Investor Presentation. January 2019

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1 Investor Presentation January 2019 As Ternium of January I ,

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. 2

3 Profile and Performance 3

4 Ternium s Profile A comprehensive management approach Net sales of USD 9.7 billion in 2017 Crude steel capacity of 12.4 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 Usiminas 1 control group Steel Shipments 9M18 Argentina, 17% USA, 17% Mexico, 50% Brazil, 8% 1 Usiminas: a leading company in the Brazilian flat steel market Colombia, 4% Other, 4% 4

5 Ternium s Profile Consistently superior results Focus on high margin value-added products Flexible production configuration Diversified cost structure EBITDA Margin (% of net sales) 21% 20% 25% Upstream and downstream integration Best practices 15% 17% 17% 14% 16% Broad distribution network 12% Recruitment and retention of talent Innovative culture, industrial expertise and longterm view Ternium Peers range 1 9M18 1 Long steel Americas, global player, U.S. minimill and U.S. integrated (Source: Bloomberg) 5

6 Performance Sustainable growth and resilient profitability Steel shipments (million tons) Mexico Southern Region Other Markets EBITDA (USD million) 1,487 1,471 1,549 1,073 1, Free cash flow (USD million) Capital Expenditures (USD million) (26)

7 Performance Solid financial position Strong balance sheet Net debt to EBITDA ratio of 0.8x at the end of September 2018 USD1.5 billion five-year syndicated term loan facility to finance CSA acquisition in September 2017 Net Debt (USD billion) x 1.1x 0.6x 1.4x 0.8x Sep Growing dividend payments USD1.1 per ADS for 2017, 47% increase since Annual dividends (USD per ADS) % dividend yield in Net Debt/EBITDA Ratio (last 12 months EBITDA) 2 Dividend yield: Dividend / Average stock price (Source: Bloomberg)

8 Performance Quarterly EBITDA and net income EBITDA (USD million) % 18% EBITDA Margin (% of net sales) 22% 24% 29% 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 EBITDA per ton 1 (USD) Net Income (USD million) Earnings per ADS Net Income and Earnings per ADS Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 8

Performance Continuous focus on profitability Breakthrough initiatives to increase differentiation and reduce costs Customer integration

9 Performance Continuous focus on profitability Breakthrough initiatives to increase differentiation and reduce costs Customer integration Labor productivity Exiros Working capital optimization Logistics management Contractors management Energy efficiency Continuous improvement 9

10 Latin American Steel Markets 10

11 Latin American Steel Markets Mexico became the largest steel market in the region Mexico, Brazil, Argentina and Colombia account for approximately 80% of Latin America s steel consumption Mexico s steel consumption CAGR of 6.6% in the last decade, among the highest in the region, driven by a dynamic manufacturing industry Apparent steel use (million tons) Brasil Mexico 26 Argentina Colombia e e Source: Wordlsteel SRO Oct 18 - Canacero, Aço Brasil, Cámara Argentina del Acero, ANDI 11

12 Mexico 12

13 Ternium s Markets - Mexico Shipments to industrial customers growing consistently An attractive steel market in Latin America Apparent flat steel use Mexico (million tons) Sustained growth of flat steel consumption Opportunity to substitute imports of high-end Local 12.7 Imports products Industrial market increasing relevance 51% 55% NAFTA to be replaced by U.S., Mexico and Canada (USMCA) agreement Safeguard in Mexico renewed e Apparent flat steel use Mexico (% share) Industrial Commercial 43% 40% 40% 35% 57% 60% 60% 64% Source: Alacero / Ternium estimates e 13

14 Ternium s Markets - Mexico Strong industrial steel demand Positive prospects for the production of light vehicles New OEM capacity added USMCA: a growth driver for North American automotive industry 2.9 Light vehicle production (million units) Construction Weak environment as a result of decreasing government spending Private activity offset decrease in government investment over the last years Construction spending (billion of constant MXN) Private Government Source: AMIA / Global Insights / INEGI e 14

15 Ternium s Markets - Mexico Strong growth of Ternium s shipments Ternium shipments in Mexico consistently growing Ternium steel shipments in Mexico (million tons) New Pesquería Industrial Center Industrial 5.0 Commercial % Upgrade of re-rolling facility resulting in a 58% broader product range 42% 55% Differentiation in the commercial market through value-added products and services Ternium s steel shipments by industry (2017) Increasing customer digital connectivity Nationwide coverage through distribution centers and regional distributors Automotive, 27% Home appliances, 8% HVAC / lighting, 8% Commercial, 45% Other industries, 11% 15

