Investor Presentation As of November 21, 2017
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. 2
Profile and Performance Investor Presentation 3
s Profile A leading steel company in Latin America 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 Usiminas 1 control group Steel Shipments 2 9M 2017 Other Markets 17% Mexico 61% 1 Usiminas: a leading company in the Brazilian flat steel market Southern Region 22% 2 Brasil (ex-csa) started consolidating in September 2017 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) 21% 21% 17% 17% 14% 14% 8% Best practices Broad distribution network Recruitment and retention of talent 2012 2013 2014 2015 2016 9M17 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 5
Performance Sustainable growth and resilient profitability Steel shipments (million tons) Mexico Southern Region Other Markets 8.8 9.0 9.4 9.6 9.8 1.2 1.1 1.1 1.4 1.4 2.5 2.6 2.2 2.4 2.6 EBITDA (USD million) 1,287 1,487 1,471 1,073 1,549 5.0 5.0 5.6 5.9 6.4 2012 2013 2014 2015 2016 Free cash flow (USD million) 2012 2013 2014 2015 2016 Capital Expenditures (USD million) 857 664 1,023 883 444 467 436 209 33 62 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 6
Performance Solid financial position Strong balance sheet Net debt to EBITDA ratio of 1.5x as of September 2017 Net debt and net debt to EBITDA ratio 2 (USD billion) 2.7 USD1.5 billion five-year syndicated term loan facility to finance CSA acquisition in September 2017 1.5 1.8 1.1 0.9 1.0x 1.2x 1.1x 0.6x 1.5x 2013 2014 2015 2016 Sep-17 Growing dividend payments Annual dividends USD1 per ADS in 2016, 54% increase in last 5 years 5% dividend yield in 2016 1 0.65 (USD per ADS) 0.90 0.90 0.75 1.00 1 Dividend yield: Dividend paid / Average stock price (Source: Bloomberg) 2012 2013 2014 2015 2016 2 Last 12 months EBITDA 7
Performance Quarterly EBITDA and net income EBITDA EBITDA Margin 502 (USD million) 465 498 466 27% (% of net sales) 351 19% 23% 22% 19% 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 EBITDA per ton 1 Net Income and Earnings per ADS 214 (USD) 188 189 Net Income (Loss) (USD million) 1.33 Earnings (Losses) per ADS 1.17 1.27 147 152 0.99 264 0.60 310 282 233 145 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 1 Consolidated EBITDA divided by steel shipments. 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
A Level Playing Field World 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 Claims initiated against China for unfair steel trade in the world (# per year) 5 13 36 2006 2011 2016 Standing duties for Chinese steel imports in U.S. and Mexico Hot-rolled Cold-rolled Corrosionresistant U.S. Mexico U.S. Mexico U.S. Mexico Note: AD: anti-dumping; CV: countervailing up to 91% AD up to USD355/ton AD 256% CV 266% AD up to 103% AD 210% AD up to 241% CV up to 76% AD 10
Latin American Steel Markets Investor Presentation 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 2.9% in the last decade, among the highest in the region, driven by a dynamic manufacturing industry Apparent steel use (million tons) Brasil Mexico 26.8 Argentina Colombia 4.8 18.4 3.7 2.7 9.7 6.6 1.1 1990 2000 2010 2017f 1990 2000 2010 2017f Source: Canacero, Aço Brasil, Cámara Argentina del Acero, ANDI 12
Mexico Investor Presentation 13
s Markets - Mexico Shipments to industrial customers growing consistently Most attractive steel market in Latin America 46% 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 16.7 Industrial market increasing relevance 55% 58% Strong measures to promote fair trade in the NAFTA region 33 cases against 35 countries mainly against China China with dumping cases in most of the steel products Renewal of 15% import tariff in Mexico (for countries with no trade agreements) 2011 2013 2015 2017f Apparent flat steel use Mexico (% share) Industrial Commercial 44% 42% 41% 38% 56% 58% 59% 62% 2011 2013 2015 2017f Source: Alacero / estimates 14
