Steel Market Dynamics - Ternium's steel prices have shown significant volatility, with U.S. prices of hot-rolled coils dropping to $485 per ton in 2020 and peaking at $2,135 per ton in 2021[37]. - In 2023, Brazil experienced a 42% surge in flat steel product imports, primarily from low-priced Chinese steel, adversely affecting domestic production[42]. - High inflation rates and tighter monetary conditions in the U.S. and Europe have contributed to weaker demand for steel products in these markets during 2022, 2023, and 2024[36]. - Ternium's competition is intensifying, with competitors potentially expanding production capacity and investing in modernization, which could impact Ternium's market share[45]. - The company faces risks from excess steel production capacity, particularly in China, which could lead to depressed margins and industry weakness[41]. - Supply chain disruptions, such as those experienced in the automotive industry in 2021 and Argentina in 2023, have negatively impacted steel demand and sales[43]. Business Strategy and Investments - Ternium's business strategy includes significant investments and acquisitions across multiple countries, including a new industrial center in Pesquería, Mexico, and expansion plans in Brownsville, Texas[50]. - Ternium's growth strategy may be adversely affected if acquisitions or investments do not perform as expected or if integration challenges arise[52]. - Ternium's goodwill related to its Mexican subsidiaries amounted to $662.3 million as of December 31, 2024, with investments in non-consolidated companies valued at $468.5 million[58]. - In July 2023, Ternium increased its participation in Usiminas, resulting in a non-cash net loss of $1.1 billion, including a $935 million loss related to prior stakes in Usiminas[59]. - Ternium's participation in Usiminas began in July 2023, consolidating its operations in Brazil, which could be impacted by local economic and regulatory developments[149]. Operational Risks - The ongoing geopolitical risks, including the Russian invasion of Ukraine, have led to disruptions in the global supply of slabs and other inputs, affecting Ternium's operations[47]. - Labor disputes remain a concern, with potential for work stoppages that could negatively impact Ternium's operations and financial results[62][64]. - Changes in foreign currency exchange rates could adversely affect Ternium's business, particularly as a significant portion of transactions occur in currencies other than the U.S. dollar[65]. - Ternium's operations in Mexico are at risk due to water scarcity and increased costs, particularly in areas affected by severe droughts, with new water use concessions suspended since 2022[79]. - Ternium's mining activities are subject to significant risks, including operational accidents and environmental liabilities, which could adversely impact profitability and result in material liabilities[85]. Environmental and Regulatory Challenges - The construction of Ternium's new steel slab facility in Mexico is expected to be completed by 2026, but may face delays and increased costs due to geopolitical risks affecting suppliers[54][55]. - Ternium's mining operations in Mexico faced significant challenges due to increased violence and crime, leading to the idling of its main mining operation during the first half of 2023[103]. - The company may experience increased costs and capital expenditure requirements due to factors such as changes in environmental regulations and diminished iron ore reserve grades[99]. - The Mexican Congress approved constitutional reforms in 2024 that could increase state control over key sectors, impacting Ternium's operations and market conditions[120]. - Ternium's operations are subject to significant regulatory risks, including environmental regulations that may increase operating costs and impact production[162]. Financial Performance and Economic Conditions - Ternium's ability to pay dividends is contingent on the financial performance of its subsidiaries, which could be adversely affected by legal and regulatory restrictions, particularly in Argentina[113]. - The Argentine government has announced plans for tax reform in 2025, which could increase the tax burden on Ternium's operations[142]. - Inflation in Argentina reached 118% in 2024, significantly affecting Ternium's cost structure and competitiveness[138]. - Ternium's financial results could be negatively impacted by changes in tax regulations and increased scrutiny from tax authorities globally[106]. - The U.S. government imposed a 25% tariff on steel imports from countries outside the USMCA region, which could adversely affect Ternium's operations and market dynamics[126]. Climate Change and Sustainability Initiatives - Ternium aims for a 15% reduction in emissions intensity by 2030 compared to a 2023 baseline, including Scope 1, 2, and 3 emissions[196]. - The EU's Carbon Border Adjustment Mechanism (CBAM), adopted on May 17, 2023, imposes a carbon levy on imports of certain products, including steel, from non-EU countries[172]. - New carbon pricing mechanisms in Mexico and Argentina could increase Ternium's production costs, affecting profitability and net results[177]. - Ternium is developing several projects aimed at reducing carbon emission intensity, but these projects may face delays or higher-than-anticipated costs[175]. - Ternium's environmental management system is certified under ISO 14001 and ISO 50001, ensuring compliance with environmental laws and regulations[226]. Community Engagement and Corporate Governance - Ternium invests in community programs focusing on education, culture, volunteer work, and health to foster sustainable growth in local communities[230]. - The company emphasizes transparency and ethical behavior through mandatory training programs and a Compliance Line for reporting violations[193]. - Ternium collaborates with small and medium-sized enterprises through the ProPymes program to strengthen its value chain and improve competitiveness[214]. - Ternium's community programs focus on education and technical training to support local development and social mobility[192]. - The company has centralized its processes on a unified IT platform, improving customer management through the digital marketplace "Ternium Activo"[221].

