GGB

Welcome to Gerdau's first quarter 2026 results presentation. I'm Ariana Pereira, Investor Relations Specialist. Joining us on this conference call are our CEO, Gustavo Werneck, and CFO, Rafael Japur. Please note that this call is being simultaneously translated into English. You can choose your preferred language by clicking on the globe icon at the bottom of the screen. During the presentation, all participants will be in listen-only mode. Then we will start the Q&A session. Analysts and investors can join the queue by clicking on the raise hand button. It is worth noting that the forward-looking statements contained herein are based on the company's beliefs and assumptions based on information currently available. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that may or may not occur.

Now I'll turn the floor to Gustavo to begin the presentation.

Hello and good afternoon. I hope that you're all well. I thank you very much for this opportunity to join you for another earnings release presentation. We will briefly discuss the highlights of the first quarter of 2026. We will also talk about the outlook for our operations, and then we will proceed to our Q&A session. For one more period, we posted strong results in North America. Between January and March of this year, we posted the best-Adjusted EBITDA for our first quarter since 2022 in our North American operations, which accounted for 75% of the company's consolidated EBITDA. This performance results from continued strong local steel demand, driven by consumption in segments such as data centers, infrastructure, and solar power, as well as the sound operating performance of our operations in the region.

Meanwhile, in Brazil, the domestic market remained under pressure from excessive steel imports, whose volume rose 4.2% in the first quarter of 2026 when compared to the same period of the year before, reaching a penetration rate of 22.7%. Against this backdrop, we continue to closely monitor potential developments in the anti-dumping investigations regarding long and flat steel products, which are expected to be updated in the coming months. This scenario of unfair imports has impacted the profitability of our operations in the Brazilian market. I reiterate that we are investing in initiatives that strengthen the competitiveness and profitability of our operations in the country. We have even seen a recovery in EBITDA for our Brazilian operation in this first quarter as a result of this strategy.

Finally, I would like to highlight that we recently introduced Gerdau NewEco to the market, a low carbon steel solution developed to support customers seeking to advance their decarbonization journey and strengthen their competitiveness in the transition to a low carbon economy. With the launch of this new line, we now offer a complete portfolio of products with a lower carbon footprint for steel consuming sectors in general, like the automotive and construction industry. I will now turn the floor to Japur, who is next to me, who will give you more details on the financial highlights and the impact of the current scenario on our results. Then I will conclude with some brief comments, and we will jump to Q&A.

Thank you, Gustavo. Good day, everyone. It's always a great pleasure to be here with you today in another Gerdau earnings conference call. We started 2026 with BRL 1 billion of consolidated net income, 50% up compared to the previous quarter, 34% above the same, or compared to the same period in 2025. These results were driven by sequential growth across all our business segments, particularly our operations in North America, which continues to gain prominence, as Gustavo just mentioned. In Brazil, on the other hand, despite the decline in apparent consumption of long steel products, our main market, we achieved a higher EBITDA margin than in the previous quarter, a lot thanks to our cost discipline. Therefore, we recorded EBITDA of BRL 3 billion in Q1, 2026.

Well, we were talking about our operations in Brazil, even with a decline in apparent consumption of long steel products, typically our main market. We achieved a higher EBITDA margin compared to the previous quarter, a lot thanks to our cost discipline. Thus, in consolidated numbers, we ended in EBITDA of BRL 3 billion in Q1, with an EBITDA margin of almost 18%.

We ended the month of March with a leverage of 0.74x net debt over EBITDA ratio, a level we consider extremely sound and in keeping with our financial strategy and policy. In the first quarter 2026, we recorded a free cash flow of BRL 16 billion, even in a period which typically consumes cash due to the replenishment of working capital and also the end of year maintenance shutdowns. Compared with the same period of 2025, we generated BRL 1.3 billion more in cash. This reflects not just the substantial improvement in our EBITDA, but also the substantial reduction in the pace of CapEx investments compared to previous years. This does not mean that we are not investing in our future. Until the end of 2026, I'd like to remind you.

Again, stressing what we have talked about in our previous earnings calls and Investor Day. Gerdau should complete three very significant projects for Gerdau. The mining expansion in Miguel Burnier, the scrap processing center in Pindamonhangaba, and the first phase of the metallurgical expansion in Texas. Together, these projects have the potential to add nearly BRL 1.5 billion to our annual EBITDA when the ramp-ups are complete. Lastly, we remain steadfast in our commitment to creating value for our shareholders. This quarter, Gerdau S.A. will distribute BRL 0.18 per share in dividends, while Metalurgica Gerdau will distribute BRL 0.08 per share. In addition, talking about Metalurgica Gerdau, we just approved the launch of a new share buyback program covering up to 10 million preferred shares, which today amount to approximately BRL 100 million at current market price.

I'll wrap up here, and I'll join you again during the Q&A session. Thank you.

Thank you, Japur. To end, I'd like to say that in Brazil we see signs of a gradual recovery in domestic demand, particularly in the construction and infrastructure sectors, following a more intense seasonality or seasonal slowdown at the beginning of the year. We still face an excessive inflow of imported steel into the local market. In North America, meanwhile, we continue to see steel consumption stable at high levels with the order backlog above historical averages. We continue to monitor developments regarding Section 232 and the formal review of the U.S., Mexico, Canada Agreement, USMCA, scheduled for the beginning of the second half of the year. We'll now turn the floor back to Ariana and Japur. I will be available to answer your questions and address your concerns. Ariana?

Thank you, Gustavo and Japur. We will now initiate the Q&A session. Our first question comes from Ricardo Monegaglia with Safra Bank.

Good morning, everyone, and thank you for taking my questions. It's always nice to talk to you. I don't know if you can see the screen. You can see me on the screen. First, I would like to congratulate the performers in Brazil. It was a very pleasant surprise, both for me and also in my late conversations with investors. I would like to go on with that topic of productivity in Brazil. You're talking about a new wave of improvement that is not coming from, you know, closing capacity, but more efficiency and cost reduction. I would like to give you this opportunity to tell us what are the main levers that you see today. I wanna know whether, you know, this includes logistics, mining, industrial productivity.

This is a very broad question, but I think it's also very relevant for the current moment. My second question, in terms of capital allocation. I see that there's still some differences between what the market expects in terms of CapEx for 2027. I would just like to confirm with you. Given the fact that you already delivered the mining project and with other very competitive projects being, you know, more clearly outlined and CapEx being lower, does it make sense for us to expect that next year's CapEx would be closer to the level of depreciation? Mainly considering that the company's priority is to be very disciplined in capital allocation and cash generation. Thank you for taking my question.

Ricardo, no, we cannot see your camera, but we could hear you loud and clear. I will talk about competitiveness in more general terms, and Japur can give you more detailed numbers, and then I can add, you know, if necessary. Also Japur can answer the question about CapEx. Well, in general, Ricardo, the evolution of our margins in the first half of this first quarter of this year, they stem from initiatives that we control. We still see that there is still room to seek for further cost competitiveness. In Brazil, we serve all corners of the country, from the south to the north.

In terms of logistics, we have lots of opportunities because we take the materials from the mills and we take to more than 70 locations, we deliver to construction stores. Therefore, the maximization of our equation competitiveness versus cost hasn't reached its limit yet. We see opportunities to go forward, so we will certainly pursue all the possible opportunities. On the other hand, looking ahead, there is also a pressure over costs, especially in terms of the energy grid, and this conflict between U.S. and Iran has led our main input providers are constantly ask us to negotiate prices. At the moment, we are negotiating with our customers, trying to find a solution where they could probably, you know, transfer part of the cost to several segments.

Going forward, we still have the benefits coming from capital allocation and investment and CapEx of projects that we are, you know, doing in Brazil. Japur can give you more detail, competitiveness in terms of scrap and the investment in the Miguel Burnier mining project. There are many things to look forward to going forward, but we are very much, you know, confident of things that we have under our control. For next quarter, we want to continue in our, you know, reduction cost trajectory, and we are putting all of our efforts to accomplish that. We do not expect any margin or radical cuts. Gradually, we believe that we have all it takes to improve our margins. Without even considering the trade defense measures, especially concerning, you know, flat steel anti-dumping measures.

We believe that this could bring a new reality to the sector starting the third quarter of this year. This is my general view on the topic. Now I turn the floor to Japur to elaborate further or to give you more details. I would also ask you to answer the question on CapEx.

To give you a little bit more light, we are thinking about two major projects that should be delivered from now until the end of the year. One is in mining in Miguel Burnier, and this project should generate about BRL 1.1 billion a year and potentially with additional EBITDA. We are thinking about cost savings in our project in Ouro Branco, but also this would be, you know, incoming revenue. This project contemplates both components.

Also thinking about our mini mills or the electric power mills, there is an investment to be concluded at the end of the year, which is the scrap recycling center, and this will generate about BRL 100 million in benefits. Meaning that we have very robust projects and levers. I mean, it's very complex to estimate performance. Structurally thinking about the mid and long range, we will increase our level of competitiveness, so we should be seeing that in Brazil in the next coming years. Structurally speaking, that's the major change. This is probably linked to your second question on CapEx. We know that it's probably too soon to talk about any formal guidance for CapEx for 2027, because the year 2026 is just beginning.

Typically, our CapEx guide for the current year is given in February. Last year, we anticipated our Investor Day because we thought it was important to be more accountable to the market. I mean, the board had already made a decision to reduce the level of BRL 6 billion of disbursement to something close to BRL 4.7 billion. If we think about the first quarter and then you annualize it, the pace is very much in line with the CapEx. Thinking about 2027, I think it's still too soon to give you any information about it.