s Markets - Mexico Strong industrial steel demand Light vehicle production expected to continue growing Production up 10% YTD, to reach 3.9 million units in 2017 New OEM capacity starting up during 2017 2.9 2.9 Light vehicle production (million units) 3.2 3.4 3.5 3.9 Production expected to reach 4.2 million units by 2020 Home appliance and electrical equipment industries growing 3% YTD Construction activity up 3% YTD Private activity offsetting decrease in government investment Infrastructure investment expected to improve in 2018 300 200 100 0 2012 2013 2014 2015 2016 2017f Source: AMIA/IHS Private Government 2012 2013 2014 2015 2016 2017f Source: INEGI Construction spending (billion of constant MXN) 15
s Markets - Mexico Strong growth of s shipments outpacing Mexican steel consumption growth through import substitution 500,000-ton shipment increase in 2016 Volume growth higher in the automotive and home-appliance industries Broader product range enabled by upgrading of re-rolling facility Differentiation in the commercial market through value-added products and services Increasing customer digital connectivity steel shipments in Mexico (million tons) +8% Industrial Commercial 6.4 5.6 5.9 5.0 5.0 60% 40% s shipments growth in 2016 (year-over-year % change) 20% 50% 50% 2012 2013 2014 2015 2016 Nationwide coverage through regional distributors and distributors centers 11% 4% 3% Automotive Home appliance Construction Other sectors 16
Southern Region - Argentina Investor Presentation 17
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% -18.6% Apparent flat steel use Argentina (million tons) 2.8 3.1-19% 2.5 +13% 2.8 +10% 3.1 2017 +2.9% +12.5% 2018 +3.2% +10.0% Source: BCRA REM Oct 17 2014 2015 2016 2017f 2018f Source: Alacero / estimates Economy gaining momentum driven by: Agriculture Construction Non-conventional oil & gas Gradually improving: household appliance and automotive industries 18
s Markets - Argentina Activity recovering in 2017 and positive outlook for 2018 Higher agro production and investment Production: +14% in 16/ 17 season Bright spots: sales of agro machinery and pick-up trucks Government infrastructure investments driving construction activity 17.2 20.4 Agro equipment sales (thousand units) Implements Seeders Tractors Harvesters 14.8 13.9 17.6 +36% 12.2 16.5 Vaca Muerta: shale oil & gas drilling increasing in 2H 17 2012 2013 2014 2015 2016 9M16 9M17 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 10.7 Cement shipments (million tons) 11.9 11.4 12.2 10.9 +12% 11.9 2012 2013 2014 2015 2016 2017f Source: INDEC and AFCP 19
Steel Market Trends Investor Presentation 20
Steel Market Trends US steel market Steel price (hot rolled coils) Scrap price (shredded USA Midwest) 800 Europe domestic (USD/ton) US domestic (USD/ton) 450 USD/long ton 700 390 600 330 500 270 400 210 300 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Oct 17 150 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Oct 17 US steel imports Million tons 4.5 4.0 3.5 3.0 2.5 2.0 1.5 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 US service center inventory Million tons Months of supply 10.5 4.0 10.0 3.7 9.5 3.4 9.0 3.1 8.5 2.8 8.0 2.5 7.5 2.2 7.0 1.9 6.5 1.6 6.0 1.3 5.5 1.0 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 Oct 17 Source: Metal Bulletin / Steel Business Briefing / MSCI / US Census Bureau / 21
Steel Market Trends Input costs Iron ore price (IODEX CFR China) Slab price (FOB Black Sea) 105 USD/ton 600 USD/ton 90 500 75 400 60 300 45 200 30 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 100 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Hard met coal price (FOB Australia) USD/ton 350 300 250 200 150 100 Natural gas price (Henry Hub) USD/MMBtu 6 5 4 3 2 50 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Source: Metal Bulletin / Steel Business Briefing / Bloomberg 22
Developing s industrial system Investor Presentation 23
CSA Acquisition Strong foundation to continue growing New 5 mtpy high-end slab facility in Brazil 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 24
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 with a broader dimensional offering and the most advanced steel grades Aimed at replacing high value-added steel imports, improving customer service and reducing lead-times in the value chain Targeting the demanding and innovative automotive industry, as well as the home appliance, machinery, energy and construction sectors Annual production capacity of 3.7 million tons (option to increase capacity by 1.1 million tons with small additional investment) Expected start up in second half of 2020 Total investment of USD1.1 billion 25
