Gerdau S.A. (GGB): History, Ownership, Mission, How It Works & Makes Money

When you look at the global steel industry, how does a company like Gerdau S.A. (GGB), Brazil's largest steel producer, maintain a market capitalization of approximately $6.95 billion as of November 2025, even with volatility? The answer lies in its strategic diversification, which saw its North American operations contribute a significant 61% of consolidated EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) in the second quarter of 2025, delivering an adjusted EBITDA of R$2.6 billion. This resilience, plus a massive 2025 investment plan estimated at R$6.0 billion, shows you a company that isn't just surviving; it's defintely building for the next decade, and understanding its core mechanics-history, ownership, and how it makes money-is crucial for any serious investor.

Gerdau S.A. (GGB) History

Given Company's Founding Timeline

You're looking at a company with a history that stretches back over a century, which is rare in the volatile steel industry. Gerdau S.A. didn't start as a steel giant; it began with a simple, practical product: nails. This foundational focus on basic construction materials is defintely what gave the company its enduring, pragmatic core.

Year established

The company was established in 1901.

Original location

The original location was in Porto Alegre, in the state of Rio Grande do Sul, Brazil.

Founding team members

The founder was João Gerdau, a German immigrant who had settled in Brazil. His son, Hugo Gerdau, also played a crucial role in the early years, taking over the leadership in 1907.

Initial capital/funding

The initial funding came from João Gerdau's acquisition of the Pontas de Paris Nail Factory. This was a modest investment that marked the start of the company, and it was a strategic move to secure a manufacturing base. The quick math here is that a nail factory in 1901 was a world away from the multi-billion dollar operation we see today.

Given Company's Evolution Milestones

Gerdau's evolution is a masterclass in strategic pivot and geographical diversification. They moved from a single product to becoming a global steel producer, which is a massive shift. The key was a series of smart acquisitions and a willingness to embrace the mini-mill model (a steel mill that recycles scrap metal) early on.

Given Company's Transformative Moments

The biggest transformative moment wasn't a single event, but a generational shift in mindset. When Curt Johannpeter, son-in-law of Hugo Gerdau, took the helm in 1946, he faced raw material shortages post-WWII. His decision to buy a steel mill in 1948 wasn't about growth initially; it was about survival. That's a great lesson in business: sometimes your most transformative decision is a defensive one.

The second major shift was the sustained push into North America. The 1999 acquisition of AmeriSteel and the subsequent $4.22 billion acquisition of Chaparral Steel in 2007 were massive bets. That strategy is paying off today: in the third quarter of 2025, the North America segment accounted for a record 65% of the company's consolidated Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of R$2.7 billion. That's a huge concentration of earnings power.

The company's current focus is on financial discipline and asset optimization, which is a clear action for you to watch:

• The approved investment plan (Capital Expenditure or CapEx) for 2025 is projected at R$6.0 billion, with a focus on maintenance and competitiveness initiatives.
• They are actively managing their capital structure, having completed 88% of the 2025 Share Buyback Program as of Q3 2025, repurchasing approximately 56.8 million shares for an investment of R$902 million.
• The launch of Gerdau Next in 2020 signals a long-term move to diversify revenue beyond core steel, exploring high-growth areas like graphene additives and materials through Gerdau Graphene.

The company's commitment to a global, diversified, and sustainable model is clear, and you can read more about their philosophical direction in their Mission Statement, Vision, & Core Values of Gerdau S.A. (GGB).

Gerdau S.A. (GGB) Ownership Structure

Gerdau S.A. operates with a dual-layer ownership structure, where the founding family maintains control through a holding company, Metalúrgica Gerdau S.A., even though the company is publicly traded. This structure ensures long-term strategic alignment while allowing access to public capital for expansion.

Gerdau S.A.'s Current Status

Gerdau S.A. is a publicly traded company, listed on the New York Stock Exchange (NYSE: GGB) and the B3 S.A. - Brasil, Bolsa, Balcão in São Paulo. This public status gives the company financial flexibility, but the Gerdau family still indirectly controls the company through their majority stake in Metalúrgica Gerdau S.A., which is the primary controlling shareholder. This setup means that while you can buy shares, the ultimate strategic decisions are steered by the family's long-term vision, a common arrangement for large, multi-generational Brazilian corporations.

