Ternium SA Q3 FY2024 earnings call

• Market Reviews: Mexico's steel market healthy, record Q3 shipments, Q4 expected decline but optimistic for next year with new pickling line and automotive growth; Brazil's steel consumption growing, but flat steel imports up 20% from China with anti-dumping investigations; Argentina's steel volumes recovering, wind farm to start operation by year-end, reform program expected to boost investments.
• Expansion Projects: Pickling line and finishing center in Pesquería ramping up, galvanizing line and cold-rolling mill in progress, slab making facility in Pesquería under construction.
• Sustainability: Updated Sustainability Report with Scope 3 emissions, 15% reduction in emissions intensity by 2030, including expanded CO2 reporting.

Steel Segment: Adjusted EBITDA was $368 million and net income $93 million for Q3. Shipments increased across markets, but sales held steady due to revenue per ton decline from lower realized steel prices; cost per ton slightly decreased. Usiminas' blast furnace had efficiency gains. Mining Segment: Shipments rose 13% sequentially in Q3 due to higher production in Mexico and Brazil, but net sales were stable due to lower iron-ore prices; margins decreased due to price drop, though cost per ton reduction softened the impact.

• Expect sequential shipment growth in Mexico's first quarter next year.
• Anticipate margin improvement in 2025 with lower raw material costs and cost-cutting.
• Total CapEx in 2025 expected to be around $2.3 billion, focused on Americas.

• Mexico: Seasonal weakness in Q4, soft public investment post-administration change.
• Brazil: Ineffective import quota system, potential unfair trade imports.
• Argentina: Risk of increased unfair trade imports.

Q: Questions on Mexico's demand, dividend cut, US election impact A: Maximo and Pablo discussed Mexico's future, dividend payout ratio, positive outlook on US election alignments Q: Outlook on North American steel market A: Maximo talked about regional markets, competitiveness, and North America's ability to supply its needs Q: Brazil steel imports and future investments A: Maximo discussed working with Brazilian government on import issues and focus on Americas for future investments Q: CapEx, cost, and free cash flow A: Pablo and Maximo discussed 2025 CapEx of $2.3 billion, cost reduction plans, and positive free cash flow expectations