Investor Presentation As of August 22, 2018
Forward-Looking Statements This presentation contains certain forward-looking statements and information relating to S.A. and its subsidiaries (collectively, ) that are based on the current beliefs of its management as well as assumptions made by and information currently available to. Such statements reflect the current views of 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 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 does business or other countries which have an impact on 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 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. does not intend, and does not assume any obligation, to update these forward-looking statements. Investor Presentation 2
Profile and Performance Investor Presentation 3
s Profile A leading steel company in Latin America 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 1H18 Argentina 20% USA 19% Mexico 60% Brazil 10% 1 Usiminas: a leading company in the Brazilian flat steel market Colombia 5% Other 5% Investor Presentation 4
s Profile Consistently superior results Focus on high margin value-added products Flexible production configuration Diversified cost structure Upstream and downstream integration 15% 14% Average 6% EBITDA Margin (% of net sales) 23% 21% 20% 17% 17% 14% 15% 11% Best practices Broad distribution network Recruitment and retention of talent 2013 2014 2015 2016 2017 1H18 Peers range 1 1 Long steel Americas, global player, U.S. minimill and U.S. integrated (Source: Bloomberg) Innovative culture, industrial expertise and long-term view Investor Presentation 5
Performance Sustainable growth and resilient profitability Steel shipments (million tons) Mexico Southern Region Other Markets 11.6 9.0 9.4 9.6 9.8 2.5 1.4 1.2 1.1 1.1 2.5 2.6 2.2 2.5 2.6 EBITDA (USD million) 1,487 1,471 1,073 1,549 1,931 5.0 5.6 5.9 6.4 6.6 2013 2014 2015 2016 2017 Free cash flow (USD million) 857 664 2013 2014 2015 2016 2017 Capital Expenditures (USD million) 883 209 62 443 467 435 409 (26) 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Investor Presentation 6
Performance Solid financial position Strong balance sheet Net debt to EBITDA ratio of 1.0x at the end of June 2018 USD1.5 billion five-year syndicated term loan facility to finance CSA acquisition in September 2017 Net Debt and net debt to EBITDA ratio 2 (USD billion) 2.7 2.4 1.8 1.1 0.9 1.2x 1.1x 0.6x 1.4x 1 1.0x 2014 2015 2016 2017 jun-18 Growing dividend payments USD1.1 per ADS for 2017, 47% increase since 2013 0.75 Annual dividends (USD per ADS) 1.00 0.90 0.90 1.10 4% dividend yield in 2017 2 1 Net Debt/EBITDA Ratio (last 12 months EBITDA) 2 Dividend yield: Dividend / Average stock price (Source: Bloomberg) 2013 2014 2015 2016 2017 Investor Presentation 7
Performance Quarterly EBITDA and net income EBITDA EBITDA Margin (USD million) 788 (% of net sales) 498 466 502 665 21% 18% 18% 22% 25% 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 189 EBITDA per ton 1 (USD) 189 237 Net Income and Earnings per ADS Net Income (USD million) Earnings per ADS 1.87 1.66 152 147 1.27 282 0.99 233 0.92 198 422 338 2Q17 3Q17 4Q17 1Q18 2Q18 1 Consolidated EBITDA divided by steel shipments. 2Q17 3Q17 4Q17 1Q18 2Q18 Investor Presentation 8
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 Investor Presentation 9
Latin American Steel Markets Investor Presentation 10
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 27.3 Argentina Colombia 5.4 20.4 3.7 2.7 9.7 6.6 1.1 1990 2000 2010 2018f 1990 2000 2010 2018f Source: Canacero, Aço Brasil, Cámara Argentina del Acero, ANDI Investor Presentation 11 11
Mexico Investor Presentation 12