16 Southern Region - Argentina 16

17 Ternium s Markets - Argentina Decreased flat steel consumption in 2018 Flat steel use in Argentina revised down in 2018 Agribusiness sector affected by adverse weather conditions (grain production down 18% y-o-y in 2017/18) Significant volatility in local financial markets High interest rates Public infrastructure investments decelerating Decreased local demand for vehicles and home appliances Apparent flat steel use Argentina (million tons) 3.1-5% e Ternium s steel shipments by industry (2017) Automotive, 15% Commercial, 48% Agribusiness, 6% Home appliance, 5% Cans, 4% Oil & gas, 5% Source: Alacero / Ternium estimates Other industrial, 16% 17

18 Argentina Positive outlook for agribusiness and energy Agribusiness sector recovery Record acreage sown for the coming season Projected grain production +24% y-o-y Development of the Vaca Muerta shale formation Natural gas production rates accelerating Announced investments over $12 billion Construction sector Expected decline in government spending in infrastructure that could be offset by kick-off of Private-Public Projects (PPP) Renewable energy projects Approved projects account for 13% of Argentina s electricity generation capacity Grain production Argentina (million tons) Source: Ministerio de Agroindustria / G&G Energy Consultants /Ternium estimates /12 12/13 13/14 14/15 15/16 16/17 17/18 18/19f Shale gas production Argentina (million m 3 /day)

19 Steel Market Trends 19

20 Developing Ternium s industrial system 20

service supported by higher operational flexibility Customized steel products Coordinated product development Enhanced logistics

21 Ternium Brasil Strong foundation to continue growing New 5 mtpy high-end slab facility in Brazil Further integrate Ternium Brasil to take it to its full potential Increase competitiveness in the high-end Mexican steel market visà-vis imports Improve customer service supported by higher operational flexibility Customized steel products Coordinated product development Enhanced logistics Realize cost reduction opportunities Coordinated procurement effort (Exiros) IT integration Inventory optimization Benchmarking 21

Targeting the automotive industry, as well as the home appliance, machinery, energy and construction sectors Annual production

22 New Hot Rolling Mill at Pesquería Industrial Center A logical step after the addition of Ternium Brasil Significant technological upgrade to expand TX s product range in Mexico Aimed at replacing high value-added steel imports and improving customer service Targeting the automotive industry, as well as the home appliance, machinery, energy and construction sectors Annual production capacity of 4.1 million tons (option to increase capacity to 4.8 million tons) Expected start up: end of 2020 Total investment of USD1.1 billion 22

New Coating Lines at Pesquería Industrial Center Opportunity to grow in the high-end Mexican market New hot-dipped galvanizing and painting lines High-end value-added products for the home-appliance,

23 New Coating Lines at Pesquería Industrial Center Opportunity to grow in the high-end Mexican market New hot-dipped galvanizing and painting lines High-end value-added products for the home-appliance, heating-ventilation-air conditioning (HVAC) and automotive industries Most advanced painting technology in Mexico Annual production capacity: Galvanizing: 350,000 tons Painting: 120,000 tons Expected start up: Galvanizing: May 2019 Painting: March 2019 Total investment of USD280 million 23

Colombia Growth opportunity in the long steel market Colombian steel market is the fourth largest in Latin America Imports account for a significant share of long steel consumption Ternium to expand

24 Colombia Growth opportunity in the long steel market Colombian steel market is the fourth largest in Latin America Imports account for a significant share of long steel consumption Ternium to expand its participation in the construction sector in the north/northwest of Colombia Approximately 50% of steel rebar consumption No local production Expensive logistics from the mills in central Colombia Greenfield rebar facility under construction Annual capacity of 520,000 tons Start up in 2019 Total investment of $90 million Apparent long steel use (million tons) Local production Imports e 24

25 Conclusion 25

Conclusion Consistently superior results in attractive steel markets in Latin America Solid financial position and strong dividend payments Successful implementation of business strategy geared

26 Conclusion 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 TX Brasil integration and new investment program provide opportunity to grow and strengthen business in the region Continued focus on generating long-term shareholder value 26

27 27

28 Appendix Corporate Structure Production Capacity CSA Acquisition Shipments and Net Sales Income Statement Cash Flow Statement Balance Sheet Webcast Presentation Third Quarter

