Good morning and welcome to Gerdau's Fourth Quarter 2025 results presentation. I am Ariana Pereira, specialist with Investor Relations, and it's a pleasure for me to be joined by CEO, Gustavo Werneck; and CFO, Rafael Japur. Please note that this call is being simultaneously translated in English, and you can choose your preferred language by clicking on the globe icon at the bottom of the screen. It is worth noting that the forward-looking statements contained herein are based on the company's beliefs and assumptions based on information currently available. Forward-looking statements are not a guarantee of future performance and are subject to risks and uncertainties that may or may not occur. I will now turn the floor over to Gustavo to begin the presentation.

Hello. Good afternoon, everyone. I hope you're all well, and thank you for joining us again for another earnings release presentation. We will briefly comment on the highlights of the last quarter and also the year 2025 as well as the outlook for our operations, and then we will move on to the Q&A session. The year of 2025 was marked by distinct scenarios in the main regions where we operate, North America and Brazil. In light of this, I would like to emphasize that Gerdau has greatly benefited from its business model based on geographic diversification and production flexibility. Moreover, I would like to highlight the resilience of the North American market, which has seen strong steel consumption and the reduction in import levels, as well as the robust operating performance of our operations in the region. Even in the fourth quarter, when there is typical year-end seasonality, we achieved solid results. In December 2025, we even posted record shipments in North America. Meanwhile, in Brazil, the market reached a new record for steel imports in 2025 with a 7.5% increase in shipments year-on-year, despite important advances in trade defense measures such as the recent inclusion of new NCMs in the list of products covered by the 25% import tariff and the implementation of antidumping tariffs on cold-rolled steel. This unfair import scenario has impacted the profitability of our operations in the Brazilian market. On the other hand, I would like to highlight the progress of our new sustainable mining platform in Miguel Burnier in the city of Ouro Preto. In Minas Gerais, the project is about to go into operation and will contribute to a significant reduction in production costs at our Ouro Branco unit. I will now turn the floor to Japur, who will elaborate on the financial highlights and the impacts of this current scenario on our results.

Thank you, Gustavo. Hello, and good morning, everyone. It's also a great pleasure to be here with you in the presentation of the fourth quarter of 2025. We ended 2025 with EBITDA of BRL 10.1 billion, down 7% when compared to 2024 results, mainly reflecting a still challenging environment in Brazil marked by increased competition. On the other hand, our operations in North America continued to gain relevance, supported by resilient demand and excellent operating performance, significantly contributing to the group's consolidated results and the overall results of Gerdau. Having said that, I would like to highlight four points related to this quarter's results. First, in the fourth quarter, our net income was impacted by nonrecurring items related to impairment losses in Brazil units in the amount of BRL 2 billion. It's also important to note that these write-offs have no cash effect. Excluding these effects, Gerdau's adjusted net income in 2025, in our view, that accurately reflects the operating performance for the period stood at BRL 3.4 billion, down 21% when compared to the previous year. Secondly, regarding Gerdau's investments, we carried out CapEx in 2025 of BRL 6.1 billion. Now for 2026, as already disclosed, our guidance is BRL 4.7 billion, representing an important reduction of BRL 1.4 billion. We understand that this will bring more flexibility to our free cash flow generation in 2026. Even with a very strong pace of investments in Miguel Burnier with our expansion mining project, in this fourth quarter, we achieved a very strong free cash flow generation of BRL 1.4 billion. As a result, the annual cash flow generation for the last 12 months, which was negative until then, is now positive and stood at BRL 394 million in 2025. Part of this cash generation was earmarked for reducing our debt. As a result, we ended the year with leverage of 0.76x net debt over EBITDA, a level that we consider to be extremely sound. Our resilient business model continues to be very, very resilient, combined with caution in capital allocation. All of that allowed us to grow significantly without sacrificing shareholders' return. As evidence of this, throughout 2025, we paid out BRL 2.4 billion in dividends and share buybacks. Finally, in addition to completing our buyback program initiated in December 2025, which we already announced last December, yesterday we announced the launch of a new program for Gerdau S.A. It will be for approximately 2.9% of outstanding shares of the company, and if we think about today's numbers of the last exchange floor, this will be the equivalent to BRL 1.2 billion. So I'll end here, and I'll join Gustavo for the Q&A session.

