Financial Data and Key Metrics Changes - Net sales for Q3 were $769.8 million, with adjusted EBITDA at $41.6 million and adjusted earnings per share at $0.27 [11][30] - Earnings for Q3 were $10.4 million or $0.20 per share, down from $13.8 million or $0.27 per share in the prior year quarter [33] - Adjusted EBITDA decreased to $20 million, down $5.3 million from $25.3 million in the prior year quarter [38] - Total shipments were approximately 818,000 tons, down 64,000 tons or 7% year-over-year [39] Business Line Data and Key Metrics Changes - Direct sales volume made up 63% of the mix in the current year quarter compared to 57% in the prior year quarter, with a 4% increase in direct volume year-over-year [39] - Direct shipments to the automotive market increased by 10% year-over-year, significantly outpacing the overall automotive production growth of 3% [41] - Agriculture volume was up 9% due to improved OEM equipment demand, while container volume increased by 11% [42] - Toll processing volumes declined by 22% year-over-year, attributed to the closure of the Cleveland facility and near-term demand headwinds [44] Market Data and Key Metrics Changes - The automotive market outlook remains cautiously optimistic, with expectations for a more robust market later in the year [13] - The agricultural market is believed to be nearing the trough of the cycle, with a slow rebound expected to begin in late calendar year 2026 [14] - Construction conditions remained flat, but growth is anticipated in data centers and heavy trucks in the second half of 2026 [15][16] - European market conditions remain challenging, particularly in electrical steel and automotive end markets, with intensified competition from China [48] Company Strategy and Development Direction - The proposed acquisition of Kloeckner is viewed as a significant strategic step, aimed at creating a larger, more diversified metals processing platform [5][6] - Investments in electrical steel growth and innovation are ongoing, with projects in Canada and Mexico progressing as planned [17][18] - The company is focused on improving operational efficiency through the Worthington Business System and artificial intelligence [23][29] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment was described as volatile and uneven, with challenges such as compressed galvanized spreads and delayed industrial activity due to weather [12] - Management expressed confidence in the company's ability to navigate current challenges and create long-term value [53] - There is a belief that the market is starting to show signs of recovery, with expectations for increased demand in key markets [76] Other Important Information - Cash flow from operations was $63 million, and free cash flow was $33 million, benefiting from a reduction in working capital [49] - Capital expenditures for the quarter were $30 million, with expectations for total CapEx for fiscal 2026 to be in the range of $110 to $115 million [50] - A quarterly dividend of $0.16 per share was announced, payable on June 26, 2026 [52] Q&A Session Summary Question: Direct volumes for Q3 only up 3% year-over-year, but auto shipments increased by 10%. Can you discuss the market share wins? - Management noted that while overall automotive production was down slightly, direct shipments to the Detroit Three increased by 13%, indicating market share gains [59] Question: Regarding the short-term debt used to purchase Kloeckner securities, can you provide more context? - The company increased its ABL by $126 million to purchase approximately 8% of Kloeckner shares, with the ability to buy shares in the open market as long as the price remains below the tender offer [62] Question: What are the expectations for net working capital in Q4 given the inventory holding gains? - Management indicated that upward pressure on working capital is expected in Q4 due to rising steel prices [64] Question: How does the current geopolitical situation affect the company's view on debt levels post-acquisition? - Management expressed confidence in the current capital structure and plans to manage debt effectively, despite concerns about the European economy [72]

Core Viewpoint - The company's performance was affected by a volatile macro environment, including compressed galvanized spreads and winter weather delays in industrial activity [1] Group 1: Automotive Sector - Direct automotive shipments increased by 13%, significantly outpacing the Detroit Three production growth of 3% due to strategic market share gains and new program wins [1] - The company is adapting to a shift in the EV market, moving from government-mandated battery electric vehicles (BEVs) to consumer-led demand for hybrids [1] Group 2: Operational Efficiency - Operational efficiency improvements are being driven by the 'Worthington Business System,' which has transitioned the Delta, Ohio facility from a push-based to a pull-based inventory model [1] - The company is aggressively implementing AI and automation across administrative functions to eliminate manual data entry and enhance scalability [1] Group 3: Acquisition Progress - The Kloeckner acquisition is advancing through the German regulatory process, with management expressing confidence in achieving the 57.5% minimum tender threshold [1]