s Markets - Mexico Shipments to industrial customers growing consistently Most attractive steel market in Latin America 50% increase in flat steel consumption since 2011 Opportunity to substitute imports of high-end products Apparent flat steel use Mexico (million tons) Local 11.5 Imports 12.6 15.0 17.2 Industrial market increasing relevance 55% 62% NAFTA: renegotiation progressing Section 232: exemptions under negotiation Safeguard in Mexico: Renewal under analysis by the Mexican government 2011 2013 2015 2017 Apparent flat steel use Mexico (% share) Industrial Commercial 44% 42% 41% 36% 56% 58% 59% 64% 2011 2013 2015 2017 Source: Alacero / estimates Investor Presentation 13 13
s Markets - Mexico Strong industrial steel demand Light vehicle production is expected to continue growing Production in 2017 increased by 12% reaching 3.9 million units 2.9 Light vehicle production (million units) 3.2 3.4 3.5 3.9 New OEM capacity added during 2017 Production expected to reach 4.1 million units by 2020 Construction: Weak environment as a result of decreasing government spending Private activity offset decrease in government investment over the last years 300 200 100 0 2013 2014 2015 2016 2017 Source: AMIA/Global Insights Private Construction spending (billion of constant MXN) Government 2013 2014 2015 2016 2017 Source: INEGI Investor Presentation 14 14
s Markets - Mexico Strong growth of s shipments shipments in Mexico consistently growing 200,000-ton shipment increase in 2017 Broader product range enabled by upgrading of re-rolling facility in 2017 Differentiation in the commercial market through value-added products and services Increasing customer digital connectivity Nationwide coverage through distribution centers and regional distributors steel shipments in Mexico (million tons) +4% Industrial 5.0 58% 42% Commercial 5.6 5.9 s steel shipments by industry (2017) Automotive 27% 6.4 6.6 45% 55% 2013 2014 2015 2016 2017 Other manufacturing industries 24% Construction 45% Other 4% Investor Presentation 15 15
Southern Region - Argentina Investor Presentation 16
s Markets - Argentina Recovery in 2017 and positive outlook for 2018 Economic reforms to improve Argentina s performance in following years: GDP ASU 2016-2.2% -20% Apparent flat steel use Argentina (million tons) -4% 3.1 2.8 2.9 2.8 2.5 2017 +2.9% +17% 2018f -0.3% -2% Source: BCRA REM Jul 18 2014 2015 2016 2017 2018f Source: Alacero / estimates Economy gradually recovering driven by: Construction Automotive industry Household appliances Non-conventional oil & gas Investor Presentation 17 17
Steel Market Trends Investor Presentation 18
Steel Market Trends US steel market Steel price (hot rolled coils) Scrap price (shredded USA Midwest) 1,000 900 Europe domestic (USD/ton) US domestic (USD/ton) 450 400 USD/long ton 800 350 700 600 500 400 300 250 200 300 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18Ago'18 150 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Ago'18 US steel imports 4.5 4.0 3.5 3.0 2.5 2.0 1.5 Million tons 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Source: Platts / MSCI / US Census Bureau / Jun'18 US service center inventory 10.5 10.0 9.5 9.0 8.5 8.0 7.5 7.0 6.5 6.0 5.5 Million tons Months of supply 4.0 3.7 3.4 3.1 2.8 2.5 2.2 1.9 1.6 1.3 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Jul 18 1.0 Investor Presentation 19 19
Steel Market Trends Input costs Iron ore price (IODEX CFR China) Slab price (Brazil Export) 105 USD/ton 600 USD/ton 90 500 75 400 60 300 45 200 30 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Ago'18 100 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Ago'18 Hard met coal price (FOB Australia) 350 USD/ton Natural gas price (Henry Hub) 4 USD/MMBtu 300 250 3 200 150 2 100 50 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Ago'18 1 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Ago'18 Source: Platts / Bloomberg / Investor Presentation 20 20