Thank you, Japur. And still speaking about Brazil, we expect moderate growth in demand in 2026, even despite the excessive influx of imported steel in the local market. I would like to point out that we are more optimistic about the progress of the trade defense measures recently announced by the federal government to combat unfair competition from imported materials, as well as the transparent and ongoing dialogue that the steel industry has maintained with pertinent agencies. Meanwhile, in North America, we continue to see stable steel consumption at high levels with order backlogs above historical averages. The outlook for steel demand from sectors such as solar energy, data centers, and infrastructure remains positive. I'll now hand over to Ariana. Japur and I will be available to answer your questions.

Our first question comes from Daniel Sasson with Itau BBA.

My first question has to do with the outlook of the Brazil business margins. You spoke about some stability expected for Q1 of 2026. I'd like to have your view on the trajectory over the years, starting with a somewhat weaker base. But with Miguel Burnier ramping up in the second half of the year, could we expect a different trend? Normally, we have worse seasonality at the end of the year. And do you think you can end 2026 with an EBITDA margin being double digits? Although perhaps double digits for Brazil would be too optimistic. It depends on more aggressive measures regarding price, etc. My second question is about impairment. For more than five years, you didn't have any very relevant or substantial write-offs. So could you give us more detail on the more conservative assumptions you used to project the cash flow of some assets? What made the difference here, level of usage, price level, perhaps lower growth expectations for the coming years? Also, in Brazil, some of your competitors may ramp up their own capacity. Will Gerdau consider closing down more capacity in addition to what you have done in the last few years when you adjusted your footprint?

Excellent to start the call. Addressing the elephant in the room, which is the outlook for the first quarter, we realized we got some comments in the market that people were kind of surprised with the expectation we see now of maintaining margins in the first half. There are some points here. First, we have a year with fewer business days compared to other years because there are many holidays, there's the FIFA World Cup, and so on and so forth. That has an impact on our economic activity, plus rainfall, which was stronger in the Southeast, particularly in Minas Gerais, compared to prior years. Also, considering consumption sectors like the automotive industry, we have ANFAVEA data, for example. In January, they started with a level 12% lower for vehicle manufacturing compared to January of 2025. That matches the high level of inventory that exists in Brazil for imported vehicles. That aligns with the data published last night of consumption of long steel and flat steel sales in the domestic market that were lower in January 2026 compared to January 2025. So, a stronger resumption of volume is something that we are not seeing in terms of volume. Regarding our costs and margins, although we see prices that on average are better than we had in Q4 '25, there are still some cost pressures in the short term that may take a chunk of the margin that we would have with more competitive prices. Here, we have coal. We are not so exposed to coal as other companies listed in Brazil. Most are integrated, but half of our operation in Brazil, rounding up, is the Ouro Branco unit. In our modeling, about 20% of our Brazilian costs are related to coal cost, and we see coal costs from Q4 to Q1 increased substantially. It's true that we have a long lead time between 90 to 180 days between the price of coal increasing and this being passed through to our results. Yet, we see that this will cause some level of pressure on our variable costs. Now you put it all together. We understand that we will have an environment of better prices, but perhaps costs under a little bit of pressure and at the same time, volumes that are not increasing significantly to improve the operating leverage. I don't know whether Gustavo would like to add anything about the Brazilian outlook.

If I have anything to add, I'll do it in the end.

As regards to impairment, it has something to do with the Brazil conditions. When we run our annual tests in our accounting policy and recovery of PP&E, we run a number of tests considering the future cash flow for our business operations, taking into account foreign exchange assumptions, profitability of the businesses and utilization of our capacity. When we compare the set of assets in the Brazilian business, it justifies some of the assets that we have in our balance sheet. Some plants were hibernating. They were depreciating slowly because we didn't have a definition of not returning these units. Some other units were not operating at full capacity; you can see that our utilization capacity is below 60% in terms of the melt shop operating lower than 75%. Clearly, we see a high level of idle capacity. Except if we have a significant increase in demand and profitability, we don't see any reason why we would maintain part of these assets. It's a small amount of the total PP&E that Gerdau has in terms of premium prices; we had something around BRL 350 million to BRL 400 million. But we understand that with a more challenging foreign exchange, with a more challenging market, with a more challenging macro scenario, it's a moment for us to reflect these results in our accounting, and that's why we had the impairments.