Financial Data and Key Metrics Changes - Ternium reported a net income of $171 million for the fourth quarter of 2025, with adjusted EBITDA slightly declining sequentially, in line with expectations [13][14] - The EBITDA margin reached 10% for the year, supported by a cost reduction program that generated $250 million in savings [4][18] - Cash generated by operations in 2025 was strong at $2.3 billion, allowing the company to finance capital expenditures [18] Business Line Data and Key Metrics Changes - The steel segment experienced a decline in shipments due to weaker volumes in the U.S. and Brazil, although higher volumes were noted in Mexico [15][16] - Mining cash operating income increased sequentially, driven by stronger shipments and higher realized iron ore prices [16] Market Data and Key Metrics Changes - Apparent consumption of steel in Mexico decreased by 10% in 2025, with flat products consumption down 14% compared to 2024 [23] - The U.S. implemented significant trade measures against unfair practices from China, impacting the global steel market [5][9] Company Strategy and Development Direction - Ternium is focusing on enhancing operational efficiency and reducing costs while expanding its footprint in Mexico with new facilities [8][11] - The company is optimistic about profitability improvements in 2026, driven by cost reductions and favorable trade policies [10][11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by a fatal accident at Ternium Mexico and emphasized the importance of safety [4] - The outlook for the Mexican market is cautiously optimistic, with expectations of a 4% growth in 2026 despite current low demand levels [23][24] Other Important Information - Ternium secured a $1.25 billion loan through a green financing facility to support its new projects, which received several awards [8][9] - The company proposed an annual dividend of $2.7 per ADS for fiscal year 2025, maintaining the same level as 2024 [18] Q&A Session Summary Question: Outlook for the Mexican market and recovery path - Management noted that demand in Mexico was significantly low in 2025, with expectations of a 4% market growth in 2026, aiming to gain market share against imports [23][24] Question: Impact of anti-dumping measures in Brazil - Management indicated that the impact of anti-dumping measures would be gradual, with expectations of a moderate increase in domestic prices [22][25] Question: Ternium's plan if USMCA is not renewed - Management stated that they operated in 2025 under the assumption of no renewal and would continue to adapt to the environment [30][34] Question: Volume expectations for 2026 - Management expects volumes to increase in Mexico, while the southern region may see recovery in the second half of the year [35][36] Question: Margin potential without USMCA changes - Management expressed that margins could improve, but the full impact of USMCA negotiations would likely be seen in 2027 [40][79] Question: Capital allocation priorities - Management confirmed that both increasing dividends and exploring growth opportunities in key markets are priorities [86]

Financial Data and Key Metrics Changes - Ternium reported a net income of $171 million for Q4 2025, with a slight sequential decline in adjusted EBITDA, which remained stable [13][14] - The EBITDA margin reached 10% for the year, with a cash generation from operations of $2.3 billion, allowing the company to finance capital expenditures [4][18] - The company achieved $250 million in savings through cost reduction and efficiency programs in 2025 compared to 2024 [4] Business Line Data and Key Metrics Changes - The steel segment saw a decline in shipments primarily due to weaker volumes in the U.S. and Brazil, although higher volumes were recorded in Mexico [14][15] - Mining cash operating income increased sequentially due to stronger shipments and higher realized iron ore prices, partially offset by higher unit costs [15] Market Data and Key Metrics Changes - In Mexico, apparent consumption of steel decreased by 10% in 2025, with flat products consumption down 14% compared to 2024 [23] - The U.S. implemented significant trade measures against unfair practices from China, impacting the global steel market [5][9] - Brazil's recent anti-dumping measures and increased import taxes on steel products represent a significant shift in the market environment [9] Company Strategy and Development Direction - Ternium is focusing on enhancing regional integration and has expanded its footprint in Mexico, investing in technology to offer high-value products [6][11] - The company has started production in new facilities, including