ANNUAL REPORT 2012
BUILDING OPPORTUNITIES
Gerdau
BUILDING OPPORTUNITIES
Gerdau faces the challenges of the present with an eye
It has industrial units in the Americas, Europe, and Asia, which
on the future. That is why it is always looking to build new
together represent an installed capacity of over 25 million
business opportunities that can generate outstanding returns
metric tons per year. It is the largest scrap recycler in Latin
and ensure its sustainable development. Stemming from a
America and worldwide transforms millions of metric tons of
relationship of respect, integrity, transparency, and continuous
this raw material into new steel products each year.
search for mutual gains, Gerdau seeks to contribute toward
the development of its customers, suppliers, employees, and
Gerdau steel is used in homes, cars, freeways, bridges,
communities where it operates, while creating value for its
agricultural machinery, home appliances, telephone and
shareholders.
electricity towers, among other uses and is part of the lives of
millions of people everyday.
Gerdau’s history began in 1901 as a small nail factory in Porto
Alegre (RS). Today Gerdau is the leader in the segment of
long steel in the Americas and one of the largest suppliers of
special steel in the world.
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Pictures on the Cover
Gerdau is continuously investing in building new business opportunities.
Below are some examples:
1. The construction of a new area of the rolling mill in Ouro Branco (MG) to
manufacture hot rolled coils, making it possible to start the production of flat
steel in Brazil in 2013.
2. The increase in production capacity of special bar quality (SBQ) in mills
located in Brazil and the United States.
3. The start of production of special steel in India to supply the automotive
market.
4. The expansion of production capacity of iron ore in Brazil.
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3
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KEY INDICATORS*
Consolidated financial performance
(R$ million)
40,000
37,982
2011
Investments (R$ million)
52.7
61.0
7.9
9.5
People
2012
2011
General Satisfaction Index
(internal climate)
76%
75%
Accident frequency rate*
1.06
1.59
35,407
4,176
10,000
2012
Volunteer employees
(thousand people)
30,000
20,000
Social Responsibility
4,651
2,098
1,496
0
2012
*Lost-time accident frequency rates per million hours worked,
including employees and service providers. The data also includes
restricted work and change of function (OSHA recordable treated as
LT accidents).
2011
Net sales
EBITDA*
Capital markets
Net income
2012
2011
0.32
0.55
1.4
3.1
0.24
0.35
1.3
2.4
Metalúrgica Gerdau S.A.
Dividends (R$ per share)
*Represents earnings before interest, taxes, depreciation,
and amortization. It is calculated in accordance with CVM
Instruction no. 527.
Dividend yield (%)*
Gerdau S.A.
Dividends (R$ per share)
Dividend yield (%)*
Financial margins
2012
2011
Gross margin
13%
14%
4%
6%
11%
13%
Net margin
EBITDA Margin
Production and shipments
2012
2011
Steel production
(thousand metric tons)
18,920
19,623
Consolidated shipments
(thousand metric tons)
18,594
19,164
*Ratio between the dividend paid per share and the preferred share price
on the last day of the year.
Valuation of shares*
2012
Metalúrgica Gerdau S.A. PN (GOAU4) - R$
30.2%
Metalúrgica Gerdau S.A. ON (GOAU3) - R$
20.3%
Gerdau S.A. PN (GGBR4) - R$
25.7%
Gerdau S.A. ON (GGBR3) - R$
28.4%
Gerdau S.A. ADRs Nyse (GGB) - US$
17.0%
Gerdau S.A. - Latibex (XGGB) - €
12.5%
Ibovespa (São Paulo) - R$
7.4%
Dow Jones (New York) - US$
7.3%
Latibex (Madrid) - €
Environmental management
2012
2011
Reuse of by-products
(% of total generated)
74.8
78.3
178.4
370.9
Investments (R$ million)
*The dollar exchange rate on December 31, 2012 was R$ 2.0435.
-10.7%
*The appreciation of the shares was calculated considering the local
currency at the beginning and at the end of the year.
CANADA
UNITED STATES
SPAIN
MEXICO
DOMINICAN REPUBLIC
GUATEMALA
HONDURAS
VENEZUELA
COLOMBIA
INDIA
PERU
BOLIVIA
BRAZIL
CHILE
URUGUAY
ARGENTINA
GERDAU AROUND THE WORLD
60
148
4
62
4
135
3
Steel mills
Downstream operations
Iron ore extraction areas
Scrap collection and processing facilities *
Power plants
Retail facilities
Private port terminals
Gerdau Headquarters
Countries where Gerdau has jointly controlled
entities: Guatemala, Mexico, and the
MISSION
VALUES
To create value for our customers,
shareholders, employees, and communities
by operating as a sustainable steel business.
Be the CUSTOMER’s choice
SAFETY above all
Respected, engaged and fulfilled EMPLOYEES
Pursuing EXCELLENCE with SIMPLICITY
VISION
Focus on RESULTS
To be a global organization and a benchmark
in any business we conduct.
Economic, social and environmental SUSTAINABILITY
INTEGRITY with all stakeholders
Dominican Republic
* Scrap collection and processing facilities, solid pig
iron production facilities, and coal units.
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GERDAU ANNUAL REPORT 2012
TABLE OF CONTENTS
05
06
07
11
Message from the Chairman of the Board
Message from the CEO
Corporate governance
Strategy and competitive advantage
12 Business
12 Performance of operations
18 Finances
20 Relationships
20 Employees
24
25
26
27
Customers
Suppliers
Shareholders
Society
28 Environment
30
36
40
Timeline
Summarized financial statements
Credits and contacts
2012 HIGHLIGHTS
• Gerdau announces new investments in mining to increase
• The project for building a new plant in Mexico has
its annual installed capacity from 11.5 million to 18 million
resumed as the joint venture Gerdau Corsa. Focused on
metric tons by 2016. Besides that, the first shipments of
the production of structural shapes, the plant will have an
iron ore were made to the international market, totaling
annual installed capacity of 1 million metric tons of steel
325,000 metric tons.
and 700,000 metric tons of rolled products.
• Investments continue to be made to begin the production
• Gerdau starts up the blast furnace operation in India along
of flat steel in Brazil. With an installed capacity of 800,000
with the power generation plant, the sinter plant, the melt
metric tons per year, the hot rolled coil mill will begin
shop, and the new special steel rolling mill.
operations in 2013.
• A new continuous casting plant is inaugurated in Monroe,
• The company announces the construction of a new melt
Michigan (U.S.) in 2012 as part of the investment to
shop at its Riograndense mill located in Sapucaia do Sul
expand the installed capacity of special steels to meet the
(RS) with an installed capacity of 650,000 metric tons per
growing demand of the automotive market in the region.
year, which will replace the current melt shop.
GERDAU ANNUAL REPORT 2012
MESSAGE FROM THE CHAIRMAN OF THE BOARD
“Our centennial experience and long-term strategy give us the
confidence and reassurance that we will once again transform
challenges into new business opportunities.”
Jorge Gerdau Johannpeter
Chairman of the Gerdau Board of Directors
Ability to stand out in the steel market
The year 2012 was marked by the steel sector’s effort to
As a result, the shares of our publicly traded
overcome the difficulties imposed by the global economic
companies in Brazil showed one of the best
scenario. We face an increasingly competitive environment,
performances in the world from the sector with
rising costs of raw materials, excess installed capacity, and
an increase in value of over 20% in 2012.
exchange rate policies practiced by countries to artificially
devalue their currencies in order to extend their gains
From the sector’s point of view, the steel industry is
with export. At Gerdau, this was no different. However,
currently living the effects of a cyclical movement of
our centennial experience and long-term strategy give us
depuration as has already happened in the past. This
the confidence and reassurance that we will once again
means that over the next few years only the most efficient
transform challenges into new business opportunities.
companies will continue in operation. In this context,
I am convinced that Gerdau, once again, will come
This certainty is based on our ability to work and the
out stronger, reinforcing its management capacity and
dedication of our more than 45,000 employees who
consequently stand out in the global steel market.
share the Company’s values. This translates into a
behavior of integrity, continuous search for excellence,
Acknowledgments
and proximity with all stakeholders: employees, customers,
I would like to thank the Board of Directors and the
shareholders, suppliers, and the community. Thus,
Gerdau Executive Committee for their dedication and
we have enhanced our ability to respond to this
management skills, as well as our employees
economic scenario and adjust our operations.
for their efforts and outstanding commitment.
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GERDAU ANNUAL REPORT 2012
MESSAGE FROM THE CEO
“We built new business opportunities and seek to enhance
our operational efficiency in a scenario marked
by significant challenges.”
André B. Gerdau Johannpeter
Gerdau Chief Executive Officer
Management efforts and construction of
opportunities
All this would not be possible without the commitment
of our employees in a positive work climate, which can be
seen by the high satisfaction rate on the Opinion Survey
For Gerdau, the year 2012 was marked by significant
that increased from 75% in 2011 to 76% in 2012. We also
challenges, mainly due to strong competition in the global
believe that Gerdau’s growth is directly related to its respect
steel market. Because of this, we sought to expand our
for the environment and with the development of the steel
operational efficiency and build new business opportunities
business chain. That is why we have invested in more than
in an economic scenario characterized by a slowdown in
900 social projects and in the most advanced technologies
China and other emerging countries, the European crisis,
to minimize the impact of our operations on nature.
and by the uncertainty over the fiscal policy in the United
States, which resulted in a lower global demand than
Outlook
initially expected. At the same time, we are experiencing
Considering the investments made in 2012 and the
an increase in the costs of raw materials and freight.
uncertainties about the global economic market, we will be
more selective in evaluating future projects. Investments of
Nevertheless, we increased our net sales by 7% to R$
R$ 8.5 billion have been planned for the period of 2013-
38 billion, even with the 3% reduction in shipments,
2017, considering both the steel and mining activities.
which totaled 18.6 million metric tons in 2012.
