Gerdau (GGB) 5 Aug 212021 Q2 Earnings call transcript

Good afternoon. Good afternoon, everyone.

Here is Rodrigo Mala, Investor Relations at Gerdau. Welcome to our conference call to discuss Gerdau's results for the second quarter 2021.

Here with us today are Mr. Gerdau; Scardoelli, of of CEO Werneck, and CFO Harley Gerdau. Gustavo for both do will you the They presentation today. evaluation. and may targets We reasonable based that based we to guarantee projections believe any no Instructions] on assumptions, information and affect [Operator would that future company's that related there Gerdau's like the management's that business is even and the mere on predictions are to this beliefs say operating events forecasts financial though outlook, are comments

I give Gustavo Now to Werneck. Mr. like floor to would the

may You proceed, sir.

also Good afternoon, of like the times results to to welcoming good you by way. going related possible to start best and well I Gerdau's XXXX. you our through everyone. I all these discuss quarter would all in are of hard second hope to the and meeting health

As about talk with of markets answer and highlights your joining After Rodrigo I performance our our a issues this both results you results. presentation. will up to continue available yours with At and Scardoelli, will during Scardoelli. And the ESG today our it's be and we that, he start Well, floor the is the our questions you some presentation. both you about and for operate. Scardoelli may the comment CFO, will operations. about where share information come clarify now to pleasure the will performance about details more please our agenda about Harley And the is end, give we always said next, of quarterly quarter. also us, talk with also for the of to that us before, possible our

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from BRL second in with of EBITDA to EBITDA the first the the X.X and 'XX, went quarter the financial X.X a of the a consolidated billion the this in initiate the quarter. of billion that company, quarter factors We single record impacted in which results Gerdau will year, presentation main for EUR

in All performance XX%, the quarter since only utilization is excellent best capacity capture a an the allocation to the in second scenario. current also agile XXXX, moment profitability operations the last more These by years efficient of helped of but in production to result our all of a diligent approximately us all which attributed with to gains of about level our few of favorable investments our operations. as the this industry had be not the capital and brought

industry This posted rebound X.X in In domestic quarterly only will market, capacity are XXXX. vaccination main the of that construction activities in strong terms drive we Brazil to EBITDA. another Therefore, country. and earmarked to our which an second an XX% EBITDA utilization posted billion nonresidential the than we portion consumer BD the performance of billion, of a operation same shipments resumption America is performance reflects in Brazil with very XX% last of X.X more for year. in in addition in the as quarter, higher that a than reached the margin only America North advances year's our something in sectors of the of happened BRL conveyed in North steel remained the Brazil industry of again quarter, with once the less the QX and the compared in than when quarter in back This the XX% operation the all-time last our a sectors. large gradual with EBITDA, strong XX%, of Xx over record a of the to be a margin record EBITDA foreign allocating XX.X%, BRL in result market.

performance As being the South XX% Brazil operation Brazil and priority the construction not XX%. to Brazil civil capacity similar But coming EBITDA countries by XX% performance industry, shipments of particularly has you America all the the posed XXX steel the In business in in the of challenges that's of a also to XX% of restrictions like The due back, period an domestic recall, same BRL market. quarter the quarter, our Peru. XX% putting million in in few in the we COVID-XX to operation years are benefited in exported. that utilization second This production faced Argentina, margin posted when to between a a had operation with case from in of we good XXXX. quarter. may In about we from exceeded now of the because compared

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about talk #X, and Slide to working moving flow Now will capital. free cash we

efforts positive the on left-hand that EBITDA, it cash the we historical in receivable with We to previous performance effects the also X.X impact currency we to steel foreign capital, in free consequence, reflecting of side with position. its balanced as of have over the coupled last attributed of demand company's gross can interest most and positive us the at terms In in industry, The half mostly BRL in BRL now, managed was remains was given the liquidity explained our XXXX our billion cycle conversion to XXXX, last impacted the assets days the months, we and billion. in XX reached at year the our way Furthermore, at positive was we March building the capital. the commitment debt. exposure a a the commitment on the XX the quarter. days all-time in up variation for X.X the invested reduced the our and, remuneration course of Starting see cash to allows estimate to cash the the first for debt from adequate take attributed to cycle advantage flow minimized as conversion XX few this went that that the moment months, X this flow BRL inventories cash exchange of more high. of second slide, of the As slide, moreover, which of see our working of billion, fact to which mostly experiencing the global year. We half accounts now are in June the from

