A.HISTORY AND DEVELOPMENT OF THE COMPANY Gerdau S.A. is a Brazilian corporation (Sociedade Anônima) that was incorporated on November 20, 1961, under the laws of Brazil. Its main registered office is located at Av. Dra. Ruth Cardoso, 8501 – 8th floor, São Paulo, SP, Brazil, and the telephone number is +55 (11) 3094 6300. Gerdau’s shares are listed on the São Paulo (B3) and New York (NYSE) stock exchanges. Recent History The Company is the product of several corporate acquisitions, mergers and other transactions dating back to 1901. The Company began operating in 1901 as the Pontas de Paris nail factory controlled by the Gerdau family based in Porto Alegre, who is still the Company’s indirect controlling shareholder. In 1969, Pontas de Paris was renamed Metalúrgica Gerdau S.A., which today is the holding company controlled by the Gerdau family and the parent company of Gerdau S.A. A detailed chronology of the development of the Company from its founding is set forth in our Annual Report on Form 20-F for the year ended December 31, 2020 (File Nº 001-14878), “Item 4A. History and Development of the Company”, which is not incorporated by reference into this Annual Report. Gerdau is the largest Brazilian producer of steel, a leading producer of long steel in the Americas and one of the world’s leading suppliers of special steel. In Brazil, it also produces flat steel and iron ore for its own consumption. Gerdau is the largest recycling company in Latin America and uses scrap as a key input, with around 70% of its steel production derived from this material. Every year, Gerdau transforms about 10 million tonnes of scrap into a variety of steel products. 17 Table of Contents B. BUSINESS OVERVIEW Steel Industry The world steel industry is composed of hundreds of steel producing facilities and is divided into two major categories based on the production method utilized: integrated steel mills and non-integrated steel mills, sometimes referred to as “mini mills.” Integrated steel mills normally produce steel from iron oxide, which is extracted from iron ore melted in blast furnaces, and refine the iron into steel, mainly using basic oxygen furnaces or, more rarely, electric arc furnaces. Non-integrated steel mills produce steel by melting in electric arc furnaces scrap steel, which occasionally is complemented by other metals such as direct-reduced iron or hot-compressed iron. According to World Steel, in 2024 (the most recent year for which information is available), 29.3% of the total crude steel production in the world was through electric furnaces (non-integrated process), 70.5% was through basic oxygen furnaces (integrated process) and the remaining 0.3% in other processes. Crude Steel Production by Process in 2024* ​ ​ ​ ​ ​ ​ ​ ​ ​ Crude Steel ​ ​ ​ ​ ​ ​ ​ ​ Production ​ ​ ​ ​ ​ ​ (in million ​ Production by Process (%) Blast Furnace ​ ​ ​ tonnes) ​ ​ ​ Mini mill ​ ​ ​ Integrated World ​ 1,887 ​ 29.3 ​ 70.5 China ​ 1,005 ​ 10.2 ​ 89.8 India ​ 149 ​ 58.8 ​ 41.2 Japan ​ 84 ​ 26.2 ​ 73.8 U.S.A. ​ 79 ​ 71.6 ​ 28.4 Russia 71 32.6 65.2 S. Korea 64 27.8 72.2 Turkey 37 70.0 30.0 Germany 37 29.0 71.0 Brazil 34 23.5 75.2 Source: World Steel / Steel Statistical Yearbook 2025 *Most recent year for which information is available. Over the past 10 years, according to World Steel, total annual crude steel production has grown from 1,676 million tonnes in 2014 to 1,887 million tonnes in 2024, an increase of 12.6%. The main factor responsible for the increase in the demand for steel products has been China. Since 1993, China has become the world’s largest steel market and currently consumes more than half as much as the rest of the world. 18 Table of Contents Crude Steel Production (in million tonnes) * ​ Source: World Steel / Steel Statistical Yearbook 2025 *Most recent year for which information is available China continues to rebalance its economy toward a more consumption-driven growth model. GDP growth was broadly aligned with government expectations, and despite continued credit injections into the construction and infrastructure sectors, steel consumption declined for the fourth consecutive year. In 2024, China’s share of world steel production was 53% of world total crude steel. Crude Steel Production by Country in 2024 (million tonnes) * Source: World Steel / Steel Statistical Yearbook 2025 *Most recent year for which information is available 19 Table of Contents The Brazilian Steel Industry According to World Steel Association, in 2025 Brazil was the world’s 9th largest producer of crude steel, with a production of 33.3 million tonnes, a 1.8% share of the world market. In South America, Brazil represented approximately 80.2% of the total steel production in 2025. According to Instituto Aço Brasil, in 2025 the total of Brazilian steel products sales was 31.9 million tonnes. The breakdown of total sales was 67.1% or 21.4 million tonnes of flat steel products, formed by domestic sales of 12.4 million tonnes and exports of 8.9 million tonnes. The remaining 32.9% or 10.5 million tonnes represented sales of long steel products, which consisted of domestic sales of 8.8 million tonnes and exports of 1.7 million tonnes. Breakdown of Total Sales of Brazilian Steel Products (million tonnes) ​ Source: Instituto Aço Brasil Domestic demand — Historically, the Brazilian steel industry has been affected by significant variations in domestic steel demand. Although domestic consumption varies in accordance with Gross Domestic Product (GDP), variations in steel consumption tend to be more accentuated than changes in the level of economic growth. In 2025, the Brazilian GDP increase was 2.3%, while steel consumption grew by 2.6%. Exports and imports — Over the past 20 years, the Brazilian steel industry has been characterized by a structural need for exports. The Brazilian steel market has undergone periods of excess capacity, cyclical demand and intense competition in recent years. Demand for finished steel products has lagged the total supply (total production plus imports). In 2025, Brazilian steel exports totaled 10.7 million tonnes, representing 33.5% of total sales (domestic sales plus exports). Brazil has performed an important role in the steel export market, mainly as a supplier of semi-finished products (slabs, blooms and billets) for industrial use or for re-rolling into finished products. Brazilian exports of semi-finished products totaled 8.5 million tonnes in 2025, 8.9 million tonnes in 2024 and 9.3 million tonnes in 2023, representing 80.0%, 81.9% and 80.1% of Brazil’s total exports of steel products, respectively. Brazil was the second largest exporter of steel to the United States in 2025. In 2025, when the quota for Brazilian products under Section 232 ended, exports to the U.S. were no longer subject to quantitative restrictions, and importers began paying the 25% tariff, consistent with other exporting countries. As a result, exports to the U.S. in 2025 were 7.7% higher over 2024. However, prices declined by 16% compared to 2024 for Brazilian slabs, reflecting direct competition with lower-priced products of Asian origin. 20 Table of Contents Brazilian Production and Apparent Demand for Steel Products (million tonnes) ​ Source: Instituto Aço Brasil Raw materials — One of Brazil’s major competitive advantages is the low cost of its raw materials. Brazil has an abundance of high-quality iron ore. Various integrated producers are in the state of Minas Gerais, where some of the world’s biggest iron ore mines are located. The cost of iron ore from small miners in Brazil is very competitive if compared to the cost of iron ore in China, for example. In Brazil, most of the scrap metal consumed by steel mills comes from Brazil’s southeast and south regions. Mill suppliers deliver scrap metal obtained from obsolete products and industrial scrap directly to the steel mills. Brazil is a major producer of pig iron. Most of the pig iron used in the steel industry comes from the state of Minas Gerais and the Carajás region, where it is produced by various small and midsized producers. The price of pig iron follows domestic and international markets, with charcoal and iron ore the main components of its cost formation. North American Steel Industry According to World Steel Association, in 2025 U.S. was the 3rd largest global steel producer (4th in 2024), with 81.9 million metric tons. Mexico holds the 15th position, contributing 13.5 million metric tons. Canada has the 17th spot, manufacturing 11.5 million metric tons. ​ 21 Table of Contents Crude Steel Production by North American Countries (million tonnes)* ​ Source: World Steel / Steel Statistical Yearbook 2025 *Most recent year for which information is available The North American steel market is mature and well established, demand fluctuates within a stable band, and its level of activity is directly influenced by general economic conditions, steel import levels, and the strength of the U.S. dollar. Traditionally, the North American market has been a target for steel imports with global origins. The imported steel material was often priced at low levels, sometimes even below production and shipping costs. In response to these import practices, the U.S. supported the domestic industry through Section 232 tariffs—initially set at 25% in March 2018 for national security reasons. Over time, these were largely replaced by bilateral agreements: Australia was exempted, while South Korea, Brazil, and Argentina negotiated hard-cap quotas. By 2019, tariffs were removed for Canada and Mexico in favor of volume monitoring. Additionally, Section 301 tariffs targeting Chinese steel were established in 2018 and maintained through the Biden administration. In 2022, the 25% tariffs for the EU, UK, and Japan were transitioned into tariff-rate quotas, which defined the trade landscape until the recent universal reinstatements. ​ On February 18, 2025, a proclamation was issued announcing the termination of existing 232 exception agreements with several countries, including Canada, Mexico, the European Union, Japan, South Korea, the United Kingdom, Argentina, Australia, and Brazil. The document underscored national security concerns regarding the surge in steel imports, which adversely affected U.S. domestic production driving the steel industry’s capacity utilization below the critical 80% level, necessary for sustaining production capabilities for national security. Additionally, the measure aimed at addressing transshipment and further processing of steel from restricted countries, such as China, through Mexico and other exempted nations. Imports from Ukraine, previously exempted, are also now subject to tariffs, as the exemption was found to primarily benefit EU producers rather than Ukraine. Furthermore, certain derivative steel products not originally covered by the 2018 tariffs are now subject to the 25% duty. The previous system allowing U.S. importers to request exemptions for specific steel products was also terminated, with no further exclusions permitted to prevent loopholes that could undermine the tariffs’ intended objectives. In June 2025, President Trump announced that Section 232 steel tariffs were being increased to 50% (with the exception of the UK, which remained at 25%). Finally, the shift in U.S. trade policy is still developing, and therefore there are no assurances that the reimposed 50% tariffs expected to favor the domestic steel production will not be lifted, altered, or significantly weakened – whether by legal challenges, new legislation, additional executive actions, or other means – it is likely that foreign steel imports will rise, leading to a decrease in U.S. steel prices. This change could have a significant negative impact on our revenues, financial performance, and cash flow. Company Profile Gerdau S.A. is mainly dedicated to the production and commercialization of steel products in general, through its mills located in Brazil, Canada, the United States, Argentina, Peru, Uruguay and Mexico (joint venture). 22 Table of Contents Gerdau is the leading manufacturer of long steel in North and South America. Gerdau believes it is one of the major global suppliers of special steel for the automotive industry. In Brazil, Gerdau also produces flat steel and iron ore for internal consumption, activities that are expanding Gerdau’s product mix and the competitiveness of its operations. In addition, Gerdau believes it is one of Latin America’s biggest recyclers and, worldwide, transforms millions of tonnes of scrap metal into steel every year, reinforcing its commitment to sustainable development in the regions where it operates. Gerdau’s shares are listed on the New York and São Paulo stock exchanges. Gerdau holds significant market share in the steel industries of almost all countries where it operates and was classified by World Steel Association as the world’s 33rd largest steel producer based on its consolidated crude steel production in 2024, the most recent year for which information is available. Gerdau operates steel mills that produce steel in blast furnaces and in electric arc furnaces (EAF). In Brazil it operates three integrated steel mills, including its largest mill, Ouro Branco, located in the state of Minas Gerais. Gerdau currently has a total of 29 steel producing facilities globally. As of December 31, 2025, Gerdau’s total consolidated installed annual capacity, excluding investments in joint ventures and associate companies, was approximately 15.7 million tonnes of crude steel and 15.0 million tonnes of rolled steel products. The Company had total consolidated assets of R$ 81.7 billion, shareholders’ equity (including non-controlling interests) of R$ 53.8 billion, consolidated net sales of R$ 69.9 billion and total consolidated net income (including non-controlling interests) of R$ 1.4 billion for the year ended December 31, 2025. Its product mix includes crude steel (slabs, blooms and billets), which is sold to rolling plants; finished products for the construction industry, such as rebar, wire-rods, structural shapes, hot-rolled coils and heavy plates; finished industrial products, such as commercial rolled-steel bars, light profiles and wires; and agricultural products, such as stakes, smooth wire and barbed-wire. Gerdau also produces special steel items using cutting-edge technology. The Company currently operates 10 steel production units (including special steels units) in the United States and 3 steel production units in Canada and believes it is one of the leading companies in North America in the production of certain long steel products, such as rebar, merchant bars and beams. The Company’s operating strategy is based on the acquisition and construction of steel mills located near its clients and the sources of the raw materials needed to make steel, such as scrap steel, pig iron and iron ore. Therefore, historically, most of production has been directed to supply the local markets of the regions where the Company operates. However, the Company also exports an excess portion of its production to other countries. Through its subsidiaries and associate companies, the Company also engages in other activities related to the production and sale of steel products, including reforestation projects; electric power generation projects; production of iron ore and pig iron; as well as fab shops and downstream operations. Operations The Company sells its products to a diversified list of customers for use in the construction, manufacturing and agricultural industries. Shipments by the Company’s Brazilian operations include both domestic and export sales. Most of the shipments by the Company’s business segments in North and Latin America (except Brazil) are aimed at their respective local markets. Starting with the disclosure of the results of 2025, the Company began to disclose the information and results of its business segments as follows: ● Brazil Segment*: includes the long, flat and special steel operations and the iron ore operation located in Brazil and joint ventures and associated companies located in Brazil; ● North America Segment: includes the long and specialty steel operations located in Canada and the United States and the joint ventures located in Canada and Mexico; ● South America Segment**: includes the operations in Argentina, Peru and Uruguay. 