EBITDA in turn was R$ 4.2 billion, a 10% reduction
For 2013, we expect a gradual evolution of the U.S.
compared to the previous year. Consolidated net
economy and a recovery of Brazil’s, as well as continued
income was R$ 1.5 billion, 29% lower than in 2011.
growth in China and other countries in Latin America.
These positive perspectives combined with the internal
During the year we worked hard to build new business
actions to improve our operating efficiency should
opportunities such as increased investments in mining,
improve Gerdau’s profitability throughout the year.
which will generate significant results with exporting this
raw material to the international market. We are also
Acknowledgments
going to expand the product mix in Brazil with the start
I would like to thank our employees for their dedication
of production of flat steel products in 2013. Furthermore,
and the confidence of our customers, shareholders,
we strengthened our presence in India where we started
suppliers, and communities, as they are fundamental to the
producing special steel, a high added-value segment.
continuation of our trajectory of sustainable development.
GERDAU ANNUAL REPORT 2012
CORPORATE GOVERNANCE
A solid governance structure and
transparency with our stakeholders
are at the core of Gerdau
and two are elected by the minority shareholders. In
Gerdau follows strict ethical principles that have been
It should also be pointed out that Gerdau S.A. and
consolidated along its centennial trajectory, and it is
Metalúrgica Gerdau S.A. have audit committees that
continually striving to improve its relationship with all of
monitor and inspect the actions of the board members
its stakeholders. It has a solid governance structure
as well as give their opinions and advice on the financial
and uses modern management tools that make it
statements. The members of the Board of Directors and
possible to build business opportunities, achieve increasing
of the Audit Committee in each one of the companies
levels of excellence and competitiveness, as well as
are elected at the Ordinary General Meeting (OGM).
both companies, the term of office of each member
is one year with the possibility of re-election.
achieve the highest quality in everything it does.
Corporate management is the responsibility of the
Gerdau currently has three publicly traded companies:
Board of Directors, whose Executive Committee
Gerdau S.A., Metalúrgica Gerdau S.A., and Empresa
(CEG) coordinates and supervises the Company’s
Siderúrgica Del Perú S.A.A. (Siderperu). The Gerdau S.A.
Business Operations and the Functional Processes,
shares are traded on BM&FBOVESPA (São Paulo),
working in accordance with the policies established by
on the New York Stock Exchange (NYSE), and on
the Board of Directors. Composed of a CEO and five
the Madrid Stock Exchange (Latibex). Because it has
Executive Vice-Presidents, the CEG has the support of
shares traded on the U.S. market, Gerdau S.A. follows
committees set up according to criteria of expertise.
the requirements of the Sarbanes-Oxley (SOX) act,
which sets stringent corporate governance practices
Risk management
and internal controls. The shares of Metalúrgica
A structured and continuously updated management
Gerdau S.A. are traded on BM&FBOVESPA (São Paulo)
system monitors all the variables that may pose
and those of Siderperu on the Lima Stock Exchange.
risks to Gerdau’s business and operations. In 2012,
the Company consolidated its best practices in this
Corporate governance structure
area and formalized its Risk Management Policy,
The Board of Directors of Gerdau S.A. is responsible for
which was approved by the Board of Directors.
defining the Company’s long-term strategies and to monitor
Furthermore, the Risk Committee, which is responsible
the execution of the policies it establishes. In addition, this
for managing and monitoring possible risks that
body makes decisions about issues considered relevant
may generate impacts directly or indirectly on the
within the business and operations, as well as appointing
Company, began reporting directly to the Board of
the Gerdau Executive Committee (CEG) members. The
Directors and no longer as a committee of the CEG.
Board of Directors has nine members, including external
directors, who meet between eight to ten times a year. It is
Independent Audit
assisted by the following committees: Strategy Committee,
Gerdau’s publicly traded companies regularly submit
Corporate Governance Committee, Compensation
their financial statements for external audit. In the
and Succession Committee, and Risk Committee.
case of needing to contract eventual services not
related to external auditing by the independent
The Board of Directors of Metalúrgica Gerdau S.A.,
auditor, the Company bases this on the principles
on the other hand, has 11 members, nine of which are
that preserve the auditor’s independence.
also a part of the Board of Directors of Gerdau S.A.
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GERDAU ANNUAL REPORT 2012
CORPORATE GOVERNANCE
Corporate Governance Structure
Shareholders’
Meeting
Board of
Auditors
Corporate Governance, Strategy,
Compensation & Succession,
and Risk Committees
Board of
Directors
Gerdau Officers
and Executive
Committee
Support
Committees
Macroprocesses
Business
Divisions
Brazil
Special
Steel
North
America
Read more about the Gerdau governance structure at
http://www.gerdau.com.br/sobre-gerdau/governanca-corporativa.aspx?language=en-US
Latin
America
GERDAU ANNUAL REPORT 2012
CORPORATE GOVERNANCE
Gerdau S.A. Board of Directors
Jorge Gerdau Johannpeter
Chairman
Germano H. Gerdau Johannpeter
Vice-Chairman
Klaus Gerdau Johannpeter
Vice-Chairman
Frederico C. Gerdau Johannpeter
Vice-Chairman
André B. Gerdau Johannpeter
Board Member
Claudio Gerdau Johannpeter
Board Member
Affonso Celso Pastore
Board Member
Alfredo Huallem
Board Member
Oscar de Paula Bernardes Neto
Board Member
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GERDAU ANNUAL REPORT 2012
CORPORATE GOVERNANCE
Gerdau Executive Committee (CEG)
1. André B. Gerdau Johannpeter
Chief Executive Officer (CEO) and Chairman of the Gerdau Executive Committee (CEG)
2. André Pires de Oliveira Dias
Executive Vice President of Finance, Auditing, and Investor Relations
3. Expedito Luz
Executive Vice President of Legal Affairs and Compliance
4. Francisco Deppermann Fortes
Executive Vice President of Human Resources, Management, and Organizational Development
5. Manoel Vitor de Mendonça Filho
Executive Vice President of Brazil Business Division
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6. Ricardo Giuzeppe Mascheroni
Executive Vice President of North America and Latin America Business Divisions
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3
1
2
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GERDAU ANNUAL REPORT 2012
STRATEGY AND COMPETITIVE ADVANTAGE
Searching for new business opportunities
ensures sustainable development
contributes to spreading Gerdau’s corporate culture,
Gerdau builds business opportunities in order to
Gerdau Template
generate outstanding returns and sustainable
Since 2010, Gerdau has invested heavily in implementing
further expanding the integration between operations.
development from its operations. Within this scenario,
a single and global information technology platform
it currently has three highlights in its investment plan:
in all of its units around the world. The project, which has
expansion of the mining activity, production of flat steel
a permanent team of more than 250 employees, provides
in Brazil, and manufacturing of special steel in India.
greater efficiency, security, and speed to customer service
and in sharing information between units, which also
In the mining area, the Company has been working over
contributes to the Company’s greater integration. The units
the past few years to gradually become an international
located in Colombia, Mexico, and Peru were the pioneers
supplier of iron ore, which began at the end of 2012. In
in using the new system, and have already shown positive
addition, in the segment of steel, it is working to consolidate
results. In 2012, the system was deployed in operations in
itself as a player in all segments of the market and,
Argentina, Canada, Chile, the United States, and Uruguay.
therefore, it is investing to begin production of flat steel
Now in 2013, the initiative will be expanded to other units
in Brazil with the startup of operation of a rolling mill for
in the United States and the project will start up in Brazil.
hot rolled coils in 2013, and eventually for heavy plates.
In India, industrial production started in 2012 in order to
EBITDA Deployment
meet needs of the special steel market in the region.
In order to increase its profitability, Gerdau began the
EBITDA Deployment project in 2012, which included the
Unique Features of Gerdau Management
alignment of targets and identifying gaps that impact the
Gerdau Business System (GBS)
generation of the Company’s operating cash flow. The
Taking actions as a fully integrated organization is the basis
project, which has a global scope, involves building a
of Gerdau’s strategy. To do so, it uses the Gerdau Business
breakdown plan of the EBITDA targets in which benchmarks
System (GBS), a management system that standardizes,
are established. To do this, the teams use management
enhances, and transfers the best practices to all of
techniques to continually monitor results, correct deviations,
the Company’s units around the world. The GBS also
as well as make any adjustments in the action plans.
GERDAU STRATEGY
Profitability
and Growth with Sustainability
Relevance in
the markets
Business
competitiveness
Player in
all segments
Integrated Organization
Geographic
diversification
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GERDAU ANNUAL REPORT 2012 | PERFORMANCE OF OPERATIONS
BUSINESS
12
Gerdau expands investments in mining to become an international supplier of iron ore
PERFORMANCE OF OPERATIONS
Brazilian market stands out in Gerdau’s
performance
Shipments per Business Division
18.6 million metric tons
Strong global competition in the steel market due to
the slowdown in China and other emerging countries,
the European crisis and uncertainty over the fiscal
policy in the United States influenced the reduction of
Latin America
14%
Except Brazil
3% in the volume of Gerdau’s consolidated shipments
Brazil
38%
Except special
steel mills
in 2012, which was 18.6 million metric tons.
Throughout the year, the effects of the global economic
scenario were felt at different levels, depending on
the business segment and geographic region of the
operations. The positive highlight for the year was the
Company’s performance in the Brazilian domestic market
(excluding special steel mills), despite the lower economic
activity recorded in the country, with an expansion in its
Special Steel
14%
Includes special
steel operations
in Brazil, Europe,
and the United States
North America
34%
Includes long steel
operations in the United
States and Canada
net sales (12%) and the volume of shipments (+5%).
Gerdau’s consolidated steel production in 2012, in turn,
was 18.9 million metric tons, 4% less compared to 2011.
Note: The above information does not include the shipments
volumes from affiliated companies and jointly-owned
subsidiaries, neither of coal and coke.