Rafa, perfect. Still on the margins, on the first question, is it reasonable to imagine that everything constant in the second half, we should see an improvement in the margins, at least in the part of costs with Miguel Burnier? Absolutely, absolutely. To answer the second part of your question, we are talking about a stability margin of around 7%. We don't think it's unreasonable to have a second half, perhaps a full year with a double-digit margin. It's not unthinkable. It depends on our ability to deliver the Miguel Burnier project. If we have the trade defense mechanisms and market dynamics not deteriorating, things can happen. I would like to remind you that this is a presidential election year, and there might be some volatility in some of our target markets, but it's something that we're going to be monitoring over the year. Daniel, you also mentioned a possible closing down of further capacity. When Japur was talking about lower usage, it was possible to think about closing down more operations. The thing is we have such a variety of products manufactured at these mills that if we remove capacity now, we will not be supplying the market in some of those segments. So our 2026 plan does not include closing down any more capacity. What we had to do, we did last year. Of course, over the next few years, depending on how things progress in Brazil, there’s always space. Technically, it's possible to change these assets; we can make investments, particularly in the rolling mills, to make them more flexible. But looking at the short term, in 2026, we are not thinking about any further capacity closures.

Next question from Rafael Barcellos with Bradesco.

My first question, we have seen the United States posting very strong results, contrasting with Brazil, but this has been discussed here. In this quarter, South America was a negative surprise. You talked a lot about Brazil; you gave us guidance. I would like to know more about South America and how you're seeing the expectation for the year, for the quarter. What can you tell us to help us understand the future results? My second question is about the United States, which is indeed what is impressing all the investors. We're seeing very strong results. We are following metal spreads, and it seems that we are going to see even greater margins in Q1. But in talking with some local players, they tend to be less optimistic, which is only natural because margins and prices increased. Also, there's parity of some products, which is kind of stretched in the region. So if you could speak about the United States, what you're seeing about the sustainability of the U.S. profitability and comment on the main drivers? Since this is a segment that is really standing out, some investors consider a possible listing of the operation. If you can comment on that, we would appreciate it.

Rafael, starting with South America. In this specific quarter, we had a specific team in Argentina to maintain the level of utilization of our unit. We had a greater volume of exports, which ended up increasing our cost because we had greater logistics costs that go into our cost line item, impacting profitability. We don't expect that we will maintain the same level of exports from Argentina this year. So we're expecting a normal conversion, a recovery of our margins in our South America operations already in the first half of this year and continuing in the second half of the year. Something in the mid-teens would make more sense for the South America operation, as was the case for 2024, on average in 2025. Now moving to the North America operation, we have a number of different situations worth highlighting. The situation in Canada is different from the situation in the United States. In the United States, special steels, longs, and rebar have different dynamics. It's true we had an expansion of spreads because of our beams that had some price adjustment at the end of the year. That didn't have the same level of recovery in the decrease of prices of scrap, but that does not account for our whole portfolio. We have other lines of manufacturing like special steel in the automotive industry of the United States. They are not recovering at the same level of production and sales, but to drive our SBQ operation in the region. Overall, we don't see anything that makes us think there will be a substantial reduction in the profitability of our North America segment in the short term. We continue with our order book being very strong, remaining at very high levels. I think we're actually close to 90 days rather than 80 days. This gives us good confidence that this is not just the effect of one or two months of results, but rather, it's something more recurrent. Would you like to add anything, Gustavo?

