Core Insights - Ternium S.A. announced a significant development regarding its subsidiary Ternium Investments S. [1] Group 1 - The announcement was made on November 5, 2025, indicating a strategic move by the company [1]

Financial Data and Key Metrics Changes - In Q3 2025, Ternium reported an increase in EBITDA driven by a decreasing cost per ton, with cash generation exceeding half a billion dollars during the quarter [5][13] - The net result for Q3 2025 was a loss of $270 million, primarily due to a $405 million non-cash loss related to the write-down of deferred tax assets at Usiminas [13][14] - Adjusted EBITDA is expected to decline slightly in Q4 2025 due to seasonal slowdowns, but adjusted EBITDA margin should remain consistent with the previous quarter [13][40] Business Line Data and Key Metrics Changes - Steel segment shipments increased, particularly in Mexico and Brazil, although lower volumes were noted in other markets [16][17] - The mining segment experienced a decline in net sales due to lower iron ore shipments and increased costs per ton in one of the Mexican operations [18] Market Data and Key Metrics Changes - In Mexico, steel demand has been significantly impacted by U.S. trade policies, with apparent consumption expected to decrease by 10% in 2025 [8][46] - Brazil's steel environment remains healthy with a projected 5% growth in apparent steel demand in 2025, despite challenges from unfairly traded imports [9][10] Company Strategy and Development Direction - Ternium is focused on strengthening its market position through ongoing optimization and cost reductions, particularly in response to the evolving global trade environment [11][12] - The company supports policies that promote regional integration and fair competition within the USMCA framework [6][9] Management's Comments on Operating Environment and Future Outlook - Management highlighted the uncertainty in the business environment due to ongoing changes in U.S. tariff frameworks and emphasized the importance of the USMCA [5][6] - There is optimism regarding potential structural reforms in Argentina that could enhance competitiveness and growth opportunities in the steel industry [10][46] Other Important Information - Ternium's board declared an interim dividend of $0.90 per ADS, maintaining the same payment level as the previous year [5][20] - The company received the Steel Award for Excellence in Sustainability for its renewable energy initiative in Argentina [11] Q&A Session Summary Question: What strategic opportunities arise from the recent elections in Argentina? - Management indicated that the elections may lead to structural reforms that could enhance competitiveness in the industry, but current ownership structure simplification is not a priority [22][23] Question: What is Ternium's plan if the U.S. maintains melt and pour conditions for steel products? - The company plans to continue with its investment strategy, focusing on increasing production capacity to meet regional demands [27][28] Question: What is the cash cost outlook for Q4? - Management expects further improvements in cash costs across operations, with a slight decrease in prices anticipated in Mexico and Argentina [35][40] Question: What is the outlook for demand in Mexico for 2026? - Demand is expected to recover by 4% in 2026, driven by infrastructure growth and stabilization in trade relations with the U.S. [46][48] Question: What is the status of the Pesquería project? - The new galvanized line is set to start production in December, with the overall project on track and within budget [68] Question: What are the expectations for EBITDA per ton in 2026? - Management aims for an EBITDA margin of around 10% entering 2026, with ongoing efforts to improve margins despite uncertainties in trade negotiations [74][79]