PERFORMANCE OF OPERATIONS | GERDAU ANNUAL REPORT 2012
OUTLOOK: WORLD
In a scenario of significant cost pressures, especially
of raw materials, and the deindustrialization of the
• The global steel market should show signs of
country, the main challenge for Gerdau was to improve
recovery in 2013. According to the World Steel
operational efficiency and the competitiveness
Association, steel consumption is expected to
of its units. To do this, the Company continued its
grow 3.2%, reaching 1.46 billion metric tons.
investments in the technological modernization of
its units, expanded its mining operations as a way
• Gerdau is prepared to meet the growing demand
to increase its profitability, and continued investing
for steel in the world. For the period of 2013-2017,
to begin the production of flat steel in Brazil.
R$ 8.5 billion are scheduled in investments in its
industrial units, considering both the steel and
As for the mining area, the Company plans to
mining activities.
achieve an installed capacity of 11.5 million metric
tons in 2013. Moreover, Gerdau has already made
its first shipments of iron ore to the international
market, totaling 325,000 metric tons.
Brazil
(except special steel mills)
At the end of 2012, Gerdau announced additional
Gerdau operates in Brazil with 15 mills producing steel
investments to expand its production capacity of iron ore
and rolled products, 3 downstream operations, 39
to 18 million metric tons by 2016, and implement a rail
fabricated reinforcing steel facilities, 5 flat steel service
terminal in Miguel Burnier (MG) for shipping the product
centers, 9 scrap collection and processing units, and
easily. With these investments, the Company will have
4 iron ore extraction areas. It also has 88 distribution
a broad portfolio of iron ore products – concentrates,
branches of Comercial Gerdau, which ensures an
sinter feed, and granulated materials – with a quality to
agile and efficient distribution of flat and long steel,
meet the requirements of the most demanding markets.
as well as greater proximity to customers.
Gerdau’s volume of mineral resources today reaches
Gerdau will start the production of flat steel in Brazil in 2013
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GERDAU ANNUAL REPORT 2012 | PERFORMANCE OF OPERATIONS
6.3 billion metric tons of iron ore located in the state of
OUTLOOK: BRAZIL
Minas Gerais and have an iron content above 40%.
• According to the Brazil Steel Institute, steel
In the flat steel segment, Gerdau began the testing
consumption in the country should reach 26.4 million
phase of the rolling mill for hot rolled coils at the Ouro
metric tons in 2013, which is a growth of 4.3% over
Branco mill (MG) in December 2012. The equipment,
2012, and is in accordance with the prospects for
whose annual installed capacity is 800,000 metric tons,
growth of the Brazilian economy.
will start up operation in 2013. In a second stage of the
project, Gerdau will install a heavy plates rolling mill
• The construction projects for the World Cup in
with an annual capacity of 1.1 million metric tons.
2014 and for the 2016 Olympic Games are in
full swing and should follow a faster pace during
Regarding the long steel segment, the Company will build
2013. Gerdau will continue providing steel for the
a new melt shop at its Riograndense mill in Sapucaia
construction and renovation of stadiums, as well as
do Sul (RS), increasing its annual installed capacity
building projects of urban mobility and infrastructure
from 450,000 to 650,000 metric tons in 2015. Moreover,
such as airports, railways, ports, and roads, which
still in progress is the installation of a new rolling mill
will run at a slower pace than expected. Within this
for wire rod and rolled rebar in Cosigua (RJ), which
scenario of expanding demand for steel, Gerdau is
will begin operation in 2014, initially with an annual
fully prepared to meet the market’s needs.
installed capacity of 600,000 metric tons that will be
expanded to 1.1 million metric tons in a second stage.
Among the investments initiated during the year is the
North America
implementation of a new continuous casting in St. Paul
(Includes long steel mills in the United States
mill (Minnesota), replacing the existing one, with an annual
and Canada)
production capacity of 550,000 metric tons. The equipment
Throughout 2012, Gerdau sought to improve its operational
is designed for the production of special bar quality
efficiency while simultaneously taking advantage of market
(SBQ) and will begin operations in 2015. Furthermore,
opportunities considering the economic context generated
the Company initiated the operation of a new reheating
by the uncertainty over the fisical policy in the U.S.
furnace at its Calvert City mill (Kentucky) in January 2013.
Gerdau’s steel mill in Cambridge (Canada)
PERFORMANCE OF OPERATIONS | GERDAU ANNUAL REPORT 2012
Gerdau’s CEO announces resumption of the project to build a new plant in Mexico
To reduce costs, Gerdau acquired Cycle Systems
Latin America (except Brazil)
Inc. in early 2013, a company with facilities located
In 2012, Gerdau’s units in Latin America faced heavy
in Virginia for recycling and processing scrap steel,
pressure from raw material costs and significant growth in
which is a key raw material for producing steel. It
imports. Faced with this scenario, the Company worked
also continued with the implementation of a single
to adjust its operations with agility and flexibility.
information technology system, which will further
ensure its customer service quality (see the section
Besides seeking to increase operational efficiency
“Strategies and Competitive Advantages,” p. 11).
and competitiveness in the markets where it operates,
Gerdau invested to expand its product line in the region.
OUTLOOK: NORTH AMERICA
The main highlight was the resumption of the project
to build a new plant in Mexico through its joint venture
• For 2013, we expect a gradual recovery of the
Gerdau Corsa. Focused on the production of structural
economies of the countries in North America.
shapes, the plant will have an annual installed capacity
of 1 million metric tons of steel and 700,000 metric
• In the United States, the increase in the production of
tons of rolled products. This investment will enable the
shale gas should generate new market opportunities
replacement of imports of this product in the country
for Gerdau due to the infrastructure necessary for the
and is expected to start up in the beginning of 2014.
exploration of this input, as well as allow the reduction
of operating costs with a cheaper access to an
In Guatemala, Gerdau inaugurated a new factory
alternative energy source.
of welded wire mesh focused on selling to the
construction industry. Furthermore, it continued with
• Regarding steel consumption in the region, the World
the installation of a new rolling mill for rebars and light
Steel Association forecasts growth of 3.6% in 2013 in
commercial profiles with an annual capacity of 200,000
the United States, reaching 100 million metric tons. In
metric tons that will go into operation in 2013.
Canada, in turn, the consumption of steel should have
a rise of 2.9%, reaching 15 million metric tons.
In Venezuela, the Company is investing in the
technological upgrade of its mill with the objective
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GERDAU ANNUAL REPORT 2012 | PERFORMANCE OF OPERATIONS
of improving its operational safety and expanding the
production capacity of steel and rolled products in
order to meet the growing demand in the country.
In order to get even closer to the civil construction market
in Chile, Gerdau is building a new fabricated reinforcing
steel facility that will begin operations in 2013.
OUTLOOK: LATIN AMERICA
• According to estimates from the World Steel
Association, steel consumption should evolve 6.4%
in Latin America (excluding Brazil), reaching 43.5
million metric tons.
• The markets in this region have great growth
potential for 2013 as compared to 2012. Because
Gerdau’s special steels are used in automotive parts
that require high safety, quality, and reliability
of this, Gerdau will continue investing to meet the
future expansion of the market and the specific
demand for special steel in the country. In 2013, the new
needs of its customers.
rolling mill for round bars will start up operations at the
Pindamonhangaba (SP) mill with an annual capacity
of 500,000 metric tons. In addition, the capacity of the
Special Steel
Mogi das Cruzes (SP) rolling mill will grow in 2013 from
(includes special steel operations in Brazil,
216,000 metric tons to 276,000 metric tons per year.
Europe, the U.S., and India)
With steel mills producing special steel in Brazil, the
As for the North America market (Canada, U.S., and
U.S., Spain, and India, Gerdau is a leading global
Mexico), the production of light, medium, and heavy vehicles
supplier to the automotive industry, besides selling
grew significantly during the year with an 18% evolution in
to the segments of oil & gas, wind energy, agricultural
the automotive segment and 8% in the segment of medium
machinery & equipment, mining, among others.
and heavy vehicles. In total, 15.8 million vehicles (light,
medium, and heavy) were produced and, additionally, there
In the Brazilian market, the production of medium and
was a higher local production of automotive components.
heavy vehicles (trucks and buses) showed a significant
To meet the development of the current and future
reduction over the year, of 38%, caused by the effect
demand, Gerdau started the operation of a new
of anticipated manufacturing of heavy vehicles at the
continuous casting in Monroe mill (Michigan) as well as
end of 2011 due to new Euro 5 regulations for diesel
continuing with its modernization and expansion of the
engines, which became effective in January 2012. In
installed capacity of this mill unit, which will increase
the segment of cars and light commercial vehicles, the
from 500,000 to 800,000 metric tons per year by 2014.
reduction of the excise tax (IPI) caused production to
move forward 1% to 3.2 million units according to the
In Europe, meanwhile, the economic crisis experienced
National Association of Vehicle Manufacturers (Anfavea).
in the region led to a decrease in the production of light,
medium, and heavy vehicles in 2012. For example,
Nevertheless, Gerdau continued its investments to expand
the production of light vehicle of 12.5 million units fell
the capacity of its plants, focused on expand of future
by 8%. The production of medium and heavy vehicles
PERFORMANCE OF OPERATIONS | GERDAU ANNUAL REPORT 2012
was of 378,000 units, a drop of 11% compared with the
OUTLOOK: SPECIAL STEEL
previous year. However, the Company continued investing
in the technological upgrading of its operations located
• For 2013, the markets of Brazil, the U.S., and India
in Spain, such as the modernization of the continuous
should show growth while Europe should start its
casting at the Basauri mill, in order to enhance the
process of recovering demand in 2014.
quality of its products and increase its productivity.
• In Brazil, Anfavea’s projections indicate that the
Gerdau has started the operation of a blast furnace in
production of cars will grow 4.5% and trucks 7%.