Yes. Rafael, when we speak about North America, when we look at this in more detail, when we look at Gerdau results divided by business operations since 1990, there were many moments when the results in Brazil were much better than those in North America. Other times, North America outperformed. Rarely, both were doing poorly and very rarely, both were very good. When we look at this in more detail, after we published the results, I get bothered with a number of things about Gerdau. One thing that does not bother me that much is that we see this discrepancy between the United States and Brazil. I would say that this worries me less than you do. I was more concerned in 2017 and 2018 when our Brazil results were very, very strong. And our results in the U.S. economy were kind of poor. Why do I feel that way? Because I don't see any signaling of deterioration of our margins in North America in the coming quarters for a number of reasons. When we compare the soundness of our operation since 2017 to now, we have been operating quite well. In the last eight years, we worked hard in the U.S., closing the performance gap. The public indicators indicate we have a robust operation. Our use of obsolescence scrap, coupled with our strategy to leave those products with greater penetration of imported steel, was a good decision. When we look at the main category of products, structural beams are very difficult to import due to size and weight. I would say that we're very well positioned in our business, protecting ourselves as we look forward. The health of our backlog in terms of infrastructure, solar power, and data centers gives me peace of mind about sustaining solid results in North America in the coming quarters. As we solve, and we will solve, the competitive issues we have in Brazil. I don't really worry about these points. I read some comments made by the market, and these don't worry me. And regarding Brazil, this has happened previously. If we have an antidumping of HRC, as we're expecting, there will be some improvement. There's a lot happening in the coming quarters. Our Ouro Branco mill is operating in a very solid way. The quality of our coke plant and blast furnaces is evidenced by our decision to delay stoppages. Our Ouro Branco mill is differentiated. The sustainable mining platform of Miguel Burnier will enhance our competitiveness. I am fully convinced we have adequate timing to improve margins in Brazil, and we are far from a deterioration of margins in North America. I wanted to stress this point.

Just as a follow-up question. Given everything you said about the relevance of the U.S. operation in the Gerdau business and the difference between regions, that's always questioned by investors. Are you evolving with the listing possibility? How do you see this? Are you maturing in this discussion at the company? Can you comment on that?

Of course. Overall, themes regarding company restructuring, tax impacts, and ways to unlock value are always matters we are looking at internally. But we haven't gotten any tangible study or action plan being executed or about to be executed regarding the listing of the company. We are monitoring cases of companies that have followed that path and are reaping some benefits, but with difficulties. We will continue to look into that if the management concludes this will unlock value for shareholders; it's something we might explore.

Our next question comes from Caio Greiner with UBS.

I have two questions. I would also like to revisit something you briefly mentioned during your last answer, referring to antidumping and how this is impacting the company's view. This has been a frequent discussion point. If I recall, this is one of the points you mentioned in the past, this lack of protectionism or even unfair competition coming from imported steel that is being dumped into the country. This led you to consider putting some brakes on the CapEx investment. Now we are seeing some approvals regarding antidumping and the 25% tariff. So we see some movement from the government in that direction. Certainly, the impact in terms of your products is there, but minimal. Your products should be impacted in the next coming decisions. You mentioned preliminary approval. How do you see protectionism expanding in the steel milling industry in Brazil? Does that change your relationship with your Brazil unit? Are you more comfortable now to resume investing in the region, or maybe think about reopening some of your units? I would like to hear your views on how this is impacting the company vis-a-vis the Brazilian market after the approval of the protection measures. My second question is about asset divestments. This has been an ongoing topic among your peers. Should you start considering some noncore assets? I think you already have a lot in the company. I would like to understand if this is something you are discussing today in the company. If yes, could you give me more detail about which assets you are thinking about selling, and what you see going forward?

