Oct 27, 2026 earnings call — North America strength; Brazil ramp-ups and capital returns
Gerdau reported Q3 EBITDA of BRL 3.8 billion with a margin of 20.2%.
Revenue $3.8B (est $3.6B) · EPS $0.15 (est $0.18)
Key quotes
"Resilient demand in the key markets where we operate and the very strong operating performance of our facilities in the region resulted in an EBITDA margin of 27.7%, the highest in 4 years."
"However, in Brazil, we continue to report a slight recovery in results despite ongoing pressure from imports and also an oversupply of steel in the local market."
"As for our balance sheet, our financial position remains very solid with a leverage ratio of just 0.58x net debt to EBITDA."
Analyst Q&A 10
microphone check
Q (Leonardo Correa · BTG Pactual): Analyst asked if the conference can hear him.
A: The operator confirmed they could hear him. No substantive management answer followed in this turn.
plans for Brazil and US spin-off
Q (Leonardo Correa · BTG Pactual): He asked what adjustments Gerdau will make in Brazil now and whether the U.S. business could be spun off given its strength.
A: Management said they are working on a detailed plan to improve profitability in Brazil and will give more visibility at Investor Day. They stressed doing what is under their control (cost cuts, capacity and personnel adjustments) and said there are no plans to spin off or make a major acquisition in North America now.
"We have been working heavily on what we can do, what is under our control so that we can continue to improve the profitability here." — Gustavo Da Cunha
mining growth and US risks
Q (Marcio Farid Filho · Goldman Sachs): He asked if mining is a growth option beyond Miguel Burnier and what risks could change North America's 'new normal'.
A: They said mining is a real avenue (Miguel Burnier, Dom Bosco, Várzea do Lopes and others) but no new tangible plans beyond ramping Miguel Burnier. On North America they said merchant bars and beams are key, DEACERO will enter but its ramp-up will be slow, and bilateral trade deals (U.S.-Mexico or U.S.-Canada) would have differing impacts on margins.
"Our major focus is the ramp-up of our expansion project at Miguel Burnier." — Rafael Japur (CFO)
project timing and returns to shareholders
Q (Carlos de Alba · Morgan Stanley): He asked how much EBITDA benefit Miguel Burnier and Midlothian will bring in Q4 and 2027, and how capital returns (dividends vs buybacks) will evolve.
A: Management said tests at Miguel Burnier are concluding and ramp-up will continue through Q4, with a sizable portion of benefit in 2027 but not the full benefit; they expect an order of magnitude around BRL 400 million. On capital allocation they said while shares trade below book they will keep buying and canceling shares and returning cash to shareholders; recent dividends were BRL 1.8 billion.
"Therefore, so an important portion of the benefit will be captured throughout 2027, but not the full benefit." — Gustavo Da Cunha
Miguel Burnier run rate, FX, leverage
Q (Gabriel Coelho Barra · Citi): He asked how the current market and FX change Miguel Burnier's run rate and whether leverage targets (0.6x/0.5x) remain appropriate.
A: They said the earlier BRL 1.1 billion mining return assumed certain freight and ore prices and much of the benefit is from using higher-quality own ore internally; full ramp-up in 2027 will change the picture. On CapEx they said they will not update guidance now and there is upside risk to free cash flow, so they might disburse less in 2026; on leverage they prefer flexibility and a less leveraged balance sheet given higher global interest rates.
"So we might disburse less in 2026 rather than what we gave as a guidance in our Investor Day last year, in October of last year." — Unknown Executive
U.S. outlook and trade defense
Q (Ricardo Monegaglia Neto · Safra Bank): He asked whether Gerdau's margin guidance for the U.S. is conservative, whether scrap costs will rise, and what trade-defense measures are being discussed for Brazil.
A: They said Q4 seasonality and Midlothian stoppage reduce production volumes and dilute fixed-cost absorption, which explains margin stability despite price momentum. On trade defense they said antidumping technical debate is evolving and could be a next step, and they welcome the technical rigor in government analysis.
"Antidumping is evolving in its technical debate, that might be a next step." — Gustavo Da Cunha
CapEx size and covenant review
Q (Daniel Sasson · Itaú BBA): He asked if 2026 CapEx pace implies 2027 will be the high end and whether debt or covenant policies will be revisited.
A: They said a lower CapEx level near the discussed range is a reasonable assumption for coming years (maintenance plus select projects) and pointed to BRL 4.5 billion as a reference depending on currency. They also said the gross debt policy can be revisited because it was set when FX was very different.
"We estimated this level of gross debt when the FX was totally different." — Rafael Japur (CFO)
U.S. M&A vs organic growth and demand
Q (Caio Ribeiro · BofA): He asked whether Gerdau will pursue U.S. acquisitions, more captive scrap, or expand higher-value products, and for color on margins and data-center demand.
A: They said they are not considering major acquisitions or greenfield plants and prefer organic/brownfield investments and selective capacity additions. Demand from data centers, energy and defense-related projects looks solid and the DEACERO entry should have a marginal impact; supply and demand in the U.S. appear balanced.
"We understand that this is a very important avenue for nonresidential investment expansion." — Rafael Japur (CFO)
flats and CapEx per ton
Q (Tathiane Martins Candini · JPMorgan): She asked if Gerdau can gain share in flats or special steels in Brazil and whether the lower CapEx view means lower CapEx per ton or just delays.
A: They said heavy-vehicle production is recovering which helps special steels, but the early-year drop hurt results; on CapEx they said the company is being more assertive in project approvals and hibernating some units, so total CapEx disbursement is now expected closer to BRL 4 billion versus prior BRL 4.5–4.7 guidance.
"Today, we believe that our CapEx disbursement now is closer to BRL 4 billion rather than BRL 4.5 billion or BRL 4.7 billion that was originally in our gap (sic) [ guidance ]." — Rafael Japur (CFO)
capital allocation mismatch and South America
Q (Rafael Barcellos · Bradesco BBI): He asked how the company will rebalance CapEx (Brazil vs U.S.) given EBITDA coming mainly from the U.S., and when South America will normalize and to what profitability.
A: They said the mismatch is mostly timing: investments take years to mature, so past questions about investing in North America now reversed as those investments pay off. On South America they said the quarter was weak (Argentina volumes) and they expect normalized recurring profitability similar to Peru, around 15%.
"So something close to 15% on a recurring basis." — Rafael Japur (CFO)