Investor PresentationJanuary 2018
As of January 24, 2018
January 2018Ternium
2
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 respect to future events and are subject to certain risks, uncertainties and assumptions. Many
factors could cause the actual results, performance or achievements of Ternium to be materially different from
any future results, performance or achievements that may be expressed or implied by such forward-looking
statements, including, among others, changes in general economic, political conditions in the countries in which
Ternium does business or other countries which have an impact on Ternium’s business activities and investments,
changes in interest rates, changes in inflation rates, changes in exchange rates, the degree of growth and the
number of consumers in the markets in which Ternium operates and sells its products, changes in steel demand
and prices, changes in raw material and energy prices or difficulties in acquiring raw materials or energy supply
cut-offs, changes in business strategy and various other factors. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially
from those described herein as anticipated, believed, estimated, expected or targeted. Ternium does not intend,
and does not assume any obligation, to update these forward-looking statements.
Investor Presentation 3
Profile and Performance
January 2018Ternium
4
• Net sales of USD 7.2 billion in 2016
• Crude steel capacity of 12.3 million tons
• Industrial facilities in Mexico, Argentina, Brazil, Colombia, USA and Central America
• Vertically integrated, from iron ore mines to service centers
• Focus on high value-added products
• Participation in Usiminas1 control group
Steel Shipments2 – 9M 2017
Ternium’s ProfileA leading steel company in Latin America
Mexico61%
Other Markets
17%
Southern Region22%
1 Usiminas: a leading company in the Brazilian flat steel market
2 Ternium Brasil (ex-CSA) started consolidating in September 2017
January 2018Ternium
5
• Focus on high margin value-added
products
• Flexible production configuration
• Diversified cost structure
• Upstream and downstream
integration
• Best practices
• Broad distribution network
• Recruitment and retention of talent
• Innovative culture, industrial
expertise and long-term view
Ternium’s ProfileConsistently superior results
14%
14%
6%8%
15%17% 17%
14%
21% 21%
2012 2013 2014 2015 2016
1 Long steel Americas, global player, U.S. minimill and U.S. integrated (Source: Bloomberg)
Average
EBITDA Margin (% of net sales)
Ternium Peers range1
9M17
January 2018Ternium
6
33
209
62
857
664
2012 2013 2014 2015 2016
1,023
883
444 467 436
2012 2013 2014 2015 2016
5.0 5.0 5.6 5.9 6.4
2.4 2.62.5 2.6 2.2
1.4 1.41.2 1.1 1.1
8.8 9.0 9.4 9.6 9.8
2012 2013 2014 2015 2016
Mexico Southern Region Other Markets
1,287
1,487 1,471
1,073
1,549
2012 2013 2014 2015 2016
Steel shipments (million tons)
Capital Expenditures (USD million)
EBITDA (USD million)
Performance Sustainable growth and resilient profitability
Free cash flow (USD million)
January 2018Ternium
7
2 Last 12 months EBITDA
PerformanceSolid financial position
Net debt and net debt to EBITDA ratio2
(USD billion)
Strong balance sheet
• Net debt to EBITDA ratio of 1.5x as ofSeptember 2017
• USD1.5 billion five-year syndicated termloan facility to finance CSA acquisition inSeptember 2017
Growing dividend payments
• USD1 per ADS in 2016, 54% increase inlast 5 years
• 5% dividend yield in 20161
Annual dividends(USD per ADS)
1 Dividend yield: Dividend paid / Average stock price (Source: Bloomberg)
1.51.8
1.10.9
2.7
2013 2014 2015 2016 Sep-17
0.6x 1.5x1.0x 1.2x 1.1x
0.650.75
0.90 0.901.00
2012 2013 2014 2015 2016
January 2018Ternium
8
502
351
465498
466
3Q16 4Q16 1Q17 2Q17 3Q17
EBITDA
(USD million)
PerformanceQuarterly EBITDA and net income
27%
19%
23%22%
19%
3Q16 4Q16 1Q17 2Q17 3Q17
EBITDA Margin
(% of net sales)
214
147
188 189
152
3Q16 4Q16 1Q17 2Q17 3Q17
EBITDA per ton1
(USD)