We already talked during our Investor Day that the general maintenance CapEx, the maintenance CapEx to be close to BRL 3 billion for the next five years on average, with some fluctuations depending on the shutdown of the blast furnace or the coke plant. Structurally speaking, this would be the maintenance level. We also believe that it will be hard for us to think that we will always do maintenance as the company's CapEx. I mean, whenever you think about the actual life. When you think about how the model acts in terms of the cash flow, we cannot ignore the competitive projects are there just to generate additional EBITDA, to generate growth and competitiveness. This is what we are reaching with this investment in Miguel Burnier and also with the scrap processing in Pindamonhangaba.

All of these benefits should also be incorporated in the cash flow. Oftentimes what we see when I look at the analysts and the models, they disregard any kind of gain coming from new projects, and they consider as though everything is, you know, business as usual. Considering the level that we find ourselves today, I mean, at capacity in Brazil and adjusted demand, well adjusted in North America, we don't see room for large projects with large CapEx increase, because I don't think it makes a lot of sense.

Great. That's very clear. Thank you, Japur and Werneck.

Thank you, Ricardo. Next question from Rodolfo with J.P. Morgan.

Good morning. Good morning, thank you for taking my question. I would like to hear more about the North American operation. We were here positive with that region for quite some time.

To be honest, I mean, we were surprised with the level of very high backlog. I would like to ask you, Gustavo and Japur, if you could give us more details, what is happening? What are the strengths that you see in the region? Not, not only looking at the quarter, but what do you expect to see happening in the second quarter in the region of North America? My second question is similar to that one on North America, but now I'm referring to Brazil. I think it's clear because you referred to your fight against the imported products. I would just like to hear from you, what do you see in terms of demand instead of supply? How is the construction activity going, and whether you anticipate any positive surprises coming on the demand side?

Hi, my friend Rodolfo.

How are you? It's never all perfect, because if you cheer for my soccer team, you're never in peace. Japur, okay, let's split the answer. I'll speak about Brazil, and you talk about the U.S. First of all, demand is very resilient, both short and mid-term. The segments where we find the main demands for our backlog, they remain very steady and firm. Data centers. Think about data centers. The number of data centers that are being built, and they will be built in the next coming years in North America. That will demand a significant amount of steel, and that's one strength. The other strength is that they will not build more greenfield mills in the coming years, but possibly in the areas where we operate.

The other strength is our business model, very much focused on margins, structurals, directly related to the demands that I mentioned, infrastructure and data centers. The U.S. trade defense mechanisms are very robust. Since Trump's first administration and then Biden's administration, they did not reduce what was mentioned in the 232 section. The negotiation of the U.S. USMCA will be even more favorable to North America. We have also our internal strengths. We are very lean in North America. Since 2018, when we drew up a very strong plan to recover our industrial debt in terms of the USDI, we are operating our mills very well, very few maintenance shutdowns, and we've been very assertive. We grew, you know, the critical spares. Any shutdown, we solve the problems quite fast. Things there are running very, very well.

You see China exporting a lot through the integrated route. Maybe they removed part of our competitiveness because of scrap exports. There is surplus. There is additional scrap supply in North America. That is why prices, in a way, went up and spread has been broadened. We think it will continue to be like that. We are very positive. We are very certain that the results that we deliver this quarter will continue to be good in the coming quarters. With that, we gain some time to implement what is in our control to improve productivity in Brazil. There is still a lot of things to be done, short-term adjustments. Also when we look in the mid-range, we do believe that there is still a lot of room to improve and enhance our operations in Brazil.

Somehow, in North America, we have to continue to operate with a lot of discipline or to do what we've been doing so far. That's my general view. Maybe if you have any further questions, I can answer that further. Japur, over to you.

Hi, Rodolfo. Speaking about Brazil, qualitatively speaking and looking at the results of this quarter, when we think about apparent consumption demand, looking at steel in Brazil, there was a 6% decline in the consumption of long steels when compared to last year. Part of that is attributed to, I mean, we don't give you a lot of details, but that can be attributed to the consumption of special steels. We monitor ANFAVEA numbers. I know that you also look at the numbers posted by ANFAVEA.

January and February were weak months in terms of heavy vehicles, and that's an area that is very important to the consumption of SBQ or special steels, and that's an important market for us. This puts prices upwards because price per ton is higher when compared to, you know, regular longs. This impacts our realized net revenue or net sales because we sold less special steels because January and February were weak months in terms of heavy vehicles. On the other hand, thinking about potential upsides and risks, in March, there was an important rebound in the production of heavy vehicles by ANFAVEA. If we continue to see this rebound in the coming months for this particular line of products, we believe that this will also boost our shipments in terms of special steels.

Because the prices and margins are interesting, and this can lead to more constructive margins in our Brazil operation going forward. In addition to all the projects we mentioned before that will contribute to an improvement in our, you know, operations in Brazil. Well, certainly there are still many uncertainties. There's the issue of freight and impact in terms of, you know, coal to complete, I mean, the metallurgical coal that comes to Brazil. This is something systemic. It's not nothing very specific of the company. Therefore, these are some positive points for short and mid-term and other points of attention in relation to our business. Infrastructure activities are going okay there. We haven't seen any major quantitative changes in this segment.

I think what changed a bit the profile of realized prices and cost structure was mostly attributed to the lower volume of heavy vehicles in the first part of the year.

Thank you.

Thank you, Rodolfo.

Next question is from Leonardo Correa with BTG Pactual.

Hi, everyone. Good day. Rafael, Japur, Ari, thank you. I have two questions. Perhaps the first one is about the top line. In the quarter, we saw the average price realized in Brazil dropping a little more than what we expected, 5% QoQ. I understand that there are a number of effects there. Mix perhaps some effects related to seasonality impacting prices. We have heard about all these attempts to pass through to 6% increases happening in the production chains. I would like to hear your expectation regarding implementation. I know that this is a competitive market with a lot of players competing for market share, and imports are still hurting. What about this attempt? Platts is not showing a lot of pass-through, 2.3% increase. I don't know whether this number is accurate or not.

I would like to have more detail on the top line. My second question, Werneck, is kind of a more comprehensive one. I know you've been an advocate, and you've been very vocal asking for equal conditions, trade defense mechanisms, fairness to compete. We see imports of long steel more controlled, imports of flat steel that seem to be reducing. The freight problem is going to make imports more expensive. We have anti-dumping for BF galvanized and HRC and the quotas. In the stock market, we see some excitement. People kind of pricing the results and thinking that things will improve in the future and that there will be a consistent recovery of results. What are you thinking? How excited are you about what the government is doing, and what kind of impact are you seeing in your operations?

Do you think that this idea of a substantial improvement in the second half of the year, do you think it's exaggerated optimism in the market, or do you see these green shoots? Do you think that the worst is behind us and that things are on the right track to improve in Brazil? These are my two questions.

Good, Leo. Good questions. They are good opportunities to debate. When we talk about cost pressure and price, when we look at the profit pool of the several chains in which we operate, the sector under the most pressure is ours. This is changing From time to time. It's different in the, than in the post COVID pandemic time. I mean, we cannot avoid passing through this cost pressure. The prices, this will happen. Japur monitors this daily. If he disagrees regarding price, well, he has all of the numbers in his head. I mean, this will happen. Many of our clients have been working with a little more leeway in their balance sheets, with a little higher margins, but this dynamic has been constant. Every day, somebody is knocking on our doors. Suppliers of electrodes, inputs, and others, they're knocking on our doors. I think that passing through a cost which is well-known, a global cost, the pressure that comes from a complex global situation, well, it will happen.

If this were related to inefficiency in the sector or of Gerdau, it would be difficult to create a narrative and a rationale that would allow us to pass through the cost increase. This will happen. We have different segments, distribution, civil construction. In civil construction, they work by contract per project. I'm not worried that this will not happen. It will. My main concern is that when we pass through this cost increase, we'll need to improve the margins, deploy more improvements in the short term, which is something we're doing. Logistics is one. The amount of material being handled in Brazil, we're optimizing that, reducing that. There are things to be done, homework to be done in-house. In terms of trade defense mechanisms, I'm optimistic as well because this is something that is developing over time.

The fact that Minister Geraldo Alckmin left and Marjorie Olivas will be conducting this area of trade defense mechanism, he is very knowledgeable. He knows about all the damage caused to the chain. The numbers are clear. The evidence became very clear over the last two years. Evidence of the terrible damage made to the sector. You look at our balance sheet, but not ours only. All of the companies in Brazil, we cannot continue to invest. It is not possible to survive that way. I believe that these two mechanisms, the quota tariff system, will continue in effect. I do not know whether they are going to broaden it, expand it to other products. What we know of the quota tariff system in the last quarters, we are confident.

We believe that the anti-dumping investigations that took a little longer than normal, a little longer than expected, are unfolding. The evidence is very clear. I'm very optimistic at this point because we see that the trade defense will be broadened with a more anti-dumping quota tariff system. This is what I'm thinking.

That's clear. Thank you.

Anything else you want to add, Japur?

No, I think you said it all.

All right, Leo. Thank you. To you.

Next question is from Gabriel Barra with Citi.

Hi there. Can you hear me now?

Yeah, we hear you super well. We can see you and hear you.

Thank you, Werneck, Japur. I have two points of clarification. The first about Miguel Burnier. If I'm not mistaken, in the last earnings call, 2.25, you spoke a little about the ramp up.