Developing s industrial system Investor Presentation 21
CSA Acquisition Strong foundation to continue growing New 5 mtpy high-end slab facility in Brazil Further integrate CSA into to take it to its full potential Increase competitiveness in the high-end Mexican steel market vis-à-vis imports Improve customer service supported by higher 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 Investor Presentation 22 22
New Hot Rolling Mill at Pesquería Industrial Center A logical step after the addition of CSA 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 in second half of 2020 Total investment of USD1.1 billion Investor Presentation 23 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: 2H 2019 Painting: 1H 2019 Total investment of USD280 million Investor Presentation 24 24
New Reinforcing Bar Production Facility in Colombia Expanding TX s share in the country s construction sector Colombian long steel market growing significantly over the last years Apparent steel use Colombia (million tons) Fourth largest steel market in Latin America Targeting the dynamic construction sector to expand market share by substituting imports 1.3 1.4 3.0 +192% 3.5 3.7 3.7 Investment to enable upstream integration by replacing purchases of reinforcing bars from third parties 2000 2004 2008 2012 2016 2018f Annual production capacity of 520,000 tons Expected start up in second half of 2019 Total investment of USD90 million Investor Presentation 25 25
Conclusion Investor Presentation 26
Conclusion Opportunities for in the next five years Strategic agenda Expansion in Mexico Increase in high-end product offering Operational excellence Develop market value potential relative to peers Next five years Continue growing in the Mexican market Capitalize on the integration of CSA into s industrial system Continue development of new high-end steel products (Investment program and R&D) Intensive use of new technologies to achieve breakthroughs in operational excellence Investor Presentation 27 27
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 CSA acquisition and new investment program provide opportunity to grow and strengthen business in the region Continued focus on generating longterm shareholder value Investor Presentation 28 28
Investor Presentation 29 29
Appendix Corporate Structure Production Capacity CSA Acquisition Shipments and Net Sales Income Statement Cash Flow Statement Balance Sheet Webcast Presentation First Quarter 2018 Investor Presentation 30 30
Corporate Structure Techint Group: 62% Tenaris: 11% (treasury shares): 2% Public: 24% Subsidiaries Joint operations Non-consolidated companies 71% 61% México 29% Argentina 4 39% Other 100% Las Encinas 50% Peña Colorada 50% 28% 1 100% 100% 50% 6% 1 Usiminas Colombia Exiros 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 100% 100% 48% Brasil 5 USA Int. Guatemala 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 Mexico 71% 17% 89% Argentina 4 61% 61% Brasil 5 100% 100% Usiminas 2 17% 2% 19% Tenigal 51% 51% Colombia 100% 100% TX Int. Guatemala 100% 100% TX USA 100% 100% Las Encinas 71% 17% 89% Investor Presentation 31 31
Production Capacity Production Capacity as of year-end 2017 (million metric tons per year) (2) Slabs 2.4 3.2 5.0 10.6 (1) Brazil, Southern US, Colombia and Central America (2) Corresponds to Brasil Mexico Argentina Other (1) Total Billets 1.6 0.2 1.9 Crude steel 4.1 3.2 5.2 12.4 Hot rolled coils 6.4 2.9 9.2 Rebars & wire rods 1.2 0.2 1.4 Cold rolled coils 3.6 1.8 5.4 Tinplated products 0.2 0.2 Galvanized products 1.9 0.7 0.3 3.0 Pre-painted products 0.6 0.1 0.2 0.9 Service center 3.9 2.3 1.2 7.4 Investor Presentation 32 32