1 Consolidated EBITDA divided by steel shipments.
264
145
310282
233
1.17
0.60
1.33 1.27
0.99
3Q16 4Q16 1Q17 2Q17 3Q17
Net Income and Earnings per ADSNet Income (Loss) (USD million)
Earnings (Losses) per ADS
January 2018Ternium
9
Breakthrough initiatives to increase differentiation and reduce costs
• Customer integration
• Labor productivity
• Exiros
• Working capital optimization
• Logistics management
• Contractors management
• Energy efficiency
• Continuous improvement
PerformanceContinuous focus on profitability
January 2018Ternium
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A Level Playing FieldWorld dealing with unfair trade
• Cases against steel unfair trade grew
strongly in the last decade
• China is the main target of unfair trade
cases in more than 20 countries
• World reacted against unfair Chinese
steel trade conditions
Note: AD: anti-dumping; CV: countervailing
Claims initiated against China forunfair steel trade in the world (# per
year)
Standing duties for Chinese steel imports in U.S. and Mexico
U.S. up to 91% AD
Mexico up to USD355/ton AD
256% CV
266% AD
Mexico up to 103% AD
210% AD
up to 241% CV
Mexico up to 76% AD
U.S.
U.S.
Cold-rolled
Hot-rolled
Corrosion-
resistant
6
25
36
2007 2012 2017
Investor Presentation 11
Latin American Steel Markets
January 2018Ternium
12
2.7
4.8
1.1
3.7
1990 2000 2010
Argentina
Colombia
9.7
18.4
6.6
26.8
1990 2000 2010
Brasil
Mexico
• Mexico, Brazil, Argentina and Colombia account for approximately 80% of Latin
America’s steel consumption
• Mexico’s steel consumption CAGR of 2.9% in the last decade, among the highest in
the region, driven by a dynamic manufacturing industry
Latin American Steel MarketsMexico became the largest steel market in the region
Source: Canacero, Aço Brasil, Cámara Argentina del Acero, ANDI
Apparent steel use (million tons)
2017f 2017f
Investor Presentation 13
Mexico
January 2018Ternium
14
Ternium’s Markets - MexicoShipments to industrial customers growing consistently
55%58%
11.512.6
15.016.7
2011 2013 2015 2017f
Local Imports
Apparent flat steel use – Mexico (million tons)
56% 58% 59% 62%
44% 42% 41% 38%
2011 2013 2015 2017f
Industrial Commercial
Apparent flat steel use – Mexico (% share)
Source: Alacero / Ternium estimates
Most attractive steel market in Latin America
• 46% increase in flat steel consumptionsince 2011
• Opportunity to substitute imports ofhigh-end products
• Industrial market increasing relevance
• Strong measures to promote fair tradein the NAFTA region
• 33 cases against 35 countriesmainly against China
• China with dumping cases in mostof the steel products
• Renewal of 15% import tariff inMexico (for countries with no tradeagreements)
January 2018Ternium
15
0
100
200
300
2012 2013 2014 2015 2016 2017f
Private Government
Ternium’s Markets - MexicoStrong industrial steel demand
• Light vehicle production is expected tocontinue growing
• Production in 2017 increased by8% reaching 3.8 million units
• New OEM capacity was addedduring 2017
• Production expected to reach 4.2million units by 2020
• Construction: Private activity growthstabilized in 2017
• Private activity offset decrease ingovernment investment over thelast years
• Infrastructure investment expectedto improve in 2018
2.9 2.93.2 3.4 3.5
3.8
2012 2013 2014 2015 2016 2017
Light vehicle production(million units)
Construction spending(billion of constant MXN)
Source: AMIA/IHS
Source: INEGI
January 2018Ternium
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Ternium’s Markets - MexicoStrong growth of Ternium’s shipments
• 500,000-ton shipment increase in 2016
• Volume growth higher in the automotiveand home-appliance industries
• Broader product range enabled byupgrading of re-rolling facility
• Differentiation in the commercial marketthrough value-added products andservices
• Increasing customer digital connectivity
• Nationwide coverage through regionaldistributors and distributors centers
20%
11%
4%3%
Automotive Homeappliance
Construction Othersectors
Ternium’s shipments growth in 2016(year-over-year % change)
5.0 5.05.6 5.9
6.4
2012 2013 2014 2015 2016
Industrial Commercial
Ternium steel shipments in Mexico (million tons)
+8%
60%
40%50%
50%
Ternium outpacing Mexican steel consumption
growth through import substitution
Investor Presentation 17
Southern Region - Argentina
January 2018Ternium