Financial Performance - Ternium S.A. reported its annual financial results for the year ended December 31, 2024, with a focus on operational data and consolidated financial statements prepared in accordance with IFRS[5][14]. - In 2024, Ternium's net sales reached $17,649 million, a slight increase of 0.2% compared to $17,610 million in 2023[53]. - Ternium's net income for 2024 was $174 million, significantly down from $986 million in 2023, impacted by a $410 million provision for ongoing litigation[45][48]. - Adjusted EBITDA decreased by 26% to $2,038 million, with an adjusted EBITDA margin of 12% compared to 16% in 2023[48]. - The operating income decreased to $1,263 million in 2024 from $2,198 million in 2023, reflecting a significant decline of 42.4%[53]. - The net financial results showed a loss of $194 million in 2024, compared to a gain of $123 million in 2023[56]. - Basic earnings per ADS were $(0.27) in 2024, down from $3.44 in 2023, while adjusted earnings per ADS were $1.61[48]. - Ternium maintained a robust net cash position of $1.6 billion as of December 31, 2024, despite significant cash disbursements[64]. - Cash from operations was $1.9 billion in 2024, with capital expenditures also amounting to $1.9 billion[63]. - Ternium's total financial debt was $2.2 billion as of December 31, 2024, with a weighted average cost of debt at 8.83%[73]. Sustainability and Environmental Commitment - The company aims for a 15% reduction in emissions intensity by 2030 compared to a 2023 baseline, including Scope 1, 2, and 3 emissions[27]. - Ternium is committed to achieving carbon neutrality and is collaborating with other companies and institutions to research and develop new technologies[27]. - The company emphasizes continuous improvement in operational performance through an energy efficiency program aimed at reducing the carbon footprint[20]. - Ternium has established a comprehensive sustainability agenda aligned with the United Nations Global Compact and reports progress through various frameworks[26]. - Ternium's research and development efforts focus on expanding advanced steel products and decarbonizing operations, with a commitment to reducing the carbon footprint and enhancing product complexity[83][84]. - Ternium is building pilot equipment to study renewable fuel injection mechanisms in steel production, aiming to reduce the carbon footprint of steel products[90]. - Ternium's expansion program includes a new pickling line and finishing center at the Pesquería industrial center, expected to enhance service capacity for automotive manufacturers[95]. - The new EAF-based steel shop, expected to start-up in 2026, will support Ternium's decarbonization targets and increase production of finished products in the USMCA region[96]. Community and Social Responsibility - Ternium's community programs focus on education and technical training, offering scholarships and internships to support local development[23]. - The company prioritizes diversity, equity, and inclusion, providing training programs through Ternium University to foster innovation and continuous improvement[22]. Operational Highlights - In 2024, Ternium's total steel shipments increased by 10% year-over-year to 15,622 thousand tons, primarily due to the full consolidation of Usiminas' results[48]. - The Mining Segment's net sales rose by 21% year-over-year, driven by a 56% increase in mining shipments to 6,426 thousand tons[48][50]. - Steel shipments in the Southern Region decreased by 20% year-over-year, primarily due to economic stabilization measures in Argentina[42]. - The automotive sector in Brazil saw a 10% year-over-year increase in vehicle manufacturing, reaching 2.6 million vehicles in 2024, boosting steel shipments[41]. Governance and Shareholder Information - Ternium's controlling shareholder is San Faustin S.A., which plays a significant role in the company's governance