Financial Data and Key Metrics Changes - In Q3 2025, Ternium reported an increase in EBITDA driven by a decreasing cost per tonne, with cash generation exceeding half a billion dollars during the quarter [5][13] - The net result for Q3 2025 was a loss of $270 million, primarily due to a $405 million non-cash loss related to the write-down of deferred tax assets at Usiminas [13][14] - Adjusted EBITDA is expected to decline slightly in Q4 2025 due to seasonal slowdowns, but adjusted EBITDA margin should remain consistent with the previous quarter [13][40] Business Line Data and Key Metrics Changes - Steel segment shipments increased, particularly in Mexico and Brazil, although lower volumes were noted in other markets [16][17] - The mining segment experienced a decline in net sales due to lower iron ore shipments and increased costs per tonne in one of the Mexican operations [18] Market Data and Key Metrics Changes - In Mexico, steel demand has been impacted by uncertainty from U.S. trade policies, with a projected 10% decrease in apparent consumption for 2025 [8][48] - Brazil's steel environment remains healthy with an expected 5% growth in apparent steel demand in 2025, despite facing challenges from unfairly traded imports [9][10] - Argentina's steel activity leveled off due to pre-election uncertainty, but there is optimism for growth following the elections [10][11] Company Strategy and Development Direction - Ternium is focused on strengthening its market position through ongoing optimization and cost reductions, particularly in response to trade volatility and competition from Asian countries [11][12] - The company supports policies aimed at increasing local value addition and reducing reliance on imports, particularly in Mexico [9][10] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of the USMCA framework and ongoing trade negotiations to ensure fair competition and long-term growth in the region [6][7] - The Mexican government is prioritizing efforts to fortify local value chains and promote self-sufficiency against external pressures [8][9] - Management expressed optimism about potential structural reforms in Argentina that could enhance competitiveness in the steel industry [10][11] Other Important Information - Ternium received the Steel Award for Excellence in Sustainability for its renewable energy initiative in Argentina, which significantly reduces its environmental footprint [11] - The board declared an interim dividend of $0.90 per ADS, maintaining the same level as the previous year [5][20] Q&A Session Summary Question: Strategic opportunities post-Argentina elections - Management indicated that the elections would not change existing projects and expressed optimism for structural reforms that could enhance competitiveness in Argentina [22][23] Question: Conditions for restructuring ownership - Management noted that restructuring depends on external factors, particularly the share held by ANSES, and emphasized the need for government reforms before considering such initiatives [24][25] Question: Plans if U.S. maintains melt and pour conditions - Management confirmed that they would continue with existing investment plans, anticipating increased production capacity in response to market conditions [27][29] Question: Cash cost outlook for Q4 - Management expects ongoing efficiencies to improve cash costs across operations in Mexico, Argentina, and Usiminas, despite slight price decreases [37][41] Question: Demand outlook for Mexico in 2026 - Management projected a recovery in demand for 2026, driven by infrastructure growth and stabilization in U.S.-Mexico trade relations [48][50] Question: Update on Compactos project - Management stated that decisions regarding the Compactos project would be made in mid-2026, with ongoing analysis of various alternatives [78][80] Question: Expectations for EBITDA per ton in 2026 - Management indicated that while they aim for an EBITDA margin of around 10% entering 2026, achieving this will depend on various market conditions and trade negotiations [76][82]

Financial Data and Key Metrics Changes - In Q3 2025, Ternium reported an increase in EBITDA driven by a decreasing cost per tonne, with cash generation exceeding half a billion dollars during the quarter [4][11] - The net result for Q3 2025 was a loss of $270 million, primarily due to a $405 million non-cash loss related to the write-down of deferred tax assets at Usiminas [11][12] - Adjusted EBITDA is expected to decline slightly in Q4 2025 due to seasonal slowdown, but the adjusted EBITDA margin is projected to remain consistent with the previous quarter [11][38] Business Line Data and Key Metrics Changes - Steel segment shipments increased, particularly in Mexico and Brazil, although lower volumes were noted in other markets [13][14] - The mining segment experienced a decline in net sales due to lower iron ore shipments and increased costs in one of the Mexican operations [15] Market Data and Key Metrics Changes - In Mexico, apparent steel consumption is projected to decrease by 10% in 2025, with expectations of a 4% recovery in 2026 driven by infrastructure growth [48] - Brazil's steel environment remains healthy with a 5% growth expectation in apparent steel demand for 2025, despite challenges from unfairly traded imports [8][14] Company Strategy and Development Direction - Ternium is focused on strengthening its market position through ongoing optimization and cost reductions, particularly in response to the evolving global trade environment [9][10] - The company supports policies that promote regional integration and fair competition within the USMCA framework [5][6] Management's Comments on Operating Environment and Future Outlook - Management highlighted the uncertainty in the business environment due to ongoing changes in the U.S. tariff framework, but expressed optimism about structural reforms in Argentina following the recent elections [5][22] - The company anticipates a slight decline in prices in Mexico and Argentina for Q4 2025, but expects stability in North American prices [38][42] Other Important Information - Ternium's board declared an interim dividend of $0.90 per ADS, maintaining the same level as last year [4][17] - The company received the Steel Award for Excellence in Sustainability for its renewable energy initiative in Argentina [9] Q&A Session Summary Question: Strategic opportunities post-Argentina elections - Management indicated that the elections would lead to structural reforms that could enhance competitiveness in Argentina, but no immediate changes to ownership structure are planned [21][23] Question: Ternium's plan if U.S. maintains melt and pour conditions - The company plans to continue with its investment strategy, anticipating that melt and pour conditions will remain relevant, especially in the automotive sector [27][29] Question: Cash cost outlook for Q4 - Management expects ongoing efficiencies in operations, with a slight decrease in cash costs anticipated in Mexico and Argentina [35][42] Question: Demand outlook for Mexico in 2026 - A recovery in demand is expected in 2026, driven by infrastructure growth and stabilization in trade between the U.S. and Mexico [48][50] Question: Update on the Pesquería project - The new galvanized line is set to start production in December, with the overall project on budget and timeline [72][74] Question: Expectations for EBITDA per ton in 2026 - Management aims for an EBITDA margin of around 10% entering 2026, with ongoing efforts to improve margins despite uncertainties in trade negotiations [84][85]