Thank you, Caio. I will start, and then Rafa will follow through. One of the main reasons that led me to be more optimistic about the trade defense measures is that it's no longer a political issue but becoming more technical. There are countries that right after the election made a political decision to introduce defense mechanisms. I'm careful using the word protection. I prefer the word defense because we don’t need to be protected; the industry needs to be defended against unfair competition. For political reasons in the last few years, we didn't see swift decisions in the steel industry as we did in the U.S. market. Section 232 is vital for promoting reindustrialization and growth of steel milling industries. I believe we will see better and clearer indicators. I am a bit frustrated because technical trade defense could have happened faster. I understand the federal government's difficulties, especially the lack of experts like we had in the past. Some functional structures are being revisited, but I still believe that it could have been faster. Looking at HRC and a temporary measure being put in place shows a transition from a political measure to a technical one. I think it’s difficult for any government to make a decision that is not aligned with proof of damage to the domestic industry. Therefore, I believe the HRC antidumping should become a definitive measure by June or July. This could be significant for our trade defense measures. This will not change our internal decision to allocate capital or our CapEx decision. I did not talk about it extensively, but I believe we should continue to allocate capital in Brazil to improve our competitiveness. There are alternatives showing we should bring our cost levels to a level allowing us to compete on equal footing with fair competition companies. We are not changing our CapEx for this year of BRL 4.8 billion. I believe we will continue to invest in Brazil. We might allocate capacities for exports to the domestic market. There are still some possibilities, maybe some rolling mill or production capacities that will make sense for the future. Our main CapEx focus for Brazil will be in line with what we are ramping up in Miguel Burnier, which will bring our cost equation and competitiveness to a new level. I covered your questions; now I will turn it to Japur for noncore assets.

I don't want to make anyone nervous, the guidance is BRL 4.7 billion, not BRL 4.8 billion. I don't want anyone to be nervous about the number. Regarding your question about noncore assets, I think we have two main sources. We speak to investors as they approach us on the subject. The first front involves our forest assets and farms we have in Brazil for coal production. Today, we have excess capacity in terms of land and forests. This has value and needs to be justified in our P&L. It's nice to have assets, but they also have to generate value. So we understand that, if we have more clarity, we are now working to validate that. We have an important amount of forests and farms that can be monetized over time. Another front of noncore assets has to do with real estate. Gerdau, both in Brazil and abroad, has grown through acquisitions. Sometimes these acquisitions come with properties, and we use them fully or not. We are beginning to revisit some of our units. For example, Comercial Gerdau in Brazil. This property was well located, but that’s no longer the case. I mean, this asset has changed in terms of its location and surroundings. We are trying to understand how much this portfolio is worth and the best way to extract value. It’s important to clarify that Gerdau made significant efforts to deleverage its balance sheet and maintain a robust and sound balance sheet to continue investing in growth while rewarding shareholders without taking unnecessary risks in a cyclical industry. Hence, any divestment of noncore assets will prioritize value generation for the company. We don’t need to make any sale. We want to create value, not just carry out an operation to take it out of our balance sheet. We want to evaluate our asset portfolio and determine the best location for every asset. When we realize we are no longer the natural owners of the assets—farmland or property—we will try to create value through that. This is the main idea behind it. We don’t have concrete plans but will inform the market as we move forward. So I will go back to you, Ariana.

The next question is from Carlos De Alba with Morgan Stanley.

Just maybe following up on recent discussions, how is the company and maybe the Board of Directors, to the extent you can share their views, thinking about returning any excess cash that the company generates? We acknowledge and took very positively the share buyback after concluding the one successfully that you implemented before. Despite the very strong cash flow generation in the fourth quarter, dividends came a little below expectations from the sell side. I wanted to understand how the Board is thinking about shareholder returns in terms of cash, excess cash between these two alternatives. If the company executes these noncore asset sales, would the company return the proceeds from those to shareholders, or would it keep it as part of the cash balance of the company? My second question has to do a little bit with the CapEx view, maybe not guidance, but broadly speaking, how does the company see CapEx beyond 2026? Do you think it will be closer to BRL 4.5 billion or may move back to BRL 6 billion that we saw in the past?

