SEGMENT REPORTING

12 Months Ended

Dec. 31, 2025

NOTE 27 — SEGMENT REPORTING

The chief operating decision maker (“CODM”), responsible for making operational decisions, allocating resources, and evaluating performance include the Executive Board and the Board of Directors, which evaluate the performance of their business segments using Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization). The information presented to senior management, including the respective performance of each segment, is derived from records maintained in accordance with accounting practices, with some reallocations between segments.

Starting with the disclosure of the results of 2025, the Company began to disclose the information and results of its business segments as follows:

●

Brazil Segment: includes the long, flat and special steel operations and the iron ore operation located in Brazil and and joint ventures (note 3.2) and associates (note 3.3) companies located in Brazil.

●

North America Segment: includes the long and specialty steel operations located in Canada and the United States and the joint venture (note 3.2) located in Canada and Mexico;

●

South America Segment: includes the operations in Argentina, Peru and Uruguay.


		Business Segments
		2025
				North America		South America		Eliminations and
		Brazil Operation		Operation		Operation		Adjustments		Consolidated
Net sales		29,687,978		35,787,268		5,561,450		(1,178,164)		69,858,532
Cost of sales		(27,807,111)		(30,299,734)		(4,964,009)		1,179,815		(61,891,039)
Gross profit		1,880,867		5,487,534		597,441		1,651		7,967,493
Selling, general and administrative expenses		(952,200)		(792,172)		(167,648)		(208,774)		(2,120,794)
Other operating income (expenses)		(61,631)		14,570		12,822		(194,261)		(228,500)
Depreciation and amortization		2,144,039		1,236,636		303,439		(529)		3,683,585
Adjusted EBITDA proportional to joint ventures and associate companies*		233,865		538,073		—		—		771,938
Tax credits/provisions recovery **		—		—		—		—		—
Adjusted EBITDA		3,244,940		6,484,641		746,054		(401,913)		10,073,722
*Adjusted EBITDA proportional to joint ventures and associate companies
Operational income (Loss) before financial income (expenses) and taxes proportional to Joint Ventures and associate companies		34,747		375,842		—		—		410,589
Depreciation and amortization proportional to joint ventures and associate companies		199,118		162,231		—		—		361,349
Adjusted EBITDA proportional to joint ventures and associate companies		233,865		538,073		—		—		771,938
** Tax credits/provisions recovery: includes other non-recurring items adjusted in EBITDA.

Supplemental information:
Net sales between segments		1,178,164		—		—		—		1,178,164
Investments in associates and joint ventures		1,029,852		2,914,622		—		—		3,944,474
Total assets		35,798,486		35,468,282		4,943,445		5,477,962		81,688,175
Total liabilities		6,016,546		3,674,907		1,209,590		16,988,643		27,889,686


		Business Segments
		2024
				North America		South America		Eliminations and
		Brazil Operation		Operation		Operation		Adjustments		Consolidated
Net sales		30,217,819		31,931,433		5,758,695		(881,291)		67,026,656
Cost of sales		(26,319,344)		(27,434,949)		(4,930,715)		861,592		(57,823,416)
Gross profit		3,898,475		4,496,484		827,980		(19,699)		9,203,240
Selling, general and administrative expenses		(939,297)		(808,836)		(177,189)		(241,297)		(2,166,619)
Other operating income (expenses)		(145,527)		36,322		12,453		(595,824)		(692,576)
Depreciation and amortization		1,761,151		1,046,614		304,996		13,486		3,126,247
Adjusted EBITDA proportional to joint ventures and associate companies*		143,366		702,687		—		—		846,053
Tax credits/provisions recovery **		—		—		—		528,964		528,964
Adjusted EBITDA		4,718,168		5,473,271		968,240		(314,370)		10,845,309

*Adjusted EBITDA proportional to joint ventures and associate companies
Operational income (Loss) before financial income (expenses) and taxes proportional to Joint Ventures and associate companies		90,423		543,584		—		—		634,007
Depreciation and amortization proportional to joint ventures and associate companies		52,943		159,103		—		—		212,046
Adjusted EBITDA proportional to joint ventures and associate companies		143,366		702,687		—		—		846,053

** Tax credits/provisions recovery: includes other non-recurring items adjusted in EBITDA.

Supplemental information:
Net sales between segments		881,291		—		—		—		881,291

Investments in associates and joint ventures		1,373,663		2,848,654		—		—		4,222,317
Total assets		32,692,029		39,788,415		5,921,448		8,412,601		86,814,493
Total liabilities		10,040,090		3,468,797		1,361,551		13,770,269		28,640,707