Gerdau S.A.'s Ownership Breakdown

As of late 2025, the ownership breakdown shows a significant portion of the company's equity is held by the controlling entity, with the remaining shares constituting the public float, which is split between institutional and retail investors. Institutional ownership, for example, stood at approximately 15.34% as of November 13, 2025. Here's the quick math for the general breakdown:

What this estimate hides is the dual-class share structure (common and preferred shares) that often solidifies the family's control, even when their direct equity percentage looks like a minority stake in the total shares outstanding. For a deeper dive into the numbers, you should check out Breaking Down Gerdau S.A. (GGB) Financial Health: Key Insights for Investors.

Gerdau S.A.'s Leadership

The leadership team blends professional management with oversight from the controlling family, a clear reflection of the governance structure. The Board of Directors, which sets the long-term strategy, includes members of the Gerdau Johannpeter family and independent directors. The executive management is responsible for day-to-day operations and achieving the strategic goals.

• CEO: Gustavo Werneck da Cunha has been the Chief Executive Officer since January 1, 2018.
• CFO and Executive Vice-President of Finance: Rafael Dorneles Japur, who also serves as the Investor Relations Officer.
• Chairman of the Board: André Bier Gerdau Johannpeter, representing the controlling family's direct involvement in governance.
• Vice-Chairmen: Guilherme Chagas Gerdau Johannpeter and Cláudio Johannpeter also hold key positions on the Board.

The average tenure for the Board is considered experienced at 5.0 years, which is defintely a source of stability, while the executive management team has a shorter average tenure of 1.4 years, suggesting a push for new strategies and operational focus. This mix of experienced board guidance and a newer executive team is what steers the company's capital allocation, like the planned 2025 CapEx, which was guided at BRL 16 billion earlier in the year.

Gerdau S.A. (GGB) Mission and Values

Gerdau S.A.'s core identity centers on generating value for all stakeholders-not just shareholders-by producing steel sustainably, which is a massive undertaking for a company of its scale. Their cultural DNA is built on ten clear principles that prioritize safety, ethics, and a long-term view of societal contribution over short-term gains.

You're looking at a company that is the largest recycler in Latin America, meaning their commitment to sustainability is defintely baked into the business model, not just a marketing add-on. For an investor, knowing this deep-seated commitment helps map long-term risk against evolving environmental regulations.

Gerdau S.A.'s Core Purpose

The company's purpose goes beyond simply selling steel; it's about enabling progress and development in the communities where it operates. This purpose is the foundation for their strategic investments, like the estimated R$16 billion in capital expenditure (CapEx) guided for the 2025 fiscal year, much of which is aimed at enhancing asset competitiveness and sustainability.

Official mission statement

Gerdau S.A.'s formal mission is a clear directive, focusing on a balance of economic and environmental responsibility:

• Generate value for our customers, shareholders, employees, and communities.
• Produce steel in a sustainable way.
• Contribute to the development of society.

Here's the quick math: producing steel with an average of 96% recycled content in North America is how they execute on that 'sustainable' promise.

Vision statement

The vision statement maps their aspiration in the global steel market, linking innovation and sustainability directly to value creation for their stakeholders:

• Be a global reference in special steels.
• Create value for stakeholders by operating in a sustainable and innovative way.
• Contribute to a better future.

This isn't just talk; their environmental goal to reduce greenhouse gas emissions to 0.82 t/CO2e per tonne of steel by 2031 puts them on a path to be less than half the global average emissions in the steel sector.

Gerdau S.A. slogan/tagline

The company's core purpose, which serves as its modern tagline, is a succinct, human-centric statement:

• Empowering People Who Build the Future.

This purpose is supported by their 10 principles, which include 'Safety above all' and a 'Diverse and inclusive environment.' Socially, their commitment is tangible; in 2024, their social investments totaled R$94 million, which benefited over 480,000 people through various community programs. If you want to dive deeper into the financial stability that enables this long-term focus, check out Breaking Down Gerdau S.A. (GGB) Financial Health: Key Insights for Investors.