structure[17]. - The company is listed on the New York Stock Exchange under the ticker symbol TX, indicating its presence in the global financial market[12]. - Ternium's board proposed an annual dividend of $2.70 per ADS, totaling $530 million, to be approved at the upcoming shareholders' meeting[47]. - The annual dividend includes an interim dividend of $0.90 per ADS, totaling $177 million, paid in November 2024, and a proposed net dividend of $1.80 per ADS, totaling $353 million, to be paid on May 14, 2025[80]. Risks and Challenges - Ternium's operations are affected by fluctuations in industry inventory levels and supply chain disruptions, which can lead to irregular purchasing volumes[123]. - The steel industry faces risks from excess production capacity, particularly in China, which could lead to unfair trade practices and increased competition[120]. - Ternium's acquisitions and investments may not perform as expected, potentially impacting operations and profits[134]. - Uncertainty regarding global economic activity remains high, influenced by recent U.S. trade actions and geopolitical tensions[115]. - Ternium's operations in Argentina, Brazil, and Mexico are vulnerable to extreme weather events, which could materially damage production facilities and infrastructure, adversely affecting financial results[165]. - Ternium does not carry business interruption insurance, and existing property damage and general liability insurance may not adequately cover potential losses from extreme weather events[171]. - Labor disputes could lead to work stoppages, negatively impacting Ternium's operations and results[149]. - Ternium's operations are exposed to foreign currency exchange rate fluctuations, which could adversely affect financial results[153]. - Cybersecurity threats have increased in sophistication and frequency, with the manufacturing sector being particularly vulnerable to ransomware attacks in 2024[156]. - Ternium does not currently maintain cybersecurity insurance, which may leave it exposed to financial losses from cyber events[162]. Mining Operations and Regulatory Environment - Ternium has equity interests in two iron ore mining companies, with a 100% interest in Las Encinas and a 50% interest in Consorcio Peña Colorada, both of which are subject to operational and environmental risks[172]. - The company faces potential liabilities from environmental damages caused by mining operations, which could materially affect margins, cash flow, and profitability[176]. - Ternium's mining activities are subject to significant regulatory risks, including potential revocation of concessions if compliance with obligations is not met[181]. - Exploration activities are speculative and may not yield expected results, with substantial costs incurred that could adversely affect the company's business if sufficient ore resources are not found[186]. - Ternium's mining operations in Mexico may face increased costs and delays due to the need for continuous investment in equipment and compliance with environmental regulations[188]. - The company may need to substitute self-produced lower-cost iron ore with third-party iron ore, potentially increasing steel production costs if mining activities are not maintained[188]. - Ternium's financial condition could be adversely affected by difficulties in maintaining relationships with local communities, which may lead to disruptions in mining operations[191]. - Recent violence and crime in Mexico have worsened the security situation, potentially leading to temporary or permanent shutdowns of mining operations[194]. - The company is subject to increased scrutiny from tax authorities globally, which may impact financial results due to potential disputes over transfer pricing and double taxation[196]. - Ternium is preparing for the implementation of the OECD's Pillar 2 global minimum taxation framework, effective from 2024[198].