CSA Acquisition The Transaction On Sep 7, 2017 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 an agreement to supply slabs to thyssenkrupp s former Calvert re-rolling facility in the U.S. (amended in Dec17) 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 began consolidating tksi s balance sheet and results of operations in its consolidated financial statements in Sep17 Upon closing, CSA name was changed to Brasil Investor Presentation 33 33
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, s CEO at the time said: This acquisition brings another state-ofthe-art facility into 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, 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. Investor Presentation 34 34
Shipments and Net Sales Second Quarter 2018 and First Half 2018 USD million 2Q 2018 2Q 2017 Dif. 2Q 2018 2Q 2017 Dif. 2Q 2018 2Q 2017 Dif. Mexico 1,657.4 1,424.2 16% 1,721.7 1,720.4 0% 963 828 16% Southern Region 589.3 563.5 5% 604.2 599.4 1% 975 940 4% Other Markets 778.8 270.9 188% 995.8 321.0 210% 782 844-7% Total steel products 3,025.4 2,258.6 34% 3,321.6 2,640.8 26% 911 855 6% Other products (1) 108.0 64.1 68% Total steel segment 3,133.4 2,322.7 35% Total mining segment 73.7 55.6 33% 915.6 874.5 5% 81 64 27% Intersegment eliminations (73.1) (55.6) 32% Total steel and mining segments 3,134.0 2,322.7 35% (1) As of 2Q'18, the item "Other products" primarily includes the sale of energy of Mexico and Brazil. USD million 1H 2018 1H 2017 Dif. 1H 2018 1H 2017 Dif. 1H 2018 1H 2017 Dif. Mexico 3,172.8 2,724.0 16% 3,496.2 3,383.4 3% 907 805 13% Southern Region 1,226.3 1,074.9 14% 1,249.5 1,144.5 9% 981 939 4% Other Markets 1,504.0 494.7 204% 2,098.7 587.7 257% 717 842-15% Total steel products 5,903.1 4,293.6 37% 6,844.5 5,115.6 34% 862 839 3% Other products (1) 191.4 104.2 84% Total steel segment 6,094.5 4,397.8 39% Total mining segment 143.5 118.2 21% 1,844.9 1,737.9 6% 78 68 14% Intersegment eliminations (142.7) (118.2) 21% Total steel and mining segments 6,095.3 4,397.8 39% (1) As of 1H2018, the item "Other products" primarily includes the sale of energy of Mexico and Brazil. Net Sales (million USD) Shipments (thousand tons) Revenue / ton (USD/ton) Net Sales (million USD) Shipments (thousand tons) Revenue / ton (USD/ton) Investor Presentation 35 35
Shipments and Net Sales Full year 2017 and 2016 USD million 2017 2016 Dif. 2017 2016 Dif. 2017 2016 Dif. Mexico 5,378.6 4,477.6 20% 6,622.8 6,405.2 3% 812 699 16% Southern Region 2,313.6 1,865.9 24% 2,456.0 2,220.8 11% 942 840 12% Other Markets 1,699.0 864.4 97% 2,517.7 1,138.1 121% 675 760-11% Total steel products 9,391.2 7,208.0 30% 11,596.6 9,764.0 19% 810 738 10% Other products (1) 309.1 13.8 2140% Total steel segment 9,700.3 7,221.8 34% Total mining segment 271.5 204.9 32% 3,551.1 3,309.6 7% 76 62 23% Intersegment eliminations (271.4) (202.7) 34% Total steel and mining segments 9,700.3 7,224.0 34% (1) The item "Other products" primarily includes the sale of energy in Brasil. Net Sales (million USD) Shipments (thousand tons) Revenue / ton (USD/ton) Investor Presentation 36 36
Income Statement USD million 2Q 2018 2Q 2017 1H 2018 1H 2017 2017 2016 (Unaudited) (Unaudited) Net sales 3,134.0 2,322.7 6,095.3 4,397.8 9,700.3 7,224.0 Cost of sales (2,233.0) (1,728.2) (4,436.5) (3,259.6) (7,403.0) (5,384.4) Gross profit 900.9 594.5 1,658.8 1,138.1 2,297.3 1,839.6 Selling, general and administrative expenses (245.0) (189.0) (485.5) (361.3) (824.2) (687.9) Other operating expenses (income), net (5.6) (12.6) 0.2 (19.8) (16.2) (9.9) Operating income 650.3 392.8 1,173.4 757.0 1,456.8 1,141.7 Finance expense (33.3) (24.1) (67.1) (45.5) (114.6) (90.0) Finance income 5.5 4.5 10.6 9.1 19.4 14.1 Other financial expenses, net (121.4) (47.5) (172.5) (70.6) (69.9) 38.0 Equity in earnings of non-consolidated companies 12.4 15.2 32.3 36.6 68.1 14.6 Profit before income tax expense 513.5 340.9 976.8 686.5 1,359.8 1,118.5 Income tax expense (175.7) (59.1) (217.0) (94.4) (336.9) (411.5) Profit for the period 337.8 281.8 759.9 592.2 1,022.9 706.9 Attributable to: Owners of the parent 326.6 249.7 693.3 511.0 886.2 595.6 Non-controlling interest 11.2 32.1 66.6 81.1 136.7 111.3 Profit for the period 337.8 281.8 759.9 592.2 1,022.9 706.9 Investor Presentation 37 37
