Gerdau's North American Muscle Funds Green Steel Future in Brazil

SÃO PAULO, BRAZIL – April 28, 2026 – Gerdau S.A. today announced robust first-quarter results, showcasing a significant financial upswing powered almost entirely by its booming North American operations. The steel producer reported an adjusted EBITDA of R$3.0 billion, a 25% surge from the previous quarter, signaling its best start to a year since 2022. This impressive performance allows the company to pursue a dual strategy: rewarding shareholders with substantial returns while simultaneously funding a major strategic pivot towards renewable energy in its home market of Brazil.

The quarter's results paint a picture of a company capitalizing on regional strengths to navigate a complex global market. While its North American division thrived, Gerdau also made a landmark stride in its sustainability agenda with the inauguration of a massive new solar complex, underscoring a long-term vision that balances immediate profitability with environmental responsibility.

North American Engine Powers Performance

The standout story from Gerdau's first quarter is the overwhelming success of its North American business unit, which contributed a staggering 75% of the company's consolidated EBITDA. The division's net sales climbed 7.5% sequentially to R$9.35 billion, fueled by a 4.5% increase in shipment volumes, which reached 1.28 million tonnes.

This growth is not accidental but is driven by robust demand from key sectors, particularly non-residential construction and the expanding renewable energy industry. The strength is further evidenced by a healthy order backlog that now extends beyond 90 days, a significant increase from the typical 70-day average. This suggests sustained momentum for the division in the coming months as expanding metal spreads—where steel prices are outpacing the cost of scrap inputs—are expected to further bolster margins.

Gerdau’s success mirrors a broader trend of resurgence in the North American steel market. Competitors like Nucor Corporation and Steel Dynamics also reported strong first-quarter earnings, citing record shipments and strengthening customer order activity. This regional buoyancy stands in stark contrast to the challenges in Gerdau's domestic market. In Brazil, the company faced headwinds from record-high steel import penetration levels of 27%, which pressured domestic shipments and pricing, even as crude steel output saw an increase. The performance highlights how geographic diversification, particularly a strong foothold in the thriving U.S. market, has become a critical pillar of Gerdau's financial stability and strategic flexibility.

From Steel Mills to Solar Fields

Leveraging the financial strength provided by its North American success, Gerdau is making significant capital investments in its long-term sustainability. The most prominent example is the recent inauguration of the Barro Alto Solar Complex in the state of Goiás, Brazil. This sprawling facility, built with an investment of approximately R$1.3 billion (US$249 million), boasts an installed capacity of 452 MWp, making it a cornerstone of the company's green energy strategy.

The solar farm is projected to supply roughly 13% of Gerdau's total power requirements in Brazil, providing a stable, lower-cost energy source that enhances operational competitiveness. More importantly, it represents a tangible step toward the company's ambitious environmental goals. Gerdau aims to reduce its Scope 1 and 2 carbon emissions rate to 0.82 tonnes of CO2 equivalent per tonne of steel by 2031—a figure less than half the current global industry average—and is targeting full carbon neutrality by 2050.

This investment is not an isolated gesture but part of a deeply integrated ESG strategy. Gerdau, which was recently named a Worldsteel Steel Sustainability Champion for 2026, has historically maintained one of the industry's lowest carbon footprints due to its production model, which relies heavily on recycling scrap metal and using renewable charcoal as a bio-reducer. The new solar complex, combined with product innovations like the lower-carbon Gerdau NewEco line, solidifies the company's position as a leader in the burgeoning 'green steel' movement, appealing to an increasingly eco-conscious customer base and ESG-focused investors.

Rewarding Investors While Building for Tomorrow

Alongside its strategic investments in growth and sustainability, Gerdau demonstrated a firm commitment to returning value to its investors. The company's board approved a dividend distribution of R$354.1 million, or R$0.18 per share, scheduled for payment in early June. This was complemented by continued activity in its 2026 Share Buyback Program, with the company acquiring 21% of its authorized shares in the quarter alone, representing an investment of R$211 million.

This approach aligns with a consistent, long-term capital allocation policy. Since 2018, Gerdau has systematically returned approximately 75% of its free cash flow to investors through a combination of dividends and buybacks, reducing its total share count by 7% over that period. This commitment to shareholder returns is underpinned by a remarkably strong and disciplined financial position.

The company ended the quarter with a net debt-to-EBITDA leverage ratio of just 0.74x, far below its internal policy ceiling of 1.5x. Capital expenditures (CAPEX) for the quarter were a measured R$1.1 billion, a 27% decrease from the prior quarter and perfectly in line with its R$4.7 billion guidance for the full year. With 57% of this CAPEX directed toward competitiveness and modernization projects, Gerdau is carefully balancing short-term shareholder rewards with the long-term investments necessary to secure its future. The company's robust liquidity of R$10.2 billion ensures it has ample flexibility to continue executing this balanced strategy without compromising its financial health.