our slide, Slide to X. next moving Now

situation second North X.XXx would finally the about Clearly, dollars, I from year. and in like BRL on ratio America. June this EBITDA because same this of of net year. of year years to long the debt exposure last and to given quarters, at reduce the nominal closer would than Brazilian in the that life which a in of the XX% XX ratio the leverage reals an the that due of debt went leverage, lately. like point X, in we part we from term we on the the of a that the in high total to in average implemented of approved net We in interest to lower be BRL With position. rates XXX that the worth along XX% the in XX% about as take June, of the volatility of in the will exchange billion, the us of consequence our of amortization like certainly of debt meaning the would currency financial addition billion scenario EBITDA in March significant QX X.X%. level are goals and that the only this real kind well out in our The are of I was at by million show foreign quarter the of X which second policy this U.S. there to substantial distributed talk of to reported over total the strong in to Therefore, March advantage was current our defined dollar, our the the XX.X after by to the by EBITDA over puts and of increased a is to also of And U.S. about X.X of exceeded debt next cost amount ourselves few of company the highlight considering the foreign between impact more a rate our to allocated operations underline that Brazilian This depreciation a is X.XXx debt BRL the is this of in a years which X.Xx, the This usually concentrated approximately to It's we average of between approximately generated portion from the to opportunities debt through. seen fact as which natural adequate debt our hedge XX keep schedule was with debt protect net that is months, Brazil. XXXX. exchange Board believe debt debt we end dollar vis-a-vis EBITDA denominated in the cyclical the our results and we coming measured the exposure financial generated company, that was mentioning dollars. quarter -- of denominated we strategy the last is Slide U.S. or brought less XX% goes assets XXXX. levels,

percentage monitor significant months of company June Now the XX.X% capital, to of total positive in the This company's from on equity had next versus show than cost The which it from is I of gains taxes the Court's cost exclusion yield with X.X%. XX of quarter posted end taxes. that return of effect yield net the paid this dividend value reduction ruling go and our rather Combined in each the net debt, the our translated at we is capital the the interest of than the which based debt around from has BRL the the employed, last has returns generation evolution shares X.X% traded higher finally the of Therefore, over of related last conclude, stock in to This on slide, period. that XXXX, or closing a payout price meaning better this and -- million, we XXXX, XX, like in And the of annual May ICMS of of results reflect appreciation in adjusted closely. to its XXXX beginning of last the dividends and net cost very million very X% the of prepayment also combination the Slide in XXX income of not in nonrecurring something share market. few does dividends interest the is on ending into of shareholders, to on XXX much PIS/COFINS the effects the that XX BRL a a #X. -- base until capital in the of on went years, We June. paid show translated to on results. would to evolution out our dividend dividend recognized more the of and Supreme now months demonstrating and

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the attention. Gustavo, floor for turn market who will the much your to comment very you now And I'll thank outlook. on So

good. Thank Very Scardoelli. you,

the next to #X. move slide, Slide Now let's

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shipments grew government, the and Our should active. the of XX% quarter-on-quarter. XX% annual real and in going compared number according consulting longs increase same sites quarter, emergency XX% comparison federal was to April and landscape about and second construction by and from to active X% remains of Company. and and flats quarter Retail studies to between grow very forward sales launches the The market the company. In previous when X.X%, estate projects from the the according industry domestic the The they sales measures remains up on an June should very with favorable. very [indiscernible] Consulting XXXX, aid strong, XX.X% to respectively, remained construction boosted

the I of second application sector hand, the On of industrial mainly the also by Port the highlight like, would was X.X% private Association and infrastructure but according industrial also in of billion XXXX only our XXX activity According solely Industries, like bridge increment mostly highway develop BRL driven This reorganization investments the and in equipment global and the the in agribusiness, BR the which gave the of projects energy, the Brazilian influenced and Catarina, by highway the the industrial the very instance, total Paraná. Basic the quarter, customers Maranhão spotlight IBGE, equipment for the durable should that expand their segments. continuous with was in on and, Infrastructure grow in and GDP and of supply agriculture, energy recovery state exporting continued Itaqui should to not the strong, machinery chains demand to public year, by to opportunity Santa sectors. activities. this to in attributed the other highways, internal XXX in to the Brazil-Paraguay of to goods

