GERDAU 2007 ANNUAL REPORT
GERDAU 2007 ANNUAL REPORT
GERDAU 2007 ANNUAL REPORT
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<strong>2007</strong> <strong>ANNUAL</strong> <strong>REPORT</strong> GROWING WITH PEOPLE
People: source of growth for<br />
an integrated group that shows<br />
passion in everything it does<br />
PROFILE<br />
THE <strong>GERDAU</strong> GROUP<br />
A leader in the production of long steel in the Americas and a major<br />
world steel producer, the Gerdau Group has 107 years of history and<br />
participates in the process of consolidation of the global steel industry.<br />
It has 37,000 employees and operates in thirteen countries<br />
It produces long, specialty and flat steel for civil construction, industry<br />
and the agricultural sectors. Its products are used in cars, trucks,<br />
tractors, houses, bridges, highways, home appliances, machinery,<br />
and other products. It is one of the major recyclers in the world,<br />
transforming 12.8 million tons of iron scrap into steel each year.<br />
The shares of its public companies are traded on the stock exchanges<br />
of São Paulo, New York, Toronto and Madrid.<br />
1 2<br />
3 4 5<br />
14 6 7 8 9<br />
15 16 10 11 12 13<br />
<strong>GERDAU</strong> EMPLOYEES COVER: 1. ALBERTH MAURICIO CASTEBLANCO — Diaco — Colombia |<br />
2. JENNIFER STEVENSON — Gerdau Ameristeel — USA | 3. MARIO ALBERTO VARAS MOYA —<br />
Gerdau AZA — Chile | 4. ISABEL CRISTINA L. DE OLIVEIRA — Gerdau Riograndense —<br />
Brazil | 5. ALEJANDRO GOMEZ — Sidenor — Spain | 6. EDUARDO GOMEZ — Sidertul —<br />
Mexico | 7. RAMAYANAM GOVINDHA BHARATHI — Kalyani Gerdau — India | 8. EDUARDO SINCINI —<br />
Sipar Gerdau — Argentina | 9. DANIEL OBREGÓN — Sidenor — Spain | 10. RODRIGO MURAKAMI —<br />
Gerdau Riograndense — Brazil | 11. KARLA DANIELE COSTA VON BENTZEEN —<br />
Gerdau Açominas — Brazil | 12. ANTONIO A. ABREU RABELO — Gerdau Cosigua — Brazil |<br />
13. TIMOTHY SMITH — Chaparral Steel — USA<br />
BACK COVER: 14. EDILBERTO VÁSQUEZ — Diaco — Colombia | 15. VICTOR JAVIER PEREZ<br />
CASTREJON — Sidertul — Mexico | 16. CAROLINA MARÍN SILVA — Gerdau AZA — Chile
THE <strong>GERDAU</strong> GROUP AROUND THE WORLD<br />
MISSION<br />
Gerdau is an organization focused on the steel<br />
business, seeking to satisfy customers’ needs<br />
and add value for shareholders, committed to<br />
the fulfillment of people and to the sustainable<br />
development of society.<br />
<br />
VISION<br />
To be a global steel company and one of the most<br />
profitable in the sector.<br />
VALUES<br />
SATISFIED customers<br />
42 Steel mills<br />
14 Downstream operations<br />
87 Fabricated reinforcing steel facilities<br />
4 Flat steel service centers<br />
75 Retail facilities<br />
32 Scrap collection and processing facilities<br />
4 Iron ore extraction areas<br />
2 Solid pig iron production facilities<br />
2 Private port terminals<br />
TOTAL SAFETY in the workplace<br />
ENGAGED and fulfilled people<br />
QUALITY in everything we do<br />
RESPONSIBLE ENTREPRENEURSHIP<br />
INTEGRITY<br />
GROWTH and PROFITABILITY<br />
Associated companies<br />
10 Steel mills<br />
4 Downstream operations<br />
3 Retail facilities<br />
Joint ventures<br />
2 Steel mills<br />
4 Downstream operations<br />
1 Fabricated reinforcing steel facility<br />
