Research

Ternium
February 2022
 TXAR Simplified Corporate Structure
Ternium S.A. BYMA/FGS Simplified structure

o Leading flat steel o 26,03% owned by FGS

Ternium S.A. BYMA FGS
producer in Latin o 11,97% Free Float in
America, of the BYMA
Techint Group, with o Market cap(1): US$
62% 12% 26%
sales of +US$ 13.4bn 2.677m
in 3Q21LTM
Consolidates for
EBITDA
62% 38%

Does not consolidate for

EBITDA 4%
Nippon Steel Corp.: 19%
17% Usiminas TenarisConfab: 3%
(Brasil) CEU: 3%
o Largest Steel company in Argentina Bovespa: 55%
o Manufactures hot and cold rolled steels, galvanized, 28,7%
electrozinced, pre-painted and tinplate
71% Ternium
o +55 years since operation start (originally Siderar) México
o It operates 1 integrated steel production plant together
Does not consolidate for
with 4 additional processing plants and 6 service TXAR EBITDA /
centers, with a production capacity of 3.0 MM tons of Consolidates for TX
EBITDA
finished flat steel (Consolidates for EBITDA)
o 5,685 direct employees (Only Ternium Argentina)
o Own minority interest in Usiminas (Brasil) y Ternium
México (Does not consolidate for EBITDA)
o 2020 flat Steel Sales: US$ 1.8bn
o 2020 exports: 15% of net sales

(1) @Blue chip swap

 Market Valuation
Historical Evolution BCBA:$TXAA
(US$ - US$ m)(1)
4.000,0
Mkt Cap (US$m) PX (US$)
0,80 0,75 3.500,0

0,70
3.000,0

Market Cap (US$m @CCL)

0,60
Precio de la Acción @CCL

0,60
2.500,0
0,50
0,51
2.000,0
0,40
1.500,0
0,30

1.000,0
0,20

0,10 500,0

0,00 0,0
sep-2021 oct-2021 nov-2021 dic-2021 ene-2022

$TXAR - Market multiples $TXAR – Quarterly EBITDA(2)

@16/02/22 315

266

TXAR Consolidated @FX Oficial @FX CCL 226

203
Market Cap (US$m) 2.719,1 2.719,1
Net Cash (US$m) 857,2 615,8
Enterprise Value (US$m) 1.861,9 2.103,3
EBITDA 2021 (US$m) 1.010,2 591,8
EV/EBITDA (x) 1,8x 3,6x

1Q21 2Q21 3Q21 4Q21

(1) @Blue chip swap – (2) @Official FX average from each period
 Ternium Argentina (BCBA:$TXAR) Stand-Alone Valution
Market multiples – TXAR Stand-Alone – Ternium MX with EV/EBITDA multiple from TXAR Consolidated at FX CCL
@16/02/2022

TXAR Stand-Alone @Official fx @Blue chip swap

Market Cap (US$m)(1) 2.719,1 2.719,1
Market Cap Usiminas (US$m) -117,2 -117,2
Market Cap Ternium MX (US$m) -3.546,7 -3.546,7
Net Debt (US$m) -857,2 -615,8
Enterprise Value (US$m) -1.802,0 -1.560,6
EBITDA 2021 (US$m) 1.010,2 591,8
EV/EBITDA (x) -1,8x -2,6x

Market multiples – TXAR Stand-Alone – Ternium MX at 2x EV/EBITDA

@16/02/2022

TXAR Stand-Alone @Official fx @Blue chip swap

Market Cap (US$m)(1) 2.719,1 2.719,1
Market Cap Usiminas (US$m) -117,2 -117,2
Market Cap Ternium MX (US$m) -1.995,8 -1.995,8
Net Debt (US$m) -857,2 -615,8
Enterprise Value (US$m) -251,0 -9,6
EBITDA 2021 (US$m) 1.010,2 591,8
EV/EBITDA (x) -0,2x -0,0x

(1) @Blue chip swap

 Historical Results

Sales Sales(1)
(ktons) Local Market Exports (US$m)
3.500 3.308

3.200 3.000
2.595
2.700
2.447 2.546 2.500
2.354 2.302 2.222
160 189
2.200 257 2.129 2.070
2.000 1.857
356 312
1.700
1.500

1.200 2.357
2.287 2.097 1.000
1.772 1.758
700
500
200
0
-300 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021

Gross Margin(1)
Margin %
(US$m)

1.400 2 00

1.151
1 80

1.200
1 60

1.000 1 40

800
1 20

558 621 1 00

600 415 478 80

400
60

35
24 24 26
40

200 19 20

0 0

2017 2018 2019 2020 2021

(1) @Official FX average from each period
 Historical Results
EBITDA w/affiliates@wi(1) EBITDA wo/affiliates(1)
(US$ m) (US$ m) Margin %

2 .5 0 0

1 .2 0 0

300
2.098
1010
250
2 .0 0 0

1 .0 0 0

1 .5 0 0
8 00

200

1.002
6 00

150
1 .0 0 0
489
406
707 365 100
300
4 00

544 578
5 00

31 50
22
2 00

16 19 14
0 0

0
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021

Free Cash Flow including finantial investments(1) Net Cash(2)

(US$m) (US$m) Debt
Payed Dividends
7 00

1 00 0

1 20
857
6 00 579 8 00
$ 4 40

1 00

6 00

5 00

434
91 413
$ 2 40

4 00

80

4 00

2 00

72 71 63
60

-$ 0 $ 40

$-
3 00

2017 2018 2019 2020 2021

-97 -$ 26
40 -2 00

2 00

-$ 16 0

113
-334
-4 00

20

53 -$ 178
1 00

-6 00

-$ 36 0

0 0 0

-8 00

-$ 497
2017 2018 2019 2020 2021
-1 00 0 -$ 56 0

(1) @Official FX average from each period (2) @Official FX from the end of each period
 Ternium Argentina (BCBA:$TXAR) Quarterly
Net Sales EBITDA
(US$m)(1) (US$ m)
942
889 315
797
266
681
627 226
203
512 187