construction the of course, we investments local to Now the Peru, finally, of the country. the resumed restrictions consumption monthly starting of industry the Argentina, the because of of of chamber of a the central continue we our construction figures the to sector fight Brazil. construction good the shop supply And Argentinian plant year-on-year, in from pandemic of not retail activity sector. survey of and unit from in operations the performance remains speaking in our early in according follow July and to the was the was good as due The market with in country. plants The driven the period rolling South about construction the to the by and after to grew in in measures latest oxygen country. country. monthly America civil XX.X% steel May Service Well, at the presidential XX% remains in year-on-year local growing served operation by in according affected levels result to also elections latest the the bank civil high, X.X% Argentina a melt public

expect major changes However, any now, sector. do we to right our not

in the Now And first amount BRL second steel increase of to Minas invite Mill early half meeting structural the investment know we for where in which being and of BRL And would now capacity the total market In products. both let's the invested strips the hot move you of Gerais. in here, investment X. in in the of customers. XXX,XXX products back to that reinforced annual modernization of say capacity like would PP&E to Brazilian structural capacity to And investments at would investment. Slide for let year. of a that jump highlight flats to X.X of the in estimated CapEx started XXXX, you we we in I in case coiled Ouro spending metallic profiles, also available construction to in that XXX and slide, as to CapEx of connect to the can the Brazil, quarter, Branco like is the X BRL includes, to of longs globally, XX contributing growth profiles I XXXX rolled mix the our aimed see here, million this intend to that the the demand Slide I tonnes billion to to our XXX,XXX development production from billion. tonnes role increases like like also you in this pioneers I to and of the in this expansion years expanding would the covers

the activities the And with us industrial high to contribute of years help certainly the planned as of recently of as Our serve in of demand of the continues to the the of the the Janeiro our X to markets in hibernation, north the like in and with over portfolio estimated resumed second year. of to the of that of end plan distribution to you at supply at activities production country. in from Rio our Moreover, take all unit construction, of profiles the planned, to that the playing be to SILAT occur renamed the and And in that focus I would half this rolling in serving sectors. to will Gerdau the Araucária one continues July, northeast in opportunity Caucaia Ceará. and bars optimize customers important plant country. full our of lines Cosigua Paraná was The the that an our product role resume after rebars, domestic we growth end, plant to market. the about the the purpose de mill And reinitiation remain of to operations supply talk of

points would you have. I again, you once will So like questions for available also, be as us initial listen may to joining on elaborate thank explanations. today And answer to to Scardoelli and further be all to and interest. we'll myself our your of available any And always, to

Thank So very session. much time back you to our you Rodrigo, to floor Q&A so far. I for turn the your organize

you. So Rodrigo, up to

session Q&A we And phone. for from with over questions Rodolfo you, [Operator Instructions] coming now JPMorgan. Thank Gustavo. comes the Angele you, Our question first Thank from initiate Scardoelli. the will

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Rodolfo. you, Thank

at talk discussion terms market, very will Before I to give about I'll of and this the a then the running in something the is capital have to through this time. lot in involves track. some to capital, well, like going we for an Olympic, run floor are talk this Well, Gerdau. who working back strategic certainly you a as been -- about that come working we've And Scardoelli, discussing is

So quarter, half. in very in now our important. second market it's or market preparation quarter order strong fourth in what -- see serve fourth quarter, we anticipate this to we In serve a very fully -- is the the in third the past

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Fine.

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many leaders industry like to add Scardoelli. just Thank I would segments. you, that we in are

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management, mentioned for Going the of but some we look price escalation inputs. strong also strategy costs electric a of cost metallurgical forward, second the part at the involves our looking half coal. of capital working strategy, our very Scardoelli of at energy,

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Itaú. Sasson next Our from from Banco question comes Daniel

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please the prices? I you Scardoelli, then talking and dividend, with can start continue scrap about will

terms dividends, policy is we adequate. -- believe In of that our we

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interest lower are So expected. and rates stable than

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allow certainly in and to the business So quotas. further because us a is very look to game our of with of I profitability say costs we collect further. models sustained. And lead reduce prices position would in flexible way the we even in will the good profitability our higher ourselves of And unique half will that scrap and scrap demand, the name second opportunities for be in and terms management. this find a cost to

Daniel from Pactual. from question BTG next Correa -- is Leonardo Our

Gerdau relates question to Metalúrgica. first My

energy. Sometimes to know to cash frequently are been your question your few rationing. risk What add. crisis don't to what don't to or position, for a a we My to potential weeks. preparation to is or also This a new power get whether past of related getting about have is energy been a months. Gerdau doing that of in priority? more know is be whether possible possible to -- scarcity I the anything involves that is any face any rationing has face prepared point I we related which stagnated second energy we've that asked question are number? the What these is you getting

Okay.