India, a large potential market, with an annual installed
capacity of 350,000 metric tons, the power generation
• In the United States, the stronger demand in the
plant that will use blast furnace gas, sintering, the melt
region is expected to drive growth in the production
shop, and the new special steel rolling mill with an annual
of light vehicles and medium and heavy commercial
installed capacity of 300,000 metric tons. Two new
vehicles by 4%, according to market forecasts.
inspection lines of bars will start operating in 2013, and
already in the plans for 2014 is the implementation of a
• In India, it is estimated that the production of light
coking plant with an annual capacity of 200,000 metric
and heavy vehicles will present a growth compared
tons and integrated into it is a power generation plant.
to the previous year.
Gerdau starts up the production of special steel in India to supply the region’s market
17
18
GERDAU ANNUAL REPORT 2012 | FINANCES
FINANCES
Net Sales Grows 7% in 2012
Net sales
Source of net sales
R$ 38 billion
North America
Gerdau closed the year 2012 with a
32%
consolidated net sales of R$ 38 billion, which
Brazil
Includes long steel
operations in the
United States and Canada
is a growth of 7% compared to last year.
36%
Except special
steel mills
Cost of sales and operating expenses
In 2012, the cost of sales in consolidated terms was
R$ 33.2 billion, 10% above that recorded in 2011.
This increase reflects the rising costs of key raw
materials for the steel production process and lower
dilution of fixed costs due to lower volumes sold.
Selling, general, and administrative expenses
grew 3% to R$ 2.5 billion. However, its part in
relation to net revenues proved to be stable in
2012 compared with the previous year.
Latin America
13%
Special Steel
19%
Except Brazil
Includes special
steel operations in
Brazil, Europe, and
the United States
Note: The information above does not include data from
affiliated companies and jointly owned subsidiaries.
Consolidated statement of income - summarized*
Gerdau S.A. and subsidiaries (R$ millions)
Net sales
Cost of sales
Gross profit
Operating expenses
Income before financial income and taxes
Financial income
Income before taxes
Income tax and social contribution
Net income for period
2012
2011
37,982
35,407
-33,234
-30,298
4,748
5,109
-2,400
-2,230
2,348
2,879
-789
-528
1,559
2,351
-63
-253
1,496
2,098
* Years ended on December 31, 2012 and 2011.
Composition of consolidated EBITDA* (R$ million)
2012
2011
Net income
1,496
2,098
789
528
63
253
Depreciation and amortization
1,828
1,772
EBITDA
4,176
4,651
11%
13%
Net financial income
Provision for income tax and social contribution
EBITDA Margin
* Includes the results of associated companies and jointly-controlled entities according to the equity method.
FINANCES | GERDAU ANNUAL REPORT 2012
EBITDA
EBITDA (earnings before interest, taxes, depreciation
and amortization) was R$ 4.2 billion, which is a 10%
reduction compared to the previous year influenced
mainly by rising costs of key raw materials and lower
equity in earnings of subsidiaries and associated
companies. As a result, the EBITDA margin was also
impacted, going from 13% last year to 11% in 2012.
Indebtedness
(R$ million)
Current
12/31/2012
12/31/2011
2,583
1,757
Non-current
12,086
11,927
Gross debt
14,669
13,684
2,497
4,578
12,172
9,106
Cash, cash equivalents,
and financial investments
Net debt
Financial expenses and incomes
Financial liabilities
The higher net financial expenses, which reached
On 31 December 2012, Gerdau’s net debt (gross debt
R$ 789 million against R$ 528 million in 2011, were
minus cash on hand and financial investments) was
primarily due to a lower net income and foreign
R$ 12.2 billion against the R$ 9.1 billion recorded at
exchange losses on the hedge of net investment.
the end of 2011. This increase in net debt is a reflection
primarily of the exchange rate effect on debts in foreign
Net profit
currencies, the increased need for working capital
For the year, consolidated net profit went from R$ 2.1
throughout 2012, and investments made during the year.
billion in 2011 to R$ 1.5 billion in 2012, which was
mainly due to lower operating and financial results.
Gross debt at the end of the year was R$ 14.7 billion, of
which 82% was long-term and 18% short-term. Of the
Added value breakdown
total gross debt, 47% was in foreign currency contracted
The added value of Gerdau companies in consolidated
by the subsidiaries in Brazil, 33% in different currencies
terms reached R$ 10 billion in 2012, which is a 2% increase
contracted by subsidiaries abroad, and 20% in reais.
on the previous year. This good performance is a result
of revenues from products and services net of discounts,
On December 31, 2012, Gerdau’s available cash,
which reached R$ 39.6 billion, net of costs of R$ 29.6
cash equivalents, and investments were R$ 2.5
billion related to raw materials and consumer goods,
billion, of which 35% was held by the Gerdau
outsourced services, depreciation and amortization, equity
companies abroad, mainly in U.S. dollars.
in earnings, and financial income, among other items.
The ratio between net debt and EBITDA reached 2.9
times in December 2012 against 2.0 times in December
Added Value Breakdown
2011. The ratio between gross debt and EBITDA, in turn,
R$ 10 billion
Taxes
and social
contributions
25%
reached 3.5 times versus 2.9 times in the previous year.
Reinvestments
of profits
11%
(R$ 1.1 bi)
(R$ 2.5 bi)
Salaries, benefits,
profit sharing,
and training
49%
Interest
on financing
(R$ 4.9 bi)
11%
(R$ 1.1 bi)
Dividends and interest
on shareholder’s equity
4%
(R$ 0.4 bi)
19
GERDAU ANNUAL REPORT 2012 | EMPLOYEES
RELATIONSHIPS
20
The safety of people in the work environment is a top priority in all of Gerdau’s operations
EMPLOYEES
Gerdau’s corporate culture is the base
for the efficiency needed to face the
global challenges
leaders who act as clear agents of Gerdau’s corporate
culture, spreading the Company’s values to their teams
through personal examples, along with enhancing the
employees’ autonomy and showing respect to people.
Gerdau’s corporate culture, made up of values,
history, and attitudes, is shared by its more than
During the year, for example, meetings were held between
45,000 employees. And this is what forms the basis of
members of the Board of Directors and the Gerdau
the existence of this centennial Company. Knowledge
Executive Committee with over 1,000 employees in
of the business, focus on results, continuous search
Chile, the United States, and Peru. The perspective
for customer preference, quality, commitment, integrity,
is that all the leaders in Gerdau participate in
safety, social responsibility, and recognition are
these meetings over a period of two years.
concepts that permeate daily operations and contribute
toward Gerdau building new business opportunities
and consolidating itself in the global steel market.
Strengthening this culture, which was one of the main
highlights in the area of human resources in 2012,
has contributed toward the Company responding to
the challenges posed by the current global economic
scenario in an increasingly integrated and agile way.
This is achieved through communicating the Company’s
values, by setting up and aligning processes and
practices in all business operations, implementing
processes and tools for managing people, and developing
The book “Our Culture Unites Us
- Lessons from Our History” with
stories about the experiences
of employees in their daily work
routines, was distributed to all of
Gerdau’s operations worldwide
EMPLOYEES | GERDAU ANNUAL REPORT 2012
Health and safety
People’s safety is a fundamental value for Gerdau. That
is why the Company has a strict set of practices that are
part of its Safety Management System, which involves
investment in new technologies, equipment, and global
management systems. In 2012, this area received
R$ 92.7 million, 31% more than the previous year.
With the objective of improving safety in the work
environment, the Company has developed a manual in line
with the best global practices with guidelines on behavioral
management. In parallel, it initiated specific training on the
topic for the leaders of the operations in Argentina, Brazil,
and Spain. In 2013, the training will be extended to the other
operations in Latin America and in 2014 to North America.
Gerdau receives for the third time the Safety and Health
Excellence Recognition awarded by the World Steel Association
These initiatives contributed so that the accident frequency
rate per million hours worked (international index that
measures the occurrence of accidents in the workplace)
which is awarded by the World Steel Association.
decreased from 2.31 in 2010 to 1.06 in 2012. This level
The Company was awarded for the project “Safety
is below the world average for the sector, whose latest
Multipliers”, which recorded positive results since
figure released by the World Steel Association is 1.9.
its implementation in 2004. The project consists of
train operators who encourage and offer support to
Furthermore, Gerdau received the Safety and
their colleagues to put into practice solutions that
Health Excellence Recognition for the third time,
make the work environment 100% accident free.
Investments in occupational
health & safety (R$ million)
Accident frequency rate*
2.5
2.31
1.59
2.0
1.06
1.5
92.7
100
1.0
60
0.5
0
71.0
80
49.1
40
2010
2011
2012
20
*Lost-time accident frequency rates per million hours
worked, including employees and service providers. The
data also includes restricted work and change of function
(OSHA recordable treated as LT accidents).
0
2010
2011
2012
21
22
GERDAU ANNUAL REPORT 2012 | EMPLOYEES
Internal climate
alignment and synergy of this function in all of its
The favorability index of the Opinion Survey, which
operations. The training also aims to meet the standards
evaluates the Company’s internal climate, once again
of the Gerdau Business System (GBS) and currently there
reflected a high level of engagement of its employees.
are a total of 12 professionals participating.
The indicator rose from 75% in 2011 to 76% in 2012, with
a highlight being the growth in operations of long steel
Training and development
2012
2011
and special steels in North America. The performance
Investments (R$ million)
37.2
32.1
was five percentage points above the world market
Number of training hours per employee
52.4
53.4
average, which includes global companies with excellent
financial performance and/or that are part of the ranking
Knowledge Management
of the most admired companies in Fortune magazine.