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: 300,000 tons Painting: 120,000 tons Expected start up: Galvanizing: 2H 2019 Painting: 1H 2019 Total investment of USD260 million 26
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 Fourth largest steel market in Latin America Targeting the dynamic construction sector to expand market share by substituting imports Investment to enable upstream integration by replacing purchases of reinforcing bars from third parties Apparent steel use Colombia (million tons) 1.3 1.4 +188% 3.0 3.5 3.7 2000 2004 2008 2012 2016 Annual production capacity of 520,000 tons Expected start up in second half of 2019 Total investment of USD90 million 27
Conclusion Investor Presentation 28
Conclusion Opportunities for in the next five years Strategic agenda Next five years Expansion in Mexico Increase in high-end product offering Operational excellence Develop market value potential relative to peers Continue growing in the Mexican market Capitalize on the integration of CSA into s industrial system Continue development of new high-end steel products Intensive use of IT/IS to achieve breakthroughs in operational excellence 29
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 as an opportunity to grow and strengthen business in the region Continued focus on generating longterm shareholder value 30
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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 and First Nine Months of 2017 32
Corporate Structure Techint Group: 62% Tenaris: 11% (treasury shares): 2% Public: 24% Subsidiaries Joint operations Non-consolidated companies 71% 61% México 29% Siderar 39% Other 100% Las Encinas 50% Peña Colorada 50% CEU: 5% 6% 1 1 ArcelorMittal 28% 1 Nippon Steel & Sumitomo Metal: 32% Usiminas 1 TenarisConfab: 5% 1 100% Other (ordinary shares): 23% 1 Economic participation Brasil 4 Direct Indirect 3 Total 51% 49% Tenigal Nippon Steel & Mexico 71% 17% 89% Sumitomo Metal Siderar 61% 61% 100% Colombia Brasil 4 100% 100% 100% USA 100% Guatemala 48% Techgen 30% Tecpetrol 22% 50% 50% Exiros Usiminas 2 17% 2% 19% Tenigal 51% 51% Colombia 100% 100% TX Guatemala 100% 100% TX USA 100% 100% Las Encinas 71% 17% 89% Peña Colorada 36% 9% 45% 1 Participation based on ordinary shares distributed 2 Tenaris Participation based on total shares distributed 3 Net of non-controlling interest in Siderar 4 Formerly known as CSA 33
Production Capacity Production Capacity (*) (million metric tons per year) (1) Mexico Argentina Other Total Slabs 2.3 3.2 5.0 (2) 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 (2) Corresponds to Brasil (ex-csa) (*) As of year-end 2016 34
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 a 2.0 million tons per year agreement to supply slabs to thyssenkrupp s former Calvert re-rolling facility in the U.S. 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 September 2017 Upon closing, CSA name was changed to Brasil 35
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 said: This acquisition brings another state-of-the-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. 36
Shipments and Net Sales Third Quarter 2017 and First Nine Months of 2017 Net Sales (million USD) Shipments (thousand tons) Revenue/ton (USD/ton) 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% Net Sales (million USD) Shipments (thousand tons) Revenue/ton (USD/ton) 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 3 Q 1 7, the item "O ther produc ts " primarily inc ludes the s ale of energy in T ernium Bras il. 37
Shipments and Net Sales Full 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 includes the sale of energy in Brasil Net Sales (million USD) Shipments (thousand tons) Revenue/ton (USD/ton) 38
Income Statement USD million 3Q 2017 3Q 2016 9M 2017 9M 2016 2016 2015 (Unaudited) (Unaudited) (Unaudited) 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 39