So -- I then you and will I'll start talk start start. and I'll about energy. then

well, liquidity no instruments there. is terms invested cash with of In risk. position, cash the our daily in It's

liquidity. we that company's is Gerdau's also, cash So as investment destination holding not will investment, the any moment, for But continue it we the the -- have from for specific that deviates controller. keep the not will keep is any investment. We we and to which Well with do do anticipate cash. and that

Leo, in are demand, very energy, in terms the not exposed. terms we of of

XX% We generation. have our our is self-generation, which of

And our South hydroelectric now -- Francisca have will to why self-generation country. did the prepared they -- we our would possible units. to through our order to fully of because I in are the reopened well our plant We inventory recently Then plant supply power power Dona face say market. supply homework we That's energy in in the any that increased we this very energy risk.

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But spot contracts. of self-generation, that, comes that our in the Cosigua water like thing along only whatever we the face capacities next remains long-term And scenario on market. term, well are with prepared this the the have of in terms to short energy, in We relies is the crisis. period new

from Barcellos Santander. question is Our from next Rafael

X/X. construction question point What Brazil first a the results. your It civil follow-up in X/X and of question was share is Congratulations at operation? of the for demand. your on about the My is first portfolio then one

regard, the and you When which inventory that debt think versus So question the the first debt policy, capital about position XX. But gross I be I want financial is I also, about now? X think this And between company's look the allocation. My EBITDA is learn in company to at is have number net -- over actual I your second would mean, And position. what more very comfortable. is then you metric the X.Xx.

in you update want company is allocation -- before about a think your I amount? pursues Or you that level even also, talk the this this learn is So about need And allocation? company. to capital that the any capital there to

demand with inventory. start an XX%. Retail business in of important approximately and share me our has Let

still us. past has consumers, to profitability I are market of self-construction that, X,XXX, serve is silent Brazil but to of it X important penetration In that in and the -- look movement. move. think to at materials years. We construction our about want strategy, last we been to scheme you only the and our strategy that very serve that to market that stores. very And strategic consumer had are we very soon, there's a in a at are and not moves the in very remains self-construction more, Somos have the material the to in move, of a most past material the many XXX,XXX emphasis still it this X products more about we we demand, demands serve has able these end and margins that, we of capacity at Retail also of that we look the past, putting for XX,XXX meshes construction the developed has years. for seek We've say I we would and because more the be have because in has Brazil, capacity can market to had we this assertive become the our pursuing serve through And been in has we participation but talk like doing stores. talked but further years, already our more increased. one stores. very Juntos strong, And Mais we Therefore, look which important constantly end when the an This and the of assertive to things. a to we will

Cosigua in is recovering. trend a -- reduction saw line is levels. tonnes why the inventories, those the an because products, now been -- in segment there increased products, are the We in chain. one-off concrete, through this fully market. are to of has That's what Now serve of as we the there lately. we for in from the of as this of and the inventories case trend They inventories historic want are has of reinforced see to But demand close we increased XXX,XXX right that adding a

Rafael's answer the second Scardoelli, you can part So now of question.

we the close growth, of In up put to much That then one that our Board. when and terms you we to our financial the It set it leverage have X. our But which at lower are which Well, right is indicators to in ourselves that our of was addition into leverage, reached initial level, financial below is of that terms in our to of the our was range level context. than policy set level, things now then was X. -- down leverage very policy. and we one up X adequate. that was we And level, find by

would the business million of is cyclical with we in of And business. BRL because X.X. comfortable was maintain be we know is these a around EBITDA level past EBITDA. this adequate. level we cyclical. are we'd XX at like then months X that alone, X had steel leverage -- leverage BRL that X to We this to this If Therefore, even million, The

our also quarter, objective. BRL debt, to and policy. of If market industry. were effect capture I other indicator also our well, the debt billion. and financial to something us XX.X BRL very strong billion healthy to is is demands FX balance We mean, allow at to gross grasp is objective. to we and the that Now terms in X maximum meet will will went continues through That's be of reduce in and continue XX.X we to strike but opportunities. to billion the to debt gross adequate this a the that a because by and amortization BRL allowed pursue to able it important from that continue prudent balance grow the It of look we our as organic This we opportunities that to

question, Suisse. Crédit Our Ribeiro Next from from Caio

shipments believe if increasing My question you the see you're domestic I trend continue still the on the vis-a-vis going external to that tell domestic could whether your is to domestic domestic some can the know the market. you market? you do of or mix room also forward implement about first But -- this your will your market opportunities me market. you And whether that your increase dividend to domestic market? the add buyback exports policy. shipments vis-a-vis a policy you to see And how