Thank you, Carlos, for your three questions. I will try to answer each one at a time, starting with shareholders' return and noncore assets, then talk more about CapEx. Carlos, it's good to see you again. As we’ve said in the past, we've maintained the dividend payout slightly above our policy consistently at an average of 45% to 50% payout, which has been the case in the past. Considering the value of our shares today, we still believe that it is below their intrinsic value, given our cash generation, especially in North America profitability, and where we find ourselves in the CapEx cycle as we begin to decrease investments and start generating more free cash flow to our shareholders. In the long run, we want to return more value to our shareholders, not only the amount we are paying now above the mandatory level but also with the buyback program. In terms of capital allocation, considering the current status of our shares, we must also look at taxes because this may impact our foreign shareholders, who are subject to withholding taxes over dividends. The buyback is exempt from that tax. We need to think about the shareholders' base of Gerdau S.A., with more than half of our base consisting of foreign shareholders. It’s important to keep this in mind when assessing shareholder value. Regarding proceeds from noncore assets, I see no reason why we shouldn't return liquidity from asset sales to shareholders. Throughout last year, if we look at all the quarters, we saw an increase in net debt of BRL 2.4 billion while paying out BRL 2.4 million to our shareholders. Therefore, we experienced higher leverage throughout the year. We continued to provide remuneration to our shareholders. In this last quarter, we had a significant release of cash and felt it was an appropriate moment to reduce net debt, giving us more flexibility moving forward. I think this clarifies your report. You expected BRL 0.13, and now you have a better understanding of what led to it. Regarding CapEx, Carlos, I don't have any guidance or details for 2027. As Japur put it well, CapEx disbursement for this year is BRL 4.7 billion, not BRL 8 billion. What I can say is we will be diligent not to disburse CapEx that does not align with our cash generation capacity. In the future, we want to avoid jeopardizing our financial health or increasing debt just to inflate CapEx. We have strong beliefs. We won’t make discussions regarding changes to these limits in the coming years. Like other companies, we have a wish list full of projects. The investments in this wish list will be more focused on reinvestments to seek further competitiveness and cost reductions rather than capacity growth. Of course, we may make investments to replace capacity for exports of semi-finished goods or high-added value, or a marginal increase in plants directly related to developing new products that will enhance our product mix. But going forward, we’ll invest in things to promote cost reductions or increase competitiveness. At some point in the next ten years, we’ll need to invest in our Ouro Branco Mill, which operates at intense levels of blast furnaces and coke production, and maintenance shutdowns will be necessary. When that arises, it will likely require relevant investment in Ouro Branco. For that reason, we will balance with CapEx reduction in other Gerdau areas to maintain a disciplined balance sheet as we have in the past.

Next question from Caio Ribeiro with Bank of America.

My first question is regarding avenues for growth in the U.S. segment. The company has the Midlothian operation that aims to be more competitive and increase its footprint in the U.S. market. But I would like to explore two related things. Firstly, how do you see the option of growing through micro mills, considering the products where you operate the most in the United States? On that same topic, other than organic growth options, would you consider M&A inorganic growth mainly via smaller players in the U.S. market? My second question is about the project that you were looking into in Mexico. Could you give us more color on how a possible renegotiation of the USMCA could lead to an increase in tariffs in the United States? Could this impact your decision to proceed with this investment or not?

Sorry, my mic was muted. Looking forward, we don't have any great wish or ambition to significantly grow our production capacity. Growing for the sake of growth for many years now has not been part of our vision. Overall, what we expect for the coming years is organic growth, where we can add capacity for higher added value products that bring value, not just for Gerdau, but for our customers. We see that micro mills make sense to reduce production costs rather than adding capacity. This solution, combining hot rolling with a melt shop, avoids the need to reheat billets; it’s interesting. If included in Gerdau's plans, the goal would be to replace less efficient existing production capacity. Regarding mergers and acquisitions or any such growth, we remain attentive, as always. I take the opportunity to congratulate our team because the discipline over the past few years has resulted in a sound balance sheet, allowing us to consider M&A in the future. We're very down to earth; we won't make unvalue-adding acquisitions. There are always opportunities to complement our business. We are open to synergies when analyzing possible acquisitions. We keep our ears and eyes open for acquisitions that make sense for a smaller, more profitable, better-prepared Gerdau in the coming years. The Mexico investment is connected to that; we have a business case ready. However, Mexico, regardless of USMCA, is undergoing substantial changes—such as the recent debates in Brazil over reducing working hours. These changes affect the competitiveness of industries. USMCA renegotiation starting in June will be a significant point for us to review the business case and decide if it’s worthwhile to invest in this new special steel mill. The U.S. market presents opportunities despite fluctuations in the heavy and light vehicle market, but we will be diligent with significant CapEx for greenfield mill in Mexico amidst discussions involving Canada, the U.S., and Mexico.