23 Table of Contents With these changes, the information and results of the former Special Steel Segment, which included the special steel operations located in Brazil and the United States, are now disclosed jointly with the other segments, according to their geographic location, as the Brazil Segment and the North America Segment, respectively. ​ This new format for disclosing information and results is in line with recent changes in the global steel industry scenario, which have led to an increasing regionalization of markets, business dynamics and local currencies of these operations, improving the presentation of Gerdau’s results in Brazil and North America, the main regions in which it operates. The comparative information of the segments presented in these Financial Statements has been adjusted to reflect this new composition. ​ *On February 10, 2025, the Company, after fulfilling all the conditions precedent, including approval by the antitrust authorities, concluded the transaction with Sumitomo Corporation and The Japan Steel Works Ltd., for the acquisition of 39.53% and 1.74%, respectively, of the total shares issued by Gerdau Summit Aços Fundidos e Forjados S.A. (“Gerdau Summit”). With the closing of the transaction, the Company will own 100% of the Gerdau Summit’s capital Gerdau Summit, until then a joint venture, with this transaction becomes a subsidiary of the Company. **In January 2024, Gerdau announced the sale of its stake in joint ventures Diaco S.A. and Gerdau Metaldom Corp. and their subsidiaries, which were part of the South America Business Segment. The following tables present the Company’s consolidated shipments in tonnage, net sales, and production by Business Segment for the periods indicated: ​ Shipments ​ ​ ​ ​ ​ ​ ​ ​ Gerdau S.A. ​ ​ ​ ​ ​ Shipments by Business Segments (1) ​ ​ ​ ​ ​ (1,000 tonnes) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 TOTAL ​ 11,360 ​ 10,984 ​ 11,323 Brazil ​ 5,833 ​ 5,667 ​ 5,740 North America ​ 4,999 ​ 4,569 ​ 4,735 South America ​ 1,111 ​ 1,010 ​ 1,125 Eliminations and Adjustments ​ (313) ​ (261) ​ (278) ​ (1) The information does not include data from associate and joint ventures. Net Sales ​ ​ ​ ​ ​ ​ ​ ​ Gerdau S.A. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Sales by Business Segments (1) ​ ​ ​ ​ ​ ​ (R$ million) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 TOTAL ​ 69,859 ​ 67,027 ​ 68,916 Brazil ​ 29,688 ​ 30,218 ​ 31,196 North America ​ 35,787 ​ 31,931 ​ 33,179 South America 5,561 ​ 5,759 ​ 5,118 Eliminations and Adjustments (1,178) ​ (881) ​ (576) ​ (1) The information does not include data from associate and joint ventures. Production ​ ​ ​ ​ ​ ​ ​ ​ Annual production (1) ​ ​ ​ ​ ​ ​ ​ ​ (million tonnes) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Crude Steel Production 12,127 ​ 11,702 ​ 11,557 Rolled Steel Production 10,707 ​ 10,226 ​ 10,469 Iron Ore Production 3,717 ​ 4,484 ​ 5,435 (1) The information does not include data from associate and joint ventures. 24 Table of Contents Brazil Business Segment The Brazil Business Segment has annual production capacity of approximately 7.9 million tonnes of crude steel and 8.2 million tonnes of finished steel products. This Business Segment minimizes delays by delivering its products directly to customers through outsourced companies under Gerdau’s supervision. Sales trends in both the domestic and export markets are forecasted monthly. The Brazil Business Segment uses a proprietary information system to stay up to date on market developments so that it can respond swiftly to fluctuations in demand. Gerdau considers its flexibility in shifting between markets (Brazilian and export markets) and its ability to monitor and optimize inventory levels for most of its products in accordance with changing demand as key factors to its success. In 2025, crude steel production decreased 2.9% compared to 2024, reflecting the fierce competitive local environment, notably due to the growing share of imported steel and new capacity entrants in Brazil. The Company directed 78.1% of its shipments in the Brazil Business Segment to the domestic market in 2025, which represents -3.2 p.p versus 2024. However, its domestic market volumes remained impacted by the excessive importation of steel into the country in 2025, creating a predatory competition dynamic with the local industry. On the other side, even with steel tariff escalation abroad, Brazil Business Segment exports grew 21% in volume versus 2024 and contributed to the dilution of fixed costs and operational leverage for the period, representing 21.9% of Gerdau’s shipments. Despite the resilience of the construction sector, in both the retail segment and direct sales to contractors, industries like manufacturing showed mixed results with gains in light vehicles and declines in sectors like heavy trucks, road transport equipment and white goods. Gerdau’s mineral assets were incorporated to its business through the acquisition of lands and mining rights of Grupo Votorantim, in 2004, encompassing the Miguel Burnier, Várzea do Lopes, and Gongo Soco compounds, located in the iron producing region in the state of Minas Gerais, Brazil. From 2004 to 2019, several geological surveys (drilling and superficial geological mapping) were conducted to obtain further information on the acquired resources. As part of that undertaking, in 2023 Gerdau received a report prepared by SRK Consulting, certifying the reserves of Miguel Burnier mine. According to the conclusions of the report, the Company now holds certified reserves of 476 million metric tonnes (Dry metric tonnes) of iron ore. For more information, see Item 3.D –“Risk Factors ⸺ Risks Relating to our Mining Operations ⸺ Estimates of Gerdau’s mineral resources are based on interpretations and assumptions, involving a level of uncertainty, and may differ substantially from the quantities that can be extracted.” North America Business Segment The North America Business Segment has annual production capacity of approximately 6.9 million tonnes of crude steel and 6.0 million tonnes of finished steel products. It has a vertically integrated network of 10 steel units, scrap recycling facilities and downstream operations. The North America Business Segment’s products are generally sold to steel service centers, steel fabricators or directly to original equipment manufacturers for use in a variety of industries, including construction, automotive, mining, energy, cellular and electrical transmission, metal construction fabrication, and equipment fabrication. Most of the raw material feed stock for the mini mill operations is recycled steel scrap. The mills of this business operation manufacture and commercialize a wide range of steel products, including steel reinforcement bars (rebar), merchant bars, structural shapes, beams, piling, and special sections. Some of these products are used by the downstream units to make products with higher value-added, which consists of railroad spikes, super light beam processing, elevator guide rails, grinding balls and solar piles. Sales of finished products to U.S. and Canadian customers are centrally managed by the sales office in Tampa, Florida. There is also a sales office in Selkirk, Manitoba for managing sales of special sections and one in Midlothian, Texas for managing sales of structural and merchant bar products. Metallurgical service representatives at the mills provide technical support to the sales group. Sales of the super light beam products are managed by sales representatives located at their respective facilities. Elevator guide rails are generally sold through a bidding process in which employees at Gerdau’s facilities work closely with customers to tailor product requirements, shipping schedules and prices. 25 Table of Contents In 2025, crude steel production and steel shipments in North America were 11.5% and 9.4% higher than in 2024, respectively, evidencing not only the improved momentum of the local industry, driven by declining imports following the reinforcement of tariffs, but also the enhancement of position in key markets and the growing share of higher value-added products and solutions. Steel shipments in 2025 were positively impacted by a strong customer preference for domestic steel, and by increasing demand from end-market sectors such as Data Centers and Renewable Energy. South America Business Segment The South America Business Segment comprises 3 steel facilities, retail facilities, fab shops and scrap processing facilities. The entire operation is focused on the respective domestic markets of each country, operating mini mills facilities with annual manufacturing capacity of approximately 900 thousand tonnes of crude steel and 800 thousand tonnes of finished steel products. The countries in the South America Business Segment are Argentina, Peru, and Uruguay. Steel production and shipments in 2025 increased by 5.0% and 10.0%, respectively, compared to 2024 fueled by increased volumes in the three countries where we operate. However, the key sectors served still showed weaker demand throughout the year. In Argentina, civil construction activity levels hit all-time lows, while in Uruguay, infrastructure works remained halted. On the other hand, in Peru, the order backlog remained resilient, driven by demand from the civil construction distribution sector Exports In 2025, the steel industry worldwide faced an increase in trade defense measures against predatory suppliers, as China’s finished steel exports hit an all-time record of 119M mt. More than ever, countries and blocs are trying to protect their local production and industries by promoting a trade war, like the import tariff increase from 25% to 50% made by the current United States government under Section 232. With this scenario, world crude steel production contracted 2% year over year in 2025, according to recently published data from the World Steel Association. Increases in India (10.4%), Vietnam (12.2%), US, Turkey and Italy (~3%) were not enough to offset the decline in China (4.4% YoY,) as well as decreases in the other five of the top 10 steel-producing countries. Also, according to World Steel, demand for steel was set to remain stable at 1,749Mt in 2025, with China accounting for 50.8% of apparent consumption. Gerdau’s focus remains primarily on the Americas, with increased sales to Europe concentrated mainly on higher value-added products. With the end of steel import quotas in the United States, North America’s share grew significantly in the first half of the year compared to the previous period. The table below presents Gerdau’s Brazilian exports by destination for selected periods: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exports of Gerdau ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ by Destination (%) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2022 ​ ​ ​ 2021 ​ ​ ​ 2020 ​ ​ ​ Total including shipments to subsidiaries (1,000 tonnes) ​ 1,185 ​ 966 ​ 1,004 ​ 928 ​ 714 ​ 825 ​ Africa ​ 1 % — % — % 4 % — % 2 % Central America ​ 22 % 37 % 43 % 28 % 12 % 21 % North America ​ 24 % 17 % 8 % 4 % 9 % 3 % South America ​ 41 % 42 % 44 % 56 % 61 % 54 % Asia ​ 2 % — % — % 5 % 17 % 17 % Europe ​ 10 % 4 % 5 % 23 % 1 % 3 % Middle East ​ — % — % — % — % — % — % The company remains focused on serving strategic markets that contribute to the overall performance of its operations, continuously assessing the impacts and opportunities arising from the persistent volatility of the international political and economic environment. 