a cold rolling mill and a galvanized line, aimed at producing high-quality automotive steel [7][8] - Ternium aims to improve profitability in 2026, driven by cost reductions and operational efficiency [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about Ternium's outlook for the coming years, expecting profitability to improve in 2026 despite ongoing trade issues [10][11] - The company is actively participating in discussions regarding trade frameworks to ensure fair competition and support local producers [5][6] Other Important Information - Ternium's board proposed an annual dividend of $2.7 per ADS for fiscal year 2025, maintaining the same level as 2024, reflecting confidence in the company's prospects [18] - The company secured a $1.25 billion loan through a green financing facility to support its projects, receiving multiple awards for this initiative [8] Q&A Session Summary Question: Outlook for the Mexican market and demand recovery - Management noted that demand in Mexico was significantly low in 2025, with expectations of a 4% market growth in 2026, driven by local steel mills gaining market share against imports [21][23][24] Question: Impact of anti-dumping measures in Brazil - Management indicated that the impact on pricing dynamics would be gradual, with expectations for a moderate increase in domestic prices [22][26] Question: Ternium's plan if USMCA is not renewed - Management stated that they operated in 2025 under the assumption of no renewal and would continue to adapt to the environment, focusing on market share growth [31][34] Question: Expectations for Ternium's volumes in 2026 - Management expects volumes to increase in Mexico, while the southern region may see recovery in the second half of the year [36][37] Question: Margin potential without USMCA changes - Management believes there is potential for margins to improve, aiming for a return to the 15%-20% range, but acknowledges that this may take time [41][46][86] Question: Capital allocation priorities - Management emphasized that both increasing dividends and pursuing growth opportunities in key markets are priorities [88][89]

Financial Performance - The company achieved third quarter revenues of $4.3 billion, with steel shipments totaling 3.2 million tonnes and adjusted EBITDA of $557 million [1][7][8] - Net income for the third quarter was reported at $318 million, or $2.05 per diluted share, which reflects a decrease in revenue compared to the second quarter due to lower flat-rolled steel pricing [7][8] - Operating income for the third quarter was $395 million, a 29% decline from the previous quarter, primarily due to steel metal spread contraction [8] Operational Highlights - The Sinton team reached a 72% utilization rate in September, with periods exceeding 90% during the quarter, demonstrating the mill's capability [1][23] - The company successfully ramped up four new value-add flat-rolled steel coating lines, expected to contribute fully to earnings by 2025, adding 1.1 million tons of higher-margin product [2][12] - Safety performance improved significantly, with the lowest total recordable incident rate and lost time rates in company history, and 84% of locations reported no recordable injuries [5][6] Market Dynamics - The domestic steel industry operated at an estimated production utilization rate of 78%, while the company's steel mills operated at 86%, indicating a competitive advantage [21] - The company is experiencing steady underlying steel demand, although a surge in steel imports has put pressure on supply dynamics for certain products [22][24] - The company anticipates increased fixed asset investment and demand drivers for steel and steel fabrication products in 2025 due to moderating interest rates and public funding [11][24] Strategic Investments - Approximately $1.9 billion has been invested in strategic growth initiatives through September 2024, with expectations for an additional $350 million to $400 million in the fourth quarter [13][14] - The company has repurchased $970 million of common stock year-to-date 2024, representing 4.5% of outstanding shares, with a remaining $486 million available for further repurchases [14] - The company is committed to sustainability, with new greenhouse gas emissions intensity targets aligned with the Paris Agreement, and is on track to introduce biocarbon into steel production by the first quarter of 2025 [15][16][81] Future Outlook - The company expects capital investments in 2025 to be in the range of $700 million to $800 million, with a focus on high-return strategic growth [14] - The aluminum production investments are projected to be EBITDA positive in the second half of 2025, with plans to operate the rolling mill at approximately 75% capacity in 2026 [12][66] - The company is optimistic about steel demand and pricing dynamics as it approaches the end of 2024 and enters 2025, driven by ongoing infrastructure spending and manufacturing onshoring [24][40]