Gerdau S.A. (GGB) How It Works

Gerdau S.A. operates as a vertically integrated steel producer, transforming scrap metal and iron ore into a diverse portfolio of steel products, primarily serving construction and manufacturing across the Americas. The company makes money by leveraging its efficient, circular production model-using over 90% of metallic input from scrap-to deliver essential, high-quality steel to large-scale infrastructure and automotive projects.

Gerdau S.A.'s Product/Service Portfolio

The company's revenue, which was approximately $12.198 billion for the twelve months ending September 30, 2025, is primarily segmented across four business units: Brazil, North America, South America, and Special Steel. North America is a critical driver, accounting for 65% of consolidated EBITDA in Q3 2025.

Gerdau S.A.'s Operational Framework

Gerdau's operational model is built on geographic diversification and a strong commitment to the circular economy, which helps mitigate raw material price volatility. The company is defintely a global player, operating industrial plants across the Americas, including Brazil, the United States, Canada, and others.

The core process is a highly efficient, integrated value chain (supply chain control from raw materials to distribution) that centers on electric arc furnace (EAF) steel production, often called 'mini-mills.' This process allows for quicker production ramp-up and relies heavily on scrap steel, which is a major cost advantage.

• Recycling Focus: Over 10 million tons of scrap steel are recycled annually, meaning approximately 92% of the steel produced comes from recycled materials.
• Strategic Investment: Capital investments (CAPEX) for 2025 are guided at approximately R$6.0 billion, with 80% of the Q2 2025 CAPEX allocated to Brazil, focusing on competitiveness and maintenance.
• Decentralized Production: Operating in multiple countries allows the company to serve regional demand directly and reduce logistics costs, plus it provides a natural hedge against single-market economic downturns.

Gerdau S.A.'s Strategic Advantages

The company maintains its market position by capitalizing on a few clear, structural advantages that competitors struggle to replicate at scale. This is how they maintain a solid capital structure, with a net debt to EBITDA ratio of 0.81x as of Q3 2025.

• Geographic and Product Diversification: Presence in multiple markets, especially the robust North American market, which offsets challenges in Brazil, provides revenue stability.
• Vertical Integration: Controlling the value chain from raw material sourcing (scrap/mining) to downstream manufacturing provides a significant cost advantage and quality control.
• Sustainability Leadership: Commitment to using 73% of energy from renewable sources and a low-carbon production model appeals to environmentally-conscious customers and can lead to premium pricing in some markets.
• Trade Protection Benefit: Strong North American performance is supported by import tariffs, which favor domestically produced steel and help maintain a strong order backlog.

If you want to dive deeper into the ownership structure and shareholder trends, you should check out Exploring Gerdau S.A. (GGB) Investor Profile: Who's Buying and Why?

Gerdau S.A. (GGB) How It Makes Money

Gerdau S.A. primarily makes money by transforming ferrous scrap metal and iron ore into a diverse portfolio of steel products, mainly long steel (rebar, wire rod) and special steel, which it sells globally to the construction, industrial, and automotive sectors.

The company operates a geographically diversified business model, mitigating regional economic volatility by relying on strong, stable markets like North America to offset challenges in its home market of Brazil. Its profitability hinges on the spread between raw material costs (like scrap metal) and the realized sales price of its finished steel products.

Gerdau S.A.'s Revenue Breakdown

The company's net sales revenue for the third quarter of 2025 (Q3 2025) clearly shows the North American market's dominance as the primary revenue and profit engine, a trend that has accelerated due to market dynamics.

The North America segment, which includes the U.S. and Canada, accounted for over half of net sales revenue in Q3 2025, and its revenue in USD terms grew by a strong 15.5% year-over-year. This strength is the main driver of overall consolidated net sales growth, which was 3.50% in the period. Brazil's segment saw revenue decline by 2.6% year-over-year, which is a direct consequence of intense import pressure.

Business Economics

The core of Gerdau S.A.'s business economics is its reliance on Electric Arc Furnace (EAF) mini-mills, which use ferrous scrap metal rather than iron ore as the primary raw material, giving it a lower carbon footprint and a more flexible cost structure than traditional blast furnaces.