26 Table of Contents Products The Company supplies its customers with a wide range of products, including steel products: Semi-finished products (Billets, Blooms and Slabs) The semi-finished products (billets, blooms and slabs) have relatively low added value compared to other steel products. Billets are bars from square sections of long steel that serve as inputs to produce wire rod, rebars and merchant bars. They represent an important part of the products from the Ouro Branco mill. Blooms are used to manufacture products such as springs, forged parts, heavy structural shapes and seamless tubes. Slabs are used in the steel industry for the rolling of a broad range of flat rolled products and mainly used to produce hot and cold rolled coils, heavy slabs, profiles and heavy plates. The semi-finished products are produced using continuous casting and, in the case of blooms and billets there is subsequent rolling process. Common Long Rolled Products Common long rolled products represent a major portion of the Company’s production. The Company’s main long rolled products include rebars, wire rods, merchant bars, light shapes and profiles, which are used mainly by the construction and manufacturing industries. Drawn Products Drawn products include barbed and barbless fence wire, galvanized wire, fences, concrete reinforcing wire mesh, nails and clamps. These products are not exported and are usually sold to the manufacturing, construction and agricultural industries. Special Steel Products Special steel requires advanced manufacturing processes because they have specific physical and metallurgical characteristics for applications with high mechanical demands. This steel is a key product for the automotive industry, as it is used in auto parts, light and heavy vehicles and agricultural machinery. Special steels also serve other significant markets, such as oil and gas, wind energy, machinery and equipment, mining and rail, among others. Flat Products The Ouro Branco unit produces cast slabs, which are rolled into flat products, such as hot-rolled coils, which are sold in the domestic market, and heavy plates, which are sold in the domestic and export markets. The Company, through its distribution channel and direct sales, distributes these hot-rolled coils and heavy plates, which adds more value through additional processing at flat steel service centers. Iron Ore Gerdau has two mines producing iron ore, all located in the Brazilian state of Minas Gerais (Várzea do Lopes and Miguel Burnier). The mines produce the following: sinter feed (featuring low content of contaminants and good metallurgical properties, enabling its use as a base material); pellet feed/concentrated (superior quality enabling its use as a chemical balancer in the synthetizing process, while also adequate for pelletizing, blast furnace quality - low loss by calcination — PPC); hematite fines (small scale production, used as input in Gerdau’s furnaces); used chiefly for own consumption at the Ouro Branco Mill). 27 Table of Contents The following table presents the main products and the contributions to net revenue and net income by Business Segment for the periods shown (consolidated): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Brazil ​ North America ​ South America ​ Eliminations and Adjustments ​ ​ ​ Rebars, merchant bars, beams, drawn ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ products, billets, blooms, slabs, wire ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ rod, structural shapes, hot rolled coil, ​ Rebars, merchant bars, wire rod, light ​ Rebar, merchant bars and ​ ​ ​ ​ ​ ​ Products ​ heavy plate and iron ore. ​ and heavy structural shapes. ​ drawn products. ​ ​ ​ ​ ​ ​ Year ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Net Sales (R$ thousand) ​ 29,687,978 ​ 30,217,819 ​ 31,195,557 ​ 35,787,268 ​ 31,931,433 ​ 33,179,048 ​ 5,561,450 ​ 5,758,695 ​ 5,118,150 ​ (1,178,164) ​ (881,291) ​ (576,309) ​ % of Consolidated Net Sales 42.5 % 45.1 % 45.3 % 51.2 % 47.6 % 48.1 % 8.0 % 8.6 % 7.4 % (1.7) % (1.3) % (0.8) % ​ Production Process In Brazil, the Company has a decentralized production process, using both mini mills and integrated facilities. In general, the Company has used the mini mill model to produce steel products outside of Brazil. Semi-integrated Process (Mini-mills) The Company operates 27 mini-mills worldwide, 11 located in Brazil, 13 in North America and 3 in South America. Mini-mills recycle steel scrap and are equipped primarily with electric arc furnaces that can melt steel scrap and produce steel products at the required specifications requested by customers. After loading the furnace with a preset mixture of raw material (i.e., steel scrap), electric power is applied in accordance with a computer-controlled melting profile. The Company’s mini mill production process generally consists of the following steps: obtaining raw material (steel scrap), melting, casting, rolling, and drawing. The basic difference between this process and the integrated mill production process described below is in the first processing phase, i.e., the steelmaking process. Mini mills are smaller plants than integrated facilities and the Company believes they provide certain advantages over integrated mills, including: ● Be a recycling process; ● Lower greenhouse gas emissions; ● Lower capital costs; ● Lower operational risks due to the low concentration of capital and installed capacity in a single production plant; ● Proximity of production facilities to raw-material sources; ● Proximity to local markets and easier adjustment of production levels; and ● More effective managerial structure due to the relative simplicity of the production process. Integrated Process Integrated mills produce steel from iron ore and are equipped primarily with blast furnaces that can transform iron ore into metallic iron. Gerdau operates three integrated mills located in Brazil. The Ouro Branco Mill is the largest integrated facility operated by the Company. It produces steel from pig iron from the blast furnace and has some of the advantages of a mini mill, since it is located near Gerdau’s iron ore source and linked by railways to Gerdau’s ports from which Gerdau exports part of its production. The Divinópolis Mill is the other integrated facility operated by the Company and produces steel using charcoal instead of mineral coal to transform iron ore into metallic iron. This route is considered low greenhouse emission since charcoal is sustainably produced at Gerdau’s farms. The third mill, Barão de Cocais, suspended production in 2024 due to the tougher domestic market in Brazil. 28 Table of Contents Gerdau’s steel manufacturing process at integrated units consists of four basic stages: preparation of raw materials, production of pig iron, production of steel, and production of semi-finished steel products (billets, blooms, and slabs). In the first stage, sinter (a mixture of iron ore and limestone), coke, and other raw materials are consumed in the Ouro Branco unit blast furnace to produce pig iron, while charcoal and other raw materials are consumed at the Divinópolis unit. Coke and charcoal act as both fuel and a reducing agent, transforming the oxide called iron ore into metallic iron. Gerdau’s blast furnaces have an aggregate installed capacity of approximately 4.1 million tonnes of molten pig iron per year. The pig iron produced is transported by rail to the desulphurization unit to reduce the steel’s sulfur content. After the desulphurization process, the low-sulfur pig iron is transformed into steel using LD-type oxygen converters. The LD steelmaking process utilizes molten pig iron and scrap to produce steel by blowing oxygen over the metallic charge inside the converters. The process does not require any external source of energy, which is fully supplied by the chemical reactions occurring between oxygen and the impurities in the molten pig iron. The LD steelmaking process is currently the most widely used in the world. There is also secondary refining after the LD converters’ output with ladle furnaces and degassing processes. Liquid steel is then sent to the continuous casting equipment, where it is solidified into billets, blooms, or slabs. These products may be sold to clients directly, transferred to other Gerdau units for transformation, or used in the production of finished rolled steel products at the integrated units. Gerdau’s integrated units in Brazil have rolling mills for rebars, bars and profiles, wire rod, structural shapes, hot-rolled coils, and heavy plates. Logistics Gerdau sells its products through a combination of independent distributors, direct sales from the mills and its retail network. Logistics costs are an important component in the steel businesses and are a significant factor in maintaining competitive prices in both domestic and export markets. Gerdau’s mills are strategically located in different geographic regions, allowing the Company to gain a competitive advantage. The proximity of these mills to raw material sources and important consumer markets helps reduce costs in obtaining raw material and enhances customer service. This logical efficiency is a significant advantage for both inbound and outbound operations. To monitor and reduce logistic costs, Gerdau employs tailored solutions for various transportation modes, including road, rail, sea and cabotage, as well for terminals, technology and equipment. Gerdau stands out as one of the Brazilian industries with the greatest participation in multimodal transportation, aligned with our effort to reducing our carbon footprint. The Company is committed to continuously improving its performance by receiving raw materials and delivering products to its customers of designated ports. As part of this effort, Gerdau develops and maintains long-term relationships with logistic suppliers specializing in delivering raw materials and steel products. In 1996, Gerdau acquired an interest in MRS Logística, one of the most important rail companies in Brazil, which operates connecting the states of São Paulo, Rio de Janeiro and Minas Gerais, which are Brazil’s main economic centers, and also reaches the main ports of the country in this region. This interest assures the availability of this mode to transport raw materials (scrap and pig iron) as well as final products. Gerdau uses a variety of ports to deliver products from the entire Brazilian coastline. Most exports are shipped from the Praia Mole Private Steel Terminal in Vitoria, Espírito Santo. Overseas, Gerdau owns a private port terminal in Chimbote (Peru), where the Company has a steel mill, used to deliver inputs, raw material and products for the operation. 29 Table of Contents Competition The steel market is divided into manufacturers of long steel products, flat steel products and special steel. The Company operates in the long steel market, which is the most important market for Gerdau, by supplying to the following customer segments: (i) construction, to which it supplies rebars, merchant bars, sections, beams, nails and meshes; (ii) manufacturing, to which it supplies products for machinery, agricultural equipment, tools and other industrial products; and (iii) other markets, to which it supplies wires and posts for agricultural installations and reforestation projects. In North America, the Company also supplies customers with special sections, including elevator guide rails and super light beams. The Company also provides its customers with higher value - added products at rebar and wire rod fabrication facilities. The Company operates in the flat steel market only in Brazil through the Ouro Branco mill that produces slabs, which are used to roll flat products such as hot-rolled coils and heavy plates. The Company distributes these hot-rolled coils to which it adds further value through additional processing at its flat steel service centers. The Company produces special and stainless steel used in tools and machinery, chains, fasteners, railroad spikes, special coil steel, grader blades, smelter bars, light rails, super light I-beams, elevator guide rails and other products that are made on demand for the Company’s customers at its special steel units in Brazil and United States. Competitive Position — Brazil The Brazilian steel market is very competitive. In the year ended December 31, 2024 (most recent information), ArcelorMittal Brasil and the Company were the two largest Brazilian crude steel producers, according to the Brazilian Steel Institute (IABr - Instituto Aço Brasil). World common long rolled steel demand is met principally by steel mini mills and, to a much lesser extent, by integrated steel producers. In the Brazilian market, no single company competes against the Company across its entire product range. The Company believes that the diversification of its products, the solution developed by its fab shops units and the decentralization of its business provide a competitive edge over its major local competitors. The main Gerdau competitors in long steel segment are ArcelorMittal, Simec, Sinobrás, Aço Verde do Brasil (AVB) and Companhia Siderúrgica Nacional (CSN). Regarding the flat steel market, Gerdau’s competitors are ArcelorMittal, Usiminas and CSN. Besides the local competitors, the Company has been facing substantial competition from long and flat steel products imports, mainly coming from China. According to the Brazil Steel Institute, the steel import penetration rate in Brazil reached 21% in 2025, 60% above the average of the last ten years, while the import volume in 2025 was 7.4% higher than in 2024, increasing the local competitive imbalance, chiefly due to steel imports under predatory competition conditions. Although the Company is a modern and highly efficient producer, it cannot compete with heavily subsidized imports, which directly affect the competitiveness of its industry. Competitive Position — Outside Brazil Gerdau’s geographic market in North America encompasses primarily the United States and Canada. The Company faces substantial competition in the sale of each of its products from numerous competitors in its markets. Rebar, merchant bars and structural shapes are commodity steel products for which pricing is the primary competitive factor. Due to the high cost of freight relative to the value of steel products, competition from non-regional producers is somewhat limited. Proximity of product inventories to customers, combined with competitive freight costs and low-cost manufacturing processes, are key to maintaining margins on rebar and merchant bar products. Rebar deliveries are generally concentrated within a 350-mile radius of the mini mills and merchant bar deliveries are generally concentrated within a 500-mile radius. Some products produced by the Midlothian, Jackson, Cartersville and Petersburg mini mills are shipped greater distances, including overseas. The Company’s principal competitors include Commercial Metals Company (CMC), Nucor Corporation, and Steel Dynamics Inc. 30 Table of Contents In South America, each country has a specific competitive position that depends on conditions