Let me just add a couple of points regarding growth. We are taking meaningful steps to enhance profitability in North America. Recently, we opened two downstream segments in Midlothian, specifically thermal treatment and solar piles. Looking at our quarterly reports year-to-date, we see that the downstream line item in North America increased 39% compared to 2024 into 2025. These high-value products are less susceptible to competitive imports where we hold a competitive edge. This aligns with what Gustavo said; we adopt caution and prudence when allocating capital for growth in North America. Additionally, we pursue smaller acquisitions and upstream investments, exemplified by acquiring scrap producers last year, which improved our scrap capacity and processing affordability. This approach represents the type of growth we prefer over major acquisitions seen previously in North America.

Next question from Igor Guedes from Genial.

Looking at the level of exports, 370,000 tonnes growing quarter-on-quarter and year-on-year, we saw a level of BRL 140 million in the consolidated EBITDA compared to BRL 80 million in Q3 and only BRL 24 million in Q4 '24. Given that you export a large amount of semi-finished steel coming from you in Brazil, even to other regions in South America, like cut, bend, hot rolling; this higher level of eliminations, would it be related to intercompany transactions, or was it due to other reasons? My second question, you mentioned that part of the CapEx in Q4 was BRL 1.5 billion allocated to restructuring and improvement in the Seara unit, Maracanau, about BRL 100 million. This was one of the two mills that you hibernated together with Barao de Cocais. I would like to explore that. Could you share with us what changes have you made to these mills? How does this fit now in the footprint of the company? Will you reactivate the mill with more efficiency than before? If you could comment on that, it would be interesting.

It's always good to see you. You raised some interesting questions. Let me start with the eliminations regarding imports and exports. In terms of eliminations, we account for all possible businessBetween reportable segments. Since we have limited exports from North America to South America, most business occurs between the Brazil segment and South America. We had a significant volume of exports of billets from Argentina to our Gerdau units in Brazil and across South America, such as Peru. This increased the eliminations we observed and significantly raised the atypical volume in the elimination line items. Regarding Maracanau, that's a very good question. In 2024, when we had the hibernations, we also hibernated the Maracanau mill in Sierra. We mentioned that it would undergo a modernization project. The goal of that modernization program is to enhance the Maracanau unit, which operates integrated with the rolling mill we acquired in 2019. The melt shop produced smaller billets, around 6 meters long. When rolled, we couldn't achieve optimal cost and yield because we had to feed the furnace with these smaller billets. Therefore, the project aims to adjust the size of the billets produced at the Maracanau melt shop to 12 meters. This size is ideal for use in the Silat rolling mill, allowing us to boost competitiveness in our Northeast operation. As Gustavo highlighted earlier, much of our project portfolio at Gerdau focuses on increasing competitiveness and cost efficiency, which this project exemplifies. We aren't creating a new mill; we're modernizing an existing one to better integrate the two assets we have in the state of Sierra.

Just a follow-up question, Japur. In terms of integrating the mill into the footprint one more time, would that entail any cost increase, perhaps a one-off cost increase that we should be paying attention to? Or would it be like a smooth transition? Just to get an idea?

No, no. It's basically the melt shop that will start operating again, supplying billets for the Silat rolling mill. There will be no one-off cost increase, no additional cost. It's basically allocating billets, including imported billets, to Silat, which now we will be supplying to a neighboring mill in the state of Seara.

Our next question is from Ricardo from Safra.

I have just two very quick questions, but they were very important in the discussions we had yesterday. First, looking at your cash flow, I would just like to understand your outlook. You have two lines, mainly working capital. There was a significant release of working capital. How much of that is structural, and how much can be reverted in the short run? The second line is cash financial expenses. There was a significant drop of almost BRL 4 billion. I just want to understand how much more reduction you anticipate in this line or whether we could review more expensive debt being paid out and the balance paid at a lower interest rate? My second question is that I would like some help to build a double-digit margin for Brazil in 2026 because Japur, I think you said that if there were not for the deterioration of market conditions, we could probably reach double digits throughout the year, even year-to-date, including Miguel Burnier. I want to understand if in your number, are we starting with a weaker margin? Will this improve in the second quarter, getting even better in the second half? Or will you create a bigger buffer, therefore, throughout the second half, will you deliver a double-digit margin?