The expectation of the BRL 400 million in EBITDA for this year. I'd like to hear from you, Werneck, perhaps Japur as well, about your expectations regarding that. I think you have maintained this kind of quote, unquote, "soft guidance" BRL 400 million for this year. Werneck, the project seems to be a little delayed, or is it on time to be delivered? If you could elaborate on the company's expectations regarding the earnings for this year and how this can impact next year's EBITDA. My second question is about potential one-off actions for cash generation. I don't know if you're considering possible investments in real estate land. The company has a lot of real estate that could be monetized. I'd like to hear what you're thinking about that. Can you wait? Can we wait for extraordinary dividends?

Are you thinking about divesting? How are you looking at that, given that the company has a more leveraged balance sheet, a very sound balance sheet in an environment of rising margins with the U.S. operation, very healthy Brazil with a positive trend for the second half. I'd like to hear from you. Investments and extraordinary dividend payout.

Right, Gabriel. How are you? Hope you're well. Let's start with Miguel Burnier. That's exactly it. We released a soft guidance with our expectation in our Investor Day in October last year. We said we are expecting to generate BRL 400 million, and that is specifically coming from Miguel Burnier project this year. We expected a ramp-up and start of operations. Operations haven't started. We're proceeding with caution.

This is the largest investment in BRL in the history of the company. It's an investment of 40 years. It's not because it's taking a few months more that we are going to do something that will sacrifice or hinder the long-term return that we expect on the capital invested. We understand that perhaps typically this mining project, and it will be hard to have all the BRL 400 million this year. We are working internally to calculate the impact of what will be the specific guidance for Miguel Burnier project, how much EBITDA it will generate this year. In parallel to that, we have a number of other initiatives. With a recovery plan to offset that loss of margin, either with internal improved operating efficiencies or through strategic alternative purchase of more competitive ore in the region of Minas Gerais.

In that regard, we are very well-positioned, geographically speaking, to buy ore from other suppliers in the region. As a way to mitigate part of this EBITDA that we will not see flowing in this year for our results. We understand that in 2027 we should have a normalized the ramp-up line or ramp-up curve. More in keeping with what we expect with the mining projects in the long term.

Okay, Gabriel. Now, as regards real estate and other one-off actions that we might have to improve liquidity, free cash flow via divestments, we continue to progress with our internal analysis of our real estate assets. Here, I think it's good to have controls leverage so that we are not forced to sell something or to expedite a sale, so that we won't hurt the long-term value created for our shareholders.

In terms of cash allocation, that these businesses might generate this year and in the coming years, I think that a commodities company is good when it is boring and predictable. We are not going to radically change our preferences in terms of capital allocation. We have been distributing dividends above the minimum set forth in our bylaws. If there's a surplus of capital, when we are not hurting our liquidity, we are allocating for share buyback when we understand that the market is not really understanding the long-term value of our assets. That's how we intend to proceed if everything else remains constant. Boring is good for a capital-intensive company like ours. Okay, Gabriel?

Absolutely, Japur. Thank you very much.

Thank you, Gabriel.

Next question from Lucas Laghi with XP. Good afternoon.

Thank you, Ari, Werneck and Japur. I have two points. I'll start with a follow-up from the previous question, thinking about the optimization of your Brazil assets. I mean, that you can focus on investments of high returns or reduce investments to optimize return. My question is, how do you view the market in terms of investing and divesting? You talked a lot about, you know, anti-dumping and protectionist view. Looking at a competitive scenario, I would just like to understand how this can impact your decision of investing more in Brazil or maybe, you know, cease with the divestment project in this current market scenario. We also talk a lot about Miguel Burnier, CapEx, et cetera.

If you could just revisit the company's expectation in terms of capturing incremental EBITDA from the projects. Maybe, I mean, we just wanna make sure that we are considering these marginal returns, given the fact that CapEx is very clear, given your guidance for 2026. These are my two questions.

Well, Lucas, thank you for your questions. We'll start and then Japur will continue. What we will probably see in the future is a concentration or combination of assets that is different from what we had a few years back. That business model, the traditional business model with many mills, where you have a small scale mill and you serve a very regional, you know, market, and you buy scrap nearby and you turn scrap into steel and also serving customers in that region. This is a model that we reviewed in the U.S. We shut down plants. We concentrated our production in a lower number of mills, but highly competitive. Speaking about the market in the future, I think speaking about divestment or investments, it's not a very good explanation because it seems like the business model remains the same.

It will be a transformational issue going forward and we will focus our investments in the winning mills.

We have some of those winning mills in Brazil, so it's very likely that the mills that were shut down, maybe they are not competitive enough to resume production. You know, we are not willing to write, you know, to go too far away to serve customers. The speed of things will follow our possibility of CapEx allocation without entering into debt. It will be a transformation of the kind that happens from time to time. Our way of operating in Brazil will change. There is also the issue of Ouro Branco. The mill was initially built to serve the export market, and we were gradually reducing our export sales because we believe that in the future, we will find better opportunities to export at more attractive margins.

Our operations in Brazil will go through a transformation, not only this one, a short-term cost reduction, but it will be something more radical. As soon as we have more detailed plans, we can show it to you. We believe that we will have to change the way we operate, because what we did in North America may be an example of what we will do here. We shut down some mills, we removed the less competitive, you know, mills. Now we have an industrial hub that is highly competitive, low cost, very reliable. That's the general outlook.

Adding to what he said, and you also talked about projects that increase denominator or decreases the denominator, meaning that we have to invest in projects that improve our numerator.

Gradually, we have to empty out our backpacks. If you are running long distances, you have to run with a less heavy or a lighter backpack. We have a lot of real estate assets, today they are not being fully utilized. Eventually, the person that operates that asset doesn't really see that they are paying, you know, they're not paying rent, so okay, it's my own, but the capital is paying for it. The cost of capital is there. There's two things. I think you already answered your own question when you talked about excess. I mean, anything that is, you know, over is not good. If you have excess of forest, it's not good. If you have excess productive capacity, it's not good either.

The focus is having an operation, just like, you know, the fact that we have a very healthy balance sheet. You have to look not only at the liability, but also assets. We have to seek for a different balance compared to what we have today. I think you answered your own question. In terms of the project on the institutional side, we gave you a little bit of details out of the three major projects we have this year. They will go into a ramp-up process throughout the year. The recycling center in Pindamonhangaba is a new project, and the investment in Miguel Burnier is more transformational.

Considering the scale of the project, as I said earlier, since we are talking about a delay, I mean, thinking about returns of the project this year, it's probably that we don't see the BRL 400 million in full that we had anticipated last October. We are also seeking for other efficiency initiatives in Ouro Branco to compensate for the returns that we will probably not see this year coming from the mining project. In 2027 and in the next 40 years of the Miguel Burnier lifespan, we will certainly see good results in the numerator, generating more value to our shareholders.

Lucas, I would just like to add that while Japur was speaking, I would like to say that rest assured that we will not raise the company's debt.

We will not disburse a lot of CapEx or much higher than what we're doing now. A good part of the resources that will be allocated in Brazil to promote the transformation will come from our decision to operate with a lower number of commercial assets. The amount of CapEx that goes into production will be reduced, and this will bring us more breadth to make more transformational investments. Our operation in Ouro Branco has been very successful in terms of efficiency, and this has allowed us to postpone major reforms in the blast furnace or the coke plant. The mill is very healthy. We are moving forward that investment level, and this creates a buffer in terms of the disbursement levels that we've seen in the past years, and this will also lead to greater transformation.

We do not want to accelerate transformation in Brazil by increasing CapEx or increasing our leverage. We know it quite well, and it's becoming more and more apparent the need we have to keep our CapEx dispersion and leverage at very healthy levels.

Great. Thank you.

Thank you, Lucas.

Next question from Daniel Sasson.

Hi, good afternoon, thank you for this opportunity. Ari, Rafa, and Werneck. My question, I think Gustavo already mentioned in his early comments. He talked about anti-dumping and the competition with imported goods. Maybe for us, it's a bit easier to understand the impact and the importance to the flat market, maybe for longs with the eventual anti-dumping measures. I know that we have wire rod. If you can tell us about the results of this investigation concerning other products also long products, and whether this will change the face of the market. Okay, in addition to anti-dumping, how do you think that the long steel players are behaving? I think at some time last year, more or less at this time, you decided to lose market share in rebar and just start the fight.

How do you think this competitive dynamic, particularly regarding longs, is shaping up the market? My second question, and maybe this is a follow-up related to Gustavo's last comment on CapEx. Now I know we understand that Rafa cannot give us a CapEx guidance for 2027. It's not even what we are expecting. If we think about the opportunities, in addition to that, the BRL 3 billion in maintenance, the other projects, what are the priorities? Last year, you said that maybe it would make sense to allocate BRL 1 in the U.S. versus allocating that same amount in Brazil. You even referred to a project in Mexico at the moment because you saw an increase in the auto parts market in the region. Things changed, and even there, the market became more protectionist.

If you could tell us more about the priorities, maybe specifying it per region or types of projects related to competitiveness and growth. Maybe that could help us think about, you know, where this will stand in the next coming months or years.

Okay. Japur can give you more details on the anti-dumping matter, but I will give you an overview of the topics you mentioned. Unlike North America, in Brazil, whenever we talk about trade defense, there are lots of rumors in the consumer section. In the U.S., since the days of Section 232, whenever they talk about trade defense or whenever they talk about defending the country, everybody understands that that's important for the country and that the industry matters for the country.