in their respective markets. Most compete domestically and face significant competition from imports. More than 90% of shipments from Gerdau’s South American operation originate from Argentina and Peru. In this market, the main barriers faced by Gerdau sales are freight and transportation costs and the availability of imports. The main products sold in the South American market are for the construction, agriculture and mining markets. Despite the large-scale characteristic of rebars, bars and profiles, Gerdau believes that it stands out from many of its competitors for its wide range of products, quality, consistent delivery performance and the ability to fulfill large orders. Gerdau believes that it produces one of the most complete lines of bars and profiles. The variety of products offered by Gerdau is an important competitive advantage in a market where many customers seek to meet their needs with few key suppliers. Business Cyclicality and Seasonality The steel industry is highly cyclical. Consequently, the Company is exposed to fluctuations in the demand for steel goods that in turn cause fluctuations in the prices of these goods. Furthermore, since the production capacity of Brazil’s steel industry exceeds its demand, it is dependent on export markets. The demand for steel goods and consequently the financial conditions and results of operations of steel producers, including the Company, are generally affected by fluctuations in the world economy and in particular the performance of the manufacturing, construction and automotive industries. Unfavorable conditions in China and steel-exporting countries can significantly impact steel prices in other markets. China, as the world’s largest steel producer and consumer, influences global steel demand and supply dynamics. Factors like a lack of real estate investment, lower consumer confidence and rationalization of government stimulus can diminish steel demand within China, affecting global prices. Additionally, steel-exporting countries, benefiting from lower production costs, efficient supply chains, and economies of scale, can exert competitive pressures on international steel prices, particularly when coupled with government subsidies or trade agreements. These combined factors create a complex interplay of supply and demand forces that can swiftly impact steel prices worldwide. In Gerdau’s Brazilian and South American operations, shipments in the second and third quarters of the year tend to be stronger than in the first and fourth quarters, given the seasonality, and reduction of sector’s activity such as construction. In Gerdau’s North American operations, demand is influenced by winter conditions, when consumption of electricity and other energy sources (i.e., natural gas) for heating increases and may be exacerbated by adverse weather conditions, contributing to increased costs and decreased construction activity, and in turn leading to lower shipments. Information on the Extent of the Company’s Dependence The Company is not dependent on industrial, commercial or financial agreements (including agreements with clients and suppliers) or on new production processes that are material to its business or profitability. The Company also has a policy of diversifying its suppliers, which enables it to replace suppliers without affecting its operations in the event of failure to comply with the agreements, except in the case of its energy and natural gas supply. In addition to the government regulations that apply to its industry in general, the Company is not subject to any specific regulations that materially or adversely affect its business. In the case of a power outage, there are no alternative supply options available at most Gerdau mills due to the high volume and tension required for the operation of these plants. Some of Gerdau’s small plants may choose, as an alternative, to use generators to compensate for the energy shortage. Moreover, at the Ouro Branco Mill, about 90% of the thermal demand in stationary equipment such as furnaces, regenerators and boilers is met by gases resulting from the steelmaking process. In case of a lack of natural gas, the equipment could be adjusted to use diesel and LPG. Gerdau’s operations are spread across various geographic regions, which provides a risk diversification of any electricity or natural gas supply problems in Brazil. The distribution of electric power and natural gas is a natural monopoly in most countries, which leads the distributor to be the only supplier in each geographic region. In some countries, regulations allow for a choice of electrical power or natural gas commodity supplier, allowing Gerdau to diversify its supply agreement portfolio. 31 Table of Contents Production Inputs Price volatility Gerdau’s production processes are based mainly on the mini mill concept, with mills equipped with electric arc furnaces that can melt ferrous scrap and produce steel products at the required specifications. The main raw material used at these mills is ferrous scrap, which at some plants is blended with pig iron. The component proportions of this mixture may change in accordance with prices and availability to optimize raw material costs. Iron, iron ore (used in blast furnaces) and ferroalloys are also important. Although international ferrous scrap prices suffer high influence by the U.S. domestic market (since the United States is the largest scrap exporter), the price of ferrous scrap in Brazil varies from region to region and is influenced by supply, demand and transportation costs. Brazil Segment — The Company’s Brazilian mills use scrap and pig iron purchased from local suppliers. Due to the nature of the raw materials used in its processes, Gerdau acquires scrap from the domestic market in accordance with the operational requirements of its mills. Scrap for the Brazilian operation is priced in Brazilian reais; thus input prices are not directly affected by currency fluctuations. Due to its size, the Ouro Branco mill has developed over the last few years a strategy to diversify its raw materials, which are supplied through various types of contracts and from multiple sources, which include: (i) coking coals imported from Colombia, the United States and Russia as well as petroleum coke purchased from Petrobras; (ii) ferroalloys, of which around 90% are purchased in the domestic market; and (iii) iron ore, which is mainly produced from its own mines and partially supplied by mining companies, most of them strategically located close to the plant. North America Business Segment — The main input used by the Company’s mills in North America is ferrous scrap, and it has consistently obtained adequate supplies of raw materials, not depending on a small number of suppliers. Since the United States are one of the largest scrap exporters in the world, the prices of this raw material, in the country, may fluctuate according to domestic supply vs. global demand. In September 2024 Gerdau acquired the assets of Dales Recycling Partnership, a company engaged in the operation, processing, and recycling of ferrous and non-ferrous scrap with an annual capacity to process approximately 160,000 tons of ferrous and non-ferrous scrap. This acquisition aims to increase Gerdau’s captive ferrous scrap in North America through proprietary channels, supplying raw materials at a competitive cost. South America Business Segment — The main input used by the Company’s mills in South America is ferrous scrap. This operation is exposed to market fluctuations, varying its prices according to each local market. Ferrous Scrap There are two broad categories of ferrous scrap: (i) obsolete scrap, which is steel from various sources, ranging from cans to car bodies and white goods; and (ii) industrial scrap, which is composed of scrap from manufacturing processes, essentially steel bushings and flashings, steel turnings and even scrap generated by production processes at steel producers, such as Gerdau. In Brazil, the use of scrap in electric arc furnaces varies between scrap from obsolescence and industrial scrap. Special Steel mills mainly use industrial scrap. Because ferrous scrap is one of its main raw materials in steel production, Gerdau is dedicated to improving its supply chain in various countries, aiming to develop and integrate micro and small suppliers into the Company’s business. In Brazil, the main part of the scrap consumed by the Company comes from small scrap collectors who sell all their material to Gerdau, which provides a direct supply at more competitive costs for the Company. In North America, although the scrap supply is more consolidated, the number of vendors is still significant, ensuring the competitiveness of the business in the region. Brazil Business Segment — The price of steel scrap in Brazil varies by region and reflects local supply, demand and transportation costs. The Southeast is the country’s most industrialized region and generates the highest volume of scrap. Due to the high concentration of players in this region, competition is more intense. In Brazil, Gerdau has five scrap shredders, including mega-shredder at the Cosigua mill in Rio de Janeiro and at the Araçariguama mill in Sao Paulo, with capacity to process scrap in volumes superior to 200 vehicles per hour. The Company will start a new mega shredder at the Pindamonhangaba mill by 2026. 32 Table of Contents North America Business Segment — Ferrous scrap is the main raw material. The availability of this input varies according to the level of economic activity, seasonality, export levels, climatic conditions and price fluctuations. Of the thirteen units in the North America Business Segment, five of them have shredders on-site. Considering that not all the scrap consumed comes from their yards, the rest of the demand is guaranteed through direct acquisitions or via resellers who originate and prepare the scrap. In North America, all production units are semi-integrated mills or mini mills, in which results of operations are closely related to the cost of ferrous scrap and its substitutes, which are the main input of mini mills. Ferrous scrap prices are relatively higher during the winter months in the north hemisphere due to the impact of climate on collection and supply. More than half of North America’s steel industry output is currently produced in electric arc furnaces with the use of ferrous scrap. Prices of ferrous scrap are subject to market forces beyond the Company’s control, including demand from the United States and international steel producers, freight costs and speculation. South America Business Segment — The price of scrap in South America varies widely from country to country in accordance with supply, demand and transportation cost. Pig Iron and Sponge Iron Brazil is an exporter of pig iron. Most of Brazil’s pig iron is produced in the state of Minas Gerais by small producers. Pig iron is an important component of the metallic charge in steelmaking complementing scrap in the mix. The price of pig iron follows domestic and international demand, and its cost production is basically composed by reducers and minerals. In North America, the availability of scrap plays an important role for our operations. Sponge iron and pig iron are used in limited quantities to produce steels with specific characteristics. Iron Ore Iron ore is the main input used to produce pig iron at Gerdau’s blast furnace mills located in the state of Minas Gerais, southeastern Brazil. The pig iron is used in the melt shops together with scrap, to produce steel. Iron ore is purchased in its natural form as lump ore, pellet feed or sinter feed, or agglomerated as pellets. The lump ore and pellets are loaded directly into the blast furnace, while the sinter feed and pellet feed need to be agglomerated in the sinter plant and then loaded into the blast furnace, to produce pig iron. The production of 1.0 tonne of pig iron requires about 1.6 tonnes of iron ore. Iron ore consumption in Gerdau mills in Brazil amounted to 6.3 million tonnes in 2025, partially supplied by mining companies adjacent to the steel plants and partially supplied by Gerdau’s mines. Other Inputs In addition to scrap and iron ore, Gerdau’s operations use other inputs to produce steel such as ferroalloys, electrodes, furnace refracting materials, oxygen, nitrogen, and other industrial gases and limestone, albeit in smaller amounts. Additional inputs associated with the production of pig iron are thermal reducers, such as coal coke, charcoal, or natural gas, which are used in blast furnace mills. The Ouro Branco mill’s significant raw materials and inputs also include solid fuels, comprising metallurgical coal, used in the production of coke and for pulverized injection into the blast furnace. This process increases productivity and consequently reduces the final cost of pig iron. Besides metallurgical coal, the Company also uses anthracite, a solid fuel used in the production of sinter. The gases resulting from the production of coke and pig iron are reused to generate thermal energy, which is converted into electric energy for the mill, improving energy efficiency. 