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Ternium’s Markets - ArgentinaRecovery in 2017 and positive outlook for 2018
2.83.1
2.52.8
3.1
2014 2015 2016 2017f 2018f
+13%
+10%
-19%
Apparent flat steel use – Argentina (million tons)
Economic reforms to improve Argentina’s
performance in following years:
Economy gaining momentum driven by:
• Agriculture
• Construction
• Non-conventional oil & gas
• Gradually improving: household
appliance and automotive industries
Source: Alacero / Ternium estimates
GDP ASU
2016 -2.2% -18.6%
2017 +2.9% +12.5%
2018 +3.2% +10.0%
Source: BCRA – REM Dec’17
January 2018Ternium
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Ternium’s Markets - ArgentinaActivity recovering in 2017 and positive outlook for 2018
Source: INDEC and AFCP
10.711.9 11.4
12.210.9
12.2
2012 2013 2014 2015 2016 2017
Cement shipments(million tons)
+12%
17.2
20.4
14.8 13.9
17.6
12.2
16.5
2012 2013 2014 2015 2016 9M16 9M17
Implements Seeders Tractors Harvesters
Agro equipment sales(thousand units)
+36%
• Higher agro production and investment
• Production: +14% in ’16/’17 season
• Bright spots: sales of agro machinery
and pick-up trucks
• Government infrastructure investmentsdriving construction activity
• Vaca Muerta: shale oil & gas drillingincreasing in 2H’17
• Government price stimulus
• Restructured labor agreements
• USD7 billion recently announced
investments in next 3 years
• Government investment estimates:
USD14 billion in 2017/18; USD15-20
billion per year from 2019
Investor Presentation 20
Steel Market Trends
January 2018Ternium
21
150
200
250
300
350
400
450
4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Jan-18
USD/long ton
300
400
500
600
700
800
1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 Jan-18f
Europe domestic (USD/ton) US domestic (USD/ton)
1.5
2.0
2.5
3.0
3.5
4.0
4.5
4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
Million tons
Source: Platts / MSCI / US Census Bureau / Ternium
Steel price (hot rolled coils)
US service center inventoryUS steel imports
Steel Market TrendsUS steel market
Scrap price (shredded USA Midwest)
1.0
1.3
1.6
1.9
2.2
2.5
2.8
3.1
3.4
3.7
4.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
10.5
4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
Million tons Months of supply
January 2018Ternium
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1
2
3
4
5
6
4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
USD/MMBtu
50
100
150
200
250
300
350
4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
USD/ton
30
45
60
75
90
105
4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
USD/ton
100
200
300
400
500
600
4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17f
USD/ton
Steel Market TrendsInput costs
Slab price (Brazil Export)
Source: Platts / Bloomberg / Ternium
Natural gas price (Henry Hub)
Iron ore price (IODEX CFR China)
Hard met coal price (FOB Australia)
Jan-18f
Jan-18f Jan-18f
Investor Presentation 23
Developing Ternium’s industrial system
January 2018Ternium
24
CSA AcquisitionStrong foundation to continue growing
• New 5 mtpy high-end slab facility in Brazil
• Integrate CSA into Ternium to take it to itsfull potential
• Increase competitiveness in the high-endMexican steel market vis-à-vis imports
• Improve customer service supported byhigher operational flexibility
• Customized steel products
• Coordinated product development
• Enhanced logistics
• Realize cost reduction opportunities in CSA
• Coordinated procurement effort(Exiros)
• IT integration
• Inventory optimization
• Benchmarking
January 2018Ternium
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• Significant technological upgrade toexpand TX’s product range in Mexico witha broader dimensional offering and themost advanced steel grades
• Aimed at replacing high value-added steelimports, improving customer service andreducing lead-times in the value chain
• Targeting the demanding and innovativeautomotive industry, as well as the homeappliance, machinery, energy andconstruction sectors
• Annual production capacity of 3.7 milliontons (option to increase capacity by 1.1million tons with small additionalinvestment)
• Expected start up in second half of 2020
• Total investment of USD1.1 billion
New Hot Rolling Mill at Pesquería Industrial CenterA logical step after the addition of CSA
January 2018Ternium