Maybe the numbers or the data is not so evident, but we are constantly talking to our customers there. I'm very convinced that in the next coming quarters, we'll be able to have a better reading that the North American industry is going back to the game. In Brazil, these debates take years, and then the industry loses its fight. It's very much influenced by what happened in the last few years. When we started noticing, you know, a high penetration of imported steel, this has never been seen in Brazil. It came right after the pandemic, and the steel industry was delivering results, had high margins. A few years ago, nobody talked about whether that was right or wrong, if that was here to stay, and whether the trade defense would continue to deteriorate margins in other segments.

After a few years, the topics became much more mature. There are many balance sheets that have been published from clients and even steel companies, and it's becoming very apparent from the discussions in Brasilia that if the country does not utilize more intense trade measures, the steel industry cannot survive in the long run. There are many sectors that are questioning the anti-dumping measures. More recently, they talked about the maintenance of margins by renegotiating prices with the sector. We saw discussions in manifestos and letters. The debate is intense, but I think they have to defend their beliefs in Brasilia. I think we struggled a lot in the past few years. All of our discussions in Brasilia and at the Ministry, I see that the environment now is quite different when it comes to implementing these mechanisms.

I mean, for two years, the topic has become more mature. Many analyses have been done. We saw good penetration of imported goods, and also wire rod was also another product that was heavily penalized. I see a better environment now that will lead to probably some more important trade defense measures.

Well, Daniel, my perspective here, I mean, it's far from being the truth, but what I think about what it means, especially for wire rod. In a rough approximation, whenever we think about long, we have something between 10%-20%, depending on the time of the year, that is equivalent to wire rod national production. The proportions vis-à-vis rebar is approximately 3.5 to 1 or 4 to 1. What happens is that oftentimes the producers of rod products, they also produce rebar.

When you have a lot of wire rod entering the country with dumping margins of $550 per ton of dumping, this is what was verified by the Ministry of Industry and Trade. This then leads productive companies that they don't wanna sit idle. It leads them to produce prices for contribution margin, so they produce rebars or other products. Therefore, this is not specifically about rebars, but it is also about the spillover, the tripling effect coming from a massive entry of wire rod, which leads producers to produce something else. Since this can be an input for other products like, you know, cutting bands, you know, profiles, columns. This has a detrimental effect in the entire margin of the long steel segment in general.

There are two investigations going on, like China with a margin of BRL 550 per ton and Russia with BRL 100 per ton, approximately. It is a significant amount that leads to a great impact in competitiveness. What we are asking for is, you know, fair trade. We should conduct a technical analysis and say, "Okay, there is dumping, there is damage, there is nexus, and we cannot ignore the facts, because the facts do not matter to us at the moment A or B." We should be mature enough, as, you know, a democratic country, that the rules that have been set up, they have to be enforced. Those who are selling to Brazil, they should also abide by the same rules, so we should be able to enforce them.

In the second half of the year, we expect to see the conclusion of this investigation related to wire rod dumping, and we have the potential to improve not only wire rod specifically, but also other long products that gravitate around this portfolio product. My last point on this competitive dynamic is that I see that somehow the issue of Market share in Brazil is very stable. Now, we still have further opportunities to be captured because it doesn't matter if I have all of my assets in the south and I have a 30% share, but only in the north of Brazil, because this is inefficient, logistically speaking. We have a very encompassing product portfolio.

I think now this market share among more stable players gives us a very unique opportunity, which is improving our efficiency, you know, on the way that we serve our customers. We started capturing these opportunities, and I see a very good avenue of opportunity going forward. We do have a market share that it was redefined last year with all of our recent initiatives. Once given our share of the market, it is not being served the most efficient way possible. I mean, from which mill we will serve, the way we will serve, whether it's via Comercial Gerdau or via a distributor. There are things that are up to us to do or to decide the most rational possible way to serve the share that has been given. Thank you.

Thank you very much.

Our last question from Carlos de Alba with Morgan Stanley.

Hello, Gustavo. Hello, Rafael Japur. The cash flow generation in the quarter was particularly strong. Working capital contributed differently to that, as well as low cash tax payments. Can you comment maybe what are you expecting for the second quarter, maybe the second half of the year in those two items? I have another question on projects.

Hi, Carlos. Great. Well, regarding these working capital line items this quarter, in terms of tax, we had two effects. The first, well, we do not generate profit in Brazil. We have a loss. Our effective tax rate ended up being lower. This is basically profit of the United States operation, and we had more income Income tax, withholding tax on the distribution of results from the United States to Brazil, which we did most strongly in the end of last year. This contributed to a tax line item that was higher in Q4 than we had now. Over the year, we expect a normalization. Typically, we have a greater disbursement of taxes in Q4, paying in April the income tax and corporate tax of the United States. Along the year, this should be normalized. For the second half of the year, we expect to have a positive free cash flow generation, both due to our operating results and also because of working capital. All remain operating as important. We had almost BRL 1 billion in working capital in quarter-on-quarter. We believe that this is relatively normalized for the second half of the year.

Throughout the year, we believe. Again, I'd like to remind you, we are going to have a lower investment of CapEx than last year. We expect that we will have a stronger free cash flow generation this year than in 2025, both because of an EBITDA that we're generating, which is by comparison, stronger in this past Q1, and also because of CapEx reduction. There is a double benefit there.

On the iron ore division, the iron ore business. First, on Miguel Burnier, can you give us any more color on what caused the slight delays this year in terms of the EBITDA generation that the company was expecting? Then, maybe longer term, as you transform the business strategy in Brazil, is investing in iron ore to increase the third-party shipments an option? I think, Gustavo, in the last investors day, you had mentioned the possibility of that investment taking place. I don't know if you can add more color at this time. Thank you.

Perfect. Carlos, the problems that we faced at Miguel Burnier that led to the delays are quite well-known issues, which are the current difficulty of carrying out civil construction and electronic and electric assembly. The project is very robust. We had a schedule that started on time. Historically, the schedule was aligned with the traditional productivities that we have in the civil construction segment and electromechanical assembly sector. Since Brazilian companies are finding it hard to hire people and finding it difficult to have a more technical and skilled labor, these sectors are facing difficulties. Our difficulties were 100% related to productivity issues in civil construction and electromechanical assembly. This is a theme which I believe will need to be addressed differently in the future by Brazilian companies.

Else we will continue to find it hard to have these projects and results becoming more and more complex to make investments because of civil construction and assembly points. That was the main reason. We continue to wish to monetize our mining rights in the state of Minas Gerais. I think the success of this first operation, it's a big operation, 5.5 million tonnes. Once it's in operation and it is successful as we expect, it will give us not only safety, but it will give us more time to have more in-depth studies in terms of what should be the next steps for us to increase our production of ore. We have a lot of mining rights. The chronology of which one we should tap into first, that's being analyzed.

Once this project is implemented and starts producing successfully, it will give us an opportunity to accelerate our plans for a second stage. Once this is more clear, we commit to give you more detail on that, all right?

Thank you very much.

We are now ending the Q&A session, and now I will turn the floor back to Gustavo Werneck.

Thank you, Ari. I'd like to thank everyone for joining us today. On my behalf and on Japur's behalf, I'd like to say goodbye.

Good morning and welcome to Gerdau's Fourth Quarter 2025 results presentation. I am [ Ariana Pereira ], specialist with Investor Relations, and it's a pleasure for me to be joined by CEO, Gustavo Werneck; and CFO, Rafael Japur. Please note that this call is being simultaneously translated in english and you can choose your preferred language by clicking on the globe icon at the bottom of the screen. [Operator Instructions] It is worth noting that the forward-looking statements contained herein are based on the company's beliefs and assumptions based on information currently available. Forward-looking statements are not guarantee of future performance and are subject to risks and uncertainties that may or may not occur. I will now turn the floor over to Gustavo to begin the presentation.

Hello. Good afternoon, everyone. I hope you're all well, and thank you for joining us again for another earnings release presentation. We will briefly comment on the highlights of the last quarter and also the year 2025 as well as the outlook for our operations, and then we will move on to the Q&A session. The year of '25 was marked by distinct scenarios in the main regions where we operate, North America and Brazil. In light of this, I would like to emphasize that Gerdau has greatly benefited from its business model based on geographic diversification and productivity -- and production flexibility. Moreover, I would like to highlight the resilience of the North American market, which has seen strong steel consumption and the reduction in import levels as well as the robust operating performance of our operations in the region. Even in the fourth quarter, when there is a typical year-end seasonality, we achieved solid results. In December 2025, we even posted record shipments in North America. Meanwhile, in Brazil, the market reached a new record for steel imports in 2025 with a 7.5% increase in shipments year-on-year, despite important advances in trade defense measures such as the recent inclusion of new NCMs in the list of products covered by the 25% import tariff and the implementation of antidumping tariffs on cold-rolled steel. This unfair import scenario has impacted the profitability of our operations in the Brazilian market. On the other hand, I would like to highlight the progress of our new sustainable mining platform in Miguel Burnier in the city of Ouro Preto. In Minas Gerais, the project is about to go into operation and will contribute to a significant reduction in production costs at our Ouro Branco unit. I will now turn the floor to Japur, who will elaborate on the financial highlights and the impacts of this current scenario on our results.