• Raw Material Advantage: The company is one of the world's largest recyclers of scrap metal, and its recent $60 million investment in acquiring Dales Recycling assets in the U.S. is a clear move to vertically integrate and secure a reliable, cost-competitive scrap supply.
• North America Pricing Power: The U.S. market is a high-margin environment, supported by trade protections like the Section 232 tariffs, which limit cheaper imports and allow for favorable domestic pricing. Demand is robust, particularly from non-residential construction projects like data centers and solar energy installations.
• Brazil Import Headwind: The Brazilian market is highly challenging, with steel import penetration reaching 23.4% in the first half of 2025, which forces local prices down and compresses margins. This is why the company is reducing its future capital expenditures in Brazil starting in 2026.
• Product Mix: The company focuses on long steel products (rebar, bars, rods) for construction and special steel for the automotive and industrial sectors, products that generally carry a higher value-add than commodity flat steel.

You can see the strategic shift in capital allocation by Exploring Gerdau S.A. (GGB) Investor Profile: Who's Buying and Why?, which is heavily focused on the stability of the North American market.

Gerdau S.A.'s Financial Performance

Gerdau S.A.'s financial health as of Q3 2025 remains strong, underpinned by its operational efficiency and prudent financial management, even as net income is pressured by the Brazilian market's woes.

• Adjusted EBITDA: Adjusted EBITDA for Q3 2025 was R$2.7 billion, a 7% increase quarter-over-quarter, with the North American segment contributing a record 65% of this consolidated total.
• Net Income: Net income for Q3 2025 was BRL 1.089 billion, which is approximately $202.4 million USD, reflecting a decline from the prior year but still a solid profit base.
• Liquidity and Leverage: The company's leverage is well under control, with the Net Debt/EBITDA ratio reduced to a very conservative 0.81x in Q3 2025. That's a sign of a strong balance sheet, defintely.
• Capital Allocation: The approved investment plan (CAPEX) for the full year 2025 is projected at R$6.0 billion, with a significant portion directed toward asset competitiveness and maintenance, ensuring long-term operational excellence.
• Shareholder Returns: Gerdau S.A. continues to reward shareholders, having completed approximately 88% of its 2025 Share Buyback Program, repurchasing about 56.8 million shares for an investment of R$902 million.

Gerdau S.A. (GGB) Market Position & Future Outlook

Gerdau S.A. is strategically positioned as a resilient, geographically diversified steel producer, with its future outlook heavily reliant on its high-margin North American operations, which contributed a record 65% of consolidated Adjusted EBITDA in the third quarter of 2025. The company is actively executing a capital allocation strategy focused on high-return investments in North America and vertical integration in Brazil, aiming for long-term value creation despite persistent import challenges in the South American market.

Competitive Landscape

Gerdau operates in a fragmented global steel market, but its core competition in the Americas' long steel and special steel segments comes from major regional players. The company's primary defense is its deep geographic diversification, which insulates it from single-market shocks, plus its reliance on Electric Arc Furnace (EAF) technology, which uses recycled scrap metal and offers a lower carbon footprint than traditional blast furnaces.

Opportunities & Challenges

As a seasoned analyst, I see Gerdau's near-term trajectory as a tale of two markets: strong, tariff-protected growth in North America offsetting the structural headwinds in Brazil. The company's approved 2025 investment plan projects R$6.0 billion (Brazilian Reais) in CAPEX, primarily for maintenance and competitiveness initiatives, showing a clear commitment to operational efficiency.

Industry Position

Gerdau's industry standing is defined by its operational flexibility and its strategic pivot toward the US market. Honestly, the North American division is the defintely the profit engine, driving the company's strong financial health and low leverage.

• EAF Leadership: The company is a major producer of steel via Electric Arc Furnaces (EAFs), a process that uses scrap metal and positions them well for growing sustainability demands and lower carbon emissions.
• Capital Allocation Discipline: Management is focused on shareholder returns, having executed 88% of its 2025 share buyback program and paying out a 75% dividend payout ratio on Q3 2025 net income.
• Debt Management: The company announced the early repayment of its 2030 Bond, a US$498 million (approximately R$2.6 billion) move that is expected to reduce gross debt to about R$14 billion by the end of 2025.

This strong balance sheet and strategic focus on high-growth, protected markets make Gerdau a compelling case in the cyclical steel sector. You can dig deeper into the ownership structure and investor sentiment in Exploring Gerdau S.A. (GGB) Investor Profile: Who's Buying and Why?