Gerdau: 3 Key Takeaways for Long-Term Investors

On its third-quarter 2026 earnings call, held on Oct. 27, 2026, Gerdau (NYSE:GGB) announced a North American EBITDA margin, or earnings before interest, taxes, depreciation, and amortization, of 27.7%. Long-term investors should care because high profitability in North America is offsetting persistent steel import pressures in Brazil.

Three things management said stand out.

1. North American Demand Drives Four-Year Margin Peak

Heavy spending on data centers and energy projects keeps order volumes elevated in North America, helping insulate overall operating results from broader market choppiness.

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.
-- Gustavo Werneck, Chief Executive Officer

2. Brazil Focuses on Efficiency and Domestic Asset Upgrades

Surging foreign steel imports continue to weigh on domestic Brazilian pricing, prompting management to shift focus toward internal productivity and lower capital expenditures, or cash used for physical asset upgrades.

So we are focused on reducing our exports over time. And we're focused on making investments, which we believe are important in Brazil so that we can be competitive.
-- Rafael Japur, Chief Financial Officer

3. Capital Returned to Shareholders Exceeds Generated Cash Flow

Strong free cash flow generation allows management to prioritize direct shareholder returns through quarterly dividends and share repurchases while maintaining low debt leverage.

Combining dividends and share buybacks in 2026 done by Gerdau S.A. throughout the year 2026, we certainly returned more than BRL 1.850 billion to our shareholders, certainly demonstrating in concrete terms, our commitment to creating value to our shareholders.
-- Rafael Japur, Chief Financial Officer

Looking Ahead

Orders from artificial intelligence infrastructure and power transmission lines continue piling up across North America, and management is capitalizing on that operational momentum. Internal iron ore production from the Miguel Burnier mine expansion in Brazil will soon lower raw material costs for blast furnaces, while specialized rolling mill capacity expands in Texas. Management is watching domestic trade defense decisions and global scrap price stability.

In North America, despite the typical seasonality for the period, we continue to see steel demand at high levels with a very strong order backlog driven by a solid portfolio from segments such as renewable energy and data centers.
-- Gustavo Werneck, Chief Executive Officer

Capital spending is trending down toward essential maintenance as large expansion initiatives wrap up. Low leverage gives the balance sheet flexibility to manage interest rate shifts while maintaining ongoing shareholder distributions in Brazilian reais, abbreviated as BRL.

Today, the North American investment is doing really well. We continue to make organic investments to continue to grow as the case of the Midlothian project.
-- Rafael Japur, Chief Financial Officer

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