33 Table of Contents The North American operations also use additional inputs. Various domestic and foreign companies supply other important raw materials or operating supplies required for the business, including refractory materials, ferroalloys and graphite electrodes that are available in the national and international market. Gerdau North America Business Segment has obtained adequate quantities of these raw materials and supplies at competitive market prices. The Company is not dependent on any one supplier as a source for any particular material and believes there are adequate alternative suppliers available in the marketplace if the need to replace an existing one arises. Energy Requirements Steel production is a process that consumes large amounts of electricity, especially in electric arc mills. Electricity represents an important role in the production process, along with natural gas, which is used mainly in furnaces to re-heat billets in rolled steel production. In Brazil, electricity is currently supplied to the Company’s industrial units under one type of contracts: ● Contracts executed in the Free Market Environment, in which Gerdau is a “Free Consumer”, are used by the following units: Açonorte, Araçariguama, Araucária, Caucaia, Charqueadas, Cosigua, Cearense, Ouro Branco, Divinópolis, Barão de Cocais, Riograndense, São José dos Campos, Cumbica, Cotia, Pindamonhangaba, Mogi das Cruzes, Várzea do Lopes, Miguel Burnier, São Caetano do Sul, Sete Lagoas and Usiba. The load of these units is served by a portfolio of contracts and by self-generation. The power supply contracts are entered into directly with generation and/or distributing companies at prices that are pre-defined and adjusted in accordance with conditions pre-established by the parties. The transmission and distribution rates are regulated and revised annually by ANEEL (Regulatory agency for the electricity sector in Brazil). In the Ouro Branco mill approximately 25% of the electricity consumed is generated internally. As a result, this makes the plant have significantly lower exposure to the energy market than mini mills. The Company holds the following power generation concession in Brazil: ● Dona Francisca Energética S.A. (DFESA) operates a hydroelectric power plant with nominal capacity of 125 MW located between Nova Palma and Agudo, Rio Grande do Sul State (Brazil). Its corporate purpose is to operate, maintain and maximize use of the energy potential of the Dona Francisca Hydroelectric Plant. DFESA participates in a consortium (Consórcio Dona Francisca) with the power utility Companhia Estadual de Energia Elétrica (CEEE). The shareholders of DFESA are Gerdau S.A. (53.94%), COPEL Participações S.A (23.03%) and Celesc (23.03%). The terms of the Dona Francisca generation concession agreements are for 39 years as of the signature of the agreement. As such: DFESA expires in 2037. ● Gerdau holds a 40% stake in Newave Energia. As a result, the Company consumes 40% of the energy generated from the Solar Arinos (approximately 45 average megawatts) and will acquire approximately 23 MWm from four Barro Alto SPEs of Newave Energia, when they start operations. ● Gerdau has entered into agreements to fully acquire 100% of three other SPEs of the Barro Alto Solar Park (Barro Alto V, Barro Alto VI and Barro Alto VII), thereby obtaining the right to all the energy to be generated by them, estimated at approximately 43 average megawatts (MWm) ● Barro Alto Solar Park is scheduled to start operations in 2026. ● On January, 21, 2025, Gerdau has entered into contracts for the acquisition of Small Hydroelectric Plants (SHPs) named Garganta da Jararaca and Paranatinga II. The SHPs Garganta da Jararaca and Paranatinga II are located in the state of Mato Grosso, and each has an installed capacity of 29MW, with an average of 21MW and 17MW of assured energy, respectively. 34 Table of Contents In Brazil, natural gas is currently supplied to the Company’s industrial units under two types of contracts: ● Contracts in the Regulated Contractual Environment, in which the Company is a “Captive Consumer”, are used at the following units: Açonorte, Araucária, Caucaia, Cearense, Mogi das Cruzes and São José dos Campos. ● Contracts executed in the Free Market Environment, in which Gerdau is a “Free Consumer,” are used by the following units: Ouro Branco, Cosigua, Charqueadas, Rio Grandense, Araçariguama, Pindamonhangaba and Cilindros. The Várzea do Lopes, Miguel Burnier, São Caetano do Sul, Sete Lagoas, Cumbica, Cotia, Barão de Cocais and Divinópolis units do not have access to natural gas supplies. In the United States, there are essentially two types of electricity markets: regulated and deregulated. In the regulated market, contracts are approved by Public Utility commissions and are subject to an approved rate of return. These regulated tariffs are specific to local distributors and generally reflect the utilities transmission, generation capital and operational costs including fuel. In deregulated markets, the price of electricity has three main components: generation capital costs, transmission costs and variable costs. The variable cost is set by the marginal resource and fluctuates with demand and fuel cost. Natural gas in the United States is mostly deregulated. While in general, the U.S. energy market is benefiting from the increased exploration of shale gas, the environmental goals of decarbonization have resulted in natural gas scarcity during periods of high electricity and heating demand causing shortages and price volatility of natural gas and electricity. In Uruguay, electricity is purchased under agreements that are renewed automatically on an annual basis from the state-owned utility UTE. Natural gas is purchased from Montevideo Gas with prices set by the Argentinean export tariff agreement (fuel oil as substitute). In Peru, the Company holds an electricity supply contract valid from January 2023 to December 2034. Additionally, it has a natural gas supply contract spanning from January 2025 to December 2034. The natural gas is supplied as LNG (Liquefied Natural Gas), transported by trucks, decompressed, and gasified for distribution through the internal network to support production processes. In Argentina, natural gas agreements are renewed annually with private companies. In 2008, Gerdau Sipar signed a long-term agreement with a private company to supply the electrical needs of the plant. In Mexico, electricity is purchased under agreements regulated by the state-owned utility Companía Federal de Electricidad (CFE). The natural gas agreements are annually renewed with private companies. Electricity and natural gas prices are indexed and adjusted monthly based on the NYMEX prices indexes. Technology and Quality Management All Gerdau mills have a Quality Management System supported by a wide range of quality control tools. Product development projects are headed by specialists who use quality tools such as, but not limited to, “Six Sigma” (a set of statistical methods for improving the assessment of process variables), DOE (Design of Experiment) and Process Analysis. In general, production, market developers, and quality teams are responsible for developing new products to meet customer and market needs. Given this level of quality management, mills are ISO 9001certified, and certain mills have additional certifications such as but not limited to IATF 16949 (Automotive Industry), ABS (American Bureau of Shipping), German Ü-Sign conformity mark (Ü-Zeichen) and AASHTO Product Evaluation for US highway and bridge construction. The Gerdau Quality Management System requires robust tests on products and processes to ensure that the specifications and requirements are met. A specially trained team and modern technologies guarantee high quality standards for the products manufactured. Gerdau’s market developers do planned visits, some are randomly selected, and some are scheduled visits, to its customers to identify new product development opportunities and check on the quality of the delivered products to guarantee the final user satisfaction for products purchased. Due to the specialized nature of its business, the Gerdau special steel mills are constantly investing in technological upgrading and in research and development. These mills are active in the automotive segment and maintain a technology department (Research and Development) responsible for new products and the optimization of existing processes. 35 Table of Contents International machinery manufacturers and steel technology companies supply most of the sophisticated production equipment that Gerdau uses. These suppliers generally sign technology transfer agreements with the purchaser and provide extensive technical support and staff training for the installation and commissioning of the equipment. Gerdau has technology transfer and benchmarking agreements with worldwide recognized performance companies. As is common with mini mill steelmakers, Gerdau usually acquires technology in the market rather than develops new technology through intensive process research and development, since steelmaking technology is readily available for purchase. The Company is not dependent on patents or licenses or new manufacturing processes that are material to its business. See item “Information on the Extent of the Company’s Dependence” for further details. Sales Terms and Credit Policy The Company’s Brazilian sales are usually made on a 21/28-day settlement CIF (Cost, Insurance and Freight) basis. Comercial Gerdau, the retail arm of Gerdau in Brazil, sells on 28-day settlement basis, mainly CIF. Brazilian customers are subject to a credit approval process. The concession of credit limits is controlled by a corporate-level system (ECC) that can be accessed by all sales channels. The credit and collection department are responsible for evaluating, determining and monitoring credit in accordance with the credit limit policy. This policy includes the active participation of staff from the various sales channels. At Comercial Gerdau, the criteria for retail sales also include practices such as the use of credit card services. Gerdau exports are guaranteed via letters of credit and/or pre-payment before the product is shipped. Exports to Gerdau’s subsidiaries may be sold on credit at market interest rates. Gerdau North American credit terms to customers are generally based on customary market conditions and practices. The Company´s North American business is seasonal, with orders in the second and third quarters tending to be stronger than those in the first and fourth quarters, primarily due to weather-related slowdowns in the construction industry. The Company´s Special Steel operations in the United States and Brazil have their own credit departments for customer credit analysis. The Company’s impairment loss on financial assets has been at low levels. On December 31, 2025, provision for expected credit losses was 1.9% based on gross account receivables per Note 5 to the Consolidated Financial Statements, compared to 2.2% on December 31, 2024, and 1.8% on December 31, 2023. Gerdau has improved its credit approval controls and enhanced the reliability of its sales process using risk indicators and internal controls. Insurance The Company maintains insurance coverage in amounts that it believes suitable to cover the main risks of its operating activities. The Company has purchased insurance for its integrated mill Ouro Branco to insure against operating losses, which covers assets of approximately US$ 7.9 billion (R$ 43.2 billion as of December 31, 2025), including material damage to installations of US$ 7.6 billion (R$ 41.7 billion as of December 31, 2025) and losses of gross revenues of US$ 275.7 million (R$ 1.5 billion as of December 31, 2025), such as halts in production due to business interruptions caused by accidents for a period up to twelve months. The Company’s current insurance policy relating to the Ouro Branco mill remains effective until May 31, 2026. The Company’s mini mills are also covered under insurance policies which insure against certain operational losses resulting from business interruptions. Trade Investigations and Government Protectionism Over the past several years, exports of steel products from several companies and countries, including Brazil, have been subject to antidumping, countervailing duties and other trade-related investigations in importing countries. Most of these investigations resulted in duties and/or volume quotas limiting the investigated companies’ ability to access such import markets. Prior to 2025, the U.S. managed steel trade through Section 232 tariffs, initially implemented at 25% in 2018 for national security reasons. Over time, this framework evolved into a network of bilateral agreements: Australia received a full exemption, while countries like South Korea, Brazil, and Argentina moved to “hard-cap” quotas. Additionally, tariffs were removed for Canada and Mexico in 2019 in favor of volume monitoring, and by 2022, the Biden administration had transitioned tariffs for the EU, UK, and Japan into tariff-rate quotas. 36 Table of Contents This regulatory environment shifted on February 18, 2025, with a proclamation terminating these exceptions to restore domestic capacity utilization to the critical 80% threshold. The new measures addressed transshipment concerns—specifically Chinese steel entering via Mexico—and expanded the 25% duty to previously exempt regions like Ukraine and to various derivative steel products. This overhaul also ended the product-specific exclusion process for importers to ensure the tariffs’ objectives were not undermined. By June 2025, the administration intensified these protections by raising the standard Section 232 rate to 50%, with the UK remaining at 25% pending the finalization of the U.S.