Core Insights - Ternium S.A. reported a revenue of $3.96 billion for Q3 2025, reflecting an 11.7% year-over-year decline and an EPS of $0.10, down from $0.16 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $3.99 billion by 0.79%, while the EPS was significantly below the consensus estimate of $0.78, resulting in an EPS surprise of -87.18% [1] Financial Performance Metrics - Ternium's stock has returned +8.5% over the past month, outperforming the Zacks S&P 500 composite's +3.6% change [3] - The company currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3] Steel Segment Analysis - Total steel product shipments were reported at 3,757 K Ton, below the average estimate of 3,884.72 K Ton [4] - Shipments in Mexico were 1,849 K Ton, compared to the estimated 1,941.65 K Ton [4] - Shipments in Brazil were 994 K Ton, against the average estimate of 1,024.70 K Ton [4] - Revenue per ton for total steel products was $992, lower than the estimated $1,008.80 [4] - Net sales for the total steel segment were $3.8 billion, below the estimated $3.96 billion [4] - Net sales in Mexico were $1.8 billion, compared to the estimated $1.95 billion [4] - Net sales in Brazil were reported at $950 million, slightly above the average estimate of $943.17 million [4]

Press Release Sebastián Martí Ternium - Investor Relations +1 (866) 890 0443 +54 (11) 4018 8389 www.ternium.com Ternium Announces Third Quarter and First Nine Months of 2025 Results Luxembourg, October 28, 2025 – Ternium S.A. (NYSE: TX) today announced its results for the third quarter and first nine months ended September 30, 2025. The financial and operational information contained in this press release is based on Ternium S.A.'s operational data and consolidated condensed interim financial statements pre ...

Core Insights - The focus is on identifying value companies primarily in the commodities sector, particularly those with sustained free cash flows and low leverage [1] - There is an emphasis on companies in emerging markets that exhibit high margins and present good medium to long-term investment opportunities [1] - The analysis prioritizes firms with a strong pro-shareholder attitude, including consistent buyback programs and dividend distributions [1] Company Characteristics - Target companies are those undergoing distress but possess high recovery potential [1] - Preference is given to sectors that are often overlooked by the market, such as oil & gas, metals, and mining [1] - Companies operating outside the United States are particularly of interest for finding value [1] Investment Philosophy - The investment strategy is centered around companies with solid financial health, characterized by sustainable debt levels and strong cash flow generation [1] - The analyst aims to share insights and information to enhance the decision-making process of individual investors within the seeking alpha community [1] - The educational background includes a financial master's degree with a specialization in company valuation and an economic degree [1]

Group 1 - The history of Ternium (TX) shows signs of recovery, and the market is beginning to notice this trend, although it has not yet recognized its full price potential [1] Group 2 - The investment approach focuses on value companies with solid long-term potential, indicating a strategy that may align with Ternium's recovery narrative [2]

