Investor Presentation January 2019 As Ternium of January I 2019 25, 2019 1
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
Profile and Performance 3
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
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 2013 2014 2015 2016 2017 Ternium Peers range 1 9M18 1 Long steel Americas, global player, U.S. minimill and U.S. integrated (Source: Bloomberg) 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 2.6 2.5 2.6 2.2 2.5 5.0 5.6 5.9 6.4 6.6 EBITDA (USD million) 1,487 1,471 1,549 1,073 1,931 2013 2014 2015 2016 2017 Free cash flow (USD million) 857 664 2013 2014 2015 2016 2017 883 Capital Expenditures (USD million) 209 62 443 467 435 409 (26) 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 6
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) 2.1 1.8 1.1 0.9 1.2x 1.1x 0.6x 1.4x 0.8x 1 2014 2015 2016 2017 Sep-18 2.7 Growing dividend payments USD1.1 per ADS for 2017, 47% increase since 2013 0.75 Annual dividends (USD per ADS) 0.90 0.90 1.00 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 7
Performance Quarterly EBITDA and net income 466 502 EBITDA (USD million) 601 712 832 18% 18% EBITDA Margin (% of net sales) 22% 24% 29% 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 EBITDA per ton 1 (USD) 214 171 152 147 265 Net Income (USD million) Earnings per ADS 0.99 0.92 233 198 Net Income and Earnings per ADS 1.75 383 1.56 304 2.49 523 3Q17 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 Labor productivity Exiros Working capital optimization Logistics management Contractors management Energy efficiency Continuous improvement 9
Latin American Steel Markets 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 26 Argentina Colombia 5 20 4 2.7 9.7 6.6 1.1 1990 2000 2010 2018e 1990 2000 2010 2018e Source: Wordlsteel SRO Oct 18 - Canacero, Aço Brasil, Cámara Argentina del Acero, ANDI 11
Mexico 12
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 14.2 15.4 15.9 products Industrial market increasing relevance 51% 55% NAFTA to be replaced by U.S., Mexico and Canada (USMCA) agreement Safeguard in Mexico renewed 2012 2014 2016 2018e Apparent flat steel use Mexico (% share) Industrial Commercial 43% 40% 40% 35% 57% 60% 60% 64% Source: Alacero / Ternium estimates 2012 2014 2016 2018e 13
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) 3.9 3.9 3.2 3.4 3.5 2013 2014 2015 2016 2017 2018 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 255 238 241 254 247 219 223 205 202 180 166 166 Source: AMIA / Global Insights / INEGI 2013 2014 2015 2016 2017 2018e 14
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 5.6 5.9 6.4 6.6 45% 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 2013 2014 2015 2016 2017 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
Southern Region - Argentina 16
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% 2.8 2.9 2.7 2.5 2014 2015 2016 2017 2018e 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
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 91 0.5 1.4 Grain production Argentina (million tons) 105 111 123 125 2.9 4.1 137 Source: Ministerio de Agroindustria / G&G Energy Consultants /Ternium estimates 6.7 113 138 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19f Shale gas production Argentina (million m 3 /day) 27.7 2013 2014 2015 2016 2017 2018 18
Steel Market Trends 19
Developing Ternium s industrial system 20
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
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, 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 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 2.5 2.1 2.2 1.9 2.2 2.1 2.1 2012 2013 2014 2015 2016 2017 2018e 24
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 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