prioritize operations. country The So the continue sustain of I'll the answer came we going levels they development the in market. the XX% in question, the help part. the down are XXXX. can can -- up And also, higher. to take X% help profitability first XX% domestic second were to part and the grow Caio, then Scardoelli of They and little will we first Brazilian of bit and sustain we the now, market. with we because then some XXXX, are They to Exports in opportunities customers. GDP. XXXX, will were resumed in with a to the X% will opportunity. the dropping. also quarter serve other to something happen quarter at market, melt in serving in find fully partners, domestic the the high quarter margins focus we the export second we But that focused to if had strategic of coming third months Argentinian Therefore, look Well, are not in on our right that is Brazilian XXXX our totally because certainly shop our

issue Now other Scardoelli, -- the other the you the about about can answer question buyback.

used is to long-term very hedge our used given This and share, be -- executives. is just our used was comfortable. for program. It position now hedging options, that is the our this which hedge is to to buyback The options is incentives

on the reducing aggressive of But We it is look options. on. of at buyback focus more in today, also present menu gross program, is a of terms course, the could debt. In our further this

for is Our some CapEx this also year. growth demanding program

current We our start would horizon. today, say would this I are But our multiple of continues from like the debt, this in view say we is cap down. at which you is terms So of our expectations historically is sounds at to don't have is Xx, between looking industry But and for low in multiple, reports -- X market which of which And I of our that probably, options. will what thinking net analysts, speaking. Well, possibly buyback. looking be? menu that market when in anything if is about short-term again, and our part come this time to a that

is from Bradesco. question Thiago Lofiego next from Our

rolling new mill, your projects. think hot-roll are about coil Gustavo strip new I these

you question CapEx range very I demand this And Because think the rolling the see be you already it? same the talked helpful? year, the degree very on for what of profiles? CapEx of second mill, the a about the a what And do comfort? could you M for Brazil you in coil good. strip profiles. remains hot-rolled and I And Where project side? Ouro is next me Where sector give my it's think is most lower worries could Gustavo, demand if Branco

are where you forward? are see down? more coming as in of prices the quarter, not prices U.S. think risk spreads steel we metal So down, And metal coming whereas do should you third in expansion spread going do the spreads expect an

will be to conservative it CapEx. comes Well, to CapEx, very when continue we improving

been These heavy important. bring for of in will a to strips This mills. with rolling these and in discuss Ouro for very is we And that profitability areas related These for us products areas plates. is X invest mill mill core often. have return. current something decisions X This are rolling X very are an coil also are lines investment We adequate can that we hot-roll Branco our objectives. rolling much very future and happy we've Gerdau,

operating We have we strips our time at capacity production, quite full a which is strategic of expand distributing arm, which increasing additional it's time. mill that capable to Commercial is that some And there coil profitability. production, hot-rolled Gerdau, rolling probably for have

X Phase be an And investment. existing this so of would

used the And million we the profiles, of And at investment that, production will is question. in of any in And Ouro soil, that the tons where and already a commit there. in this involves $XXX CapEx this mill segment I this It mean, we flow the And and rolling Asia, coil amount the global year. answer rolling included for located construction not increase the hot-rolled mill of will rolling side by because metallic strips our company. the profile lack CapEx. coil already million increase mill total America. million. a side is with year, will and structural items, the capacity areas hot-rolled be think, as from about, to strips rolling disbursement CapEx going million Well, a changes under overall and And by is And your right segment the our be X.X is without using only a will producers time, -- in rolling We involves the any $XXX to forward disclose mill -- the of X disclosed this metallic is a we structural lot, about Branco. of growing part following capacity are above profiles ground X structural will so sector to you that I the in million first the mill know, automotive is the Latin model optimistic terms with of components. I'm both of I

mean have of United said highlight -- is is we EBITDA important of said also previous few closely side the is to be commitment a what our be terms that one occasions, on components recall is heavy run trucks X that -- as margins for globally. that States, in of during in solved monitoring should the that moving market short you my And year. And understand margin. demands segment this I time were market in throughout vehicles, our not presentation of and electronic Metallic will half digits. this XX% smoothly. XX%. flats, is margins EBITDA reached the We since grow this We that in will I we very did But and the buses, very longs will everything our components. XXXX, EBITDA the But electronic spreads We first above for homework. because

buy scrap much but also portfolio competitive past to terms able become in service that U.S. and a way product past. in the the only in more operation very has the than of in not we few competitive years, customer were cost So in and

did did the in well. and our we So we it U.S., homework,

U.S. this will And capacity in run. demand the infrastructure market the term will market they more spread the metallic be in by position going the infrastructure way I of short our the competitive, very positive the in the able very the term, but terms forward. in think in a EBITDA be few will comfortable see will package. meet only Congress, more be as very Therefore, not very package good the long still for approved a the next margins a higher to optimistic market days, in are in the to and and capture serve U.S. we demands serve And well. We we're short to market with