Cash Flow Statement USD million 3Q 2017 3Q 2016 9M 2017 9M 2016 2016 2015 (Unaudited) (Unaudited) 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) 40
Balance Sheet USD million September 30, 2017 December 31, 2016 USD million September 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 companies 488.1 418.4 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 sale 9.7 10.2 Total assets 11,426.2 8,322.9 Capital and reserves attributable to the owners of the parent 4,888.0 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 liabilities 2,865.0 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 liabilities 2,826.8 1,831.5 Total liabilities 5,691.8 3,156.3 Total equity and liabilities 11,426.2 8,322.9 41
3Q17 Results Webcast Presentation Consolidated Net Sales Net Sales Steel Shipments 1,856 1,850 (USD million) 2,040 2,263 10% 2,480 (thousand tons) 2,475 2,348 2,378 2,641 16% 3,070 900 870 840 810 780 750 720 690 3Q16 4Q16 1Q17 2Q17 3Q17 789 Revenue per ton (USD/ton) 855-6% 802 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 Mexico 53% Steel Shipments 3Q17 Other Markets 25% Southern Region 1 22% 1 Southern Region encompasses the steel markets of Argentina, Bolivia, Chile, Paraguay and Uruguay. 42
3Q17 Results Webcast Presentation Mexico Net Sales 1,173 1,128 Net Sales (USD million) 1,300 1,424-5% 1,349 Steel Shipments (thousand tons) 1,663 1,720 1,529 1,525-6% 1,625 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 860 820 780 740 700 660 767 Revenue per ton (USD/ton) 828 830 620 3Q16 4Q16 1Q17 2Q17 3Q17 43
3Q17 Results Webcast Presentation Southern Region Net Sales Net Sales Steel Shipments 452 (USD million) 498 511 564 10% 619 535 578 (thousand tons) 545 599 11% 666 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 1,000 970 940 910 880 850 820 790 845 Revenue per ton (USD/ton) 940 3Q16 4Q16 1Q17 2Q17 3Q17 929 44
3Q17 Results Webcast Presentation Other Markets Net Sales Net Sales (USD million) Steel Shipments (thousand tons) 83% 495 143% 779 227 218 224 271 283 276 267 321 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 900 870 840 810 780 750 720 690 660 630 600 803 Revenue per ton (USD/ton) 844-25% 3Q16 4Q16 1Q17 2Q17 3Q17 636 45
USD Million 3Q17 Results Webcast Presentation EBITDA 600 111 500 2 17 400 (163) 300 200 498 466 100 0 EBITDA 2Q17 Shipments Price/Mix Cost Other EBITDA 3Q17 46
USD Million First 9M 2017 Results Webcast Presentation EBITDA 2,200 813 2,000 1,800 1,600 1,400 180 (749) (14) 1,200 1,000 800 600 400 200 0 1,198 EBITDA 9M16 1,429 Shipments Price/Mix Cost Other EBITDA 9M17 47
USD Million 3Q17 Results Webcast Presentation Net Results 350 300 38 0 250 (43) (45) 200 150 282 100 233 50 0 Net Income 2Q17 Operating Income Net Financial Results Equity in Earnings of nonconsolidated companies Income Tax Net Income 3Q17 48
USD Million First 9M 2017 Results Webcast Presentation Net Results 900 800 212 109 700 44 600 (102) 500 400 825 300 562 200 100 0 Net Income 9M16 Operating Income Net Financial Results Equity in Earnings of nonconsolidated companies Income Tax Net Income 9M17 49
USD Million 3Q17 Results Webcast Presentation Free Cash Flow 600 500 400 (18) 300 (111) 5 200 466 (97) 100 (100) 145 0 EBITDA 3Q17 Cash financial results Cash income tax Changes in working capital Other Capex Free cash flow 3Q17 50
USD Million First 9M 2017 Results Webcast Presentation Free Cash Flow 1,600 1,400 1,200 1,000 (52) Inventories: +USD318 million steel price +USD189 million steel volume +USD85 million raw materials and other (price/volume) +USD44 million Trade and other receivables and payables (net): +USD141 million 800 600 1,429 (515) 400 46 200 (555) 0 EBITDA 9M17 Cash financial results Cash income tax Changes in working capital (283) 69 Other Capex Free cash flow 9M17 51
3Q17 Results Webcast Presentation Free Cash Flow and Net Financial Debt Cash from operations (USD million) Capital expenditures (USD million) 278 220 245 105 100 84 99 100 86 21 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 Free cash flow Net debt and net debt to EBITDA ratio 1 115 178 (USD million) 145 (USD billion) 2.7 2 1.1 0.9 0.9 1.2 0.7x 0.6x 0.5x 0.7x 1.5x (78) 3Q16 4Q16 1Q17 2Q17 3Q17 3Q16 4Q16 1Q17 2Q17 3Q17 1 Last 12 months EBITDA 52