Thank you, Gustavo. Hello, and good morning, everyone. It's also a great pleasure to be here with you in the presentation of the fourth quarter of 2025. We ended 2025 with EBITDA of BRL 10.1 billion, down 7% when compared to 2024 results, mainly reflecting a still challenging environment in Brazil marked by increased competition. On the other hand, our operations in North America continued to gain relevance, supported by resilient demand and excellent operating performance, significantly contributing to the group's consolidated results and the overall results of Gerdau. Having said that, I would like to highlight four points related to this quarter's results. First, in the fourth quarter, our net income was impacted by nonrecurring items related to impairment losses in Brazil units in the amount of BRL 2 billion. It's also important to note that these write-offs have no cash effect. Excluding these effects, Gerdau's adjusted net income in 2025, in our view, that accurately reflects the operating performance for the period; stood at BRL 3.4 billion, down 21% when compared to the previous year. Secondly, regarding Gerdau's investments, we carried out CapEx in 2025 of BRL 6.1 billion. Now for 2026, as already disclosed, our guidance is BRL 4.7 billion, representing an important reduction of BRL 1.4 billion. And we understand that this will bring more flexibility to our free cash flow generation in 2026. I mean this is the third topic, by the way, that I would like to highlight. Even with a very strong pace of investments in Miguel Burnier with our expansion mining project, even then, in this fourth quarter, we achieved a very strong free cash flow generation of BRL 1.4 billion. And as a result, the annual cash flow generation for the last 12 months, which was negative until then, is now positive and stood at BRL 394 million in 2025. Part of this cash generation was earmarked for reducing our debt. And as a result, we ended the year with leverage of 0.76x net debt over EBITDA, a level that we consider to be extremely sound. Our resilient business model continue to be very, very resilient, combined with caution in capital allocation. And all of that allowed us to grow significantly without sacrificing shareholders' return. As evidence of this, throughout 2025, we paid out BRL 2.4 billion in dividends and share buybacks. And finally, in addition to completing our buyback program initiated in December 2025, which we already announced last December, yesterday, we announced the launch of a new program for Gerdau S.A. It will be for approximately 2.9% of outstanding shares of the company. And if we think about today's numbers of the last exchange floor, this will be the equivalent to BRL 1.2 billion. So I'll end here, and I'll join Gustavo for the Q&A session.

Thank you, Japur. And still speaking about Brazil, we expect moderate growth in demand in 2026, even despite the excessive influx of imported steel in the local market. I would like to point out that we are more optimistic about the progress of the trade defense measures recently announced by the federal government to combat unfair competition from imported materials and as well as the transparent and ongoing dialogue that the steel industry has maintained with pertinent agencies. Meanwhile, in North America, we continue to see stable steel consumption at high levels with order backlogs above historical averages. The outlook for steel demand from sectors such as solar energy, data centers and infrastructure remains positive. I'll now hand over to Ariana. And Japur and I will be available to answer your questions.

Our first question comes from Daniel Sasson with Itau BBA.

My first question has to do with the outlook of the Brazil business margins. You spoke about some stability expected for Q1 of 2026. I'd like to have your view about the trajectory over the years, starting with a somewhat weaker base. But with Miguel Burnier ramping up in the second half of the year, could we expect a different trend? Normally, we have a worse seasonality in the end of the year. And do you think you can end 2026 with an EBITDA margin being double digit? Although perhaps double digit for Brazil would be too optimistic. It depends on more aggressive measures regarding price, et cetera. My second question is about impairment. For more than 5 years, you didn't have a very relevant or substantial write-offs. So could you give us more detail on the more conservative assumptions you used to project the cash flow of some assets? What made the difference here, level of usage, price level, perhaps lower growth expectations for the coming years? And in Brazil, some of your competitors may ramp up their own capacity. Will Gerdau consider closing down more capacity in addition to what you have done in the last few years when you adjusted your footprint?

Excellent to start the call. Addressing the elephant in the room, which is the outlook for the first quarter, we realized, we got some comments in the market that people were kind of surprised with the expectation we see now of maintaining margins in the first half. There are some points here. First, we have a year with fewer business days compared to other years because there are many holidays, there's the FIFA World Cup and so on and so forth. And that has an impact on our economic activity; plus rainfall, which was stronger in the Southeast, particularly in Minas Gerais, stronger rainfall, heavier rainfall compared to prior years. Also, considering consumption sectors as the automotive industry, we have ANFAVEA data, for example. In January, they started with a level 12% lower for vehicle manufacturing compared to January of 2025. And that matches the high level of inventory that there is in Brazil of imported vehicles. And that matches of the data published last night of consumption of long steel and flat steel sales in the domestic market that were lower in January 2026 compared to January 2025. So a stronger resumption of volume is something that we are not seeing in terms of volume. And as regards to our costs and margin, although we see prices that on average are better than we had in Q4 '25, there are still some cost pressures that we see in the long -- in the short term that may get a chunk of the margin that we would have with the more competitive prices. And here, we have coal, the coal theme. We are not so exposed to coal as other companies listed in Brazil. Most of them are integrated, but half of our operation in Brazil rounding up is the Ouro Branco unit. And when we get our modeling, about 20% of our Brazilian costs have a relationship with the cost of coal, and we see that coal costs from Q4 to Q1 increased substantially. It is true that we have a long lead time between 90 and 180 days between the price of coal increasing and this being passed through to our results. But we see that this will cause some level of pressure on our variable cost. Now you put it all together. We understand that we will have an environment of better prices but perhaps costs under a little bit of pressure and at the same time, volumes that are not increasing significantly to improve the operating leverage. I don't know whether Gustavo would like to add anything about the Brazilian outlook. Go ahead, if you have anything.

If I have anything to add, I'll do it in the end.

As regards to impairment, it has something to do with the Brazil conditions. When we run our annual tests in our accounting policy and recovery of PP&E, et cetera, we run a number of tests considering the future cash flow for our business operations, taking into account foreign exchange assumptions, profitability of the businesses and utilization of our capacity. When we compare the set of the assets in the Brazilian business, it justifies some of the assets that we have in our balance sheet. Some plants were hibernating. They were depreciating slowly because we didn't have a definition of not returning these units. Some other units that were not operating at full capacity, they were far -- you can see that our utilization capacity is below 60% in terms of the melt shop operating lower than 75%. So clearly, we see a high level of idle capacity. Except if we have a significant increase in demand and the level of profitability, we don't see any reason why we would maintain part of these assets. It's a small amount of the total PP&E that Gerdau has in terms of premium prices, well, we had something around BRL 350 million, BRL 400 million. But we understand that with a more challenging foreign exchange, with a more challenging market, with a more challenging macro scenario; it's a moment for us to reflect these results in our accounting. That's why we had the impairments.

Rafa, perfect. Still on the margins, on the first question, is it reasonable to imagine that everything constant in the second half, we should see an improvement in the margins, at least in the part of costs with Miguel Burnier? Absolutely, absolutely. And to answer the second part of your question, again, we are talking about stability of a margin of around 7%. We don't think it's unreasonable to have a second half, perhaps a year-to-date -- a full year with a 2-digit margin. It's not unthinkable. It depends on our ability to deliver the Miguel Burnier project. And if we have the trade defense mechanisms and market dynamics not deteriorating, things can happen. I'd like to remind you that this is a presidential election. It's an election year. There might be some volatility in some of our target markets, but it's something that we're going to be monitoring over the year. And Daniel, you also mentioned a possible closing down of further capacity. When Japur was talking about a lower usage, we were -- it was possible to think about closing down more operations. But the thing is we have such a variety of products manufactured at these mills that if we remove capacity now, we will not be supplying the market in some of those segments. So our 2026 plan does not include closing down any more capacity. What we had to do, we did last year. Of course, over the next few years, depending on how things progress in Brazil, there's always space. And technically, it is possible to change these assets, we can make investments, particularly in the rolling mills to make them more flexible. But looking at the short term, in 2026, we are not thinking and we're not considering closing down any more capacity. So our expectation of cost reduction and optimizing our Brazilian operations that will not come by closing down mills, okay?

Next question from Rafael Barcellos with Bradesco.

My first question, we have seen the United States posting very strong results, kind of contrasting with Brazil, but this has been discussed here. And in this quarter, South America was a negative surprise. You talked a lot about Brazil. You gave us a guidance. And I would like to know more about South America and how you're seeing the expectation for the year, for the quarter. What can you tell us to help us understand the future results? And my second question is about the United States, which is indeed what is impressing all the investors. We're seeing very, very strong results. We are following metal spreads, and it seems that we are going to see even greater margins in Q1. But in talking with some local players, they tend to be less optimistic, which is only natural because margins and prices increased. But also there's parity of some products, which is kind of stretched in the region. So if you could speak about the United States, what you're seeing about the sustainability of the U.S. profitability and comment on the main drivers? And since this is a segment that is really standing out, some investors consider a possible listing of the operation. If you can comment on that, we would appreciate it.

Rafael, starting with South America. In this specific quarter, we had a specific team in Argentina to maintain the level of utilization of our unit. We had a greater volume of exports, which ended up increasing our cost because we have a greater logistics cost that goes into our cost line item, and that impacted profitability. We don't expect that we will maintain the same level of exports from Argentina this year. So we're expecting a normal conversion, a recovery of our margins in our South America operations already in the first half of this year and continuing in the second half of the year. Something in the mid-teens would make more sense to the South America operation, as was the case of what happened in the year of 2024, on average, what happened in 2025. Now moving to the North America operation. We have a number of different situations that are worth highlighting. The situation in Canada is different than the situation in the United States. And in the United States, special steels, longs and rebar have different dynamics. It is true that we had an expansion of spreads because of our beams that had some price adjustment at the end of the year. And that didn't have the same level of recovery in decrease of prices of scrap, but that does not account for our whole portfolio. We have other lines of manufacturing such as special steel in the automotive industry of the United States. They are not recovering at the same level of production and sales that we would like to see to drive our SBQ operation in the region. So I guess that, overall, we don't see anything making us think that there will be a substantial reduction in the profitability of our North America segment in the short term. We continue with our order book being very strong, remaining at very high levels. I think that we're actually now a little above the level of the end of the quarter. We are close to 90 days rather than 80 days. So that gives us good confidence that this is not the effect of just 1 or 2 months of results, but rather, it's something more recurrent. Would you like to add anything, Gustavo?