Knowledge Management is an initiative on Gerdau’s
part to have a set of strategies to maximize the use of
Moreover, Gerdau was elected as the best company
existing knowledge in the Company, generating positive
to work for in the steel and metallurgy industry in Brazil
impacts such as increased efficiency and operational
by Guia Exame/Você S.A., a leading benchmark in the
productivity, while at the same time reducing costs. One
country in this area. The Company is among the 150
of the main strategies adopted is the Communities of
organizations best positioned in this ranking since 2007.
Practice, which facilitate interaction between employees in
different countries through a virtual network for sharing of
Training
best practices. This way, for example, it is possible for an
Gerdau seeks to invest heavily in training its team of
employee from one country to have an issue cleared up by
employees, which already includes about 600 people
a colleague from across the world with speed and clarity.
with master’s and doctorate degrees. The main
objective is working with high performers who are
In the fifth year since it began, the Communities of
aligned with the strategic business objectives, besides
Practice have already gathered together more than
forming global leaders. In 2012, the investments
5,000 employees in 36 communities, exceeding
in this area reached R$ 37.2 million. The activities
58,000 posts. Posts can take on the form of
involved 2.2 million hours, which represents an
questions, answers, documents, and news, and they
average of 52 hours of training per employee.
take place between 95 plants in 14 countries. The
operation in India began its participation in 2012.
The Gerdau Business Program (GBP) is one of the
highlights in this area. Lasting two years, this initiative was
Autonomy and Creativity
developed in partnership with the Institute of Education
Gerdau encourages delegation, autonomy, and creativity
and Research (Insper) in São Paulo and consists of a
in its teams. One example of this is the program
specific MBA degree conducted in accordance with the
Management Focused on the Operator (MFO) where
needs of Gerdau. The executives selected for this program
employees, besides performing their usual activities,
are of high potential and participate in modules in leading
help control processes such as quality, safety, cost,
universities worldwide such as Insead in France and
maintenance, and the environment. This shared
Darden in the United States. The third edition of the GBP
management encourages professionals to overcome their
is in progress with the participation of 32 executives from
challenges, expand the productivity of processes and
Brazil, Chile, Mexico, Peru, and the Dominican Republic.
quality of final products. The program has been deployed
in plants in Argentina, Brazil, Chile, Colombia, the United
In 2012, the Company launched a program structured
States, Mexico, the Dominican Republic, and Uruguay. In
for training controllers with the aim of increasing the
2013, it will be expanded to eight more industrial plants.
EMPLOYEES | GERDAU ANNUAL REPORT 2012
The active participation of employees is also present
executives are prepared to take strategic positions in the
in two other programs: Quality Improvement Story
Company. In 2012, there were 211 of these committees
(QIS) and Ideas. In the QIS, teams of three to seven
set up in various countries where Gerdau operates.
people offer creative solutions to problems in their daily
operations. In 2012, 6,800 employees in 11 countries
Gerdau Future Trainees
participated with 437 projects, which generated earnings
The Gerdau Future Trainee Program is the main
worth US$ 145.3 million. The Ideas program, on the
entrance of young professionals into the Company.
other hand, encourages the search for innovative
For a two-year period, the trainees work on projects and
solutions both individually or in groups. During the year,
activities that challenge their professional skills while also
the project involved 13,800 people from eight countries
bringing good results to the business. Furthermore, the
who registered over 97,000 new ideas. Of this total, the
trainees receive training and evaluations that help their
Company implemented 73,000 suggestions throughout
learning and development process. Currently, Gerdau
the year that yielded earnings of US$ 20.2 million.
has 382 trainees in this program in ten countries.
Compensation and benefits
Gerdau maintains a compensation policy of fixed and
variable amounts based on the achievement of individual,
team, and operation’s targets. In addition to this, the
Company offers a benefit plan for employees and their
families. The benefits vary according to the needs of
each region where Gerdau operates.
A new health insurance model was launched in Brazil
in 2012. In line with the best market practices, the plan
The teams that reach the most significant results are
recognized at the QIS global meetings
gives the option for more coverage and flexibility for
employees with more competitive costs for Gerdau.
Furthermore, close to 100% of the employees in Brazil
Management of high potentials
participate in the complementary pension plan with a
To be able to count on outstanding professionals who
defined contribution, and the Company adds 150%
are prepared to take on positions of high responsibility
of that amount as a contribution to the employee.
is another of Gerdau’s concerns. In this sense, external
consultants contribute to enhance the training of the
Benefits (R$ million)
2012
2011
Company’s employees through the External Executive
Meals
94.7
71.7
Coaching Program, an initiative launched in 2012.
Transportation
75.4
68.6
Parallel to this, 14 of Gerdau’s leaders with higher level of
Health Insurance
401.4
299.0
knowledge and experience, among them members of the
Private Pension Plan
170.7
137.3
Board of Directors and the Gerdau Executive Committee,
supported during the exercise the development of
19 executives through the Mentoring Program.
Labor union agreements
Gerdau guides its relationship with the unions by
Succession
seeking mutual gains, taking into account the labor
Discussions about careers and succession at Gerdau
demands and the Company’s sustainability. During the
are held in the People Development Committees
year, 15 agreements were made in Brazil, Canada,
made up of leaders from different areas. This way, new
Chile, the United States, Mexico, and Venezuela.
23
24
GERDAU ANNUAL REPORT 2012 | CUSTOMERS
CUSTOMERS
Fabricated reinforcing steel facilities adopt new practices and processes to improve customer service
Innovative solutions contribute to increasing
the competitiveness of customers
Gerdau steel also contributes for building projects
to receive environmental certifications for their
work because it is 100% recyclable. The Leadership in
Gerdau seeks to establish a relationship of mutual
Energy and Environmental Design (LEED) certification,
gains with its more than 130,000 customers,
for example, has already been granted to several
contributing to the development of the consumer chain
projects that use the Company’s products. Among
of steel. It also strives for excellence in all aspects of
the projects certified are the Duke Energy Center
its business, all the way from the quality of its products
in the United States, the Oscar Niemeyer Tower in
and services to delivery and technical assistance. To
Brazil, and the Transoceanic Building in Chile.
do this, it has a team of highly specialized employees
and takes surveys to monitor customer satisfaction
Gerdau’s Research and Development Centers
and improve its services to each market segment, as
for the special steel sector located in Brazil and
well as carrying out specific relationship programs.
Spain are another highlight of its services for the
industry. Currently the Company is participating in
Toward this end, Gerdau held a survey in 2012 with
more than 70 projects for the automotive, energy,
more than 500 civil construction technicians in Brazil to
and naval sectors. These initiatives are aimed at
understand fabricated reinforcing steel market needs.
continually improving the mechanical properties of
As a result it adopted new technologies and internal
steel, resulting in better performance in use and gains
processes, set up monitoring systems to increase the
in efficiency along the chains supplied by Gerdau.
predictability of deliveries, and also trained sales teams
Two of these projects are focused on developing
for giving technical support to contractors. These new
nano-alloyed steels for the automotive industry.
practices will be applied in Gerdau’s more than 100
fabricated reinforcing steel facilities around the world. The
Regarding the flat steel segment, Gerdau is
cutting and bending system makes it possible to deliver
conducting an intense market mapping in order to
the steel in quantities, shapes, and sizes according to the
understand customer needs before the startup of
demands of each project and can increase productivity by
operations of a hot rolled coil mill in Brazil (read
up to 70% in the structure assembly stage at the jobsite.
more on this topic in chapter “Business”, p. 14).
SUPPLIERS | GERDAU ANNUAL REPORT 2012
SUPPLIERS
Supporting the sustainable development
of suppliers strengthens the steel
business chain
monitoring the execution of action plans. In total, more than
500 training hours are devoted to addressing issues
related to management improvement, quality &
productivity, encouraging entrepreneurship, citizenship,
Gerdau establishes long-term relationships with its
and sustainability over a period of 24 months.
suppliers based on a direct, transparent and in search
for mutual gains relationship. It gives preference to
The program has had a direct impact on Gerdau’s
contracting suppliers that share its policy of respect for
competitiveness as it prepares the way to receive products
people and the environment because it believes that the
and services of better quality, punctual delivery, and building
sustainability of its business also passes through the
long-term relationships, as well as sharing its ethical values
steel chain. Because of this, it requires strict compliance
along its business chain. Moreover, by strengthening these
with the laws in each country where it operates and
micro, small, and medium enterprises, this stimulates
carries out periodic audits to make sure that the supply
market growth and generates jobs and wealth based on
chain is complying with its levels of excellence.
projects with a strong social content. In 2012, the program
involved 404 micro, small, and medium enterprises in
With operations in the Americas, Europe, and Asia, Gerdau
Argentina, Brazil, Colombia, Mexico and Peru. As a result,
currently has a network of more than 30,000 suppliers,
the business volume between Gerdau and the participating
60% of which are micro, small and medium enterprises
companies grew 24% compared to 2011. For 2013, the
that strengthen the local economies where it operates.
program will be expanded to suppliers in Chile, India,
For this reason, the Company has supported its Supplier
the the Dominican Republic, Uruguay, and Venezuela.
Development Program since 2007 in order to improve the
management performance of these organizations. This
Regarding the supply of scrap steel, a key raw material
initiative, developed with partner organizations, ranges
in steel production, Gerdau has its own collection and
from giving courses and on-site consulting to designing and
processing units of scrap, especially in Brazil and North
America. In order to expand the supply of this raw material
and develop micro and small suppliers, programs to
develop technical and managerial skills were promoted
in 2012 for about 90 companies and scrap cooperatives
in Brazil, Chile, Colombia, Peru, Uruguay, and Venezuela
that increased their sales to Gerdau by 125%.
At the same time, Gerdau is increasingly seeking to expand
the synergy among its operations around the world through
a global procurement structure that makes it possible to
reach economies of scale, productivity, and cost reduction
in the purchase of equipment and inputs. Additionally,
the new structure generates for the large suppliers the
Participants of the Supplier Development Program receive
certificates in Peru
opportunity to expand their business in different countries
and regions, as well as to streamline their logistics delivery.