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• New hot-dipped galvanizing and painting lines
• High-end value-added products for the home-appliance, heating-ventilation-airconditioning (HVAC) and automotive industries
• Most advanced painting technology in Mexico
• Annual production capacity:
• Galvanizing: 300,000 tons
• Painting: 120,000 tons
• Expected start up:
• Galvanizing: 2H 2019
• Painting: 1H 2019
• Total investment of USD260 million
New Coating Lines at Pesquería Industrial CenterOpportunity to grow in the high-end Mexican market
January 2018Ternium
27
New Reinforcing Bar Production Facility in ColombiaExpanding TX’s share in the country’s construction sector
• Colombian long steel market growingsignificantly over the last years
• Fourth largest steel market in LatinAmerica
• Targeting the dynamic constructionsector to expand market share bysubstituting imports
• Investment to enable upstreamintegration by replacing purchases ofreinforcing bars from third parties
• Annual production capacity of 520,000tons
• Expected start up in second half of 2019
• Total investment of USD90 million
1.3 1.4
3.03.5
3.7
2000 2004 2008 2012 2016
Apparent steel use – Colombia (million tons)
+191%
Investor Presentation 28
Conclusion
January 2018Ternium
29
Strategic agenda
• Expansion in Mexico
• Increase in high-end
product offering
• Operational excellence
• Develop market value
potential relative to peers
ConclusionOpportunities for Ternium in the next five years
Next five years
• Continue growing in the
Mexican market
• Capitalize on the integration
of CSA into Ternium’s
industrial system
• Continue development of
new high-end steel
products
• Intensive use of IT/IS to
achieve breakthroughs in
operational excellence
January 2018Ternium
30
• Consistently superior results in
attractive steel markets in Latin
America
• Solid financial position and strong
dividend payments
• Successful implementation of business
strategy geared toward sustainable
profitable growth
• CSA acquisition as an opportunity to
grow and strengthen business in the
region
• Continued focus on generating long-
term shareholder value
Conclusion
January 2018Ternium
31
January 2018Ternium
32
• Corporate Structure
• Production Capacity
• CSA Acquisition
• Shipments and Net Sales
• Income Statement
• Cash Flow Statement
• Balance Sheet
• Webcast Presentation Third Quarter and First Nine Months of 2017
Appendix
January 2018Ternium
33
Corporate Structure
Economic participation
1 Participation based on ordinary shares distributed
2 Participation based on total shares distributed
3 Net of non-controlling interest in TX Argentina
4 Formerly known as Siderar
5 Formerly known as CSA
Non-consolidated companies
Techint Group: 62%Tenaris: 11%Ternium (treasury shares): 2%Public: 24%
Exiros
Ternium Colombia
Ternium México
Usiminas
Ternium Argentina4
CEU: 5%1
Nippon Steel & Sumitomo Metal: 32%1
TenarisConfab: 5%1
Other (ordinary shares): 23%1
39%
29%
71%
61%
50%
100%
6%1
Other
28%1
Tenaris50%
Subsidiaries
Peña Colorada
50%
Las Encinas
100%
TerniumGuatemala
Ternium USA
100%
100%
Joint operations
ArcelorMittal
50%
Tenigal51% Nippon Steel &
Sumitomo Metal
49%
Techgen48%
22%
Tecpetrol30%
Ternium Brasil5100%
Direct Indirect3 Total
Ternium Mexico 71% 17% 89%
Ternium Argentina4 61% 61%
Ternium Brasil5 100% 100%
Usiminas2 17% 2% 19%
Tenigal 51% 51%
Ternium Colombia 100% 100%
TX Guatemala 100% 100%
TX USA 100% 100%
Las Encinas 71% 17% 89%
Peña Colorada 36% 9% 45%
January 2018Ternium
34
Production Capacity (*)
(million metric tons per year)
Mexico Argentina Other Total
Slabs 2.3 3.2 5.0 10.6
Billets 1.6 0.2 1.8
Crude steel 3.9 3.2 5.2 12.3
Coils 6.1 2.9 8.9
Rebars & wire rods 1.1 0.2 1.3
Hot rolled 7.2 2.9 0.2 10.3
Cold rolled coils 3.7 1.8 5.6
Tinplated products 0.2 0.2
Galvanized products 1.9 0.7 0.3 2.9
Pre-painted products 0.6 0.1 0.2 0.9
Service center 3.9 2.3 1.2 7.4
(1) Brazil, Southern US, Colombia and Central America
(*) As of year-end 2016
Production Capacity
(2)
(2) Corresponds to Ternium Brasil (ex-CSA)
(1)
January 2018Ternium
35
• On Sep 7, 2017 Ternium acquired thyssenkrupp Slab International B.V. (tkSI) and its
wholly-owned subsidiary CSA Siderúrgica do Atlântico Ltda. from thyssenkrupp AG
(tkAG)
• In addition, tkAG assigned to Ternium a 2.0 million tons per year agreement to
supply slabs to thyssenkrupp’s former Calvert re-rolling facility in the U.S.