Financial Data and Key Metrics Changes - Adjusted EBITDA increased by 25% in the second quarter, primarily driven by stronger realized steel prices in Mexico, partially offset by a slight increase in cost per ton [14] - Net income for the second quarter amounted to $259 million, including a $40 million provision adjustment related to ongoing litigation [15] - Adjusted net income, excluding the provision, was $299 million, supported by better operational performance and favorable deferred tax results due to a 7.5% revaluation of the Mexican peso [15] Business Line Data and Key Metrics Changes - Shipments in the steel segment declined primarily in Mexico and the U.S., partially mitigated by higher volumes in the southern region [16] - Iron ore shipments rose quarter over quarter driven by increased production levels, although net sales remained broadly unchanged due to lower realized prices [18] Market Data and Key Metrics Changes - The Mexican market is experiencing a cautious business environment, with government measures contributing to a decrease in steel imports, creating a more level playing field [6][8] - The Brazilian steel market faces significant challenges due to a surge of unfair imported steel, particularly from China, undermining local competitiveness [8] - Argentina saw a significant increase in shipments during the second quarter, driven by seasonal factors and a recovering macroeconomic environment [9] Company Strategy and Development Direction - The company is focused on reducing costs to strengthen competitiveness, with ongoing initiatives aimed at optimizing production processes and supply chains [10][11] - The expansion project in Pesqueria is a cornerstone of the company's growth strategy, with expectations of increased shipments in Mexico [8][10] - The company is committed to sustainable industrial development, as highlighted in their sustainable report [11] Management's Comments on Operating Environment and Future Outlook - The operating environment remains uncertain and volatile, with expectations of a sequential improvement in the third quarter, particularly in Mexico [4][5] - Management is optimistic about ongoing negotiations between the U.S. and Mexico leading to mutually beneficial agreements [7] - The company anticipates a mixed performance across key markets, with growth expected in Mexico and steady shipments in Argentina, while Brazil continues to face headwinds [17] Other Important Information - Cash from operations totaled $1 billion in the second quarter, aided by a significant reduction in working capital [19] - The company’s net cash position decreased primarily due to elevated capital expenditures and dividend distributions, but remains solid at $1 billion [20] Q&A Session Summary Question: Can you elaborate on the state of steel supply in Mexico? - Management indicated that recent trade measures have led to lower imports, and they expect to gain market share due to these developments [22][23][25] Question: What is the outlook for cost reduction initiatives? - Management expects a total of $300 million in cost efficiency improvements for the year, with various initiatives contributing to this target [29][61] Question: What is the expected improvement in EBITDA? - Management anticipates reaching an average EBITDA margin closer to 15% by the fourth quarter, supported by cost reduction measures [40][41] Question: What is the status of the CSN litigation? - The litigation remains pending, with an appeal filed and awaiting a decision from the Supreme Court of Justice in Brazil [50][52] Question: What are the plans for capital allocation and dividends? - The company plans to sustain dividend payments while managing significant capital expenditures, with a peak expected this quarter [71][75]

Financial Data and Key Metrics Changes - Ternium's adjusted EBITDA increased by 25% in Q2 2025, primarily driven by stronger realized steel prices in Mexico, despite a slight increase in cost per ton [15][16] - Net income for Q2 2025 amounted to $259 million, including a $40 million provision adjustment related to ongoing litigation, with adjusted net income excluding this provision at $299 million [16][22] - Cash from operations totaled $1 billion in Q2 2025, supported by a significant reduction in working capital [21][22] Business Line Data and Key Metrics Changes - Shipments in the steel segment declined primarily in Mexico and the U.S., partially mitigated by higher volumes in the southern region [17][18] - Iron ore shipments rose quarter over quarter due to increased production levels, although net sales remained broadly unchanged due to lower realized prices [20] Market Data and Key Metrics Changes - The Mexican steel market is experiencing a cautious environment with pending clarity on U.S. trade policy, while the Brazilian market faces challenges from a surge in unfair imported steel [6][8] - Argentina saw a significant increase in shipments during Q2 2025, driven by seasonal factors and a recovering macroeconomic environment [10] Company Strategy and Development Direction - Ternium is focused on reducing costs to strengthen competitiveness, with ongoing initiatives aimed at optimizing production processes and supply chains [11][12] - The company is committed to its expansion project in Pesqueria, which is seen as a cornerstone of its growth strategy [7][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a sequential improvement in shipments for Q3 2025, particularly in Mexico, supported by government measures against unfair trade practices [6][18] - The operating environment remains uncertain and volatile, with management emphasizing the need for concrete measures to defend the Brazilian industrial base [9][10] Other Important Information - Ternium released a sustainable report reaffirming its commitment to long-term value creation through sustainable industrial development [12] - The company anticipates a peak in capital expenditures (CapEx) in Q2 2025, with projections for a decrease in the following quarters [73][74] Q&A Session Summary Question: State of steel supply in Mexico - Management indicated that recent trade measures have led to lower imports, which may help rebalance the steel market, and Ternium is well-positioned to capture market share [25][30] Question: Cost outlook and reduction initiatives - Management expects a $300 million decrease in cost efficiency for the year, with various initiatives contributing to this target [32][33] Question: Magnitude of potential EBITDA improvement - Management anticipates a recovery in EBITDA margins, aiming for around 15% by Q4 2025, supported by cost reduction measures [42][43] Question: Update on CSN litigation - There have been no significant developments in the CSN litigation, and the next steps involve awaiting a decision from the Supreme Court of Justice [52][53] Question: CapEx cycle and allocation strategy - Management confirmed that the peak of CapEx occurred in Q2 2025, with a projected decrease in the following quarters, while maintaining dividend payments [73][77]