Thank you, Gustavo.

give about evolving? months? quick could you see me in that you see follow-up any pressure about the price the next for increases do flats. the How U.S., Do the of you of price you're XX a spread potential the if If on scrap on in very metal capacity talking U.S. even What

scrap. will scrap. mitigate U.S. able our prime to the to somehow we'll in that special used a Mill Monroe that prime continue pressure scrap The for be is so concluded pressure Prime scrap price important mostly operation. very on our in in We investment exist steel

in our we we competitive Now is which such we scrap, use on our don't a have more pressure the see obsolescence But scrap costs. longs operation.

the all even operation competitive. have make elements We necessary our to more

about the a above U.S. because in scrap supply demand in but way the talked in scrap scrap, U.S., for about talking we happen are call, is and this prime prime this scrap we not obsolescence During the reduction does possible

Our from Morgan question next Stanley. is Eduardo from [indiscernible]

be was structural not you Can so you about connection an strips structural the you you if I good capacity please any hot-roll X rolling give market, new I This new said. will entering And the risk profiles? additional capture think put mill additional lines, what on me this comment pressure see EBITDA Can on coiled these of for idea both couldn't very your your profile? for and and helpful. finally, CapEx could and whether any don't this prices.

you little a tell let and the figures. bit So about me refresh CapEx

how these these additional that the and about EBITDA Scardoelli EBITDA capacities additional again CapEx add about And fit talked will We in capacities. the Okay. business. run. could can talk to I long can capacities refer then our and to

year. certain structural before, of this $XXX in I for investment said order in around the profiles, of magnitude in And as already million. it's ranges included Eduardo, So investments

we've where careful additional I So terms be of there operate. the -- in or been further. very will no mean geographies disbursement you

compared if a capacity the we very the very impact we in give of terms time that rolling does so volatility. it flats mill entry tons. Commercial market was will should that, that our the plate this understand Gerdau. a the in XXXX, this distributed this very is terms recovery. X.X investment have of we be of terms find to when time, demand have a And capacity today, very a some step XXXX investment, why in this investments affect done not tons, because being heavy moment. So adequate means is all and been We of market quite privileged way a be reach operating fully not share will It's rolling This will we But that or in to our investment in That's really the in year, were to the materialized after side, which additional in will any is and believe Brazil position extraordinary this today. that far. market, Brazil do additional fortunate installed mill an of had now market a low-risk to million having right the in We when what it country. because in is through higher strong in the XXX,XXX in meet On ourselves of our demand. was around for

and company product more of in see called Gerdau coming relevant profiles, years that our structural was is an through other that geographies mature ago -- to come And In and done investments in very growth this investment construction we other the as Next, was will metallic is terms a Brazil the that's some geographies, case segment. of GXBase.

we our see world. the are foundations. in I our cleaner over environmentally We cleaner America, increase once Therefore, tons, allow to a are X.X to to think will Latin us we will offer for our offer the working market. production as that solutions and And solutions, all the strengthen only growing to million solutions position demand producers clients we to this

new to floor who I'll talk the investments. So now these about for EBITDA additional turn will Scardoelli,

at start strips. as entry of we the as market, shipments then have Gustavo the increase could different that strips, -- of quickly about that the we And well, should very in new coiled -- was What what assumptions. equipment the we absorbing the at curve hot-rolled about Gerdau. saying with look And hot-rolled for also assumptions we and possibility our happens, coiled

We are our producing to our capacity full of rolling mill.

the EBITDA per the slightly throw we this $XXX we operation to about over quarter in without shipments our can If is look EBITDA as reach analysts. year, ton. EBITDA I what hard BRL average if So talking I I'm mean, in probably was I it same tons of would it distinguishing at considering this why total at I That's second something can divide if dollars, and ton. do. add the the the last very operation, average projection market. XXX,XXX capacity, to domestic we the you had Brazil per the meet demand. The above you that quarter, we mean, back by foreign XXX mean to