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Appendix Corporate Structure Production Capacity CSA Acquisition Shipments and Net Sales Income Statement Cash Flow Statement Balance Sheet Webcast Presentation Third Quarter 2018 28
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
Production Capacity Production Capacity as of year-end 2017 (million metric tons per year) Mexico Argentina Other (1) Total Slabs 2.4 3.2 5 10.6 Billets 1.6 0.2 1.8 Crude steel 4.1 3.2 5.2 12.5 Hot rolled coils 6.4 2.9 9.3 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 2.9 Pre-painted products 0.6 0.1 0.2 0.9 Service center 3.9 2.3 1.2 7.4 (2) (1) Brazil, Southern US, Colombia and Central America (2) Corresponds to Ternium Brasil 30
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
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
Shipments and Net Sales Third Quarter 2018 and Nine Months 2018 Net Sales (USD million) Shipments (thousand tons) Revenue / ton (USD / ton) 3Q 2018 3Q 2017 Dif. 3Q 2018 3Q 2017 Dif. 3 3Q 2018 3Q 2017 Dif. Mexico 1,518.4 1,348.6 13% 1,525.2 1,625.0-6% 995 830 20% Southern Region 415.8 618.8-33% 546.5 666.3-18% 761 929-18% Other Markets 865.8 495.4 75% 1,071.3 778.8 38% 808 636 27% Total steel products 2,800.0 2,462.8 14% 3,143.0 3,070.2 2% 891.0 802.0 11% Other products 1 102.8 72.2 42% Total steel segment 2,902.8 2,535.0 15% Total mining segment 66.6 84.3-21% 914.5 938.3-3% 73.0 90.0-19% Intersegment eliminations (66.4) (84.3) -21% Total net sales 2,903.0 2,535.0 15% 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 2018 9M 2017 Dif. 9M 2018 9M 2017 Dif. 3 9M 2018 9M 2017 Dif. Mexico 4,691.1 4,072.6 15% 5,021.5 5,008.4 0% 934 813 15% Southern Region 1,198.6 1,693.7-29% 1,796.0 1,810.8-1% 667 935-29% Other Markets 2,367.1 990.2 139% 3,170.0 1,366.5 132% 747 725 3% Total steel products 8,256.8 6,756.4 22% 9,987.5 8,185.8 22% 827.0 825.0 0% Other products 1 294.2 176.3 67% Total steel segment 8,551.0 6,932.8 23% Total mining segment 210.1 202.4 4% 2,759.3 2,676.3 3% 76.0 76.0 0% Intersegment eliminations (209.1) (202.4) 3% Total net sales 8,551.9 6,932.8 23% 1 The item Other products primarily includes Ternium Brasil s and Ternium México s electricity sales. 33
Shipments and Net Sales Full Year 2017 and 2016 Net Sales (USD million) Shipments (thousand tons) Revenue / ton (USD / ton) 3 USD million 2017 2016 Dif. 2017 2016 Dif. 2017 2016 Dif. Q 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 7,207.9 30% 11,596.5 9,764.1 19% 810.0 738.0 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 33% 3,551.1 3,309.6 7% 76.0 62.0 23% Intersegment eliminations (271.4) (202.7) 34% Total net sales 9,700.3 7,224.0 34% 1 The item Other products primarily includes the sale of energy in Ternium Brasil. 34
Income Statement USD million 3Q 2018 3Q 2017 9M 2018 9M 2017 2017 2016 (Unaudited) (Unaudited) Net sales 2,903.0 2,535.0 8,551.9 6,932.8 9,700.3 7,224.0 Cost of sales (2,012.6) (1,972.5) (6,211.6) (5,232.1) (7,403.0) (5,384.4) Gross profit 890.4 562.6 2,340.3 1,700.7 2,297.3 1,839.6 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 689.3 349.8 1,701.0 1,106.8 1,456.9 1,141.8 Finance expense (36.7) (29.2) (94.5) (74.7) (114.6) (90.0) Finance income 5.0 5.3 15.1 14.3 19.4 14.1 Other financial expenses, net (80.9) (4.8) (165.6) (75.5) (69.9) 38.0 Equity in earnings of non-consolidated companies 22.6 15.5 54.9 52.1 68.1 14.6 Profit before income tax expense 599.3 336.6 1,511.0 1,023.1 1,359.8 1,118.5 Income tax expense (75.9) (103.8) (300.3) (198.2) (336.9) (411.5) Profit for the period 523.4 232.7 1,210.8 824.9 1,022.9 707.0 Attributable to: Owners of the parent 488.5 194.9 1,137.4 706.0 886.2 595.6 Non-controlling interest 34.8 37.8 73.4 118.9 136.7 111.3 Profit for the period 523.4 232.7 1,210.8 824.9 1,022.9 706.9 35
