOTAL

1H07ACQUISCAPEX

2424

� External members on the Boardof Directors

� Fiscal Board (Audit Committee)

� Gerdau Executive Committee

� Support and Excellence Committee

� Corporate Governance Committee

� Strategy Committee

� Compensation and Succession Committee

� Disclosure Committee

Gerdau S.A. shares are included in the following São Paulo stock exchange indexes:

Bovespa Index - Ibovespa

Corporate Sustainability Index – ISE

Special Corporate Governance Stock Index – IGC

Special Tag Along Stock Index – ITAG

Brazil Index 50 - IBrX 50

Industrial Sector Index – INDX

� Gerdau Business System

� Risk Management

� Tag Along (100% ON and PN)

� Quarterly dividends (30% of the adjusted net income according to BR GAAP)

� Bovespa Level 1

� New York Stock Exchange

� Toronto Stock Exchange

� LATIBEX – Madrid Stock Exchange

Governance – Best Practices

2525

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.

2626

www.gerdau.com.br

inform@gerdau.com.br

+55 51 3323 2703