Cash Flow Statement USD million 2Q 2018 2Q 2017 1H 2018 1H 2017 2017 2016 (Unaudited) (Unaudited) Profit for the period 337.8 281.8 759.9 592.2 1,022.9 706.9 Adjustments for: Depreciation and amortization 137.3 105.0 279.3 205.6 474.3 406.9 Equity in earnings of non-consolidated companies (12.4) (15.2) (32.3) (36.6) (68.1) (14.6) Changes in provisions (0.1) 0.7 1.0 1.3 2.8 1.7 Net foreign exchange results and others 115.7 64.0 140.6 110.0 70.9 (33.9) Interest accruals less payments 5.5 3.0 (7.1) 2.0 19.5 12.7 Income tax accruals less payments 51.1 (278.0) (48.5) (309.6) (273.4) 182.3 Changes in working capital (84.7) (140.7) (350.8) (458.5) (865.0) (162.4) Net cash provided by operating activities 550.1 20.7 742.2 106.5 383.9 1,099.6 Capital expenditures (135.5) (98.6) (237.9) (182.5) (409.4) (435.5) Proceeds from the sale of property, plant and equipment 0.2 0.3 0.4 0.4 1.1 1.2 Investment in non-consolidated companies - Usiminas - - - - (114.4) Dividends received from non-consolidated companies - 0.1-0.1 0.1 0.2 Loans to non-consolidated companies 4.8 - - (23.9) (23.9) (92.5) Decrease (Increase) in Other Investments 13.7 (2.7) 6.3 (8.2) 15.0 86.3 Net cash used in investing activities (116.8) (101.0) (231.2) (214.2) (2,030.0) (554.7) Dividends paid in cash to company's shareholders (215.9) (196.3) (215.9) (196.3) (196.3) (176.7) Dividends paid in cash to non-controlling interest (29.0) (30.6) (29.0) (30.6) (30.6) (50.8) Finance Lease payments (2.5) - (3.8) (1.1) (4.2) - Proceeds from borrowings 298.9 519.4 526.0 858.4 3,239.1 910.6 Repayments of borrowings (477.7) (318.9) (885.4) (527.3) (1,205.8) (1,191.8) Net cash (used in) provided by financing activities (426.2) (26.4) (608.1) 103.2 1,802.3 (508.7) Increase (decrease) in cash and cash equivalents 7.1 (106.6) (97.1) (4.5) 156.2 36.2 Investor Presentation 38 38
Balance Sheet USD million June 30, 2018 December 31, 2017 USD million June 30, 2018 December 31, 2017 Property, plant and equipment, net 5,138.8 5,349.8 Capital and reserves attributable to the owners of the parent 5,257.6 5,010.4 Intangible assets, net 1,027.4 1,092.6 Non-controlling interest 772.2 842.3 Investments in non-consolidated companies 438.3 478.3 Total Equity 6,029.7 5,852.8 Deferred tax assets 129.1 121.1 Provisions 657.1 768.5 Receivables, net 636.0 677.3 Deferred tax liabilities 453.1 513.4 Trade receivables, net 5.6 4.8 Other liabilities 365.8 373.0 Other investments 31.1 3.4 Trade payables 1.1 2.3 Total non-current assets 7,406.3 7,727.3 Financial Lease Liabilities 67.4 69.0 Borrowings 1,512.2 1,716.3 Receivables 262.7 362.2 Total non-current liabilities 3,056.6 3,442.5 Derivative financial instruments 1.7 2.3 Current income tax liabilities 72.2 52.9 Inventories, net 2,589.4 2,550.9 Other liabilities 347.7 357.0 Trade receivables, net 1,273.7 1,006.6 Trade payables 1,027.3 897.7 Other investments 97.9 132.7 Derivative financial instruments 49.1 6.0 Cash and cash equivalents 229.8 337.8 Financial Lease Liabilities 8.0 8.0 Total current assets 4,455.3 4,392.5 Borrowings 1,273.1 1,505.6 Non-current assets classified as held for sale Total current liabilities 2,777.5 2,827.3 2.2 2.8 Total liabilities 5,834.0 6,269.8 Total assets 11,863.8 12,122.6 Total equity and liabilities 11,863.8 12,122.6 Investor Presentation 39 39