-UK Economic Prosperity Deal (EPD). These measures are set to not only increase tariffs on steel imports, but limit import volume as well, which could significantly affect the export volumes of some companies and redirect the export flow to other regions. Finally, given the evolving nature of the current U.S. trade environment, there is no guarantee that the 50% steel tariffs will remain in place. These protections, currently benefiting domestic production, could be modified, rescinded, or diluted through legislative changes, executive orders, or legal rulings. Should these tariffs be lifted or weakened, a subsequent rise in foreign steel imports would likely exert downward pressure on U.S. steel prices. Such a shift in the market would potentially result in a significant adverse effect on our North American revenues, cash flow, and overall financial results. Material effects of government regulation on the Company’s activities The Company’s steel production activities are not subject to special authorizations other than the licenses and permits typical to the industry. The Company maintains a good relationship with the government agencies responsible for issuing common authorizations and does not have any history of problems in obtaining them. Gerdau’s mining operations in Brazil are subject to the rules of the Brazilian Mining Code and its regulation (Decree-Law 227, of February 28, 1967, and Decree 9,406, of June 12, 2018) and to the applicable mining legislation, with mining exploration governed by Mining Property Rights and Concessions. Gerdau acquired the surface of the properties located in the polygon of the respective mining rights, as well as all other Mining Property Rights and Concessions, under an Agreement for the Sale of Assets and Assignment of Rights entered into by and between Gerdau Açominas S.A. and Companhia Paraibuna de Metais, Siderúrgica Barra Mansa S.A., Votorantim Metais Ltda., and Votorantim International Holding N.V., on May 19, 2004. The Company’s mining exploration activities are subject to the conditions and limitations imposed by the Federal Constitution of Brazil, the Brazilian Mining Code and related laws and regulations, which include requirements connected to, among other factors, how mineral deposits are used, occupational safety and health, environmental protection and restoration, pollution prevention and the health and safety of the local communities where the mines are located. The Brazilian Mining Code also establishes some requirements for the submission of notifications and information. Companies authorized to economically explore mineral resources are required to pay royalties to the Federal Government, which distributes most of them to States and Municipalities. On July 26, 2017, Provisional Presidential Decree 789/17 was published, which was later converted into Federal Law 13,540/17, amending Federal Laws 7,990/89 and 8,001/90, which provide for the Financial Compensation for Exploration of Mineral Resources (CFEM). For iron ore, the rate is fixed at 3.5%. In this case, upon a justified need, the regulatory entity of the mining sector could exceptionally reduce the iron compensation rate from 3.5% to as low as 2% to not adversely affect the economic feasibility of deposits with low performance and profitability due to the iron content, production scale, payment of taxes and number of employees. Gerdau holds environmental licenses for commercial operation of the mines located in the cities of Miguel Burnier/Ouro Preto and Várzea do Lopes/Itabirito in the Brazilian state of Minas Gerais. 37 Table of Contents The mining rights held by Gerdau cover 8,837.19 hectares, and the concessions are valid until the mining deposits are exhausted, provided the legal requirements are fulfilled annually. The table below lists the ANM processes referring to the mining rights held by Gerdau: ​ ​ ​ ​ ​ ​ ​ ​ ANM Process ​ ​ ​ City ​ ​ ​ Location / Mine / Project ​ ​ ​ ​ State ​ ​ ​ ​ ​ ​ ​ 001.978/1935 ​ BARÃO DE COCAIS ​ GONGO SOCO ​ MG 000.724/1942 ​ OURO PRETO / OURO BRANCO ​ MORRO GABRIEL ​ MG 004.575/1935 ​ OURO PRETO ​ MIGUEL BURNIER ​ MG 003.613/1948 ​ OURO PRETO ​ MIGUEL BURNIER ​ MG 005.303/1948 ​ OURO PRETO ​ MIGUEL BURNIER ​ MG 005.514/1956 ​ OURO PRETO ​ MIGUEL BURNIER ​ MG 005.975/1956 ​ OURO PRETO ​ MIGUEL BURNIER ​ MG 006.549/1950 ​ OURO PRETO ​ MIGUEL BURNIER ​ MG 930.600/2009 ​ OURO PRETO ​ GM MIGUEL BURNIER ​ MG 003.583/1957 ​ ITABIRITO / MOEDA ​ VÁRZEA DO LOPES ​ MG 003.584/1957 ​ ITABIRITO ​ VÁRZEA DO LOPES ​ MG 003.585/1957 ​ ITABIRITO ​ VÁRZEA DO LOPES ​ MG 008.141/1958 ​ ITABIRITO ​ VÁRZEA DO LOPES ​ MG 006.255/1960 ​ ITABIRITO ​ VÁRZEA DO LOPES ​ MG 000.317/1961 ​ ITABIRITO ​ VÁRZEA DO LOPES ​ MG 005.945/1961 ​ ITABIRITO ​ VÁRZEA DO LOPES ​ MG 932.705/2011 ​ ITABIRITO ​ GM VÁRZEA DO LOPES ​ MG 833.209/2006 ​ OURO PRETO / OURO BRANCO ​ DOM BOSCO ​ MG 832.090/2005 ​ OURO PRETO / OURO BRANCO ​ DOM BOSCO ​ MG 832.044/2006 ​ OURO BRANCO ​ DOM BOSCO ​ MG 830.158/2007 ​ OURO PRETO ​ DOM BOSCO ​ MG 830.159/2007 ​ OURO PRETO ​ DOM BOSCO ​ MG 830.160/2007 ​ OURO PRETO ​ DOM BOSCO ​ MG 831.640/2003 ​ OURO PRETO ​ DOM BOSCO ​ MG 830.475/2007 ​ OURO PRETO ​ DOM BOSCO ​ MG 832.620/2006 ​ OURO PRETO ​ MIGUEL BURNIER ​ MG 830.798/2013 ​ OURO PRETO ​ MIGUEL BURNIER ​ MG 832.377/2014 ​ OURO PRETO ​ MIGUEL BURNIER ​ MG 832.375/2014 ​ OURO PRETO ​ MIGUEL BURNIER ​ MG 833.018/2015 ​ ITABIRITO ​ VÁRZEA DO LOPES ​ MG 832.625/2016 ​ ITABIRITO ​ VÁRZEA DO LOPES ​ MG ​ 38 Table of Contents C. ORGANIZATIONAL STRUCTURE The Company’s operational structure (including its main operating subsidiaries engaged in steel production) on December 31, 2025, is below: ​ ​ 39 Table of Contents The table below lists the significant consolidated subsidiaries of Gerdau on December 31, 2025, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Equity Interests Consolidated Company ​ Country ​ Total capital (*) ​ ​ ​ ​ ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ Gerdau GTL Spain S.L. Spain 100.00 100.00 100.00 Gerdau Internacional Empreendimentos Ltda. - Grupo Gerdau Brazil 100.00 100.00 100.00 Gerdau Ameristeel Corporation and subsidiaries (1) USA/Canada 100.00 100.00 100.00 Gerdau Açominas S.A. and subsidiary (2) Brazil 99.89 99.86 99.86 Gerdau Aços Longos S.A. and subsidiaries (3) Brazil 99.84 99.83 99.83 Gerdau Steel Inc. Canada 100.00 100.00 100.00 Paraopeba - Fixed-income investment fund (4) Brazil 77.83 84.49 75.36 Gerdau Hungria Holdings Limited Liability Company Hungary 100.00 100.00 100.00 GTL Equity Investments Corp. British Virgin Islands 100.00 100.00 100.00 Empresa Siderúrgica del Perú S.A.A. - Siderperú Peru 90.03 90.03 90.03 Gerdau GTL México, S.A. de C.V. Mexico 100.00 100.00 100.00 Seiva S.A. - Florestas e Indústrias Brazil 97.73 97.73 97.73 Gerdau Laisa S.A. Uruguai 100.00 100.00 100.00 Sipar Gerdau Inversiones S.A. Argentina 99.99 99.99 99.99 Sipar Aceros S.A. and subsidiary (5) Argentina 99.98 99.98 99.98 Gerdau Trade Inc. British Virgin Islands 100.00 100.00 100.00 Gerdau Next S.A. and subsidiaries (6) ​ Brazil ​ 100.00 ​ 100.00 ​ 100.00 (*) The voting capital is substantially equal to the total capital. The interests reported represent the ownership percentage held directly and indirectly in the subsidiary. (1) Subsidiaries: Gerdau Ameristeel US Inc., GUSAP III LLP, GNA Financing Inc., Gerdau Macsteel Inc. and Chaparral Steel Company and Gerdau Steel North America Two Corporation. (2) Subsidiary: Gerdau Açominas Overseas Ltd. (3) Subsidiaries: SPEs Barro Alto Solar Park (SPE Barro Alto V, SPE Barro Alto VI and SPE Barro Alto VII), Paranatinga Energia S.A., Comercial Gerdau Aços Planos Ltda., Sul Renováveis Participações S.A. and Rio do Sangue Energia S.A. (4) Fixed-income investment fund managed by Santander Bank. The participation shown refers to the balances applied by the Company in relation to the total fund each year. (5) Subsidiary: Siderco S.A. (6) Subsidiaries: G2L Logística S.A., G2base Fundações e Contenções Ltda, G2 Adições Minerais e Químicas Ltda. and Circulabi S.A.. The Company’s investment in MRM Guide Rail in North America, in which Gerdau Ameristeel holds a 50% of the total capital; the investment in Gerdau Corsa S.A.P.I. de CV in Mexico, in which Gerdau holds a 75% stake; the investment in Dona Francisca Energética S.A, in Brazil, in which the Company holds a 53.94% stake; the investment on Newave Energia S.A., in Brazil, in which Gerdau holds a 40% stake; the investment in Gerdau Summit Aços Fundidos e Forjados S.A., in Brazil, in which Gerdau had a 58.73% stake and on February 10, 2025 came to own 100%; the investment in Addiante S.A., in Brazil, in which the Company holds a 50% stake; the investment in Juntos Somos Mais Fidelização S.A., in Brazil, in which Gerdau holds a 27.48% stake; the investment in Brasil ao Cubo S.A., in Brazil, in which Gerdau holds a 44.66% stake; the investiment in MRS Logística S.A., in Brazil, in which Gerdau holds a 1.32% stake; and the investments in Bradley Steel Processor in which Gerdau Ameristeel had a stake of 50% and on December 01, 2025 came to own 100%, are accounted in the Company’s financial statements using the equity method (for further information, see Note 3 — Consolidated Financial Statements). On February 10, 2025, the Company, after fulfilling all the conditions precedent, including approval by the antitrust authorities, concluded the transaction with Sumitomo Corporation and The Japan Steel Works Ltd., for the acquisition of 39.53% and 1.74%, respectively, of the total shares issued by Gerdau Summit Aços Fundidos e Forjados S.A. (“Gerdau Summit”). With the closing of the transaction, the Company owns 100% of the Gerdau Summit’s capital Gerdau Summit, until then a joint venture, with this transaction becomes a subsidiary of the Company. On March 21, 2025, Sul Renovaveis Participações S.A acquired 100% of the shares of Rio do Sangue Energia S.A., previously held by Atiaia Energia S.A. 40 Table of Contents On April 11, 2025, Gerdau Aços Longos S.A. acquired 100% of the shares of Kloeckner Metals Brasil Ltda. (currently Comercial Gerdau Aços Planos Ltda.) previously held by Kloeckner &Co.SE. On April 28, 2025, Gerdau Aços Longos S.A. acquired 100% of the shares of Paranatinga Energia S.A., previously held by Atiaia Energia S.A On December 1, 2025, Gerdau Ameristeel Corporation completed the transaction with John Buller Inc. to acquire 50% of the total outstanding shares of Bradley. Upon closing the transaction, the company came to own 100% of the share capital of Bradley. The main operating companies that are accounted according to the equity accounting method in the financial statements of Gerdau are described below: Gerdau Metaldom Corp. — On January 17, 2024, Gerdau S.A. celebrated the Share Purchase Agreement selling its stake in Gerdau Metaldom Corp. to INICIA Group, which sale was concluded on February 1, 2024. Gerdau Corsa S.A.P.I de C.V. — The subsidiary of this company is a long steel producer located in the metropolitan area of Mexico City with annual installed capacity of 1,500,000 tonnes of crude steel and 1,350,000 tonnes of rolled products. Gerdau Summit Aços Fundidos e Forjados S.A. — On January 5, 2017, the Company subscribed capital stock in Gerdau Summit Aços Fundidos e Forjados S.A. through the contribution of some of its assets and liabilities, which were valued by a specialized independent evaluation firm. Gerdau Summit Aços Fundidos e Forjados S.A. is accounted for as a joint venture in the Financial Statements of Gerdau S.A., with a 58.73% interest. On February 10, 2025, the Company, after fulfilling all the conditions precedent, including approval by the antitrust authorities, concluded the transaction with Sumitomo Corporation and The Japan Steel Works Ltd., for the acquisition of 39.53% and 1.74%, respectively, of the total shares issued by Gerdau Summit Aços Fundidos e Forjados S.A. (“Gerdau Summit”). With the closing of the transaction, the Company will own 100% of the Gerdau Summit’s capital Gerdau Summit, until then a joint venture, with this transaction becomes a subsidiary of the Company. The main operating companies that are fully consolidated in the financial statements of Gerdau are described below: Gerdau Aços Longos S.A. — This company produces common long steel and has ten mills distributed throughout Brazil and an annual installed capacity of 3.2 million tonnes of crude steel. This company also sells general steel products and has steel distribution centers located throughout Brazil. Gerdau Açominas S.A. — Gerdau Açominas S.A. owns the mill located in the state of Minas Gerais, Brazil. The Ouro Branco mill is Gerdau’s largest unit, with an annual installed capacity of 3.6 million tonnes of crude steel, accounting for 52.9% of Gerdau’s crude steel output in the Brazil Business Segment. Gerdau Ameristeel Corporation — Gerdau Ameristeel has an annual capacity of 5.7 million tonnes of crude steel and 4.8 million tonnes of rolled products. The company is one of the largest producers of long steel in North America. Gerdau MacSteel Inc. — This company is the largest special steel producer in the U.S., has three units and a combined annual production capacity of 1.2 million tonnes of crude steel and 1.2 million tonnes of rolled products. Gerdau Laisa S.A. — Gerdau Laisa is the one of largest long steel producers in Uruguay and has annual installed capacity of 85,000 tonnes of crude steel and 80,000 tonnes of rolled products. Sipar Gerdau Inversiones S.A. — Sipar Gerdau Inversiones, through its operational subsidiary Sipar Aceros S.A. has annual installed capacity of 450,000 tonnes of crude steel and 240,000 tonnes of rolled products. Empresa Siderúrgica del Perú S.A.A. — This company is a long steel producer with annual installed capacity of 377,000 tonnes of crude steel and 500,000 tonnes of rolled steel. 41 Table of Contents D. PROPERTY, PLANT AND EQUIPMENT Facilities Gerdau’s principal properties are for the production of steel, rolled products and drawn products. The following is a list of the locations, capacities and types of facilities, as well as the types of products manufactured on December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ INSTALLED CAPACITY ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ LOCATION ​ (1,000 tonnes) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ PIG ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ IRON/ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ SPONGE ​ CRUDE ​ ROLLED ​ ​ ​ ​ PLANTS ​ COUNTRY ​ ​ ​ STATE ​ IRON ​ STEEL ​ PRODUCTS ​ EQUIPMENT ​ ​ ​ PRODUCTS BRAZIL OPERATION ​ ​ 4,130 7,921 8,179 ​ ​ Ouro Branco ​ Brazil ​ MG ​ 3,700 ​ 3,600 ​ 3,034 ​ Integrated with blast furnace, LD converter and rolling mills ​ Billets, blooms, slabs, wire rod, heavy structural shapes and HRC Araçariguama ​ Brazil SP — 950 550 EAF mini mill, rolling mill Billets, rebars and coil rebar Cosigua ​ Brazil RJ — 936 1,398 EAF mini mill, rolling mill, drawing mill, nail and clamp factory Rebar, merchant bars, wire rod, drawn products and nails Divinópolis ​ Brazil MG 430 600 460 Integrated/blast furnace, EOF converter and rolling mill Rebar and merchant bars Riograndense ​ Brazil RS — 450 475 EAF mini mill, rolling mill, drawing mill, nail and clamp factory Rebar, merchant bars, wire rod, drawn products and nails Açonorte ​ Brazil PE — 265 272 EAF mini mill, rolling mill, drawing mill, nail and clamp factory Rebar, merchant bars, wire rod, drawn products and nails Caucaia ​ Brazil CE — — 425 EAF mini mill, rolling mill Billets, rebars and coil rebar Usiba ​ Brazil BA — 495 * 397 * EAF mini mill, rolling mill, drawing mill, nail and clamp factory Rebar, merchant bars, wire rod, drawn products and nails Guaíra ​ Brazil PR — 420 * — EAF mini mill Billet Barão de Cocais ​ Brazil MG 330 * 330 * 193 * Integrated/blast furnace, LD converter and rolling mill Merchant bars Cearense ​ Brazil CE — 160 ​ 135 * EAF mini mill, rolling mill Rebar and merchant bars Sete Lagoas ​ Brazil MG 132 * — — Blast furnace Pig iron Pindamonhangaba ​ Brazil SP — 530 866 EAF mini mill, rolling mill, finishing and foundry Bars, wires, wire rod, finished and rolled bar, rolling mill rolls. Charqueadas ​ Brazil RS — 430 699 EAF mini mill, rolling mill and finishing Bars, special profiles, wires, wire rod, cold finished bar Mogi das Cruzes ​ Brazil ​ SP ​ — ​ 280 * 264 * EAF mini mill, rolling mill and finishing ​ Bars, special profiles ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ NORTH AMERICA OPERATION ​ ​ ​ — ​ 6,884 ​ 6,006 ​ ​ Midlothian ​ USA TX — 1,407 1,393 EAF mini mill, rolling mill Rebar, merchant bars and beams Petersburg ​ USA VA — 821 519 EAF mini mill, rolling mill Merchant bars and beams Whitby ​ Canada ON — 882 671 EAF mini mill, rolling mill Structural shapes, rebar, merchant bars Cartersville ​ USA GA — 875 670 EAF mini mill, rolling mill Merchant bars, structural shapes, beams Jackson ​ USA TN — 629 472 EAF mini mill, rolling mill Rebar, merchant bars Charlotte ​ USA NC — 410 279 EAF mini mill, rolling mill Rebar, merchant bars Manitoba - MRM ​ Canada MB — 360 296 EAF mini mill, rolling mill Special sections, merchant bars, rebar Wilton ​ USA IA — 270 237 EAF mini mill, rolling mill Rebar and merchant bars St. Paul ​ USA MN ​ 370 * 360 * EAF mini mill, rolling mill Rebar, merchant bars, special bars (SBQ) and round bars Cambridge ​ Canada ON — 299 * 279 EAF mini mill, rolling mill Rebar, merchant bars Fort Smith ​ USA AR — 500 500 EAF mini mill, rolling mill and finishing Special bars and shapes and cold finished bar Monroe ​ USA ​ MI ​ — ​ 730 ​ 690 ​ EAF mini mill, rolling mill and finishing ​ Special bars and shapes and cold finished bar Jackson ​ USA ​ MI ​ — ​ 280 * 250 * EAF mini mill, rolling mill and finishing ​ Special bars and shapes and cold finished bar ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ SOUTH AMERICA OPERATION ​ ​ ​ ​ ​ 912 820 ​ ​ Peru ​ Peru — — ​ 377 500 EAF mini mill, rolling mill Rebar and merchant bars Argentina ​ Argentina — — ​ 450 ​ 240 EAF mini mill, rolling mill, drawing mill Rebar, merchant bars and mesh Uruguay ​ Uruguay — — ​ 85 ​ 80 EAF mini mill, rolling mill Rebar, merchant bars and mesh ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ GERDAU TOTAL** ​ ​ 4,130 ​ 15,717 ​ 15,005 ​ ​ ​ * Temporarily idle units. ** The capacity of the idle units is not included in the total company. Mining Assets Iron ore mines Gerdau’s activities related to the iron ore mines began after acquiring the mining rights from the Votorantim Group, in the cities of Ouro Preto (district of Miguel Burnier), Itabirito and Barão de Cocais, in 2004. These areas are located in the Iron Quadrilateral region of Minas Gerais state, in Brazil, one of the country’s most prominent mineral regions, as shown in the following figure. 42 Table of Contents Location of Gerdau’s mining operations The current and future iron ore production units encompass mainly open-pit mines, processing plants, waste and tailing piles, and logistics and operational support infrastructure. The current iron ore production units are the following: ● Miguel Burnier/Dom Bosco Complex: includes the mines located in Miguel Burnier and in Dom Bosco; ● Várzea do Lopes Complex; ● Gongo Soco. 43 Table of Contents Location and Access Miguel Burnier/Dom Bosco Complex Miguel Burnier and Dom Bosco are located in the city of Ouro Preto, in the southwestern region of the Iron Quadrilateral region of Minas Gerais, in Brazil, around 80 km from Belo Horizonte and 5 km from Vila do Pires, on Highway BR-040. The Dom Bosco Mine is located approximately 11 km from the Miguel Burnier Mine. Vila do Pires is situated on both sides of Highway BR-040, in the northern region of the city of Congonhas. Access to the mines is via a five-kilometer road starting in the Vila do Pires next BR-040 Highway. Várzea do Lopes Complex Várzea do Lopes is located in the city of Itabirito, in the Iron Quadrilateral region of Minas Gerais, in Brazil, approximately 46 km from downtown Belo Horizonte. Access to the mine is from Belo Horizonte via Highway BR-040, heading towards Rio de Janeiro. Várzea do Lopes is located approximately 20 km from Miguel Burnier, in a straight line. Gongo Soco The mining rights, as well as the mine, were leased by the company SPE MSA Trindade Mineração Ltda. In 2024, MSA Trindade obtained the environmental license to operate the Gongo Soco mine. With this, it is expected that production will start during the first half of 2025. The image below represents what the Company believes to be the location of the current and eventual iron ore production units and their main access routes: Certification of Reserves and Future Investments On August 9, 2023, Gerdau received the report prepared by SRK Consulting, certifying the reserves of Miguel Burnier mine, located in the district of Ouro Preto (MG - Brazil) and an integral part of the Brazil Segment. 44 Table of Contents The certification is a significant milestone in Gerdau’s R$ 3.6 billion investments in the sustainable mining platform, aimed at providing high-quality and competitively priced ore for the Ouro Branco Unit, while also playing an important role in its decarbonization process. The investment will be spread between the years 2023 and 2026, with the amount allocated to 2025 already included in the investment Plan announced on February 19, 2025. According to the conclusions of the report, the Company now holds certified reserves of 476 million metric tonnes (Dry metric tonnes) of iron ore. The Report was prepared in accordance with subchapter 1300 of Regulation S-K issued by the U.S. Securities and Exchange Commission – SEC, adhering to the technical report standard established by said regulation. Considering the expected annual production level of 5.5 million metric tonnes (Wet metric ton, assuming a humidity of 10%) of iron ore, we believe that the certified reserves should provide a 40-years lifespan for the investment, reinforcing Gerdau’s commitment to the socioeconomic development of the state of Minas Gerais today and in the future. Investment Programs On February 19, 2025, Gerdau approved its investment plan in the amount of R$ 6.0 billion for 2025. This investment plan is divided into two fronts: (i) Maintenance and (ii) Competitiveness and it was concluded on December 31, 2025. In addition, the Company maintained the level of nearly R$1.1 billion in projects focused on environmental returns and safety initiatives, in line with building an increasingly sustainable future and our commitment to people’s safety. On October 1st, 2025, Gerdau approved its investment plan in the amount of R$ 4.7 billion for 2026. This investment plan is divided into two fronts: (i) Maintenance and (ii) Competitiveness. Regarding Maintenance projects, the Company estimates an average investment of nearly R$3.0 billion/year over the next five years, considering assets’ current status, the current exchange rate and inflation levels. Maintenance projects are associated with the concept of reinvestment of depreciation over the years to ensure the good functioning of plants, while Competitiveness projects are related to the growth, technological updating and modernization of the business segments, with a focus on improving Environmental, Social and Governance (ESG) practices and sustainable development. The Company’s expenditure in its investment plan will be directly related to market conditions and the economic scenario of the countries and the sectors in which it operates. Environmental Issues Gerdau is currently in compliance with environmental regulations. The Company also believes that there are no environmental issues that could affect the use of its fixed assets. In 2025, Gerdau invested R$ 640.95 million in the improvement of its eco-efficiency practices and in technologies for the protection of the air, water and soil. Environmental Regulations In all of the countries in which the Company operates, it is subject to federal, state and municipal environmental laws and regulations governing, but not limited to, the air emissions, wastewater discharges and solid and hazardous waste handling and disposal. Its manufacturing facilities have been operating under the applicable environmental rules. The respective permits and licenses require compliance with conditions and various performance standards, which are monitored by regulatory authorities. The Company employs a staff of experts to manage all phases of its environmental programs and uses outside experts where needed. The Company works to ensure that its operations maintain compliance in all material respects with the applicable environmental laws, regulations, permits and licenses currently in effect. When Gerdau acquires new plants, it conducts an assessment of potential environmental issues and prepares a work plan in compliance with the local authorities. 45 Table of Contents In most countries, both federal and state governments have the power to enact environmental protection laws and issue regulations under such laws. In addition to those rules, the Company is also subject to municipal environmental laws and regulations. Under such laws, individuals or legal entities whose conduct or activities cause harm to the environment are usually subject to criminal, civil and administrative sanctions, as well as any costs to repair the actual damages resulting from such harm. The steel industry uses and generates substances that can cause environmental damage. The Company’s management conducts surveys periodically to identify areas potentially impacted and recorded as its best estimate of the costs for inspecting, treating and cleaning potentially impacted areas the amounts of R$ 620,665 on December 31, 2025 (R$ 382,800 recognized as current liabilities and R$ 237,865 as non-current liabilities), R$ 659,082 on December 31, 2024 (R$ 245,429 recognized as current liabilities and R$ 413,653 as non-current liabilities) and R$ 517,669 on December 31, 2023 (R$ 139,395 recognized as current liabilities and R$ 378,274 as non-current liabilities). The Company adopted assumptions and estimates to determine the amounts involved that could vary in the future due to the conclusion of the inspection and the assessment of the actual environmental impact at the time of the ultimate settlement. In the Gerdau Corporate Environmental Guideline, there are environmental management practices the adoption of which is aimed at optimizing natural resources and minimizing environmental impacts. Among these practices, there is the management of contaminated areas, which aims to ensure controls and preventive or corrective measures to avoid soil and water body contamination. The management process includes communication, assessment, identification, and remediation. Provisioning costs must cover remediation and monitoring activities, being sufficient to meet the Company’s plans. Units or operations in the process of closing activities at Gerdau must also undergo evaluation. Closure plans are updated periodically, and information is monitored according to the governance established in the Policy, with evaluation by technical and financial areas. See Note 22 – Environmental Liabilities. Brazilian Environmental and Regulatory Legislation The Company’s activities are subject to wide-sweeping Brazilian environmental legislation at the federal, state and municipal levels that encompass, among other aspects, the dumping of effluents, atmospheric emissions and the handling and final disposal of dangerous waste, as well as the obligation to obtain operating licenses for the installation and operation of potentially polluting activities. Brazilian environmental legislation provides for the imposition of criminal, civil and administrative liabilities on individuals and legal entities that commit environmental crimes or infractions, as well as for the obligation to repair the environmental damage caused. Any potential environmental crimes or infractions could subject the Company to penalties that include: ● fines that at the administrative level could reach as high as R$ 1 billion, and that could be influenced by the wrongdoer’s economic capacity and past record, as well as the severity of the facts and prior history, that could be potentially doubled or tripled in case of repeat offenders; ● suspension of or interference in the activities of the respective enterprise; and ● loss of benefits, such as the suspension of government financing and the inability to qualify for public bidding processes and tax breaks. The application of environmental liability in the criminal sphere depends on evidence of intent (intention) or fault (negligence and/or recklessness) and, is considered subjective. Therefore, individuals only would be prosecuted or convicted to the extent of their action, intention or fault. In the case of the administrative sphere, recent judicial precedents provide for subjective environmental liability as well, although most environmental agencies apply administrative environmental liability regardless of proof of intent or fault. In the civil sphere, environmental damage results in joint and several liability as well as strict liability. This means that the obligation to repair the environmental damage may affect all those directly or indirectly involved, regardless of intent or fault. In this case, acknowledging the causal link between the action and the damage is enough to imputation of civil responsibility. As a result, hiring of outsourced companies to intervene in its operations to perform services such as final disposal of solid waste does not exempt the Company from liability for any environmental damage that may occur. Environmental legislation also provides for piercing the corporate veil, affecting shareholder assets, whenever the lack of solvency of an entity represents an impediment to recovery of environmental damages. 