353 365
115

62
41

1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21

Cashflow Net Cash

(US$ m)(1)(2) (US$ m)(1) Debt
288
1.00 0,0

900,0
857 500,0

800,0

176 184 700,0

660 400,0

138 600,0

517
114
300,0

500,0

434
400,0

344 362
63 60
200,0

185
300,0

200,0

102
100 ,0

2,0 0,0 0,5 0,7 0,0

100 ,0

1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 -

40,6 -

-30 1Q20 2Q20 3Q20

0,03 4Q20 1Q21 2Q21 3Q21 4Q21
(1) @Official FX Rate – (2) W/O considering funds allocated to financial investments
 Business Units and Products
Sales(1): US$ 1.421m Sales(1): US$ 1.620m
Rolled steel 4Q21 Sales: 240 ktons
Uncoated 3Q21 Sales: 354 ktons
coated EBITDA(1): US$ 412m rolled steel EBITDA(1): US$ 517m
 Sale of steel strips and sheets coated with  Sale of uncoated coils, strips and sheets for
different minerals and alloys to prevent the construction, automotive, agro-industrial,
corrosion and for aesthetic use, for the transportation and energy industries:
construction, automotive and agro-industrial • Cold rolled sheet
sectors: • Hot rolled sheet
• Galvanized sheet  They are used for the manufacture of
• Electrozinced automobiles, heavy transport, pipes and high-
• Prepainted pressure vessels, buildings and large
• Cincalum structures, lighting fixtures, electric motors and
• Tin household appliances.

 Pipes and profiles for construction, the

automotive industry, civil works and Sales(1): US$ 47m
agriculture: 3Q21 Sales: 20 ktons
• General purpose tubes Others EBITDA(1): US$ 7m
• Tubes for mechanical use
• Structural use tubes  Aggregates for the paving of roads, streets
• Profiles "C" and railway uses; for cement production and
• Profiles "U" for water treatment:
 Human waste
 Steel aggregate
 Ferric oxide

(1) Valued at Official Average FX for the period

Products (1/2)
Hot rolled
Coils, strips and sheets
for various industrial uses.
Bonderized
Bonderized is a chemical
pre-treatment that is used
for post-paint applications
(field painting).
Galvalum Galvanized Prepainted
Excellent corrosion Zinc-coated sheet for Offers a variety of colors and
resistance, chemtreated or extended useful life of the technologies including
acrylic coated. Cool product. Fluorocarbon, Siliconized
applications. Polyester and Regular
Polyester.
Mechanical Use Tubes Structural Use Tubes General Use Tubes
Round duct for Duct with high degree of Round, square and
mechanical use. structural resistance rectangular duct for general
use
Products (2/2)

C profile U profile Tin

Hot rolled or galvanized Hot rolled or galvanized Thin coated foil for
steel profile. steel profile. packaging manufacturing.

Steel aggregate Blast furnace slag Ferric Oxide

Paving of streets, roads Cement Production. Construction and water

and railway uses. treatment industry.
 Historical P&L (US$m)(1)

2017 2018 2019 2020 2021

Sales 2.302 2.595 2.222 1.857 3.308
Cost of service -1.744 -1.974 -1.807 -1.380 -2.157
Gross profit 558 621 415 478 1.151
Commercialization expenses -99 -139 -124 -88 -134
Administration expenses -149 -139 -125 -97 -120
Other operating income and expenses 1 -6 -3 -6 0
Operating results 311 337 163 287 897
Financial Income 7 7 8 40 51
Financial Expenses -74 -66 -21 -9 -5
Other financial income and expenses -46 -110 9 -33 28
(Loss) Income before results from investments in affiliated companies and income
tax 199 169 159 286 971
Income from investments in affiliated companies 201 303 127 87 679
Results from income tax 399 472 286 373 1.649
Income tax -64 -6 -56 -107 -288
(Loss) Income of the period 335 466 230 266 1.361

Other comprehesive income 216 436 29 886 679

Comprehensive (loss) income for the period 552 902 259 1.151 2.040

D&A 53 151 138 119 113

EBITDA 365 489 300 406 1.010

(1) @Official Average Fx from each period

 Historical Cashflow (US$m)(1)

2017 2018 2019 2020 2021

Operative Cashflow -60 109 418 483 637
CAPEX and acquisitions -96 -85 -90 -41 -57
Dividends collected 0 293 2 0 10
Financial Investments 6 131 32 -268 -597
Financial Costs 209 -353 -217 -29 -11
FCF 59 95 145 145 -18
FCF + Finantial Investments 53 -36 113 413 579

(1) @Official Average Fx from each period

 Comparative Results
EBITDA per Ton TX / EBITDA per Ton TXAR
(ktons - X ) EBITDA per Ton TX EBITDA per Ton TXAR
(1)

700
644
600 612
505
500
479
401
400
463
300 341
219
200
210
100
124
0
3Q20 4Q20 1Q21 2Q21 3Q21

EBITDA TX / EBITDA TXAR

(US$2000
m - X) TX/TXAR EBITDA TX EBITDA TXAR
(1)
1881 7,00x

1800 5,97x
6,00x
1600

1400
1420 5,00x

1200
1057 4,00x
3,36x 3,39x
1000
2,64x 3,00x
800
6452,47x
600 2,00x

400
353
419 315 1,00x
200 315
261
0 134 0,00x
3Q20 4Q20 1Q21 2Q21 3Q21

(1) @Official FX average from each period

Thank you!