Cash Flow Statement USD million 3Q 2018 3Q 2017 9M 2018 9M 2017 2017 2016 (Unaudited) (Unaudited) Profit for the period 523.4 232.7 1,210.8 824.9 1,022.9 706.9 Adjustments for: Depreciation and amortization 142.4 116.3 443.9 321.9 474.3 406.9 Equity in earnings of non-consolidated companies (22.6) (15.5) (54.9) (52.1) (68.1) (14.6) Changes in provisions 0.3 0.6 1.3 1.9 2.8 1.7 Net foreign exchange results and others (48.7) 9.5 88.0 119.5 70.9 (33.9) Interest accruals less payments (5.9) 5.9 (13.0) 7.9 19.5 12.7 Income tax accruals less payments (49.1) (7.4) (89.7) (317.0) (273.4) 182.3 Changes in working capital (83.2) (96.8) (394.8) (555.3) (865.0) (162.4) Net cash provided by operating activities 456.5 245.3 1,191.5 351.8 383.9 1,099.6 Capital expenditures (116.5) (100.4) (344.4) (282.9) (409.4) (435.5) Proceeds from the sale of property, plant & equipment 0.2 0.4 0.6 0.7 1.1 1.2 Investment in consolidated companies Purchase consideration (1,891.0) (1,891.0) (1,891.0) Cash acquired 278.2 278.2 278.2 Investment in non-consolidated companies (114.4) Dividends received from non-consolidated companies 0.1 0.1 0.2 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) 15.0 86.3 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 579.2 1,953.9 1,105.2 2,812.2 3,239.1 910.6 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) 1,778.0 1,802.3 (508.7) Increase in cash and cash equivalents 183.2 206.0 86.0 201.5 156.2 36.2 36
Balance Sheet USD million September 30, December 31, 2018 2017 (Unaudited) (Audited) Property, plant and equipment, net 5,594.9 5,349.8 Intangible assets, net 1,006.1 1,092.6 Investments in non-consolidated companies 443.0 478.3 Deferred tax assets 118.2 121.1 Receivables, net 625.3 677.3 Trade receivables, net 5.8 4.8 Derivative financial instruments 1.2 0.0 Other investments 14.9 3.4 Total non-current assets 7,809.3 7,727.3 Receivables 293.5 362.2 Derivative financial instruments 3.4 2.3 Inventories, net 2,670.5 2,550.9 Trade receivables, net 1,257.0 1,006.6 Other investments 61.0 132.7 Cash and cash equivalents 399.1 337.8 Total current assets 4,684.4 4,392.5 Non-current assets classified as held for sale 2.2 2.8 Total assets 12,495.9 12,122.6 USD million September 30, December 31, 2018 2017 Capital and reserves attributable to the owners of the parent 5,939.6 5,010.4 Non-controlling interest 939.1 842.3 Total Equity 6,878.7 5,852.8 Provisions 632.4 768.5 Deferred tax liabilities 530.9 513.4 Other liabilities 378.3 373.0 Trade payables 1.1 2.3 Financial Lease Liabilities 66.6 69.0 Borrowings 1,689.6 1,716.3 Total non-current liabilities 3,299.0 3,442.5 Current income tax liabilities 116.6 52.9 Other liabilities 359.0 357.0 Trade payables 957.8 897.7 Derivative financial instruments 18.4 6.0 Financial Lease Liabilities 8.7 8.0 Borrowings 857.6 1,505.6 Total current liabilities 2,318.2 2,827.3 Total liabilities 5,617.2 6,269.8 Total equity and liabilities 12,495.9 12,122.6 37
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 666 645 645 604 546 Slabs Other Markets 1,151 1,103 996 1,071 Brazil USA 779 Southern Region 17% Other Markets 34% 3Q17 4Q17 1Q18 2Q18 3Q18 3Q17 4Q17 1Q18 2Q18 3Q18 38
3Q18 and First Nine Months 2018 Results EBITDA and Net Results 3Q18 (million USD) 712 167 (47) 832 304 126 9M18 (USD million) 10 (31) 114 523 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) 1,429 329 387 2,145 825 594 (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
3Q18 and First Nine Months 2018 Results Free Cash Flow, Net Financial Debt and Dividends Free Cash Flow (USD million) Capital Expenditures (USD million) 857 664 847 443 467 435 409 344 62 (26) 2014 2015 2016 2017 9M18 2014 2015 2016 2017 9M18 1.8 Net Debt (USD billion) 2.7 2.1 0.75 Dividends Payments (USD per ADS) 0.90 0.90 1.00 1.10 1.1 0.9 1.2x 1.1x 0.6x 1.4x 0.8x 1 Dec-14 Dec-15 Dec-16 Dec-17 Sep-18 2014 2015 2016 2017 2018 1 Net Debt/EBITDA Ratio (last 12 months EBITDA) 40
28 January 2019 www.ternium.com 41