• Ternium disbursed EUR1.4 billion on a cash-free, debt-free basis, for the acquisition
of both the tkSI shares and the slab supply agreement
• The transaction was financed with a five-year syndicated term loan facility in a
principal amount of USD1.5 billion
• Ternium began consolidating tkSI’s balance sheet and results of operations in its
consolidated financial statements in September 2017
• Upon closing, CSA name was changed to Ternium Brasil
CSA AcquisitionThe Transaction
January 2018Ternium
36
CSA is a Brazilian state-of-the-art steel slab producer
• 5 mtpy capacity of high-grade steel slabs
• 490 MW combined cycle power plant
• Deep-water harbor
• Compact, efficient and environmentally friendly facility
• Just-in-time iron ore supply (railroad)
Daniel Novegil, Ternium’s CEO said: “This acquisition brings another state-of-the-art
facility into Ternium’s industrial system, along with CSA’s highly-skilled personnel and
know-how, thereby enhancing our differentiation and value-added capabilities in the
steel production supply chain. Upon integration, Ternium customers will not only benefit
from our expanded high-end steel slabs capacity, but also see the results of an
enhanced product development and supply chain management effort that will increase
our high-end steel specialization in Mexico and Argentina. We move forward as a
strengthened organization across our strategic industrial sectors in Latin America.”
CSA AcquisitionThe Assets
January 2018Ternium
37
Shipments and Net SalesThird Quarter 2017 and First Nine Months of 2017
3Q 2017 3Q 2016 Dif. 3Q 2017 3Q 2016 Dif. 3Q 2017 3Q 2016 Dif.
Mexico 1,348.6 1,172.8 15% 1,625.0 1,529.4 6% 830 767 8%
Southern Region 618.8 452.5 37% 666.3 535.3 24% 929 845 10%
Other Markets 495.4 227.2 118% 778.8 283.1 175% 636 803 -21%- - -
Total steel products 2,462.8 1,852.5 33% 3,070.2 2,347.9 31% 802 789 2%
Other products (1) 16.7 3.0 455%- - -
Total steel segment 2,479.5 1,855.5 34%- - -
Total mining segment 84.3 58.1 45% 938.3 808.3 16% 90 72 25%- - -
Intersegment eliminations (84.3) (57.5) - - -
Total steel and mining segments 2,479.5 1,856.1 34%
9M 2017 9M 2016 Dif. 9M 2017 9M 2016 Dif. 9M 2017 9M 2016 Dif.
Mexico 4,072.6 3,349.2 22% 5,008.4 4,880.3 3% 813 686 18%
Southern Region 1,693.7 1,367.5 24% 1,810.8 1,643.3 10% 935 832 12%
Other Markets 990.2 646.1 53% 1,366.5 862.5 58% 725 749 -3%- - -
Total steel products 6,756.4 5,362.8 26% 8,185.8 7,386.1 11% 825 726 14%
Other products (1) 25.8 10.0 159%- - -
Total steel segment 6,782.2 5,372.8 26%- - -
Total mining segment 202.4 150.3 35% 2,676.3 2,454.1 9% 76 61 24%- - -
Intersegment eliminations (202.4) (148.7) - - -
Total steel and mining segments 6,782.3 5,374.4 26%(1) A s of 3Q 17, the item "O ther products" primarily inc ludes the sale of energy in Ternium Bras il.