29 Corporate Structure Techint Group: 62% Tenaris: 11% Ternium (treasury shares): 2% Public: 24% Subsidiaries Joint operations Non-consolidated companies 71% 61% Ternium México 29% Ternium Argentina 4 39% Other 100% Las Encinas 50% Peña Colorada 50% 28% 1 100% 100% 100% 100% 50% Usiminas Ternium Colombia Exiros 6% 1 Ternium USA Ternium Int. Guatemala 50% CEU: 5% 1 Nippon Steel & Sumitomo Metal: 32% 1 TenarisConfab: 5% 1 Other (ordinary shares): 23% 1 51% 49% Nippon Steel & Tenigal Sumitomo Metal 48% Ternium Brasil 5 Techgen 30% 22% Tecpetrol Tenaris Economic participation Peña Colorada 36% 9% 45% 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 ArcelorMittal Direct Indirect 3 Total Ternium Mexico 71% 17% 89% Ternium Argentina 4 61% 61% Ternium Brasil 5 100% 100% Usiminas 2 17% 2% 19% Tenigal 51% 51% Ternium Colombia 100% 100% TX Int. Guatemala 100% 100% TX USA 100% 100% Las Encinas 71% 17% 89% 29

30 Production Capacity Production Capacity as of year-end 2017 (million metric tons per year) Mexico Argentina Other (1) Total Slabs Billets Crude steel Hot rolled coils Rebars & wire rods Cold rolled coils Tinplated products Galvanized products Pre-painted products Service center (2) (1) Brazil, Southern US, Colombia and Central America (2) Corresponds to Ternium Brasil 30

31 CSA Acquisition The Transaction 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 an agreement to supply slabs to thyssenkrupp s former Calvert rerolling facility in the U.S. (amended in Dec17) 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 Sep17 Upon closing, CSA name was changed to Ternium Brasil 31

32 CSA Acquisition The Assets 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 at the time 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. 32

33 Shipments and Net Sales Third Quarter 2018 and Nine Months 2018 Net Sales (USD million) Shipments (thousand tons) Revenue / ton (USD / ton) 3Q Q 2017 Dif. 3Q Q 2017 Dif. 3 3Q Q 2017 Dif. Mexico 1, , % 1, , % % Southern Region % % % Other Markets % 1, % % Total steel products 2, , % 3, , % % Other products % Total steel segment 2, , % Total mining segment % % % Intersegment eliminations (66.4) (84.3) -21% Total net sales 2, , % 1 The item Other products primarily includes Ternium Brasil s and Ternium México s electricity sales. Net Sales (USD million) Shipments (thousand tons) Revenue / ton (USD / ton) USD million 9M M 2017 Dif. 9M M 2017 Dif. 3 9M M 2017 Dif. Mexico 4, , % 5, , % % Southern Region 1, , % 1, , % % Other Markets 2, % 3, , % % Total steel products 8, , % 9, , % % Other products % Total steel segment 8, , % Total mining segment % 2, , % % Intersegment eliminations (209.1) (202.4) 3% Total net sales 8, , % 1 The item Other products primarily includes Ternium Brasil s and Ternium México s electricity sales. 33

34 Shipments and Net Sales Full Year 2017 and 2016 Net Sales (USD million) Shipments (thousand tons) Revenue / ton (USD / ton) 3 USD million Dif Dif Dif. Q Mexico 5, , % 6, , % % Southern Region 2, , % 2, , % % Other Markets 1, % 2, , % % Total steel products 9, , % 11, , % % Other products % Total steel segment 9, , % Total mining segment % 3, , % % Intersegment eliminations (271.4) (202.7) 34% Total net sales 9, , % 1 The item Other products primarily includes the sale of energy in Ternium Brasil. 34

35 Income Statement USD million 3Q Q M M (Unaudited) (Unaudited) Net sales 2, , , , , ,224.0 Cost of sales (2,012.6) (1,972.5) (6,211.6) (5,232.1) (7,403.0) (5,384.4) Gross profit , , , ,839.6 Selling, general and administrative expenses (206.0) (211.2) (644.4) (572.6) (824.2) (687.9) Other operating income (expenses), net 4.8 (1.5) 5.1 (21.3) (16.2) (9.9) Operating income , , , ,141.8 Finance expense (36.7) (29.2) (94.5) (74.7) (114.6) (90.0) Finance income Other financial expenses, net (80.9) (4.8) (165.6) (75.5) (69.9) 38.0 Equity in earnings of non-consolidated companies Profit before income tax expense , , , ,118.5 Income tax expense (75.9) (103.8) (300.3) (198.2) (336.9) (411.5) Profit for the period , , Attributable to: Owners of the parent , Non-controlling interest Profit for the period , ,