Gerdau Group Headquarters
KEY INDICATORS<br />
Financial margins 2006 <strong>2007</strong><br />
Gross margin 26.4% 24.4%<br />
Net margin 16.5% 14.1%<br />
EBITDA margin 22.6% 20.4%<br />
Capital market 2006 <strong>2007</strong><br />
Metalúrgica Gerdau S.A.<br />
Dividends (R$ per share) 2.26 2.10<br />
Dividend yield (%)* 5.2 3.0<br />
Return on equity (%)** 30.0 25.7<br />
Market capitalization (R$ million) 8,063 12,819<br />
Gerdau S.A.<br />
Dividends (R$ per share) 1.35 1.26<br />
Dividend yield (%)* 3.9 2.4<br />
Return on equity (%)** 28.8 25.9<br />
Market capitalization (R$ million) 23,062 33,547<br />
Gerdau Ameristeel Corp.<br />
Dividends (US$ per share) 0.30 0.35<br />
Dividend yield (%)* 3. 4 2.5<br />
Return on equity (%)** 20.4 13.9<br />
Market capitalization — NYSE (US$ million) 2,727 6,156<br />
Market capitalization — Toronto (CAN$ million) 3,178 6,102<br />
*Ratio between the dividend paid per share and share price on the last<br />
day of the year<br />
**Ratio between net profit and consolidated shareholders’ equity<br />
Outptut and sales 2006 <strong>2007</strong><br />
Steel production (thousand metric tons) 15,767 17,907<br />
Production of rolled products (thousand metric tons) 12,803 15,160<br />
Sales (thousand metric tons) 14,889 17,159<br />
Employees 2006 <strong>2007</strong><br />
Number of employees 31,563 36,925<br />
Number of service providers 13,298 13,687<br />
Investments in training (R$ million) 37.0 44.6<br />
Environmental management 2006 <strong>2007</strong><br />
Re-use of by-products (%)<br />
(% of total generated) 76.7 79.4<br />
Investments (R$ million) 168.6 345.7<br />
Exchange rate R$ US$<br />
2006 2.1380 1.00<br />
<strong>2007</strong> 1.7713 1.00<br />
Results (R$ million)<br />
30<br />
25<br />
20<br />
15<br />
10<br />
5<br />
0<br />
Value added breakdown<br />
(R$ 10.5 billion)<br />
80<br />
60<br />
40<br />
20<br />
0<br />
25,884<br />
5,847<br />
4,261<br />
41.7<br />
30,614<br />
2006 <strong>2007</strong><br />
6,249<br />
4,310<br />
30.2%<br />
4.9%<br />
25.4%<br />
28.7%<br />
10.8%<br />
Social responsibility investments<br />
(R$ million)<br />
51.6<br />
Net sales revenues<br />
EBITDA<br />
Net profit<br />
Performance of shares in the past five years<br />
Metalúrgica Gerdau S.A. (GOAU4)<br />
Gerdau S.A. (GGBR4)<br />
Gerdau S.A. (GGB)<br />
Gerdau S.A. (XGGB)<br />
1,547.1%<br />
1,073.2%<br />
1,713.1%<br />
1,221.6%<br />
Gerdau Ameristeel Corp. (GNA)*<br />
Gerdau Ameristeel Corp. (GNA.TO)<br />
Bovespa (São Paulo)<br />
NYSE (New York)<br />
TSX (Toronto)<br />
Latibex (Madrid)<br />
205.0%<br />
471.3%<br />
467.0%<br />
54.1%<br />
105.2%<br />
141.6%<br />
0 500 1,000 1,500 2,000<br />
*Since Oct 15, 2004<br />
Profits reinvested<br />
Interest on financing<br />
Taxes and social contributions<br />
Salaries, benefits, profit sharing<br />
and training<br />
Dividends and interest on<br />
shareholders’ equity<br />
72.7<br />
2005 2006<br />
<strong>2007</strong>
INFORMATION AND CONTACTS<br />
<strong>GERDAU</strong> GROUP<br />
Av. Farrapos, 1811<br />
Porto Alegre — RS — Brazil<br />
Tel.: +55 (51) 3323.2000<br />
www.gerdau.com<br />
SHAREHOLDER RELATIONS<br />
Av. Farrapos, 1811<br />
Porto Alegre — RS — Brazil<br />
CEP 90.220-005<br />
acionistas gerdau.com.br<br />
Tel.: 0800.702.2001<br />