		Business Segments
		2023
				North America		South America		Eliminations and
		Brazil Operation		Operation		Operation		Adjustments		Consolidated
Net sales		31,195,557		33,179,048		5,118,150		(576,309)		68,916,447
Cost of sales		(27,593,565)		(26,629,584)		(4,014,010)		653,167		(57,583,992)
Gross profit		3,601,992		6,549,465		1,104,140		76,858		11,332,455
Selling, general and administrative expenses		(986,448)		(793,236)		(137,203)		(290,749)		(2,207,636)
Other operating income (expenses)		(91,517)		1,592		34,604		566,351		511,030
Depreciation and amortization		1,899,158		899,407		195,030		53,617		3,047,212
Adjusted EBITDA proportional to joint ventures and associate companies*		60,073		1,048,941		409,813		—		1,518,827
Tax credits/provisions recovery **		—		—		—		(699,854)		(699,854)
Adjusted EBITDA		4,483,258		7,706,168		1,606,384		(293,777)		13,502,034

*Adjusted EBITDA proportional to joint ventures and associate companies
Operational income (Loss) before financial income (expenses) and taxes proportional to Joint Ventures and associate companies		30,432		913,114		358,115		—		1,301,661
Depreciation and amortization proportional to joint ventures and associate companies		29,641		135,826		51,698		—		217,165
Adjusted EBITDA proportional to joint ventures and associate companies		60,073		1,048,941		409,813		—		1,518,827

** Tax credits/provisions recovery: includes other non-recurring items adjusted in EBITDA.

Supplemental information:
Net sales between segments		576,309		—		—		—		576,309

Investments in associates and joint ventures		1,092,043		2,766,406		—		—		3,858,449
Total assets		28,155,384		30,108,092		4,428,996		12,192,672		74,885,144
Total liabilities		10,996,480		3,510,503		1,373,802		9,765,496		25,646,281


Reconciliation of income before taxes to adjusted EBITDA for the year.		2025		2024		2023
Income before taxes		2,524,447		5,463,715		9,346,605
Financial result, net		1,214,621		2,023,487		1,106,122
Income before financial result and taxes		3,739,068		7,487,202		10,452,727
Depreciation and amortization		3,683,585		3,126,247		3,047,212
Results in operations with subsidiary and joint ventures		—		(808,367)		—
Impairment of financial assets		10,249		30,910		10,728
Recovery of Eletrobras Compulsory Loan		—		(100,860)		—
Impairment of assets		1,964,504		199,627		—
Equity in earnings of unconsolidated companies		(95,622)		(464,467)		(827,606)
Operational income (Loss) before financial income (expenses) and taxes proportional to Joint Ventures and associate companies		410,589		634,007		1,301,661
Depreciation and amortization proportional to joint ventures and associate companies		361,349		212,046		217,165
Tax credits/provisions recovery		—		528,964		(699,854)
Adjusted EBITDA		10,073,722		10,845,309		13,502,034

The main products by business segment are:

- Brazil Segment: rebar, bars (including special bar quality), wide flange beams, wires, plates, hot rolled plates, billets, blooms, slabs, wire rod and structural shapes.

- North America Segment: rebar, bars (including special bar quality), structural shapes, wide flange beams and billets.

- South America Segment: rebar, bars, wires, wide flange beams and billets.

The column of eliminations and adjustments includes the elimination of sales and intercompany loans between segments in the context of the Consolidated Financial Statements. This column also includes amounts that are not part of operational results of a specific segment, such as selling, general and administrative expenses of corporate employees, other operating income and expenses and the related income tax effects of these amounts.

The Company’s geographic information with net sales classified according to the geographical region where the products were shipped is as follows:


								Geographic Area
		Brazil		North America		South America ⁽¹⁾		Consolidated
		2025		2025		2025		2025
Net sales		28,509,814		35,787,268		5,561,450		69,858,532
Non-current assets ⁽²⁾		24,280,744		24,042,986		2,188,056		50,511,786


								Geographic Area
		Brazil		North America		South America ⁽¹⁾		Consolidated
		2024		2024		2024		2024
Net sales		29,336,528		31,931,433		5,758,695		67,026,656
Non-current assets ⁽²⁾		23,140,462		25,939,819		2,591,478		51,671,759


								Geographic Area
		Brazil		North America		South America ⁽¹⁾		Consolidated
		2023		2023		2023		2023
Net sales		30,619,249		5,118,150		33,179,048		68,916,447
Non-current assets ⁽²⁾		21,698,258		1,594,970		20,162,821		43,456,049

(1)	Does not include operations of Brazil

(2)	Does not include Deferred income taxes, Fair value of derivatives and Prepaid pension cost

IFRS requires the Company to disclose revenues from external customers for each product and service, or each group of similar products and services, unless the necessary information is not available and the cost to develop it would be excessive. Management does not consider this information useful for its decision-making process, because it would aggregate sales in different markets and in different currencies, subject to the effects of changes in exchange rates. Furthermore, the trends of steel consumption and the price dynamics of each product or group of products in different countries and different markets within these countries are poorly correlated and, as a result, the information would not be useful and would not serve to reach any conclusions about historical trends. Considering this scenario and considering that the information of revenue from external customers by product and service is not maintained by the Company on a consolidated basis and the cost to obtain this information would be excessive compared to the benefits of the information, the Company does not present revenue by product and service.