Yes. Rafael, when we speak about North America, when we look at this in more detail, when we look at Gerdau results divided by business operations since 1990, plotting the results and looking at them with attention, there were many moments when the results in Brazil were much better than those in North America. Other times, North America overperforming. Rarely, both were doing poorly and very rarely, both were very good. And when we look at this in more detail, after we published the results, I get bothered with a number of things about Gerdau. One thing that does not bother me that much is that we see this discrepancy between the United States and Brazil. I would say that this worries me less than you do. I was more concerned in 2017, '18 when our Brazil results were very, very strong. And our results in a solid economy like the U.S. economy were kind of poor. And why? Why do I feel that way? Because I don't see any signaling of deterioration of our margins in North America in the coming quarters for a number of reasons. When we compare the soundness of our operation of our assets in 2017 to now, we have been operating quite well. 8 years ago, the comparison of our operating performance vis-a-vis our competitors, we had a number of $30 per tonne, and that was my judgment, my analysis regarding our performance gap vis-a-vis the competitors. But in the last 8 years, we worked hard in the U.S. Not only did we close this gap, but the public indicators and indicators we have access to clearly show that we have an operation from scrap to industrial with very good results and a more robust operation than our main competitors. So we're doing very well in terms of the operation, in terms of raw materials. We learned to use only obsolescence scrap, so scrap that we have access to, that has easier access to. And from the commercial standpoint, our decision to leave those products where we see greater penetration of imported steel was a good one. When we look at the main category of products, the main structural beams, that's a product that is very difficult to import, given the size, the weight, the different gauges. So I would say that we're very well positioned. In a way, we are very well protected in our business when we look forward. The health of our backlog in terms of infrastructure, in terms of solar power, data centers; that gives me some peace of mind that we will continue to have solid and sound results in North America in the coming quarters. As we solve -- and we will solve the competitive issues that we have in Brazil. So I don't really worry about these points. Well, I read some of the comments made in general by the market, and this don't really worry me. And as regards to Brazil, this has happened previously. Of course, if we have an antidumping of HRC, as we're expecting, there will be some improvement. And there's a lot happening in the coming quarters. Ouro Branco mill operating in a very solid way. Testimonial of that is the quality of our coke plant, the quality of our blast furnaces. And we have been delaying and postponing the stoppage. I would say that our Ouro Branco mill is very differentiated. We have the new sustainable mining platform of Miguel Boni that will increase our competitiveness. So I am fully convinced that we have adequate timing or sufficient time to improve margins in Brazil. And we are far from a deterioration of margins in North America. I just wanted to stress this point. Most of the times, I agree with the comments that are made by the investors and the analysts. But right now, I kind of disagree with some of the analysis that kind of penalize our results because there's a significant difference in margin when we compare the U.S. operation, the Brazilian operation, okay? So I have a slightly different opinion on that regard.

Just as a follow-up question. Given everything you said in the relevance that the U.S. operation acquired in the Gerdau business and the difference in between the regions, that's always questioned by investors. Are you evolving with the listing possibility? How do you see this? Are you maturing in this discussion at the company? Can you comment on that?

Of course. Overall, themes regarding company restructuring, tax impacts and ways to unlock value. Well, these are always things that we are looking at internally. But we haven't got any tangible study or action plan being executed or about to be executed regarding the listing of the company. We are monitoring some cases. We are monitoring some companies that did follow that path. They are reaping some fruit, but with some difficulty as we are monitoring them. And we will continue to look into that if the management of the company concludes that this is going to unlock value for the shareholders, it's something that we might explore.

Our next question comes from Caio Greiner with UBS.

I have two questions. I would also like to revisit something you briefly mentioned during your last answer, and that refers to antidumping and how this is impacting the company's view. And this has been a very frequent discussion point. And if I recall, I think this is one of the points that you mentioned in the past, this lack of protectionism or even this unfair competition coming from imported steel that is being dumped into the country. And this is what led you to think about the putting some brakes on the CapEx investment. But now we are seeing some approvals, not only in regards to the antidumping issue, but the 25% tariff. So I think somehow we see some movements on the part of the government in that direction. Certainly, the impact in terms of your products, I mean, it's there, but it's minimal. It's very small. But your products should be still impacted in the next coming decisions. Just like what you said before, you already envisioned some preliminary approval. But the question is, how do you see protectionism expanding in the steel milling industry in Brazil? And how does that change this relationship with your Brazil unit. Are you more comfortable today to resume investing in the region or even maybe going in the opposite direction? Maybe you could start thinking about, I mean, reopening some of your units. And I would also like to revisit one of your comments. Maybe you could start thinking about investing in some rolling mills going forward. So I would just like to hear your views about how this is impacting the company vis-a-vis the Brazilian market after the approval of the protection measures. And my second question is about asset divestments. This has been an ongoing topic among your peers. Maybe you should start looking at some noncore assets, and I think there -- you still -- you already have a lot of things in the company. I would just like to understand where this is something that you are discussing today in the company. And if the answer is yes, whether you could give me more details if you're looking at some assets that you think about selling, what the assets are? And what do you see going forward?

Okay. Thank you. Thank you, Caio. I will start and then Rafa will follow through. Well, one of the main reasons that led me to be more optimistic about the trade defense measures is the fact that it's no longer a political thing, but it's becoming more technical. There are countries that right after the election, they -- some countries made a political decision to introduce these defense mechanisms. I'm very careful when I use the word protection because I never use this word when I am in Brazilia. I would rather use the word defense because we don't need to be protected by anyone. I think the industry has to be defended against some fair competition. Therefore, for political reasons, in the last few years, we didn't see any expedited decisions in the steel industry as we did see in the U.S. market. I mean, Section 232 is very important because it promotes reindustrialization and it also promotes the growth of steel milling industries. I mean when we are there, we see that reindustrialization is now taking place. So I believe that in the future, we will see better and clearer indicators. The issue is, and I will say that in a way, I'm a bit frustrated because technical trade defense could happen faster. I understand the difficulties that we have today, especially in the federal government because there, we don't see a large number of experts like we had in the past. Some functional structures are being revisited. But I still believe that it could have been faster than what we saw. But now when we look at HRC and a temporary measure being put in place, this shows a transition from a political measure to a technical measure. I think it's very difficult for any government to make a decision that is not aligned to clear proof of damage to the domestic industry. Therefore, I'm very confident that this HRC antidumping should become a definite measure come June and July. And this could be really a significant landmark in our trade defense measure. This will not change our internal decision to allocate capital or our CapEx decision. I didn't talk about it extensively, but I am of the opinion that we should continue to allocate capital in Brazil to improve our competitiveness. There are relevant alternatives in the future that indicate that we should bring our cost level to a level that would allow us to compete on equal footing with any other company, even with those that practice some fair competition. We are not going to change our CapEx for this year of BRL 4.8 billion. And my future belief is that we will continue to invest in Brazil. Probably, we might continue to translate allocated capacities for exports in the domestic market. There is still some game, maybe some rolling mill or some production capacity that we believe will make sense for the future if it is to replace any additional capacity that we have in terms of exports. But our main CapEx focus for Brazil will be aligned with what we are about to ramp up in Miguel Burnier, which is to bring our cost equation and competitiveness to a new level. And I think I covered all your questions, but if you have any additional questions, let me know. But now I will turn the floor to Japur because he's the one leading the subject of noncore assets. So he has more details on that subject than me. And so over to you, Japur.

I don't want to make anyone nervous, that guidance is 4.7, not BRL 4.8 million. Okay. I don't want anyone to be nervous with the number. Now going back to your question in terms of noncore assets, I think here, we have two main sources. I think we are speaking to investors as they approach us with the subject. The first front regards our forest assets and farms that we have in Brazil. And we have those assets because of our coal production to produce iron ore -- to produce the iron we need. And today, we have excess capacity, both in terms of land and forest. So certainly, this has some value, and this has to be justified in our P&L. I mean it's nice to have assets, but they have also to generate value. So we understand that then if we have more clarity, and we are now working to validate that. So in fact, it's important that we have an important amount of forests and farms that can be monetized throughout time. Another front of noncore assets has to do with real estate. Gerdau, both in Brazil and abroad, we grew a lot through acquisitions. And these acquisitions, sometimes, they come with some property, with some real estate attached; and sometimes due to operating aspects and the way we operate and the way we are organized. I mean, at the end, we end up keeping these properties, and we use them sometimes in full, sometimes not in full. But now we are beginning to revisit some of our units and take a look at Comercial Gerdau in Brazil. We say, okay, this property was very well located, but this is not the case nowadays anymore. And this -- I mean this asset, I mean, changed in terms of its location and the surroundings. So it's not so important to us anymore. Therefore, this asset portfolio, which is very fragmented, we are talking not about 1 or 2, but hundreds of properties; we understand that some of them have still a lot of value. We are trying to understand now how much it is worth and what will be the best way to extract value in the timeline. Having said that, it's important to make a distinction. In time, I mean, along many years, Gerdau made an important effort to deleverage its balance sheet. And we are keeping a very robust and sound balance sheet so that we can continue to invest in our growth, paying off our shareholders without taking up unnecessary risks in such a cyclical industry like steel and commodities. Therefore, any divestment of noncore assets will certainly be subordinate to value generation for the company. We don't feel the need to make any sale. And of course, I'm not against those who are doing it. What we want, I mean, at the end of the day is to create value and not simply just carry it out an operation just to take it out of our balance sheet because what we want is to indeed evaluate our asset portfolio and determine what will be the best location for every asset. And when we realize that we are no longer the natural owners of the assets, be it a farm or any particular property, we will try to create value through that. I think this is the main idea behind it. We don't have any guidance, we don't have any concrete plan. But as we move forward, we will certainly inform the market. So I'll go back to you, Ariana.