25
26
GERDAU ANNUAL REPORT 2012 | SHAREHOLDERS
SHAREHOLDERS
Transparency and agility characterize
Gerdau’s relationship with its shareholders
three months on capital of at least 30% of adjusted
net income for the year calculated in accordance with
Brazilian accounting practices. It is worth noting that
Conservative financial management, flexibility, geographic
this percentage is higher than the level of 25% set by
diversification of operations, and ability to take advantage
corporate law in Brazil. The compensation policy for the
of opportunities were Gerdau’s characteristics recognized
company Siderúrgica del Perú S.A.A. on the other hand,
by the capital market. As a result, the shares of Gerdau S.A.
is to pay dividends of up to 33% of its adjusted net profit.
appreciated by 26% and those of Metalúrgica Gerdau S.A.
by 30%, respectively, over 2012, which is one of best
In 2012, the shareholders of Metalúrgica Gerdau S.A.
performance among companies in the global
received R$ 130 million in dividends and interest on capital,
steel industry.
which is equivalent to R$ 0.32 per share and Gerdau S.A.
R$ 408 million, equivalent to R$ 0.24 per share.
Relationship actions with shareholders
With over 65 years of experience in capital markets,
Recognition from capital market
Gerdau is always working hard to improve its relationship
In recognition of Gerdau’s management capacity, the three
with its more than 130,000 shareholders. In 2012, it
major rating agencies in the capital market maintained
held over 500 meetings with shareholders, investors,
the Company’s investment grade in 2012. Standard &
and investment analysts, the main ones being 13
Poor’s and Fitch Ratings kept their rating level at BBB-,
non-deal road shows in Brazil, in the United States,
while Moody’s maintained an investment grade of Baa3.
and in countries in Europe and Asia, and participated
in two meetings of the Association of Capital Market
For the seventh consecutive year, Gerdau S.A. and
Analysts and Professionals (APIMEC) in Brazil.
Metalúrgica Gerdau S.A. have been a part of the Corporate
Sustainability Index (ISE) portfolio of BM&FBOVESPA. This
Gerdau also launched a new website (www.gerdau.com/ri)
index is made up of shares of companies that stand out
in order to improve its services to the capital markets such
for their more sustainable practices in the long term and
as increasing the speed of browsing and access to
have a high degree of commitment on issues of corporate
information. This new communication channel also provides
governance, social responsibility, and the environment.
content specific for individual shareholders and institutional
investors in Portuguese, English, and Spanish.
Moreover, Gerdau’s publicly listed companies in Brazil
are part of the main index of BM&FBOVESPA, Ibovespa,
Shareholder compensation
in which Gerdau S.A. has the 11th highest liquidity among
Gerdau’s three publicly listed companies – Gerdau S.A.,
companies that make up this indicator. They are also listed
Metalúrgica Gerdau S.A., and Empresa Siderúrgica del
on the Special Corporate Governance Stock Index (IGC),
Perú S.A.A. – have clear remuneration policies that are
the Share Index with Differentiated Tag Along Rights (ITAG),
in line with market practices. Metalúrgica Gerdau S.A.
on the Brazil Index 50 (IBrX50), on the Index of Basic
and Gerdau S.A. pay dividends and/or interest every
Materials (IMAT), and on the Industrial Sector Index (INDX).
SOCIETY | GERDAU ANNUAL REPORT 2012
SOCIETY
Volunteer work from employees is critical
to the development of social programs
its employees who want to get involved in volunteer
activities. As a result, in 2012, approximately
8,000 employees participated in the Gerdau
Over the years, Gerdau has been improving its role in
Volunteer Program (PVG) by working actively in
social responsibility and consolidating the theme in its
social projects supported by the Company.
business strategy. With the belief that the growth of its
operations is directly related to developing its business
One of the highlights among the volunteering actions
chain and the communities where its plants are
undertaken during the year was the Gerdau Volunteer
located, the Company has expanded, standardized, and
Olympics, a competition held in nine countries: Argentina,
internationalized its practices for this area over the last few
Brazil, Chile, Colombia, Spain, Mexico, Peru, Uruguay,
years. It also began to apply management methodologies
and Venezuela. Under the slogan “United for Safety:
in planning, implementation, and monitoring of social
victory belongs to us all”, 13,000 volunteer employees
projects in order to achieve even more effective results.
helped promote improvements and awareness activities
to encourage safe habits and behaviors in the daily
In 2012, R$ 52.7 million was invested in more than
activities of about 800 micro and small enterprises,
900 social projects that were conducted in 13
schools, daycare centers, and other social organizations.
countries where Gerdau operates. These initiatives
are led by Gerdau Institute, which is responsible
Gerdau also develops partnerships with major
for the Company’s social responsibility policies and
institutions that implement programs to encourage
guidelines, and are focused in the areas of education,
quality in management and entrepreneurship along
emergency assistance, and quality management.
the steel business chain. Furthermore, the Company
supports institutions that promote transforming
Moreover, Gerdau believes that volunteering is an
actions in society such as the Competitive Brazil
important transforming agent of change in society.
Movement, Everyone for Education Movement, Junior
For this reason it offers specific training courses to
Achievement, and the World Childhood Foundation.
The Gerdau Volunteer Olympics was one of the highlights among the volunteer activities done in 2012
27
GERDAU ANNUAL REPORT 2012 | ENVIRONMENT
ENVIRONMENT
28
Gerdau invested in the expansion and modernization of the dust removal system in plants in Canada, Colombia (photo), and Chile
Gerdau contributes to the sustainability of
the communities and their businesses by
transforming scrap into steel
job opportunities in the processing of this raw material.
For Gerdau, recycling is not just an initiative of
Stringent environmental management practices
environmental protection, but it is also part of its business
Gerdau’s strong commitment to the environment is
strategy. Every year, it transforms more than 15 million
reflected in its stringent practices in this area along with
metric tons of steel scrap, making it the largest scrap
its ISO 14001 certification, of which the Environmental
recycler in Latin America. The use of this raw material
Management System (EMS) is a part. The Company
reduces the volume of material deposited in inappropriate
uses the EMS to monitor the entire production cycle of
places and reduces the consumption of energy as well as
steel, beginning from the collection of raw materials all
other natural resources in the steel production process,
the way to delivering the final product and the disposal of
while minimizing emissions of greenhouse gases such
by-products. Currently 48 industrial plants are ISO 14001
as CO2. Moreover, the collection and processing of
certified, which corresponds to 89% of the total.
Since 2010 when the project began, over 36,000
metric tons of scrap have already been recycled.
scrap generate jobs over a long chain of small, medium
and large entrepreneurs who live off of this activity.
By-products
Through continuous investment, improvements in
Gerdau has been developing projects in partnership with
processes, and studies in partnership with universities,
the public sector in Brazil, Colombia, and Peru in order
research entities and companies, Gerdau seeks intelligent
to further expand scrap collection in the regions where
and sustainable alternatives for the application of
it operates and promote proper disposal of cars, trucks,
its by-products. As a result of these initiatives, in 2012,
and buses that are no longer in circulation. Besides
the reuse rate of these materials reached 74.8%.
contributing to the environment, these initiatives play
an important socio-economic role, because they reduce
Air
the costs of governments with its storage, generate
The dust removal systems at Gerdau’s plants capture with
revenue from the sale of scrap, and also create new
high efficiency the solid particles generated by the steelmaking
ENVIRONMENT | GERDAU ANNUAL REPORT 2012
process, which are later processed into by-products used
to increase energy savings in auxiliary equipment
in other segments of the industry. In 2012, the Company
to the steel production process, which represent
invested in the expansion and modernization of the dust
approximately 40% of the energy consumed in the mills.
removal system in plants in Canada, Colombia, and Chile.
The project goal is to achieve a reduction of 2.5% of total
Water
energy consumed by 2014. To start this process, teams
Gerdau has one of the best water recirculation rates
from all the industrial mills in Brazil ran a diagnostics
in the global steel industry today with an average rate
of savings opportunities, which were transformed
exceeding 97%. This percentage represented in 2012 over
into more than 1,300 actions. This project will also be
2 trillion liters of recycled water to be used internally in the
applied in other countries where Gerdau operates.
production of steel. The volume, if captured, corresponds
to a supply of water for a period of two years from the
Gerdau also optimizes the use of energy by expanding
state of New York (United States), which has over 19
the use of by-products from the production process
million inhabitants, considering an average consumption
of its mills. In addition, the Company is increasing
of 150 liters per person per day. The small amount not
its use of natural gas in its operations, which is
reused corresponds mainly to evaporative losses.
already applied in 94% of its mills worldwide.
Biodiversity
Gerdau maintains green areas at its mills for the purpose
of improving the quality of the air and maintain local
biodiversity. Currently, of its total 17,000 hectares of
Company property, 3,000 hectares are preserved native
forests made up of legal reserves, permanent preservation
areas, and private reserves of natural heritage. Over
4,000 hectares are areas preserved voluntarily.
Water treatment system in Peru will increase the mill’s
recirculation rate to more than 98%
Environmental education
As part of its environmental management practices,
Gerdau promotes awareness campaigns, conferences,
These achievements in the process of reusing water are
and training courses for employees and third parties.
due to continuous investments in advanced closed water
In 2012, these activities totaled 48,200 hours with
treatment and recirculation systems. In 2012, for example, a
the involvement of about 26,000 people.
new water treatment plant was constructed at the Reinosa
mill located in Spain. With this, the amount of water captured
One of the initiatives created during 2012 was the
externally by the plant decreased by 50%. Also, in Peru, a
Environmental Laboratory, which seeks to improve social-
project is currently underway to improve and upgrade the
environmental practices and knowledge of educators
water treatment system in order to increase the level of
in the municipal and state schools in the region of
the plant’s recirculation from 95.1% to more than 98%.
Ouro Branco (MG). For the year, 292 professionals
participated in 22 courses and workshops.