So it's very difficult.

to we aspects. market? contribution that do again, At important our enter moment? very might will this a is have in strategic the when to also And once Anyway, consider mean, what that business. I is So it

is would of Our diversified all I as they very have more deliver And to it's almost I into answer mill, the strong I And the helps the can of line assumptions. line I mean start rolling know you but we consolidate be coiled to account profiles, that that how when market take product. us some the in company to back in gradual. very product in in quicker. up starts the of mean up turn you, that strips of terms terms structural market. player Brazil, a hot-rolled every the

question Bokkenheuser is next Andreas from Our UBS. from

safe. I all hope well you're and

question on quick Just a scrap.

follow been up obviously, with to a there's lot question. about And of talk scrap tightness. wanted Just one

in mentioned prime tied the U.S. You obviously scrap getting

Some in which well. the get capacity, tight consuming world, we're adding is seeing people EAF obsolete anywhere will believe as scrap. anybody Obviously, that scrap more capacity,

is HBI to the through Are scrap that's what like DRI yards? does of looks reduce alleviate scrap down another outlook you chain your or basically you prime usage it tighter on to to tightness? how any via buying secure metallic able you question, raw the plans more about scrap on have scrap or integrating that thinking your overall definitely vertically So Do supply Are So kind market metallic? going materials? forward. a

is market? the Thank is we this of As the whether intend next current Andreas some in you in or that intend for more to Andreas. or anticipate And the years? you, what this face does may strategy to And operate acquire in for how globally. part even scrap to Gerdau's scrap this expect scrap U.S. market company asking market market? we some coming similar strategy use the restricted reduction

structural and a universe. in question changes steel Rodrigo. question. you, This you, relevant been Thank significant because we've very is noticing thank a some the Andreas, It's

next moment reduced look because Gerdau to also In the exports. industry of be Well, the we the to we will Therefore, significant furnace to increase. for the search emissions how Well, years, the and And case years, our in alternatives should reduce will per the profitability expect gases. ton domestic focusing companies sometimes all next capacity China, translated will the into scrap next China, be to see from once under we years? in all for this higher have compared years other changes we now are the over the They have the can with probably coming its continue from high we conversations did past years understand they strategic the Well, XX the XX can occurring numbers to an -- So We XX compare this performance looked our the products. in we focusing to of a that particularly will that are ago the be current we reducing integrated GHG and higher something search that was previous plant. know In you pressure an position. GHG when electric went on on and certainly, and the of all recall in general of to I if they're of due lower happening. consider the will market. when are to public. XX now. certainly their emissions EAF world I XXx GHG price is reduced at certainly, than China more X of closely opinion, happen what years. not past GHG be prices, steel and productive

in So even those days, this saw happening. we

strategies we adopting we've captive X been past to this something in our for terms already are We purchases. years. the of is scrap matured In more be acquiring doing scrap. Brazil, And

major U.S. yards are last dismantle and related right same scrap already we in or purchase delivered that we scrap the competitive like our few sort. to continue vehicles going that the the motion, by that Part and to more strengthening We of DRI scrap strategy a is strengthen to in But investments strategy of anything our pursuing We quarters of the movements of results of and we in forward. the is not wagons. now, are any related understand also that will planning

more next of take the thank Our question all is participants. from would to the and to web, like this I opportunity than XXX

is The question first from [indiscernible].

With capital this the the how demand and in and What renewable market and energy, you company Brazil and do strategy industry gas market the sanitation, for see U.S.? from in also of particularly in is sanitation? the goods the that oil, energy

for you question. Thank your

very We steel the demand approval segments, before for are is even the U.S. increased Renewable warehouses, the Amazon of package, In already strong. has infrastructure market, energy In U.S., the Biden's run optimistic. and substantially. very that short the the in

year the has in in will And already demand the we continue million already short given And and the of So XXX of these moment. coming final BRL thing from the are when goes run, because the compare segments. certainly, approval experiencing growth to package. a for investments after history Brazil a demand reached grow a same we especially infrastructure infrastructure