36 Cash Flow Statement USD million 3Q Q M M (Unaudited) (Unaudited) Profit for the period , , Adjustments for: Depreciation and amortization Equity in earnings of non-consolidated companies (22.6) (15.5) (54.9) (52.1) (68.1) (14.6) Changes in provisions Net foreign exchange results and others (48.7) (33.9) Interest accruals less payments (5.9) 5.9 (13.0) Income tax accruals less payments (49.1) (7.4) (89.7) (317.0) (273.4) Changes in working capital (83.2) (96.8) (394.8) (555.3) (865.0) (162.4) Net cash provided by operating activities , ,099.6 Capital expenditures (116.5) (100.4) (344.4) (282.9) (409.4) (435.5) Proceeds from the sale of property, plant & equipment Investment in consolidated companies Purchase consideration (1,891.0) (1,891.0) (1,891.0) Cash acquired Investment in non-consolidated companies (114.4) Dividends received from non-consolidated companies Loans to non-consolidated companies (24.5) (24.5) (23.9) (23.9) (92.5) Decrease (Increase) in Other Investments 52.3 (1.3) 58.6 (9.5) Net cash used in investing activities (88.5) (1,714.1) (309.6) (1,928.3) 2,030.0 (554.7) Dividends paid in cash to company's shareholders (215.9) (196.3) (196.3) (176.7) Dividends paid in cash to non-controlling interest (32.0) (30.6) (30.6) (50.8) Financial Lease Payments (1.2) (5.0) (1.1) (4.2) Proceeds from borrowings , , , , Repayments of borrowings (762.9) (279.0) (1,648.2) (806.3) (1,205.8) (1,191.8) Net cash (used in) provided by financing activities (184.9) 1,674.8 (795.9) 1, ,802.3 (508.7) Increase in cash and cash equivalents

37 Balance Sheet USD million September 30, December 31, (Unaudited) (Audited) Property, plant and equipment, net 5, ,349.8 Intangible assets, net 1, ,092.6 Investments in non-consolidated companies Deferred tax assets Receivables, net Trade receivables, net Derivative financial instruments Other investments Total non-current assets 7, ,727.3 Receivables Derivative financial instruments Inventories, net 2, ,550.9 Trade receivables, net 1, ,006.6 Other investments Cash and cash equivalents Total current assets 4, ,392.5 Non-current assets classified as held for sale Total assets 12, ,122.6 USD million September 30, December 31, Capital and reserves attributable to the owners of the parent 5, ,010.4 Non-controlling interest Total Equity 6, ,852.8 Provisions Deferred tax liabilities Other liabilities Trade payables Financial Lease Liabilities Borrowings 1, ,716.3 Total non-current liabilities 3, ,442.5 Current income tax liabilities Other liabilities Trade payables Derivative financial instruments Financial Lease Liabilities Borrowings ,505.6 Total current liabilities 2, ,827.3 Total liabilities 5, ,269.8 Total equity and liabilities 12, ,

38 3Q18 Results Webcast Presentation Steel Shipments Total Shipments (thousand tons) Mexico 3,070 3,411 3,523 3,322 3,143 1,625 1,614 1,775 1,722 1,525 Steel Shipments 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 Mexico 49% Other Colombia Southern Region Slabs Other Markets 1,151 1, ,071 Brazil USA 779 Southern Region 17% Other Markets 34% 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 38

39 3Q18 and First Nine Months 2018 Results EBITDA and Net Results 3Q18 (million USD) (47) M18 (USD million) 10 (31) EBITDA 2Q18 Ebitda per Ton Shipments EBITDA 3Q18 Net Income 2Q18 Operating Income Net Financial Results Equity in Earnings of non-consolidated Companies Income Tax Net Income 3Q18 9M18 (million USD) 1, , (109) 3 (102) 1,211 EBITDA 9M17 Ebitda per Ton Shipments EBITDA 9M18 Net Income 9M17 Operating Income Net Financial Equity in Income Tax Earnings of Results non-consolidated Companies Net Income 9M18 39

40 3Q18 and First Nine Months 2018 Results Free Cash Flow, Net Financial Debt and Dividends Free Cash Flow (USD million) Capital Expenditures (USD million) (26) M M Net Debt (USD billion) Dividends Payments (USD per ADS) x 1.1x 0.6x 1.4x 0.8x 1 Dec-14 Dec-15 Dec-16 Dec-17 Sep Net Debt/EBITDA Ratio (last 12 months EBITDA) 40

41 28 January

Investor Presentation. June 2018

Investor Presentation. June 2018 Investor Presentation As of June 1, 2018 Forward-Looking Statements This presentation contains certain forward-looking statements and information relating to S.A. and its subsidiaries (collectively, )