Net Sales (million USD) Shipments (thousand tons) Revenue/ton (USD/ton)
Net Sales (million USD) Shipments (thousand tons) Revenue/ton (USD/ton)
January 2018Ternium
38
Shipments and Net SalesFull Year 2016 and 2015
2016 2015 Dif 2016 2015 Dif 2016 2015 Dif
Mexico 4,477.6 4,354.8 3% 6,405.2 5,933.4 8% 699 734 -5%
Southern Region 1,865.9 2,567.2 -27% 2,220.8 2,552.2 -13% 840 1,006 -16%
Other Markets 864.4 905.4 -5% 1,138.1 1,114.6 2% 760 812 -6%
Total steel products 7,208.0 7,827.4 -8% 9,764.0 9,600.3 2% 738 815 -9%
Other products (1) 13.8 47.7 -71%
Total steel segment 7,221.8 7,875.2 -8%
Total mining segment 204.9 203.1 1% 3,309.6 3,635.6 -9% 62 56 11%
Intersegment eliminations (202.7) (200.8) 1%
Total steel and mining segments 7,224.0 7,877.4 -8%(1) The item "O ther products" primarily inc ludes the sale of energy in Ternium Bras il
Net Sales (million USD) Shipments (thousand tons) Revenue/ton (USD/ton)
January 2018Ternium
39
Income Statement
USD million 3Q 2017 3Q 2016 9M 2017 9M 2016 2016 2015
Net sales 2,479.5 1,856.1 6,782.3 5,374.4 7,224.0 7,877.4
Cost of sales (1,917.0) (1,291.3) (5,081.6) (3,967.8) (5,384.4) (6,477.3)
Gross profit 562.6 564.8 1,700.7 1,406.6 1,839.6 1,400.2
Selling, general and administrative expenses (211.2) (168.4) (572.6) (512.5) (687.9) (770.3)
Other operating (expenses) income, net (1.5) 2.8 (21.3) 0.9 (9.9) 9.5
Operating income 349.8 399.1 1,106.8 895.0 1,141.7 639.3
Finance expense (29.2) (28.7) (74.7) (65.3) (90.0) (89.5)
Finance income 5.3 3.4 14.3 10.5 14.1 8.0
Other financial (expenses) income, net (4.8) 13.2 (75.5) 20.6 38.0 (17.9)
Equity in earnings of non-consolidated companies 15.5 0.8 52.1 8.1 14.6 (272.8)
Bargain purchase on acquisition of business - - - -
Profit before income tax expense 336.6 387.7 1,023.1 868.9 1,118.5 267.1
Income tax expense (103.8) (123.4) (198.2) (306.7) (411.5) (207.3)
Profit for the period 232.7 264.3 824.9 562.2 706.9 59.8
Attributable to:
Owners of the parent 194.9 228.9 706.0 477.2 595.6 8.1
Non-controlling interest 37.8 35.5 118.9 84.9 111.3 51.7
Profit for the period 232.7 264.3 824.9 562.2 706.9 59.8
(Unaudited) (Unaudited) (Unaudited)
January 2018Ternium
40
Cash Flow Statement
USD million 3Q 2017 3Q 2016 9M 2017 9M 2016 2016 2015
Profit for the period 232.7 264.3 824.9 562.2 706.9 59.8
Adjustments for:
Depreciation and amortization 116.3 103.1 321.9 303.0 406.9 433.8
Equity in earnings of non-consolidated companies (15.5) (0.8) (52.1) (8.1) (14.6) 272.8
Changes in provisions 0.6 (0.8) 1.9 0.9 1.7 3.2
Net foreign exchange results and others 9.5 (10.7) 119.5 (10.2) (33.9) 61.5
Interest accruals less payments 5.9 1.7 7.9 8.6 12.7 5.5
Income tax accruals less payments (7.4) 73.6 (317.0) 128.2 182.3 (23.9)
Results on the sale of participation in subsidiary company - - - - - 1.7
Changes in working capital (96.8) (210.1) (555.3) (163.0) (162.4) 509.1
Net cash provided by operating activities 245.3 220.4 351.8 821.5 1,099.6 1,323.5
Capital expenditures (100.4) (104.9) (282.9) (335.0) (435.5) (466.6)
Proceeds from the sale of property, plant and equipment 0.4 0.3 0.7 0.8 1.2 1.2
