Ternium S.A. Q3 FY2025 earnings call

• Ternium saw EBITDA increase driven by cost per ton decrease from competitiveness plan; cash generation strong with operating activities contributing over $0.5B. Board declared interim dividend of $0.90 per ADS. - Business environment marked by US trade framework uncertainty; USMCA and Mexico's tariff initiatives discussed. Brazil's steel demand expected to grow 5% in 2025 but faces unfair imports from China. Argentina's steel value chain leveled off post-elections but optimistic for structural reforms. - Received Steelie Award for sustainability from World Steel Association for Argentina's wind farm project.

Steel Segment: Shipments increased during the quarter, driven by growth in Mexico and Brazil; cash operating income improved mainly due to margin increase, with slight decrease in revenue per ton offset by lower cost per ton. Mining Segment: Net sales declined quarter-over-quarter primarily due to lower iron ore shipments and increased cost per ton in Las Encinas (Mexican mining operation), but production levels expected to normalize in Q4.

• Adjusted EBITDA expected to decline in Q4 2025 due to seasonal slowdown, but margin to remain consistent as revenue per ton decrease in Mexico and Argentina offset by cost reduction. - CapEx for 2025 expected to total between $2.5B and $2.6B, with 2026 CapEx projected at $1.9B and 2027 at $1.11B. - Expect demand recovery in Mexico in 2026 due to infrastructure growth and USMCA renegotiation progress.

• Uncertainty in US trade framework affecting business environment. - Brazil faces high level of unfairly traded steel imports from Asia with lack of effective trade defense mechanisms. - Argentina's steel value chain faced uncertainty pre-elections; Brazil's industrial activity affected by high interest rates.

Q: Given the results of the elections in Argentina, what strategic opportunities do you see?

A: Maximo Vedoya mentions structural reforms in Argentina could lead to growth opportunities across steel value chains, especially in agriculture, mining, and oil & gas sectors.

Q: Outlook for demand in Mexico 2026?

A: Maximo Vedoya expects 4% demand recovery in Mexico 2026 due to infrastructure growth and USMCA renegotiation progress towards liberalizing trade between USMCA countries Q: What's the outlook for CapEx in 2025 and beyond?

A: Pablo Brizzio states CapEx for 2025 is expected to total between $2.5B and $2.6B, with 2026 CapEx projected at $1.9B and 2027 at $1.11B, noting Q2 was the peak quarter for CapEx