The next question is from Carlos De Alba with Morgan Stanley.

Just maybe following up a little bit to recent discussions, how is the company and maybe the Board of Directors to the extent that you can share their views thinking about the return to shareholders of any excess cash that the company generates? We definitely acknowledge and took a very positive notice of the yet another share buyback after concluding the one successfully that you had implemented in the past. But despite the very strong cash flow generation in the fourth quarter, dividends came a little bit below expectations from the sell side. So I wanted to understand how are you waiting or the Board is thinking about shareholder returns to -- in terms of cash, excess cash between these two alternatives. And maybe just complementing this one before I go to my second question is if you do execute the company does execute these noncore asset sales, would the company return the proceeds from those to shareholders? Or would it keep it as part of the cash balance of the company? And then just my second question has to do a little bit with the CapEx, the view on the -- maybe not guidance, but just broadly speaking, how does the company see CapEx beyond 2026. Do you think that it will be closer to BRL 4.5 billion or maybe moving back closer to BRL 6 billion that we saw in the past?

Thank you, Carlos, very much for your three questions. I will try to answer each one at a time, starting with shareholders' return and noncore assets. And then I will talk a little bit more about CapEx, right? Carlos, it's good to see you again. As we already said in the past, we've been maintaining the dividend payout slightly above our policy. And this has been so in a very consistent way. And the average has been 45% to 50% payout, which has been the case in the past. And taking into account the value of our shares today, we still believe that it is below the intrinsic value of how much they should be worth it, taking into account the cash generation level, I mean, in North America, our profitability in that geography and the moment where we find ourselves in the CapEx cycle as we start to decreasing our investments in CapEx and then we start generating more free cash flow to our shareholders. In time, we understand that in the long run, we want to return more value to our shareholders. So not only the amount that we are paying now above the mandatory level, we want to add some more with the buyback program. In terms of capital allocation, taking into account the current status of our shares, but we must also look at taxes because this may impact our foreign shareholders because now they will be subject to withhold taxes over dividends. And the buyback is not subject to that tax. And that's why when we take into account the shareholders' base of Gerdau S.A. and considering that more than half of that base consists of foreign shareholders, it is important that we bear that in mind. I mean, the effective return of how much money we place in the hands of shareholders, not necessarily how much cash leaves the company. Now about the question on proceeds from noncore assets, I don't see any reason why other liquidity of things that we may have through our assets, of course, this should be returned to our shareholders. Throughout last year, if we look at the history of all the quarters, we basically saw an increase in net debt of BRL 2.4 billion, and we paid out BRL 2.4 million to our shareholders. Therefore, we experienced higher leverage throughout the year. So quarter after quarter, we continue to remunerate our shareholders. This last quarter, when there was a significant release of cash, we thought that this would be the adequate moment to reduce our net debt, and therefore, we would have more breadth space and flexibility going forward in this current environment. So I think this can throw some light. I mean, I look at your report, you expected BRL 0.13. And I think you have now a better explanation of what led today. About CapEx, Carlos, I don't have any guidance or any detailed information about guidance for 2027 onwards. And as Japur put it well, CapEx disbursement for this year is BRL 4.7 billion, not BRL 8 billion, right, BRL 4.7 billion. What I can tell you, Carlos, is that we will be really diligent and we will not disburse CapEx that is not aligned with our capacity to generate cash. Therefore, in the future, we don't want to commit the financial health of our balance sheet or the levels of debt just to increase CapEx. I mean we have strong beliefs. Therefore, we will not discuss any changes regarding these limits in the next coming years. But as any other companies, we have a wish list, which is full of projects. What we noticed today is that the wish list, in terms of investments in the future, this list is more populated by reinvestments to seek for further competitiveness, cost reductions rather than investments that will allow us to grow in capacity. Certainly, in the future, we may make investments just to replace some capacity or exports of semi-finished goods or high added value just to serve the domestic market or maybe some marginal increase in capacity in one of our plants that may be directly related to the development of a new product or any product that may add up to our product mix of products. But going forward, I believe we will invest in things that will allow us to promote cost reductions or to increase competitiveness. But I also want you to bear in mind that at some point in the next 10 years, we will have to invest in our Ouro Branco Mill. That mill has been operating at a very intense pace in terms of our blast furnaces and the coke production unit and shutdowns for maintenance. But at some time, we will have to deal with the lifespan of the equipment. Therefore, this may require some more relevant investment in Ouro Branco. But obviously, if the need arises, this will be compensated by a CapEx reduction in other areas of Gerdau in order to maintain a disciplined balance sheet, which has been the case in the past.

Next question from Caio Ribeiro with Bank of America.

My first question is regarding avenues for growth in the U.S. segment. The company has the Midlothian operation that aims to be more competitive and increase its footprint in the U.S. market. But I would like to explore two related things. Firstly, how do you see the option of growing through micro mills, considering the products where you operate the most in the United States? And on that same topic, other than organic growth options, would you consider M&A inorganic growth mainly via smaller players in the U.S. market? My second question is about the project that you were looking into in Mexico. Could you give us more color on how a possible renegotiation of the USMCA could lead to an increase in tariffs of the United States? Could this impact your decision to go through with this investment or not?

Sorry, my mic was muted. Well, looking forward, we don't have any great wish or great ambition to significantly grow our production capacity. Growing for the sake of growing for many years now has not been part of our life. So I would say that overall, what we expect for the coming years is organic growth, where we can add some capacity for higher added value products and products that may bring value, not just for Gerdau, but for our customers. So when we look at these micro mills, in our view, they make more sense or they will make more sense to reduce our production costs rather than adding capacity. We see that this is a very modern and smart solution in terms of joining hot rolling with a melt shop. So we won't need to reheat the billets. So it's interesting. But in our view, if this is included in Gerdau's plans, the goal would be to replace some existing production capacity, which is more inefficient from the cost standpoint. And as regards to mergers and acquisitions or any such growth, of course, we are always attentive as we have always been. I take the opportunity to congratulate our team because if in the future, we can find an opportunity for M&A. This is the result of our discipline in the past few years of having a company with a very sound balance sheet. We see in the market some companies that are facing difficulties, a lot of difficulties. We have seen them in difficulty for quite a while now. And we were very disciplined in our actions to have the company's balance sheet at a certain level that will allow us to think about M&A in the future. But we are very down to earth. It doesn't make sense to make an acquisition that will not add value for the company in the long run. Of course, there are always things that can complement our business. We can always seek some synergies when we analyze a possible acquisition. We're always keeping our ears and eyes open for an acquisition that will help us get to the Gerdau that we want, a smaller Gerdau, but one which is more profitable, more well prepared to face the coming years. And the Mexico investment has to do with that. We have a business case that is ready. But Mexico, regardless of USMCA, is going through a very substantial change. I see in Brazil, a growing debate on reducing the working hour A few weeks ago, they approved a reduction in their working hours. So Mexico as a country has been losing competitiveness at the industry level. So these are always relevant elements that we have to take into account in our business case. In the USMCA, the new USMCA that will be debated as of June of this year will be a very relevant point for us to review our business case and make a decision whether it's worthwhile -- whether it's worth investing in this new mill of special steel. It is an opportunity. We understand that the U.S. market, whether it's ups and downs with heavy and light vehicle market, remains an opportunity for us, but we will be very diligent in allocating significant CapEx for greenfield mill in Mexico, considering the debates involving Canada, U.S. and Mexico. Okay?

Let me just add a couple of points to your question about growth. We have been doing some important things to improve our profitability in North America. In recent years, we opened 2 downstream segments in Midlothian thermal treatment and solar piles. And when we look at our quarterly report in the year-to-date, the different lines of products we see that the downstream line item in the North America segment increased 39% compared to 2024. into 2025. These are high added value products that are less susceptible to competitive imports and the ones in which we have greater differential or competitive edges. And I think that this matches what Gustavo said, we are very cautious and very prudent in allocating capital for growth in North America. In addition, we're growing with smaller acquisitions and upstream investments, which is the case of scrap producers that happened last year that increased our scrap potential and our ability to process scrap in a cheap way. So that's more the kind of growth that we're thinking of rather than a major acquisition as we have seen in some cases in North America.

Next question from Igor Guedes from [ Genial ].

Looking at the level of exports, 370,000 tonnes growing quarter-on-quarter and year-on-year, we saw a level of BRL 140 million in the consolidated EBITDA compared to BRL 80 million in Q3 and only BRL 24 million in Q4 '24. So given that you export a large amount of semi-finished steel coming from you in Brazil, even to other regions in South America, you mean cut, bend, hot rolling; this higher level of eliminations, would it be related with intercompany transactions? Or was it due to other reasons? And second question, you mentioned that part of the CapEx in Q4 that was BRL 1.5 billion was allocated to restructuring and improvement in the [ Seara ] unit, [ Maracanau ], about BRL 100 million. However, in one, this was one of the 2 mills that you hibernated together with Barao de Cocais. So I'd like to explore that. Could you share with us what kind of changes have you made to these mills? And how does this fit now in the footprint of the company? Will you reactivate the mill with more efficiency than before? If you could comment on that, it would be interesting.