Sale of participation in subsidiary company, net of cash disposed - - - - - (0.7)
Investment in consolidated companies
Purchase consideration (1,891.0) - (1,891.0) - - -
Cash acquired 278.2 - 278.2 - - -
Investment in non-consolidated companies - Usiminas/Techgen - - - (114.4) (114.4) (9.6)
Dividends received from non-consolidated companies - - 0.1 0.1 0.2 -
Loans to non-consolidated companies - (25.2) (23.9) (77.2) (92.5) (10.4)
(Increase) Decrease in Other Investments (1.3) 6.4 (9.5) 40.5 86.3 (85.9)
Net cash used in investing activities (1,714.1) (123.4) (1,928.3) (485.3) (554.7) (572.1)
Dividends paid in cash to company's shareholders - - (196.3) (176.7) (176.7) (176.7)
Dividends paid in cash to non-controlling interest - - (30.6) (50.8) (50.8) (32.7)
Acquisition of non-controlling interest - - - - - (74.0)
Contributions from non-controlling shareholders in
consolidated subsidiaries - - - - - 30.9
Finance Lease payments - - (1.1) - - -
Proceeds from borrowings 1,953.9 183.0 2,812.2 793.5 910.6 822.7
Repayments of borrowings (279.0) (308.4) (806.3) (900.9) (1,191.8) (1,379.7)
Net cash (used in) provided by financing activities 1,674.8 (125.4) 1,778.0 (334.9) (508.7) (809.6)
Increase (decrease) in cash and cash equivalents 206.0 (28.4) 201.5 1.2 36.2 (58.2)
(Unaudited) (Unaudited)
January 2018Ternium
41
Balance Sheet
USD millionSeptember 30,
2017
December 31,
2016
Property, plant and equipment, net 5,023.7 4,136.0
Intangible assets, net 1,132.5 842.6
Investments in non-consolidated
companies488.1 418.4
Deferred tax assets 117.8 85.8
Receivables, net 360.6 132.6
Trade receivables, net 1.5 1.3
Other investments 3.4 6.0
Total non-current assets 7,127.7 5,622.6
Receivables 316.3 79.8
Derivative financial instruments 6.3 0.3
Inventories, net 2,357.2 1,647.9
Trade receivables, net 1,068.0 633.7
Other investments 157.2 144.9
Cash and cash equivalents 383.8 183.5
Total current assets 4,288.8 2,690.1
Non-current assets classified as held
for sale9.7 10.2
Total assets 11,426.2 8,322.9
USD millionSeptember 30,
2017
December 31,
2016
Capital and reserves attributable to
the owners of the parent4,888.0 4,391.3
Non-controlling interest 846.4 775.3
Total Equity 5,734.4 5,166.6
Provisions 121.8 7.0
Deferred tax liabilities 484.4 609.0
Other liabilities 394.3 302.8
Trade payables 3.2 9.3
Financial Lease Liabilities 65.8 -
Borrowings 1,795.4 396.7
Total non-current liabilities2,865.0 1,324.8
Current income tax liabilities 36.6 178.1
Other liabilities 371.6 228.1
Trade payables 992.0 603.1
Derivative financial instruments 0.1 0.3
Financial Lease Liabilities 11.7 -
Borrowings 1,414.9 821.9
Total current liabilities2,826.8 1,831.5
Total liabilities5,691.8 3,156.3
Total equity and liabilities 11,426.2 8,322.9
January 2018Ternium
42
1,856 1,8502,040
2,263
2,480
3Q16 4Q16 1Q17 2Q17 3Q17
Net Sales
(USD million)
3Q17 Results – Webcast PresentationConsolidated Net Sales
2,348 2,3782,475
2,641
3,070
3Q16 4Q16 1Q17 2Q17 3Q17
Steel Shipments
(thousand tons)
Mexico53%
Other Markets
25%
Southern Region22%
Steel Shipments 3Q17
1 Southern Region encompasses the steel markets of Argentina,
Bolivia, Chile, Paraguay and Uruguay.
