Ternium S.A. (NYSE:TX) Q3 2020 Earnings Conference Call November 4, 2020 11:00 AM ET Company Participants Sebastian Marti - Investor Relations and Compliance Director Maximo Vedoya - Chief Executive Officer Pablo Brizzio - Chief Financial Officer Conference Call Participants Jonathan Brandt - HSBC Thiago Lofiego - Bradesco BBI Thiago Ojea - Goldman Sachs Carlos De Alba - Morgan Stanley Gabriel Galvao - Credit Suisse Rodolfo Angele - J.P. Morgan Alex Hacking - Citi Operator Ladies and gentlemen, thank you fo ...

Financial Data and Key Metrics Changes - Ternium's EBITDA decreased sequentially in Q2 2020 to $224 million, attributed to lower shipments and slightly lower EBITDA per ton [25] - Net income for the period was $44 million, compared to a net loss of $19 million in Q1 2020, which included significant currency depreciation effects [26][34] - Free cash flow for Q2 2020 was $393 million, leading to a reduction in net debt to just over $900 million, resulting in a net debt to last 12-month EBITDA ratio of 0.8 times [17][18][36] Business Line Data and Key Metrics Changes - Steel shipments decreased by 18% sequentially to 2.44 million tons in Q2 2020, with a 25% year-over-year decline in Mexico and a 32% year-over-year decline in the Southern Region [27][31] - The average realized price decreased by 6% in Q2 2020, reflecting lower prices in the spot market, particularly in Mexico [32] Market Data and Key Metrics Changes - In Mexico, production is approaching normal rates, with a gradual return of activity in the auto industry and other manufacturing sectors [19] - Brazil's slab facility increased production from minimum technical levels due to improved local steel demand, while Argentina expects a sequential volume increase driven by construction and agribusiness [20][21] Company Strategy and Development Direction - The company focused on optimizing production and overhead costs to sustain margins during the pandemic, achieving a 13% EBITDA margin despite a challenging environment [15] - Ternium is committed to maintaining a conservative balance sheet management approach amid ongoing uncertainties related to the pandemic [18] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding demand recovery in various sectors, particularly in industrial production, while noting that construction remains weak [42] - The company anticipates a sequential increase in shipments in Q3 2020, supported by improved market conditions, although uncertainty regarding COVID-19 persists [23] Other Important Information - Ternium established a $5.5 million fund to support health initiatives in response to COVID-19, including building field hospitals and supplying medical equipment [11] - The company issued its first Sustainability Report following GRI guidelines, enhancing transparency and data comparability [13] Q&A Session Summary Question: Demand outlook for different sectors in Mexico - Management noted strong demand in the industrial sector, particularly in automotive and appliances, while construction remains below expectations [41] Question: Outlook for slab exports to the U.S. - Management indicated no immediate changes in slab export quotas to the U.S. and noted current profitability favors exporting slabs elsewhere [43] Question: Cost performance despite volume declines - Management attributed cost reductions to operational flexibility and strict control of general expenses, aiming to maintain this performance in future quarters [49] Question: Pricing pressures in North America - Management explained that low prices in North America are driven by weak demand and competition among domestic steel mills, with expectations for a rebound [56][58] Question: Dividend policy and future payments - Management confirmed the suspension of dividends for 2020 but indicated a possibility of resuming payments in 2021 if conditions improve [72][74] Question: Free cash flow and balance sheet management - Management expects positive free cash flow in the second half of 2020, although working capital levels may increase with rising volumes [80][82] Question: Demand recovery in Argentina - Management highlighted challenges in Argentina but noted improvements in certain sectors like agribusiness and construction [102]

Financial Data and Key Metrics Changes - Ternium reported EBITDA of $302 million for Q1 2020, with an EBITDA margin of 13% of net sales and EBITDA per ton at $101 [27][36] - The company experienced a net loss of $19 million or $0.06 per ADS, which included a non-cash deferred tax loss of $189 million due to a 20% depreciation of the Mexican peso [29][38] - Cash from operations was strong at $443 million, with free cash flow after tax at $180 million for the first quarter [38] Business Line Data and Key Metrics Changes - Shipments in Mexico increased sequentially and year-over-year, with a notable increase in market share despite a soft construction environment [30] - In Argentina, shipments decreased significantly due to strict lockdowns, with expectations for gradual volume increases as restrictions ease [32][74] - Brazil's slab facility operated at technical minimums due to weak global demand, with plans to offset this by shipping to other markets [22][33] Market Data and Key Metrics Changes - The automotive industry in Mexico is expected to gradually reopen in May, impacting steel demand positively [20][50] - The construction sector in Mexico showed weaker demand in April, with expectations for gradual recovery [21][25] - In Argentina, the lockdown has severely impacted operations, but a gradual increase in shipments is anticipated as restrictions are lifted [24][32] Company Strategy and Development Direction - The company is focused on safeguarding employee health during the COVID-19 outbreak, implementing strict safety measures [9][12] - Ternium is optimizing production and overhead costs, reducing general expenses, and postponing capital expenditure projects to preserve cash [18][19] - The Board of Directors decided to withdraw the annual dividend proposal for fiscal year 2019 due to uncertainty in the market [19][60] Management Comments on Operating Environment and Future Outlook - Management expressed uncertainty regarding the impact of COVID-19 on the global economy and steel demand, emphasizing a cautious approach [8][19] - The company expects a sequential decrease in EBITDA and shipments in Q2 2020, with a projected overall market volume drop of around 30% [28][46] - Management anticipates a gradual recovery in demand, particularly in the automotive sector, with shipments expected to increase in the second half of the year [50][74] Other Important Information - Ternium is actively supporting local communities by donating medical equipment and establishing a field hospital in Monterrey, Mexico [14] - The company has a strong financial position, with net debt decreasing to $1.3 billion and a cash position of $1 billion as of March 31, 2020 [40] Q&A Session Summary Question: Conditions for Resuming Dividends - Management indicated that the decision to resume dividends will depend on visibility and clarity regarding steel demand, emphasizing a prudent approach given current uncertainties [42][44] Question: Volume Expectations Going Forward - Management expects a 30% decrease in overall shipments in Q2, with a gradual recovery anticipated thereafter, particularly in the automotive sector [46][50] Question: CapEx Outlook - CapEx for 2020 is expected to decrease significantly, with plans to postpone some projects to 2021 [58][60] Question: Costs Associated with COVID-19 Measures - Management noted that while there are costs associated with COVID-19 measures, they do not expect a significant increase in overall costs, and some savings are anticipated from renegotiated contracts [85][86] Question: Working Capital Expectations - Management is focused on reducing working capital and expects positive results in the second quarter despite challenges [103]