2Q18 Results Webcast Presentation Consolidated Net Sales 2,323 2,535 Net Sales (USD million) 2,767 2,961 6% 3,134 2,641 Steel Shipments -6% (thousand tons) 3,523 3,411 3,322 3,070 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 930 900 870 840 810 780 750 720 Revenue per Ton (USD/ton) 911 12% 855 817 2Q17 3Q17 4Q17 1Q18 2Q18 Mexico 52% Southern Region 18% 1 Steel Shipments 2Q18 USA Brazil Other Colombia 1 Argentina, Bolivia, Chile, Paraguay and Uruguay Other Markets 30% Investor Presentation 40 40
2Q18 Results Webcast Presentation Mexico Net Sales 1,424 Net Sales (USD million) 1,349 1,306 1,515 9% 1,657 1,720 Steel Shipments (thousand tons) -3% 1,775 1,722 1,625 1,614 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 1,010 970 930 890 850 810 770 730 Revenue per Ton (USD/ton) 963 13% 854 828 2Q17 3Q17 4Q17 1Q18 2Q18 Investor Presentation 41 41
2Q18 Results Webcast Presentation Southern Region Net Sales 564 Net Sales (USD million) 619 620 637-7% 589 599 Steel Shipments (thousand tons) 666 645 645-6% 604 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 1,030 1,000 970 940 910 880 850 820 Revenue per Ton (USD/ton) 987-1% 975 940 2Q17 3Q17 4Q17 1Q18 2Q18 Investor Presentation 42 42
2Q18 Results Webcast Presentation Other Markets Net Sales Net Sales (USD million) 7% Steel Shipments TX Brasil (thousand tons) -10% 709 725 779 1,151 1,103 996 495 779 271 321 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 880 840 800 760 720 680 640 600 Revenue per Ton (USD/ton) 844 782 19% 658 2Q17 3Q17 4Q17 1Q18 2Q18 Investor Presentation 43 43
USD Million 2Q18 Results Webcast Presentation EBITDA 1,000 900 310 800 700 (153) 13 600 500 (47) 400 300 665 788 200 100 0 EBITDA 1Q18 Shipments Price/Mix Cost Other EBITDA 2Q18 Investor Presentation 44 44
USD Million First Half 2018 Results Webcast Presentation EBITDA 1,600 158 1,400 437 (154) 49 1,200 1,000 800 1,453 600 400 963 200 0 EBITDA 1H17 Shipments Price/Mix Cost Other EBITDA 1H18 Investor Presentation 45 45
USD Million 2Q18 Results Webcast Presentation Net Results 600 127 500 (69) (8) 400 300 (135) 200 422 338 100 0 Net Income 1Q18 Operating Income Net Financial Results Equity in Earnings of nonconsolidated Companies Income Tax Net Income 2Q18 Investor Presentation 46 46
USD Million First Half 2018 Results Webcast Presentation Net Results 1,100 1,000 416 900 800 (122) (4) 700 (123) 600 500 400 760 300 592 200 100 0 Net Income 1H17 Operating Income Net Financial Results Equity in Earnings of nonconsolidated Companies Income Tax Net Income 1H18 Investor Presentation 47 47
USD Million 2Q18 Results Webcast Presentation Free Cash Flow 800 700 (22) 600 (125) 500 (85) (6) 400 788 (135) 300 200 415 100 0 EBITDA 2Q18 Cash Financial Results Cash Income Tax Changes in Working Capital Other Capex Free Cash Flow 2Q18 Investor Presentation 48 48
USD Million First Half 2018 Results Webcast Presentation Free Cash Flow 1,600 1,400 1,200 (64) Inventories: +USD226 million steel price +USD143 million steel volume USD75 million raw materials and other (price/volume) +USD158 million Trade and other receivables and payables (net): +USD125 million 1,000 (265) 800 600 1,453 (351) (31) 400 (238) 200 505 0 EBITDA 1H18 Cash Financial Results Cash Income Tax Changes in Working Capital Other Capex Free Cash Flow 1H18 Investor Presentation 49 49
2Q18 Results Webcast Presentation Free Cash Flow and Net Financial Debt Cash from Operations Capital Expenditures (USD million) 550 (USD million) 127 135 99 100 102 245 192 21 32 2Q17 3Q17 4Q17 1Q18 2Q18 2Q17 3Q17 4Q17 1Q18 2Q18 Free Cash Flow (USD million) 415 Net Debt (USD billion) 2.7 2.7 2.6 2.4 145 90 1.2 (78) (94) 2Q17 3Q17 4Q17 1Q18 2Q18 0.7x 1.5x 1.4x 1.2x 1.0x 2Q17 3Q17 4Q17 1Q18 2Q18 1 1 Net Debt/EBITDA Ratio (last 12 months EBITDA) Investor Presentation 50 50
Investor Presentation 51 51