789
855
802
690
720
750
780
810
840
870
900
3Q16 4Q16 1Q17 2Q17 3Q17
Revenue per ton(USD/ton)
-6%
1
10%16%
January 2018Ternium
43
1,173 1,128
1,300
1,4241,349
3Q16 4Q16 1Q17 2Q17 3Q17
-5%Net Sales
(USD million)
3Q17 Results– Webcast PresentationMexico Net Sales
1,529 1,5251,663 1,720
1,625
3Q16 4Q16 1Q17 2Q17 3Q17
Steel Shipments
(thousand tons)
767
828 830
620
660
700
740
780
820
860
3Q16 4Q16 1Q17 2Q17 3Q17
Revenue per ton(USD/ton)
-6%
January 2018Ternium
44
535578
545599
666
3Q16 4Q16 1Q17 2Q17 3Q17
11%
452498 511
564
619
3Q16 4Q16 1Q17 2Q17 3Q17
Net Sales
(USD million)
3Q17 Results – Webcast PresentationSouthern Region Net Sales
845
940929
790
820
850
880
910
940
970
1,000
3Q16 4Q16 1Q17 2Q17 3Q17
Revenue per ton(USD/ton)
10%
Steel Shipments
(thousand tons)
January 2018Ternium
45
227 218 224
271
495
3Q16 4Q16 1Q17 2Q17 3Q17
3Q17 Results – Webcast PresentationOther Markets Net Sales
283 276 267321
779
3Q16 4Q16 1Q17 2Q17 3Q17
143%
803
844
636
600
630
660
690
720
750
780
810
840
870
900
3Q16 4Q16 1Q17 2Q17 3Q17
Revenue per ton(USD/ton)
83%
-25%
Net Sales
(USD million)
Steel Shipments
(thousand tons)
January 2018Ternium
46
3Q17 Results– Webcast PresentationEBITDA
111
2
17
(163)
498466
0
100
200
300
400
500
600
EBITDA
2Q17
Shipments Price/Mix Cost Other EBITDA
3Q17
US
D M
illi
on
January 2018Ternium
47
First 9M 2017 Results– Webcast PresentationEBITDA
180
813
(749) (14)
1,198
1,429
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
EBITDA
9M16
Shipments Price/Mix Cost Other EBITDA
9M17
US
D M
illi
on
January 2018Ternium
48
3Q17 Results – Webcast PresentationNet Results
Equity in Earnings of non-
consolidated companies
38 0
(43) (45)
282
233
0
50
100
150
200
250
300
350
Net Income2Q17
OperatingIncome
Net FinancialResults
Income Tax Net Income3Q17
US
D M
illi
on
January 2018Ternium
49
First 9M 2017 Results– Webcast PresentationNet Results
212
44
109
(102)
562
825
0
100
200
300
400
500
600
700
800
900
Net Income9M16
OperatingIncome
Net FinancialResults
Income Tax Net Income9M17
US
D M
illi
on
Equity in Earnings of non-
consolidated companies
January 2018Ternium
50
3Q17 Results– Webcast PresentationFree Cash Flow
5
(18)
(111)
(97)
(100)
466
145
0
100
200
300
400
500
600
EBITDA
3Q17
Cash
financialresults
Cash income
tax
Changes in
workingcapital
Other Capex Free
cash flow3Q17
US
D M
illi
on
January 2018Ternium
51
First 9M 2017 Results– Webcast PresentationFree Cash Flow
46
(52)
(515)
(555)
(283)
1,429
690
200
400
600
800
1,000
1,200
1,400
1,600
EBITDA9M17
Cashfinancialresults
Cash incometax
Changes inworkingcapital
Other Capex Freecash flow
9M17
US
D M
illi
on
Inventories: +USD318 million• steel price +USD189 million• steel volume +USD85 million• raw materials and other
(price/volume) +USD44 millionTrade and other receivablesand payables (net): +USD141 million
January 2018Ternium
52
1.10.9 0.9
1.2
2.7
3Q16 4Q16 1Q17 2Q17 3Q17
3Q17 Results– Webcast PresentationFree Cash Flow and Net Financial Debt
Free cash flow
(USD million)
Cash from operations
(USD million)
Capital expenditures
(USD million)
Net debt and net debt to EBITDA ratio1
(USD billion)
0.7x 0.6x 0.7x
1 Last 12 months EBITDA
1.5x0.5x
220
278
86
21
245
3Q16 4Q16 1Q17 2Q17 3Q17
115
178
2
(78)
145
3Q16 4Q16 1Q17 2Q17 3Q17
105 100
84
99 100
3Q16 4Q16 1Q17 2Q17 3Q17