Ternium – First Quarter 2020 Earnings Conference Call and Webcast 1 First Quarter 2020 Earnings Conference Call and Webcast April 29, 2020 Forward-Looking Statements 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 res ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F (Mark One) o Registration statement pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934 or x Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2019 or o Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 or o Shell company report pursuant to Section 13 or 15(d) of the Securities Exchange Act of ...

Financial Data and Key Metrics Changes - In 2019, the company reported an EBITDA of $1.5 billion on shipments of 12.5 million tons, with an EBITDA margin of 15% [7][25] - Free cash flow reached $595 million, and net debt was reduced to $1.5 billion, resulting in a net debt-to-EBITDA ratio of 1 [8][39] - The proposed annual dividend was $1.20 per ADS, equating to a dividend yield of 6% and a payout ratio of 42% [8][40] Business Line Data and Key Metrics Changes - The fourth quarter EBITDA was $263 million, with an EBITDA margin of 12%, reflecting a low pricing environment in North America [26] - Shipments in Mexico decreased by 4% due to lower demand, but market share increased [14][30] - In Argentina, shipments decreased by 16% compared to 2018, with expectations for stability in 2020 [17][18] Market Data and Key Metrics Changes - Steel apparent consumption in Mexico decreased by 6%, primarily due to weak construction activity [13] - The Brazilian steel market showed signs of improvement, with local companies expected to increase slab purchases [22] - The overall steel shipments decreased by 5% sequentially in the fourth quarter and 2% year-over-year [33] Company Strategy and Development Direction - The company plans to complete expansion projects in Mexico and Colombia, including a new rebar mill in Colombia and a hot rolling mill in Mexico [24] - The ratification of the USMCA agreement is expected to reduce trade uncertainties and foster investment in the North American steel industry [16] - The company is considering both organic growth and potential M&A opportunities in the Americas [44][56] Management Comments on Operating Environment and Future Outlook - The management expects a gradual improvement in margins throughout 2020, with the fourth quarter being the lowest point [9][23] - The impact of the coronavirus outbreak on the steel market is currently unclear, but no significant effects are anticipated at this time [12] - The management is cautiously optimistic about the construction activity rebound in Mexico, expecting improvements in 2020 and stronger growth in 2021 [46][48] Other Important Information - The company will change the functional currency of its Argentine subsidiary to the U.S. dollar starting January 1, 2020, to reduce earnings volatility [38] - Capital expenditures in 2019 reached $1.1 billion, with expectations to remain high in 2020 at approximately $800 million [39] Q&A Session Summary Question: Long-term strategy and capital allocation - The company is focused on completing current investments and is analyzing future organic growth projects in Mexico, Colombia, and Brazil [54][56] Question: Construction activity rebound in Mexico - Management expects a slight improvement in 2020, with a more significant rebound anticipated in 2021 [46][48] Question: Capacity concerns in Mexico - The company believes it can manage increased capacity without issues due to strong demand and competitive cost structure [50][51] Question: EBITDA per ton expectations for the new facility in Colombia - The new facility is expected to improve margins by substituting imports and increasing production of high-end products [66] Question: Working capital sustainability - The company anticipates stable working capital levels, with no significant fluctuations expected in 2020 [75] Question: Price expectations for the first and second quarters - Prices are expected to improve in the second quarter, with higher volumes anticipated in the first quarter [114] Question: SG&A increase explanation - The increase was due to a new asset tax in Argentina and higher amortization costs related to a long-term contract [116][118]

Ternium – Fourth Quarter and Full Year 2019 Earnings Conference Call and Webcast 1 Fourth Quarter and Full Year 2019 Earnings Conference Call and Webcast February 19, 2020 Forward-Looking Statements 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 ...

Ternium – Third Quarter and First Nine Months 2019 Earnings Conference Call and Webcast 1 Third Quarter and First Nine Months 2019 Earnings Conference Call and Webcast October 30, 2019 Forward-Looking Statements 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 ...

Ternium S.A. (NYSE:TX) Q3 2019 Results Earnings Conference Call October 30, 2019 8:30 AM ET Company Participants Sebastián Martà - Investor Relations Director Máximo Vedoya - Chief Executive Officer Pablo Brizzio - Chief Financial Officer Conference Call Participants Caio Ribeiro - Crédit Suisse Jon Brandt - HSBC Carlos De Alba - Morgan Stanley Thiago Lofiego - BBI Timna Tanners - BoA Merrill Lynch Alex Hacking - Citi Operator Ladies and gentlemen, thank you for standing by. And welcome to the Ternium Third ...

Ternium – Second Quarter and First Half 2019 Earnings Conference Call and Webcast 1 Second Quarter and First Half 2019 Earnings Conference Call and Webcast July 31, 2019 Forward-Looking Statements 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 cu ...