+55 (51) 3323.2211<br />
Fax: +55 (51) 3323.2281<br />
Depositary Bank in Brazil<br />
Banco Itaú S.A.<br />
investfone itau.com.br<br />
Tel.: +55 (11) 5029.7780<br />
SERVICES TO ANALYSTS AND INVESTORS<br />
Av. Farrapos, 1811<br />
Porto Alegre — RS — Brazil<br />
CEP 90.220-005<br />
inform gerdau.com.br<br />
Tel.: +55 (51) 3323.2703<br />
Fax: +55 (51) 3323.2281<br />
Gerdau Ameristeel Corp.<br />
4221 W. Boy Scout Blvd. — Suite 600<br />
Tampa — FL 33607 — EUA<br />
Tel.: +1 (813) 286.8388<br />
E-mail: ir gerdauameristeel.com<br />
www.gerdauameristeel.com<br />
INDEPENDENT AUDITOR<br />
Deloitte Touche Tohmatsu<br />
Depositary Bank Overseas<br />
The Bank of New York<br />
shareowners bankofny.com<br />
Tel.: +1 (610) 382.7836
CREDITS<br />
COORDINATION<br />
Gerdau Group Corporate Communications<br />
and Public Affairs<br />
WRITING AND PRODUCTION SUPERVISION<br />
Gerdau Group Corporate Communications<br />
and Public Affairs and Imagem Corporativa<br />
GRAPHIC DESIGN<br />
Ana Couto Branding & Design<br />
TRANSLATION<br />
Eriksen Translations and<br />
Scientific Linguagem<br />
PHOTOGRAPHS AND GRAPHICS<br />
Gerdau archive (pg. 88, 89, 90, 91), Gerdau<br />
Ameristeel archive (pg. 45, 85), Emmanuelle Bernard<br />
(pg. 4, 8, 18, 19, 20, 30), GH Digital/Leo Drumond<br />
(pg. 65), Leonid Streliaev (pg. 37), Mathias Cramer<br />
(pg. 12), MP Foto/Eduardo Simões (cover, back cover,<br />
highlights, pg. 43, 46, 77, 89), MP Fotos/Guto Seixas<br />
(pg. 36), MP Fotos/Ilana Bessler (cover, back cover,<br />
pg. 63, 80, 81, 82), MP Fotos/Kiko Ferrite (cover,<br />
back cover, pg. 31, 60, 61, 71, 74, 75, 87), MP Fotos/<br />
Sanjiv Nadkarni (cover, pg. 47), Newton Verlangiere<br />
(pg. 90, 91), Paulo Arumãa (pg. 41), Produ-Video<br />
Eventos (pg. 39).<br />
PAPER AND INK<br />
Duo design 300g (cover) and Couché Matte 150g<br />
(inside pages). Produced by Cia. Suzano from<br />
cultivated trees, certified by the Forest Stewardship<br />
Council (FSC). Printed with soy-based ink<br />
PRINT RUN<br />
5,000 copies in Brazilian Portuguese, 2,500 in English<br />
and 2,200 in Spanish<br />
We thank all of those who contributed by supplying<br />
information and images for this publication.<br />
Gerdau believes in the importance of evaluating and continuously improving all of its products and services. Because of that, we would<br />
like to hear from you concerning this <strong>2007</strong> Annual Report. Please rate the scope, relevance, information quality and graphic design.<br />
Your opinion is very important.<br />
Access www.gerdau.com/annualreport and fill the opinion survey or send an e-mail to gerdau<br />
concerning aspects that may be improved.<br />
gerdau.com, with suggestions
www.gerdau.com<br />
ARGENTINA<br />
www.sipargerdau.com<br />
BRAZIL<br />
www.gerdau.com.br<br />
CANADA<br />
www.gerdauameristeel.com<br />
CHILE<br />
www.gerdauaza.cl<br />
COLOMBIA<br />
www.diaco.com.co<br />
DOMINICAN REPUBLIC<br />
www.industriasnacionales.com<br />
INDIA<br />
www.kalyanigroup.com<br />
MEXICO<br />
www.sidertul.com.mx<br />
PERU<br />
www.sider.com.pe<br />
SPAIN<br />
www.sidenor.com<br />
UNITED STATES<br />
www.gerdauameristeel.com<br />
URUGUAY<br />
www.gerdaulaisa.com.uy<br />
VENEZUELA<br />
www.sizuca.com.ve
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