Energy
In order to expand its energy efficiency, Gerdau
invests continuously in improving and optimizing its
industrial processes. In 2012, for example, the Company
initiated a pilot project in operations in Brazil in order
29
30
GERDAU ANNUAL REPORT 2012 | TIMELINE
TIMELINE
Learn about the key facts
that marked Gerdau’s history
João Gerdau businesses branch
into two separate areas: Hugo runs
the nail factory and his brother
Walter assumes responsibility
for the Gerdau Furniture Factory,
both in Porto Alegre (state of Rio
Grande do Sul, Brazil). Later,
The Nail Factory is
in 1930, Hugo and Walter Gerdau
expanded with construction
The Nail Factory – today
take part in the creation of the
of a new plant in Passo
Metalúrgica Gerdau S.A. –
State center for the manufacturing
Fundo (state of Rio
becomes a public company
industry, future Federation of
Grande do Sul, Brazil),
and begins trading on the
Industries of the State.
active until 1964.
Porto Alegre stock exchange.
1907
1933
1947
1901
1914
1946
João Gerdau and his son Hugo
Hugo Gerdau becomes a
Curt Johannpeter,
lay the foundations of Gerdau
founding member of the Cia
son-in-law of Hugo,
with the Pontas de Paris Nail
Geral de Indústrias (state of
takes the company’s
Factory in Porto Alegre (state
Rio Grande do Sul, Brazil),
helm and oversees
of Rio Grande do Sul, Brazil).
which later becomes Fogões
a decisive phase of
Geral. He later assumes
business expansion.
control of the company and in
1947 leaves the business.
TIMELINE | GERDAU ANNUAL REPORT 2012
31
Steel production begins with
Riograndense – known as Usina
The Gerdau Foundation
Farrapos (UFA) – in Porto Alegre
is created, with health,
The São Judas Tadeu
Açonorte steel plant (state
(state of Rio Grande do Sul,
education, housing
Wire Factory is set up
of Pernambuco, Brazil),
Brazil), with forward-thinking
and social assistance
in São Paulo (state
whose facilities were being
conception of the mini-mill, a
programs, reinforcing
of São Paulo, Brazil),
transferred from Tição (in
model based on the use of scrap
the culture of social
marking the company’s
the city of Iguarassu) to the
and regional sales, enabling more
responsibility within
expansion into the
industrial district of Curado
competitive operational costs.
the Organization.
Brazilian southeast.
(in the city of Recife).
1948
1963
1967
1969
1957
The second Riograndense
unit starts up operation
Gerdau acquires the
1964
Germano, Klaus, and
1970
Siderúrgica Riograndense
Jorge Gerdau Johannpeter
publicly launches shares on
in Sapucaia do Sul (RS).
take on leadership
the Rio de Janeiro and São
The mill was also known
positions in the Company,
as Rio dos Sinos mill.
and, in 1971, Frederico
Gerdau Johannpeter also
becomes part of the board.
Paulo stock exchanges.
32
GERDAU ANNUAL REPORT 2012 | TIMELINE
Beginning of
Gerdau’s executive
leadership begins
Gerdau wins its
to be in the hands
first privatization
of Jorge Gerdau
auction in Brazil
Johannpeter (CEO)
and acquires
Cosigua begins to have
and Germano, Klaus,
the Barão de
Gerdau assumes control of the
its shares traded on the
and Frederico Gerdau
Cocais steel mill
Guaíra plant, a steel production
Stock Exchanges in São
Johannpeter
(state of Minas
Paulo and Rio de Janeiro.
(Vice Chairmen).
Gerais, Brazil).
1980
1983
internationalization
Steel distribution activities start
with the acquisition of
with the first Comercial Gerdau in
Laisa in Uruguay.
the state of São Paulo (Brazil).
pioneer in the state of Paraná (Brazil).
1971
1973
1982
1988
1984
Construction of Cosigua mill
Germano, Klaus,
Operation begins at
Cosigua shares are
(RJ) begins in the Industrial
Jorge, and Frederico
the Cearense plant
publicly released,
District of Santa Cruz, which
Gerdau Johannpeter
in Maracanaú (state
was completed in record
became part of
time of 14 months. The
the Gerdau Board
project had the participation
of Directors.
of Thyssen ATH and was
financed by the World Bank
through the International
Finance Corporation
(IFC), among others.
of Ceará, Brazil).
Second Gerdau
plant in the state of
Paraná (Brazil) begins
operation, in Araucária.
which earns the
company more
than 60,000 new
shareholders.
TIMELINE | GERDAU ANNUAL REPORT 2012
Gerdau acquires
Usiba (state of
Bahia, Brazil) at a
privatization auction.
Gerdau acquires
Siderúrgica
Gerdau enters
North America with
Pains, now called
Divinópolis mill.
Gerdau acquires control of
the acquisition of
Ameristeel, marking its arrival
Courtice Steel,
in the United States.
which later took
on the name
Gerdau acquires
of Cambridge in
the province of
Ontario (Canada).
1989
Gerdau S.A., a publicly
MRM in the
stock of Sipar rolling mill in
traded company in Brazil,
province of
Argentina. In 2005, Gerdau
is listed on the New York
takes a controlling stake.
Stock Exchange (NYSE).
Manitoba, Canada.
1994
Acquire part of the capital
1995
1998
1992
1997
The Company acquires AZA in
Gerdau becomes a
Chile and Aços Finos Piratini (state
partner of Açominas with
of Rio Grande do Sul, Brazil).
a small ownership stake.
The GG 50 rebar, a Gerdau flagship
product in Brazil, is launched.
1999
33
34
GERDAU ANNUAL REPORT 2012 | TIMELINE
André B. Gerdau Johannpeter takes over as Chief
Executive Officer (CEO) and Claudio Gerdau
Johannpeter becomes Chief Operating Officer (COO).
Gerdau acquires Chaparral Steel, one of
the largest producers of structural steel in
the United States, thus marking the greatest
acquisition in the history of the Company.
The Company enters Mexico (Siderúrgica
Gerdau celebrates 100 years
Tultitlán) and Venezuela (Siderúrgica Zuliana).
in business with an installed
steel production capacity of 8.4
The Organization also acquires a stake in the
million metric tons per year.
Dominican Republic (Industrias Nacionales - Inca)
Gerdau takes a controlling
and in Aceros Corsa (Mexico), signs agreement
stake in Gerdau Açominas
for purchase of Macsteel (United States), and
(state of Minas Gerais,
starts the Kalyani Gerdau joint venture (India).
Brazil), its largest mill.
Diaco (Colombia) and
Gerdau Açominas (state of Minas Gerais,
Gerdau acquires the Cartersville
North Star Steel (United
plant (United States).
States) are acquired.
2001
2004
2002
Brazil) increases its production capacity by
50% to 4.5 million metric tons per year.
2007
2005
The merger of Gerdau
Gerdau enters Europe,
and Co-Steel, in North
acquiring 40% of Sidenor. As
America, creates
a result of this acquisition, the
Gerdau Ameristeel.
Company takes an indirect
stake in Aços Villares (Brazil).
The Gerdau Institute, responsible
for coordinating the Company’s
2006
Gerdau acquires Siderperu (Peru),
Sheffield Steel (United States),
Callaway Building Products (United
States), and GSB (Spain).
The Company announces its
joint venture Pacific Coast
Steel (United States).
social responsibility policies and
guidelines, is created, broadening
the scope of the Gerdau
Foundation, established in 1963.
Gerdau São Paulo mill
(state of São Paulo, Brazil)
commences operations.
TIMELINE | GERDAU ANNUAL REPORT 2012
35
Gerdau invests to expand its
own production of iron ore.
Gerdau acquires Tamco (United States), a leading producer
of rebars on the west coast of the United States, with
production capacity of 500,000 metric tons per year.
Gerdau enters Central America, with a 30%
stake in Corporación Centroamericana
del Acero, in Guatemala.
Gerdau gains 100% ownership of Gerdau Ameristeel, with the
acquisition of approximately 34% of the company’s minority
shares. As a result, the company shares are no longer
traded on the Toronto and New York stock exchanges.
The Company acquires a 50.9%
stake in Cleary Holdings (Colombia),
An additional stake of 49.1% is acquired in Cleary
a metallurgical coke producer and
Holdings (Colombia), granting Gerdau 100%
holder of coking coal reserves.
ownership of the company’s capital.
Gerdau takes over Macsteel
Gerdau incorporates Aços Villares, a special
operations (United States), a
steel producer in Brazil, in which the Company
producer of special steels.
already had an 87% direct and indirect stake.
2008
2010
2009
2011
2012
The Várzea do Lopes mine (state
Gerdau completes 110 years of business,
Gerdau announces new
of Minas Gerais, Brazil) is initiated
reaching an annual production capacity of 25
investments in mining
with the production of iron ore.
million metric tons and revitalizes its brand.
The Company’s entering
million metric tons by 2016.
into the flat steel sector
in Brazil is disclosed.
The Mission, Vision, Values, and Code of
Ethics are revised and unified at a global level,
Company announces new
investments in India.
to increase its annual
installed capacity to 18
strengthening Gerdau’s corporate culture.
Gerdau begins studies for commercial
exploration of part of its iron ore
resources located in Minas Gerais.
Later, it celebrates the
firts shipments of iron ore,
marking its entry into the
international mining market.
The Company completes
20 years of experience in
the special steel sector.
The first phase for implementing the Gerdau
Template, which aims to deploy a single system of
Production of special steel
information technology using SAP in all countries
in India begins, in order to
where the Company operates, is completed.
supply the region’s market.
Gerdau announces investments to increase the installed
capacity in special steel mills in Brazil and the United States.
36
GERDAU ANNUAL REPORT 2012 | FINANCIAL STATEMENTS
SUMMARIZED FINANCIAL STATEMENTS
GERDAU S.A.
