Ternium S.A. Q4 FY2025 earnings call

Maximo Vedoya mentioned the company's cost reduction and efficiency program generated $250,000,000 in savings in 2025. Discussed market conditions in different regions like Mexico, Brazil, Argentina. Announced new production in Mexico's Pesqueria facility including cold and galvanized lines, and progress on slab plant. Pablo Daniel Brizzio reviewed operational and financial performance, including adjusted EBITDA, net income, cash generation, and balance sheet performance.

Steel segment: Shipments declined during the quarter, primarily due to weaker volumes in US and Brazil, offset by higher volumes in Mexico. Steel cash operating income decreased sequentially due to lower sales volume and decline in realized steel prices, partially offset by reduced raw material purchase costs and efficiency gains. Mining cash operating income increased sequentially driven by stronger shipments and higher realized iron ore prices, partially offset by higher unit cost.

Anticipate sequential higher adjusted EBITDA in 2026 mainly driven by increase in EBITDA margin and growth in shipments. Expect CapEx to decrease to around $2,000,000,000 in 2026. Board of directors proposed an annual dividend of 2.7 per ADS for fiscal year 2025, same as 2024.

Fatal accidents at Turnure Mexico, Ternium Brazil, and Usiminas in 2025 which are significant setbacks. Impact of trade measures and potential circumvention of anti-dumping measures in different regions.

Q: Get color on Mexican market outlook, USMCA timing, and Brazil anti-dumping measures impact.

A: Demand in Mexico was low in 2025, expecting market share gain in 2026. USMCA renewal timing uncertain, projected more in 2027. Brazil anti-dumping measures impact gradual.

Q: Plan B if USMCA not renewed, earnings volumes in 2026.

A: Operating in current environment, volumes expected to increase in Mexico, recover in South America and Brazil.

Q: EBITDA margin return to 15-20%, trade actions sufficiency.

A: Cost reduction program ongoing, trade actions in right path but not sufficient yet.

Q: CapEx guidance, capital allocation, Usiminas minority stake.

A: CapEx to decrease, net cash position may change, no current plan to buy Usiminas minority shares.

Q: Upstream project in Pesqueria, margin potential without USMCA.

A: Upstream project helps in volume and cost savings, expect margin increase with USMCA negotiation.

Q: Post 2027 priorities, capital allocation.

A: Priorities include growing main markets and returning dividends, no immediate share buyback plan.

Q: CSN steel assets in Brazil opportunity.

A: Not analyzing any opportunity with CSN at present