Okay. It's always good to see you. You made some interesting questions. Let me start with the eliminations regarding imports, exports and eliminations. In eliminations, in all -- we have eliminations of all possible businesses between the reportable segments. Since we have little exports from North America to South America. What we have is more business between the Brazil segment and the South America segment. I think in the previous question, we mentioned we had a large volume of exports of billets from Argentina to some of our Gerdau units in Brazil and in South America, Peru. And that kind of increased the amount of eliminations that we had. It was a lot because of that, because of this greater volume of exports from Argentina, which typically is not a country that exports a lot and all the time. So that increased the atypical volume that we had in the line item of eliminations. To your second question about [ Maracanau ], that's a very good question. Back in 2024, when we had the hibernations, we also [ hibernated ] the [ Maracanau ] mill in [ Sierra ]. And we said that it was going to go through a modernization project and the program. What was the goal of that modernization program? Today, the [ Maracanau ] unit operates integrated with our rolling mill that we also have in [ Sierra ] that we acquired from [indiscernible] when we acquired it in 2019. That's a rolling mill, state-of-the-art rolling mill that we have, very modern. And the melt shop -- I'll be a little technical here. The melt shop made smaller billets, relatively small billets, about 6 meters long. When we rolled it and put it in the rolling furnace and started rolling it in a more robust rolling mill, a more modern rolling mill, the rolling mill of Silat, we didn't have a level of optimal cost and yield because oftentimes, I had to be feeding that furnace with smaller billets. So the project we had was to adapt the size of the billets manufactured at the [ Maracanau ] melt shop to 12 meters. They are closer to the ideal size to be consumed in the Silat rolling mill. With that, we can increase our competitiveness in the Northeast operation. And again, as Gustavo has highlighted before, a good part of our portfolio of projects at Gerdau has been focusing on increasing our level of competitiveness, our ability to be cost efficient to compete with any competitor anywhere in the world. And this is an example of this goal. We are not making a new mill. We are modernizing an existing mill and thinking about how to better integrate these two assets that we have in the state of [ Serra ]. So that's basically the rationale behind this project to modernize the [ Maracanau ] mill.

Just a follow-up question, Japur. In terms of integrating the mill to the footprint one more time, would that entail any cost increase, perhaps a one-off cost increase that we should be paying attention to? Or would it be like a smooth transition? Just to have an idea?

No, no. It's basically the melt shop that will start operating again, supplying billets for the Silat rolling mill. There will be no one-off cost increase, no additional cost. It's basically allocating billets, also imported billets that we get to Silat and that now we will be supplying to a neighboring mill in the state of [ Seara ].

Our next question from Ricardo from Safra.

I have just two very quick questions, but they were very important in the discussions we had yesterday. First, looking at your cash flow, I would just like to understand what is your outlook? You have 2 lines, mainly working capital. There was a significant release of working capital. How much of that is structural and how much of that can be reverted in the short run? And the second line is the cash financial expenses. There was a significant drop of almost BRL 4 billion. But I just want to understand, how much more reduction you anticipate in this line or whether we could review like more expensive debt being paid out and the balance paid at a lower interest rate? And my second question is that I would like some help to build a double-digit margin for Brazil in 2026 because Japur, I think you said that if there were not for the deterioration of market conditions, we could probably reach double digits throughout the year or even year-to-date, including Miguel Burnier. I just want to understand if in your number, are we starting with a weaker margin and this will improve in the second quarter and maybe getting even better in the second half? Or probably there is some room for getting a better margin quarter-on-quarter. And with that, you will create a bigger buffer. Therefore, throughout the second half, you will be able to deliver a double-digit margin.

Ricardo, so working capital, your first question. Yes, we believe that there will be a use of working capital even because of the strong results that we posted in our North America operation, we saw increase in volumes, increased shipments. And also, there was an increase in the average of our product mix, and this will require some additional working capital in addition to the resumption of our operations, especially considering our operations in Brazil because of seasonality. So there should be a certain level of working capital use, but we will not go back to everything that we were able to build because especially when you look at the inventory line, we posted important gains of efficiencies, not really thinking about working capital, but cash conversion cycle, days of working capital. This quarter, since we had the settlement of our make-whole call, we had to pay interest that had been accrued until the make-whole date. So there was an increase of what was expected in terms of cash interest because not only I had to pay for what we already anticipated in terms of payments in the due date, but also there was a make-whole of the bonus that was settled in full. So that interest account was a bit bigger. But if you break down our P&L, you look at the fact that we break down the debt per currency and type of debt. And this is very clear in our P&L. So you could have WCD in U.S. dollars and reals. And then looking forward, you can have an estimate of that interest account. But in terms of cash flow, all you have to do is pay more attention to the maturity date of the bonds because they follow dates that are more concentrated between -- in April and then October. These are the 2 months that concentrate the bulk of the interest. Now finally, about the Brazil operation. I'll start with the end of your question. Significant improvement in Brazil in terms of margins, I think this is a bit far-fetched looking at the current situation. But again, if we hadn't seen this very strong move of over 20% in coal increase that we saw from the fourth quarter onwards, probably we could have seen a more consistent improvement in the first quarter of the Brazil operation despite the fact that the market is not growing so much. So maybe the data could have been worse in January. So I don't think it's so far fetched yet to think about a 2-digit margin, considering that in the second half of the year, we will already post concrete benefits related to our Miguel Burnier ramp-up, the mining project. So a bit of this construction, I would say, is like a first quarter, very close to the margin we have today, which is high single digits and maybe other coming quarters with a gradual improvement. If you look at the combined numbers, if everything else remains constant, so we may say that by year-end, if you look at the combined numbers of the year, the EBITDA margin, everything combined would be around 2 digits.

Perfect. Just to confirm, so Miguel Burnier's EBITDA will be around BRL 400 million a year?

It will certainly depend on our capacity to deliver the Miguel Burnier project in due time and at the stability level that we want to imprint in the project. It's important to mention that this is not an existing mill because something that is new and starts ramping up every month from the end of the year that I eliminate, I have to do the math accordingly. And this affects the calculation. We don't have any number in terms of what will be the ramp-up result of the Miguel Burnier operation. But as soon as we have more information available and the project is in its integrated test phase, so as soon as we have additional information, we will soon share that information with you. So this is very important to achieve the competitive level that we expect to have.

Our last question from Emerson Vieira with Goldman Sachs.

I would like to review the U.S. profitability level. It's very clear what you said that you will maintain the levels in the short run. But my question, especially if I look at cost and the scrap prices, the pricing have not recovered in a way that it would make sense, given the rebar price level because this is growing in the U.S. But so -- looking towards the second half, do you think that there will be a more relevant scrap prices or the current scenario -- I mean, or this scenario is very unlikely. And it will be more likely for us to see the same scenario that we have today. And the second question is about what is your view regarding the potential impact of the antidumping measures related to steel exports coming from Vietnam and Algeria and whether this should lead to some marginal share gain or this is not really impacting the company in the U.S.

Well, let me share the answer with Japur because I don't want him to answer everything by himself. I mean it's very difficult for us to project scrap prices in the U.S., I mean, looking at prices 2, 3 quarters ahead. But we believe that with this level of semi-finished produced in the world, produced based on coal and iron ore coming from China, this will probably take some share of scrap coming from the U.S. Therefore, the trend going forward will be for scrap prices to be more stable. And reinstating what I said before, this lead us to believe that the metal spread will be very similar to the levels we are seeing now. And this is another reason in addition to all the reasons that I mentioned before, this is one of the reasons that lead us to be more certain about the stability of our results coming from the North America when you look at the entire year of 2026. Now I will turn to Japur to talk about antidumping.

The point is that when we look at the product portfolio, rebar is a product that is a feeder of our line. Like I have the full rolling mirror with the products that I want to produce, then I dilute my fixed cost by producing rebars. It's not something that it's a very significant portion of our business. I mean it accounts for about 10% to 15% today because beans and others have a strong price. So rebars account for about 10% of our price. But what happens, Anderson, is that at times when there are producers that make merchant bars and rebars. When profitability increases, on the rebar side, and they have modern assets or micro mills that are location for the production of rebars, so their appetite increase to use -- I mean, in terms of using scrap for merchant bars because not necessarily this has to do with the antidumping measures when you look at our own rebar producers. But this would be a secondary effect to improve merchant bar prices and producers have to look at a trade-off because they can at times produce rebars and at times produce merchant bars.

Very well, our Q&A session is now closed. I would like to take this opportunity to invite you to our next earnings conference call. It will take place on April 28. Werneck, you have the floor for your final comments.

Well, before we disconnect, I would like to send my very best to Mari. She's not here with us today. She's living a very special moment. She had a baby called Pedro Antonio. So I would like to send her all the best and wish all the best for baby and mother. And I would like to thank Ariana that you called Ari during this call. I'd like to congratulate her on how well she conducted this call today. This only reinforces Gerdau's commitment and culture to have excellent teams onboard. On my own behalf, on Japur's behalf, I'd like to close this call, wishing you all the very best. And I am sure that I will see you in April when we discuss our Q1 earnings results. Thank you very much. I will see you then.