As of December 31, 2012 and 2011
CONSOLIDATED BALANCE SHEETS
(In thousands of Brazilian reais)
2012
2011
Cash and cash equivalents
1,437,235
1,476,599
Short-term investments
1,059,605
3,101,649
Trade accounts receivable
3,695,381
3,602,748
Inventories
9,021,542
8,059,427
Other current assets
1,196,634
1,078,726
16,410,397
17,319,149
Deferred income and social contribution taxes
2,210,300
1,547,967
Other non-current assets
1,958,863
2,034,819
Investments in associates and jointly-controlled entities
1,425,605
1,355,291
Current assets
Non-current assets
Goodwill and other intangible assets
11,397,812
10,429,497
Property, plant, and equipment
19,690,181
17,295,071
36,682,761
32,662,645
53,093,158
49,981,794
Trade Accounts Payable
3,059,684
3,212,163
Short-Term Debt and Debentures
Total assets
Current liabilities
2,582,353
1,756,993
Taxes payable
528,698
591,983
Payroll and related liabilities
558,634
617,432
1,093,813
598,430
7,823,182
6,777,001
12,086,202
11,926,535
Other current liabilities
Non-current liabilities
Long-Term Debt and Debentures
Deferred income taxes
1,795,963
1,858,725
Employee benefits
1,187,621
1,089,784
Other non-current liabilities
1,402,273
1,809,946
16,472,059
16,684,990
27,245,604
24,997,469
1,552,313
1,522,334
28,797,917
26,519,803
53,093,158
49,981,794
Shareholder’s equity
Attributable to the equity holders of parent
Non-controlling interests
Total liabilities and equity
FINANCIAL STATEMENTS | GERDAU ANNUAL REPORT 2012
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of Brazilian reais)
2012
2011
37,981,668
35,406,780
-33,234,102
-30,298,232
4,747,566
5,108,548
-2,471,675
-2,401,684
72,314
172,144
2,348,205
2,879,008
Net financial income (expenses)
-654,615
-580,093
Exchange variations, net
-134,128
51,757
1,559,462
2,350,672
-63,222
-253,096
1,496,240
2,097,576
1,425,633
2,005,727
70,607
91,849
0.84
1.22
Net sales
Cost of sales
Gross profit
Selling, general, and administrative expenses
Other Operating Income (expenses), net
Income before financial
income and taxes
Income before taxes
Income and social contribution taxes
Net income
Attributed to:
Owners of the parent
Non-controlling interests
Earnings per share - common and preferred
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of Brazilian reais)
2012
2011
Net income
1,496,240
2,097,576
Adjustments to reconcile net income with net cash
3,048,240
2,794,863
-200,433
-3,182,421
4,344,047
1,710,018
Net cash used in investing activities
-3,438,025
-2,111,158
Net cash used in financing activities
-1,036,294
727,064
90,908
89,641
Changes in assets and liabilities (net of interest and income tax)
Net cash generated by operating activities
Effect of exchange rate variation on cash and cash equivalents
(Decrease) Increase in cash and cash equivalents
-39,364
415,565
Cash and cash equivalents at beginning of year
1,476,599
1,061,034
Cash and cash equivalents at end of year
1,437,235
1,476,599
Read more on the financial statements of Gerdau S.A. at www.gerdau.com/ri
37
38
GERDAU ANNUAL REPORT 2012 | FINANCIAL STATEMENTS
SUMMARIZED FINANCIAL STATEMENTS
METALÚRGICA GERDAU S.A.
As of December 31, 2012 and 2011
CONSOLIDATED BALANCE SHEETS
(In thousands of Brazilian reais)
2012
2011
Cash and cash equivalents
1,437,724
1,477,020
Short-term investments
1,059,605
3,101,649
Trade accounts receivable
3,695,381
3,602,748
Inventories
9,021,542
8,059,427
Other current assets
1,213,403
1,094,723
16,427,655
17,335,567
Deferred income and social contribution taxes
2,376,709
1,658,416
Other non-current assets
1,959,459
2,005,594
Investments in associates and jointly-controlled entities
1,425,605
1,355,291
Current assets
Non-current assets
Goodwill and other intangible assets
11,489,825
10,521,510
Property, plant, and equipment
19,690,863
17,295,833
36,942,461
32,836,644
53,370,116
50,172,211
Trade Accounts Payable
3,059,814
3,212,278
Short-Term Debt and Debentures
Total assets
Current liabilities
3,888,232
1,760,780
Taxes payable
534,631
594,532
Payroll and related liabilities
558,634
617,432
1,088,177
588,906
9,129,488
6,773,928
12,073,867
13,223,260
Other current liabilities
Non-current liabilities
Long-Term Debt and Debentures
Deferred income taxes
1,844,731
1,907,493
Employee benefits
1,187,621
1,089,784
Other non-current liabilities
2,316,057
2,626,758
17,422,276
18,847,295
9,965,945
9,040,054
16,852,407
15,510,934
26,818,352
24,550,988
53,370,116
50,172,211
Shareholder’s equity
Attributable to the equity holders of parent
Non-controlling interests
Total liabilities and equity
FINANCIAL STATEMENTS | GERDAU ANNUAL REPORT 2012
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of Brazilian reais)
2012
2011
37,981,668
35,406,780
-33,234,102
-30,298,231
4,747,566
5,108,549
-2,477,894
-2,422,943
50,783
182,865
2,320,455
2,868,471
Net financial income (expenses)
-835,573
-740,152
Exchange variations, net
-134,128
51,754
1,350,754
2,180,073
-18,077
-200,424
1,332,677
1,979,649
Net sales
Cost of sales
Gross profit
Selling, general, and administrative expenses
Other operating income (expenses), net
Income before financial
income and taxes
Income before taxes
Income and social contribution taxes
Net income
Attributed to:
Owners of the parent
456,731
760,522
Non-controlling interests
875,946
1,219,127
1.12
1.87
Earnings per share - common and preferred
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of Brazilian reais)
2012
2011
Net income
1,332,677
1,979,649
Adjustments to reconcile net income with net cash
3,184,773
2,905,786
-244,477
-3,174,739
4,272,973
1,710,696
Net cash used in investing activities
-3,438,025
-2,111,158
Net cash used in financing activities
-965,152
725,602
90,908
89,633
Changes in assets and liabilities (net of interest and income tax)
Net cash generated by operating activities
Effect of exchange rate variation on cash and cash equivalents
(Decrease) Increase in cash and cash equivalents
-39,296
414,773
Cash and cash equivalents at beginning of year
1,477,020
1,062,247
Cash and cash equivalents at end of year
1,437,724
1,477,020
Read more on the financial statements of Gerdau S.A. at www.gerdau.com/ri
39
40
GERDAU ANNUAL REPORT 2012 | credits and Corporate Information
Corporate Information
Credits
Gerdau
Coordination
Av. Farrapos, 1811
Porto Alegre – RS – Brazil
CEP 90220-005
Phone: +55 (51) 3323.2000
Gerdau Corporate Communications and Public Affairs
Editing and production supervision
Gerdau Corporate Communications and Public
www.gerdau.com
Affairs and Odin Art & Communication
Shareholders Relations
Graphic Design
Av. Farrapos, 1811
Porto Alegre – RS – Brasil
CEP 90220-005
acionistas@gerdau.com.br
Phone: 0800.702.2001
Phone: +55 (51) 3323.2211
Fax: +55 (51) 3323.2281
Depositary Bank in Brazil
Itaú Corretora de Valores S.A.
investfone@itau.com.br
Phone: 3003.9285 (Capital Cities)
Phone: 0800.720.9285 (Other Regions)
Phone: 0800.722.1722 (Hearing and speech impaired)
Depositary Bank Overseas
The Bank of New York Mellon
shrrelations@bnymellon.com
Phone: +1 888 BNY ADRS (From the United States)
Phone: +1 201 680-6825 (Outside the United States)
Investor and Analyst Service
Av. Farrapos, 1811
Porto Alegre – RS – Brasil
CEP 90220-005
inform@gerdau.com.br
Phone: +55 (51) 3323.2703
Néktar Design
Printing
Gráfica Comunicação Impressa
Paper and ink
Offset 240g (cover) and Offset 120g (content)
Printed with soy-based inks.
Circulation
300 copies in Brazilian Portuguese and 150 in English.
Photo credits and illustrations
Ana Fuccia (page 23), Animake (page 16), Gerdau Files
(pages 25, 27, and 28), Christian Buendia Gama (page 15),
Eduardo Colesi (page 20), Eduardo Rocha (cover and page
13), Foguinho / Save the image (cover), Ivson Miranda (cover
and pages 5, 6, 10, 12, and 24), Leonid Streliaev (page 14),
Rahgu (cover and page 17), República das Ideias (page 20),
Roberto René Rodríguez (page 29), WorldSteel (page 21).
We would like to thank all of those who contributed by
supplying information and images for this publication.
Gerdau believes in the importance of seeking continuous
improvement in all its processes, products and services.
As such, we would like to hear your opinion about the
Fax: +55 (51) 3323.2281
2012 Annual Report. Evaluate its scope, relevance,
Independent Auditor
Your opinion is very important to us.
PricewaterhouseCoopers
quality of information, and graphic presentation.
Access our website www.relatoriogerdau.com.br
and answer the opinion survey or send an email to
gerdau@gerdau.com, with suggestions on aspects
which can be improved. We thank you in advance
for your participation.
www.gerdau.com
ARGENTINA
www.sipargerdau.com
BRAZIL
www.gerdau.com.br
CANADA
www.gerdau.com/longsteel
CHILE
www.gerdauaza.cl
COLOMBIA
www.gerdau.com.co
DOMINICAN REPUBLIC
www.industriasnacionales.com
GUATEMALA
www.acerosdeguatemala.com
INDIA
www.gerdau.in
MEXICO
www.gerdau.com.mx
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