46 Table of Contents North American Environmental Legislation The Company is required to comply with a complex and evolving body of Environmental, Health and Safety Laws (EHS Laws) concerning, among other things, air emissions, discharges to soil, surface water and groundwater, noise control, the generation, handling, storage, transportation and disposal of toxic and hazardous substances and waste, the clean-up of contamination, indoor air quality and worker health and safety. These laws vary by location and can fall within federal, provincial, state or municipal jurisdictions. Most EHS Laws are of general application but result in significant obligations in practice for the steel sector. For example, the Company is required to comply with a variety of EHS Laws that restrict emissions of air pollutants, such as lead, particulate matter. Because the Company’s manufacturing facilities emit significant quantities of air emissions, compliance with these laws does require the Company to make investments in pollution control equipment and to report to the significant government authority if any air emissions limits are exceeded. The government authorities typically monitor compliance with these limits and use a variety of tools to enforce them, including administrative orders to control, prevent or stop a certain activity; administrative penalties for violating certain EHS Laws; and regulatory prosecutions, which can result in significant fines and (in rare cases) imprisonment. The Company is also required to comply with a similar regime with respect to its wastewater. EHS Laws restrict the type and number of pollutants that Company facilities can discharge into receiving bodies of waters, such as rivers, lakes and oceans, and into municipal sanitary and storm sewers. Government authorities can enforce these restrictions using the same variety of tools noted above. The Company has installed pollution control equipment at its manufacturing facilities to address these emissions and discharge limits and has an environmental management system in place designed to reduce the risk of non-compliance. Environmental Permits According to Brazilian environmental legislation, the proper functioning of activities considered effectively or potentially polluting or that in some way could cause environmental damage requires environmental licenses. This procedure is necessary for both the activity’s initial installation and operating phases as well as for its expansion phases, and these licenses must be renewed periodically. The Brazilian Institute for the Environment and Renewable Resources (IBAMA) has jurisdiction to issue licenses for projects with national or regional environmental impacts. In all other cases, the state environmental agencies have jurisdiction, and, in the case of local impact, the municipal agencies have jurisdiction. Environmental licensing of activities with significant environmental impacts is subject to a Prior Environmental Impact Study and respective Environmental Impact Report (EIA/RIMA), as well as the implementation of measures to mitigate and compensate for the environmental impact of the project. In most cases that involve significant environmental impact, the licensing process includes the issuance of three licenses: Pre-License (LP), Installation License (LI) and Operational License (LO). These licenses are issued in accordance with each phase of project implementation, and maintaining their validity requires compliance with the requirements established by the environmental licensing agency. The failure to obtain an environmental license, regardless of whether or not the activity is actually harming the environment, is considered an environmental crime and an administrative infraction, and may subject the wrongdoer to administrative fines, at the federal level (subject to being doubled or tripled in the case of repeat violations), an Environmental legislation also provides for piercing the corporate veil, affecting shareholder assets, whenever the lack of solvency of an entity represents an impediment to recovery of environmental damages and the suspension of operations. The Operational License (LO) must be renewed periodically. The Company’s operations currently comply with all legal requirements related to environmental licenses. However, any delay or refusal on the part of environmental licensing agencies to issue or renew these licenses, as well as any difficulty on its part to meet the requirements established by these environmental agencies during the course of the environmental licensing process, could jeopardize or even impair the installation, operation and expansion of new and current projects. 47 Table of Contents Decarbonization Strategy Gerdau determines the most significant material issues linked to the SDGs (Sustainability Development Goals) through a tool celled materiality matrix. The materiality matrix enables us to guide our strategy and management initiatives and guide the way in which we communicate with our stakeholders and society in general. One of the issues identified as most significant was “Climate change management.” GHG emissions are a key issue in the debate on climate change and a sensitive point for the steel industry, given the level of emissions from its production facilities in relation to the industrial sector. The Company defines its risk management guidelines and procedures based on business analysis, including issues related to climate change and the Sustainability Scorecard indicators. Industry trends that can impact business in the short-, medium- and long-term, as well as environmental, social and governance factors, image and legislation are assessed. The identified risk factors concerning climate change are related to unexpected interruptions in the production capacity of the Company’s main units and facilities that would increase production costs, reducing sales and earnings in the affected period. The Company could be affected by risks, such as: ● Reduced availability of electricity arising from a period of water crisis: the production of crude steel is an electricity-consuming process, especially in steel mills that use electric arc furnaces. Electricity is an important component for the production, as is natural gas, although to a lesser extent. Electricity cannot be replaced by another energy source in the Company’s mills and rationing or interruptions in supply can affect the production of these units. ● Fires or severe weather conditions: Unforeseen periods of drought can impair the performance of our forest areas, reducing the availability of the bio-reducer for our operating units that use this input; Floods can result in unforeseen periods of production stoppage, among others. ● Water shortage resulting from a period of water crisis: Reduction of water withdrawal for the production process, leading to a reduction in production. Such risks would increase production costs, reducing sales and earnings in the affected period as a result of unexpected events. Consequently, the Company is susceptible to periods of stoppage or reduction of production in the steel mills, which may also occur in the future. Interruptions in production capacity may adversely affect Gerdau’s productivity and operating results. In addition, any interruption in production capacity may require additional troubleshooting expenses which would impact the Company’s cash flow. As a result, long business interruptions can also damage the Company’s reputation and lead to the loss of customers, which can have a negative impact on business, results of operations and cash flows. The Company could also be affected by transition risks related to policy, legal, technology, market and reputation risks. In 2021, the Company prepared the GHG inventory of all of its global industrial units (base year, 2020). Since then, the data has been audited by a third party, following ISO 14064 and ISAE 3410 (GHG emissions inventory), and reporting its GHG emissions management on CDP Climate Change since 2021 (2020 base year), CDP is a reference entity in the evaluation of sustainable actions. In 2025 (2024 base year), Gerdau achieved the A- score, reaching the climate leadership level, according to CDP, reinforcing the Company’s commitment to the sustainability of its operations. Also, in 2025 (base year 2024), Gerdau reported CDP Water Security and received a B score, reinforcing the Company’s commitment to transparency. With the support of specialized consultants, we study the scenarios of productive and technological changes with the lowest effective carbon cost to define goals and guide our strategy. Consistent with this, the Company adopted the MACC “Marginal Cost Curve Abatement” and structured and published on February 1, 2022 the goal of reducing GHG emissions related to Scopes 1 and 2 by 2031, from 0.93 t of CO₂e per tonne of steel produced to 0.82 t of CO₂e per tonne of steel produced. Failure to achieve the target is a risk associated with the organization’s reputation, and it is mitigated through emissions projections monitoring in accordance with operation and investment plans, incorporating additional actions, if necessary. This target is factored in our Long-Term Incentive Plan. Gerdau’s production model and efforts for over a century have placed the Company at the vanguard on the issue of GHG emissions. Currently, we have one of the lowest emission averages in the steel industry, which is equivalent to approximately half of the global industry average. 48 Table of Contents ● Around 70% of the steel we produce comes from recycling of ferrous scrap: transforming about 10 million tonnes of scrap into steel. This enables us to promote a circular economy, saving natural resources and reduce energy consumption and GHG emissions. ● The Company has more than 200,000 hectares of forests. Our planted forests are sources of renewable raw material in the production of charcoal, a bioreducer used to produce pig iron, resulting in decreased emissions of GHG. ● Currently, we are leaders in managing GHG emissions and being well thought of as a benchmark for industry entities. Our constant efforts include the use of renewable sources, recycling, reduction of raw material consumption and energy efficiency. Our goal of reduction from 0.93t CO2e / t steel (base year 2020) to 0.82t CO2e / t steel, by 2031, in scopes 1 and 2 prioritizes: ● Greater energy and operational efficiency; ● Expansion of scrap use; ● Investment in renewable energy; ● Exploration of viable new technologies; and ● Maximization of the potential of the forestry base. The Company aims to be carbon neutral by 2050; for this, disruptive technologies will be necessary in steel production, which are not yet economically and operationally feasible on an industrial scale. No assurance can be given that it can be achieved, since there are externalities involved that we do not control; nonetheless, to contribute to this outcome, we continue to study and collaborate with diverse partners and entities in the sector to seek low carbon solutions. Public policies and measures to reduce GHG emissions from industrial processes will also be necessary. Our efforts are also dedicated to clean and renewable energy solutions. The Company has already announced the construction of a solar complex in Brazil. Moreover, we will continue to streamline our production processes and invest in new energy matrices and new technologies. In Canada, the three Gerdau mills are required to report facility-level GHG emissions and production data with verification by a third-party. Manitoba Mill is regulated by the Canadian Federal Greenhouse Gas Pollution Pricing Act, which has been in effect since 2019, setting a carbon price at CAD 95/tCO2e for 2025 and includes the Output-Based Pricing System (OBPS) Regulations. Facilities operating above the standard pay an excess emissions charge (CAD 95/tCO2e for 2025, rising $15/t per year out to 2030), while facilities operating below (better than) the standard can receive credits. Under the Canada GHG program, facilities are granted allowances based on our production x output-based standard(s) for each activity (in our case, both EAF steel and hot-rolled steel). The resulting balance is the difference between the allocations provided and the actual emissions. Emission units are not transferable outside of the Federal OBPS. Since January 1, 2022, the Whitby and Cambridge Mills have been regulated by the Provincial (Ontario) Emissions Performance Standards (EPS) Regulation. The Federal Greenhouse Gas Pollution Pricing Act applies a regulatory charge on fuel, but a facility is exempt from the carbon tax when registered under the Ontario EPS. The EPS includes performance standards, called Baseline Emission Intensities (BEIs) for the industrial facilities. Facilities operating above the standard pay an excess emissions charge (currently CAD 95/tCO2e for 2025 and rising $15/t per year in accordance with the Federal pricing), while facilities operating below (better than) the standard can receive credits. Under the EPS program, facilities are granted allowances based on our production x output-based standard(s) for each activity (in our case, both EAF steel and hot-rolled steel). The resulting balance is the difference between the allocations provided and the actual emissions. As Gerdau operates two facilities under the Ontario EPS program, we can move allowances within the Company to assist with any carbon compensation obligations. In Mexico, our operations in Tultitlán and La Presa are currently regulated by the states where they are located, which levy carbon-emission taxes. These taxes do not generate a significant financial impact. 49 Table of Contents Areas of permanent forest preservation and legal reserves Some activities of the Company, mainly those involving reforestation to produce thermal-reducer used in its industrial units, are subject to the Brazilian Forest Code. The Code determines that some areas, due to their importance for the preservation of the environment and water resources, are considered permanent preservation areas (APP), such as, for example, areas adjacent to rivers or natural or artificial reservoirs. At Gerdau’s forestry units, permanent preservation areas are an integral part of the business, being protected and in compliance with the legislation. Moreover, depending on the region where the property is located, the Code requires rural land owners to restore and preserve between 20%, 35% or 80% of areas containing native vegetation. The maintenance of these percentages of native vegetation is important because it guarantees the preservation of the local natural vegetation, perpetuating the genetic resources and the biodiversity of each Brazilian biome. Gerdau maintains its Legal Reserve areas preserved and in accordance with governing legislation.