BRL million. down XXX it's to Now

the think look the renewable has when, come solar that for rings gap Brazil. the still ways. that well we different investments One I are supply is wind rebars So Brazil more energy go provide invest to And X a big there and we are in know I And will main indicates blades. We that generators can Sanitation, of prepared it fact energy, we in in but at steel will very this to this is farms. speak the area for come. infrastructure can don't in positioned the sanitation to the market. in well serve it part infrastructure, about to and and

terms could years, commitment our can and and steel for the of also the So part self-generation next wind energy this and own of sustainability our at look and by few through And industry. the also we can seen is generating Gerdau's entire steel will supply provide in energy We be our producing power. sustainability. In of to sales increase efficiency the plants. own we renewable our

that do energy. will We through renewable

that of Our from with the in our Minas involves and Shell -- Aquarii solar park in Shell, park. Gerais energy partnership Gerdau from XX% come mill our XX% XX% will

will in share of terms our energy energy renewable In want point new well, that Brazil. energy renewable a become of arm renewable to we We Gerdau's for we as Next, a is to trader which have Gerdau grow in businesses.

have are but increased So years. will positive a very leader, as in the we these all of general, company been have lead preparing in only past points in be Brazil to the that been And demand. not to we XX elsewhere

[indiscernible] Next SFA question Investments. from from

the retail BD, how to that First Juntos strategy? of retail your -- strategy how in much of congratulations Somos that of of of sales the all, volume? much on represents regards total What your In Brazil Mais as part results. that is

question. Thank you, [Rafael]. Thank you for your

the relevant, Mais have platform are At pillar regards the because Mais. a civil of they increase their the the stores serve strategy. are first, the very only future, want Gerdau construction intend And in provider Mais it to main significant very Juntos Somos it Juntos only not very stores us step consumers There of channel Brazil. sell being Brazil. not to XX%. our penetration through in years It because Juntos materials. now be few we before Mais and we of to Brazil over reach construction material of construction entire pillars Somos and marketplace, to there And and was is the are a in market. with XXX,XXX hosted Juntos to that, X is the -- users. if loyalty would stores X,XXX a consumer. largest civil Somos is But refurbish products, operated these Somos Juntos house, in we we Juntos want Brazil largest this solution together, growth, already that Mais final we Somos So to that Commercial construction. retail Juntos closer are we interesting the is the intermediary. is in Somos penetrating to construction terms has but aggressive. only served a of before be I can more XXX,XXX end other And say. in was Mais, Juntos as allow the to we Mais, is in largest also Mais, plans our as will Somos next of Somos marketplace But become The would fully consumers One understand In to by services.

very we XX,XXX So from X,XXX materials. stores stores reach soon, will of construction

will of to before, greater demand, a -- So to this I strategies also, to capacity directly in we part serve this see is said our I'll the scratch, strengthen market. addition have related to as the that the but

to main that, be want provider users. to we addition solutions In a of end to

question Could market Brazil? you this how is approaching explain What profiles? the in in are doing segment last Our comes Gerdau structural from of [indiscernible]. you

will innovation be would department that IR Other that X in you after pillars. for Well, Thank will innovations question. In answered summary, I that questions the -- call. conference our come by this say comes

pursue. the product in innovation First,

have be in can profiles that Mill. can more technology high in Ouro activities We in like take situations They that more extreme leading-edge sea. our load used are profiles are Branco to resistant These a corrosion.

lot our in So not with also have we innovation the used the the segment added quality of And we have the of structural product in business also innovation, of increased profiles has to model. the profiles a only and flats. but our to we ago, a their years customers. of a few can for And called sell the complete introduction structural A now of GXBase, solution constructions. through foundation company our new we offer

instead we solution. profile, an So just selling entire sell of the

client is add our client because to a XXX to service side, the of This a situation we parties. So can of Gerdau. history entire And on winning profitability acquire solution value both an side, win-win they acquire but this part profiles, significant in in and do. Gerdau delivery translated work, solution. can is only everything of a adds going into has reductions, entire years our cost changes. it's innovation times, we through therefore, is on of can from Gerdau, it structural present reduction the our And everyday an And business. through our not

-- increased company. continue becoming an -- are We modern

our thank becoming to modern. to and We continuously are question. you clients. want your more innovation We for And deliver more

like we back turn the now his Gustavo. conclude floor all would final thank us for who our joined I you, Q&A I now like to Thank session. investors would of And to And to today. remarks. the Gustavo

Scardoelli, would conclude. like anything to else? I add you can Or you think

thank everyone would joining like today. I to just us for Yes,

today. joining Well, to to us you. always, as once And all a for to again, it's thank I talk been you would like pleasure

available invite and answer to we continue quarter October you available once further Rodrigo us opportunity questions any XX. held have to to is you take you to please questions. this XXXX additional of take again We that release very Thank answer the much, related remain all be and during -- to earnings may on next our join care. your And I call third to