Group 1 - Ternium (NYSE: TX) experienced a significant decline in both topline and bottom line as it concluded the year 2024, with a double-digit contraction reported [1] - The primary reason for the topline decline was not specified, indicating potential underlying issues within the company's operations or market conditions [1] Group 2 - The article reflects a focus on understanding and explaining the financial details of companies, particularly in the technology, industrial, and conglomerate sectors, emphasizing the importance of strong foundational businesses for long-term success [1]

February 19, 2025 Fourth Quarter and Full Year 2024 Earnings Conference Call and Webcast 1 / 25 Forward-Looking Statements and Non-IFRS Alternative Performance Measures This presentation contains certain forward-looking statements and information relating to Ternium S.A. and its subsidiaries (collectively, "Ternium") that are based on the current beliefs of its management as well as assumptions made by and information currently available to Ternium. Such statements reflect the current views of Ternium with ...

Financial Data and Key Metrics Changes - Ternium reported shipments of 16 million tons for 2024 with adjusted EBITDA of $2 billion, reflecting a 12% margin [7] - The company's net cash position was strong at $1.6 billion by the end of December, despite nearly $2 billion in CapEx and over $600 million in dividends paid [8][35] - Net income for the fourth quarter was $333 million, influenced by a $404 million provision reversal for ongoing litigations [28][29] Business Line Data and Key Metrics Changes - Steel segment net sales declined sequentially by 14% in the fourth quarter due to lower shipments and reduced realized prices across all markets [31][32] - Mining shipments remained stable during the quarter but were down approximately 9% year-over-year, primarily due to lower production levels in Mexico and Brazil [33] Market Data and Key Metrics Changes - In Mexico, shipments decreased in the fourth quarter due to a weaker commercial market, while the industrial market showed steady activity with a 6% increase in auto industry production [15] - Brazil experienced a positive year with flat steel apparent consumption increasing by 10%, and vehicle production also grew by 10% compared to 2023 [16][17] - Argentina saw a year-over-year decline in shipments of approximately 20%, primarily due to macroeconomic measures by the government [21] Company Strategy and Development Direction - Ternium is advancing its downstream expansion project in Mexico, with significant progress on the pickling line and finishing center [8][9] - The company is focused on enhancing operational efficiency and reducing costs to navigate potential trade scenarios [14] - Ternium's expansion projects in Mexico are crucial for strengthening its integration into the North American market [25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the USMCA's role in enhancing competitiveness and trade among member countries [12][96] - The company anticipates a sequential increase in adjusted EBITDA for the first quarter of 2025, supported by margin improvement and a small increase in volumes [27][49] - Management highlighted the ongoing uncertainty in international trade, particularly regarding US tariffs on steel imports [11][24] Other Important Information - The wind farm in Argentina began generating energy, expected to deliver approximately 480 gigawatt-hours per year, aiding in decarbonization goals [10] - Ternium opened a technical school in Brazil to provide high-quality education, reflecting its commitment to community development [20] Q&A Session Summary Question: Outlook for the first quarter and ramp-up of projects - Management expects a slight improvement in the first quarter, with the finishing lines in Pesqueria ramping up to full capacity in the next two to three months [40][43][49] Question: Update on Usiminas stake and CapEx priorities - Management is pleased with Usiminas' performance and is focused on improving productivity and addressing challenges with imports from China [54][58] Question: Impact of trade measures on investments - Management confirmed that they are not postponing investments and are proceeding with projects in Mexico [62][65] Question: Scrap exports and cost structure in Argentina - Scrap exports are not significant for Ternium, as the company does not rely heavily on scrap in Argentina [64] Question: US market supply and demand balance - Management expressed optimism about the USMCA and the potential for North America to strengthen its supply chain against unfair trade [90][96]

Core Viewpoint - Ternium, a steel producer in the Americas, experienced a significant decline in stock value in the second half of 2024, with its market capitalization nearly reduced by one-third at one point [1] Group 1 - Ternium is identified as a steel producer operating primarily in the Americas [1] - The stock price drop occurred in the latter half of 2024, indicating a period of volatility for the company [1] - The decline in market capitalization was substantial, approaching a reduction of 33% [1]

Company Overview - Ternium S.A. (TX) is currently experiencing significant attention in the options market, particularly with the February 21, 2025 $20.00 Call option showing high implied volatility, indicating expectations of a substantial price movement [1] Implied Volatility Insights - Implied volatility reflects market expectations for future price movements, with high levels suggesting that investors anticipate a significant shift in stock price, potentially due to an upcoming event [2] Analyst Sentiment - Ternium holds a Zacks Rank of 5 (Strong Sell) within the Steel-Producers industry, which is positioned in the bottom 30% of the Zacks Industry Rank. Over the past 60 days, no analysts have raised their earnings estimates for the current quarter, while one has lowered their estimate. The Zacks Consensus Estimate for current quarter earnings has decreased from $1.03 per share to $0.38 [3] Trading Strategy Implications - The high implied volatility surrounding Ternium may indicate a developing trading opportunity. Options traders often seek to sell premium on options with high implied volatility, aiming to benefit from the decay of option value if the underlying stock does not move as much as anticipated [4]