Ricardo, so regarding working capital, your first question: Yes, we believe there will be a use of working capital—especially considering the strong results in our North America operations. We saw increased volumes and shipments alongside an increase in our product mix average, requiring additional working capital, especially considering our operations in Brazil due to seasonality. There should be some level of working capital use but we won’t revert back to everything we built because especially regarding the inventory line, we posted important efficiency gains. Now about the cash financial expenses, it’s important to note that during this quarter, since we settled our make-whole call, we had interest that had accrued till that settlement. So, there was an increase in cash interest costs compared to what we anticipated. We had to pay what we expected in due dates and the make-whole fully settled. When you break down our P&L, you can review debt per currency and type. Looking forward, pay more attention to the maturity dates of bonds as they concentrate in April and October. Finally, about the Brazil operation, I think significant improvements in terms of margins looking vague. If it weren’t for the coal increase we saw from Q4 onwards, we would have seen a more consistent improvement in Q1 of the Brazil operation, despite the market not growing much. The data could have been worse in January. I don't think it's too far-fetched yet to consider a double-digit margin, especially in the second half of this year while realizing benefits from Miguel Burnier ramp-up.

Perfect. Just to confirm, will Miguel Burnier's EBITDA be around BRL 400 million a year?

It will depend on our capacity to deliver the Miguel Burnier project in due time and at the stability level we want. It's important to mention that this is a new mill that will ramp up every month from the end of the year. I have to do the math accordingly, which affects the calculation. We don't have any number regarding the ramp-up results of Miguel Burnier, but we will share that information once available, especially as the project enters its integrated test phase.

Our last question is from Emerson Vieira with Goldman Sachs.

I would like to review the U.S. profitability level. It's very clear what you said; you will maintain levels in the short run. But my question, especially looking at cost and scrap prices, the pricing has not recovered meaningfully, given the rebar price level growing in the U.S. But looking towards the second half, do you think a more relevant scrap price change is likely, or is this scenario very unlikely? Are we more likely to see the same scenario as we have today? The second question regards the potential impact of antidumping measures on steel exports coming from Vietnam and Algeria. Should this lead to some marginal share gain, or is this not significantly impacting the company in the U.S.?

Let me share the answer with Japur because I don't want him to answer everything alone. It's difficult to project scrap prices in the U.S. two to three quarters ahead. We believe with the level of semi-finished production globally based on coal and iron ore coming from China, this will likely take some share of scrap coming from the U.S. Therefore, we expect scrap prices to remain stable. This insight combined with what I previously mentioned are reasons for confidence in our predictable results in North America for the coming year 2026. Now I will turn to Japur to address the antidumping.

The point is that when we assess the product portfolio, rebar is a product that is a feeder in our line. It dilutes our fixed costs by producing rebars. It isn’t a significant portion of our business, accounting for about 10% to 15% now because beams and others hold stronger prices. When profitability increases on rebar side, with more modern assets, their appetite increases to produce merchant bars because they can produce rebars and merchant bars at times—this secondary effect can improve merchant bar prices for rebar producers. However, this is not directly tied to antidumping measures concerning our rebar producers.

Our Q&A session is now closed. I would like to take this opportunity to invite you to our next earnings conference call, taking place on April 28. Werneck, you have the floor for your final comments.

Before we disconnect, I would like to send my very best to Mari. She's not here with us today; she's living a very special moment. She had a baby called Pedro Antonio, and I want to send her all the best and wish all the best for both baby and mother. I want to thank Ariana for conducting this call so well. This only reinforces Gerdau's commitment and culture of excellent teams onboard. On my own behalf, and on Japur's behalf, I want to close this call wishing you all the very best. I look forward to seeing you in April when we discuss our Q1 earnings results. Thank you very much, and I will see you then.