Financial Data and Key Metrics Changes - Ternium reported an adjusted EBITDA of $368 million and a net income of $93 million for Q3 2024, with margins declining primarily due to decreased realized prices in the main market [6][28]. - The net cash position declined to $1.7 billion, attributed to decreased EBITDA and increased working capital alongside higher capital expenditures [33]. Business Line Data and Key Metrics Changes - The Steel segment saw increased shipments across key markets, but sales remained steady due to a decline in revenue per ton driven by lower realized steel prices [30][31]. - The Mining segment experienced a 13% sequential increase in shipments, although net sales were stable due to lower iron-ore market prices, leading to decreased margins [32]. Market Data and Key Metrics Changes - In Mexico, steel consumption remains healthy with record high shipments, although a decline is expected in Q4 due to seasonal weakness [7][10]. - Brazil's steel consumption grew by 9% year-over-year in the first nine months of 2024, but flat steel imports surged by 20% year-over-year, prompting government action against unfair trade [12][13]. - Argentina's steel volumes have shown recovery, with expectations for stable shipments in Q4 despite seasonal slowdowns [14]. Company Strategy and Development Direction - Ternium is optimistic about the Mexican market, anticipating growth in automotive production and infrastructure projects [10][11]. - The company is focused on expanding its production capacity through significant capital expenditures, including new facilities in Pesquería and a wind farm in Argentina [15][16][20]. - Ternium aims to enhance its product offerings and operational efficiency while reducing dependency on external suppliers [19][20]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in Ternium's performance in 2025, citing opportunities in key markets and expected margin improvements due to lower raw material costs [25]. - The new Mexican administration's commitment to industrialization and import substitution is seen as beneficial for the steel market [11][43]. Other Important Information - Ternium's Board announced an interim dividend of $0.90 per ADS, totaling $177 million, representing a dividend yield of about 8% based on the current share price [35][36]. - The company published its latest Sustainability Report, which includes updates on decarbonization targets and emissions reporting [21][22]. Q&A Session Summary Question: Dividend cut rationale and future expectations - Management explained that the nominal reduction in dividends was necessary due to decreased EBITDA and increased capital expenditures, but the payout ratio remains high at around 70% [44][46]. Question: Outlook for North American steel industry - Management highlighted the overcapacity issue in China and the competitive nature of North American steel production, emphasizing the region's focus on low-carbon intensity steel [51][53]. Question: Steel imports in Brazil and government actions - Management noted that the Brazilian government is addressing steel imports through a quota system, but loopholes exist that need to be closed [62]. Question: Future investments and CapEx plans - Management confirmed that total CapEx for 2025 is expected to be around $2.3 billion, primarily focused on the Pesquería project [67].

Ternium – Third Quarter 2024 | Earnings Conference Call and Webcast 1 1 / 25 November 6, 2024 Third Quarter 2024 Earnings Conference Call and Webcast Forward-Looking Statements and Non-IFRS Alternative Performance Measures This presentation contains certain forward-looking statements and information relating to Ternium S.A. and its subsidiaries (collectively, "Ternium") that are based on the current beliefs of its management as well as assumptions made by and information currently available to Ternium. Such ...

Core Viewpoint - The article emphasizes the importance of value investing as a strategy to identify strong stocks, particularly highlighting Ternium (TX) as a notable undervalued company based on various financial metrics [2][7]. Company Analysis - Ternium (TX) has a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential as a value stock [4]. - The stock has a P/E ratio of 4.58, significantly lower than the industry average of 8.65, suggesting it is undervalued [4]. - TX's Forward P/E has fluctuated between 4.36 and 6.64 over the past year, with a median of 5.19 [4]. - The PEG ratio for TX is 0.22, compared to the industry average of 0.60, indicating strong earnings growth potential relative to its price [5]. - TX's PEG has ranged from 0.18 to 3.88 in the past 52 weeks, with a median of 0.91 [5]. - The P/S ratio for TX is 0.34, which is lower than the industry average of 0.4, further supporting the view of undervaluation [6]. - Overall, Ternium is highlighted as one of the market's strongest value stocks due to its favorable earnings outlook and valuation metrics [7].