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Ternium Announces Second Quarter and First Half of 2025 Results

1. Ternium's Q2 2025 net income rose to $259 million compared to Q1 2025. 2. Steel shipments declined 4%, impacted by lower U.S. and Mexican demand. 3. Adjusted EBITDA margin improved to 10%, driven by higher steel prices. 4. Ongoing tariff discussions with the U.S. impact demand in Mexico. 5. Ternium anticipates increased shipments in Q3 2025 due to cost management.

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Why Bullish?

Ternium's improved net income and EBITDA indicate stronger future profitability. Investors often respond positively to earnings beats and margin improvements.

How important is it?

Financial improvements alongside potential increases in shipments present a solid short-term outlook for Ternium. Current tariffs and market conditions also pose risks that influence stock valuation.

Why Short Term?

The market may react quickly to quarterly results, while ongoing tariff issues may lead to long-term impacts. Recent performance improvements could positively influence stock prices soon.

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Ternium S.A. (NYSE:TX) today announced its results for the second quarter and first half ended June 30, 2025.The financial and operational information contained in this press release is based on Ternium S.A.'s operational data and consolidated condensed interim financial statements prepared in accordance with IAS 34 "Interim financial reporting" (IFRS) and presented in U.S. dollars ($) and metric tons. Interim financial figures are unaudited. This press release includes certain non-IFRS alternative performance measures such as Adjusted EBITDA, Cash Operating Income, Adjusted Net Income, Adjusted Equity Holders' Net Income, Adjusted Earnings per ADS, Free Cash Flow and Net Cash. The reconciliation of these figures to the most directly comparable IFRS measures is included in Exhibit I.Second Quarter of 2025 HighlightsSummary of Second Quarter of 2025 ResultsCONSOLIDATED2Q251Q25DIF2Q24DIF1H251H24DIFSteel Products Shipments (thousand tons)3,7193,857-4%3,841-3%7,5777,735-2%Mining Products Shipments (thousand tons)1,9801,79111%1,49632%3,7712,92029%Net Sales ($ million)3,9473,9330%4,514-13%7,8809,292-15%Operating Income ($ million)19913251%371-46%3311,045-68%Adjusted EBITDA ($ million)40332225%545-26%7251,400-48%Adjusted EBITDA Margin (% of net sales)10%8%12%9%15%Provision for Usiminas Participation Acquisition Litigation ($ million)(40)(45)(783)(85)(783)Net Income (Loss) ($ million)259142(743)402(252)Equity Holders' Net Income (Loss) ($ million)21567(728)282(366)Earnings (Losses) per ADS1 ($)1.100.34(3.71)1.44(1.87)Adjusted Net Income ($ million)29918840487531Adjusted Equity Holders' Net Income (Loss) ($ million)251108(21)359340Adjusted Earnings (Losses) per ADS ($)1.280.55(0.11)1.831.73Note: Each American Depositary Share, or ADS, represents 10 shares of Ternium's common stock. Results are based on a weighted average number of shares of common stock outstanding (net of treasury shares) of 1,963,076,776.Second Quarter of 2025 HighlightsTernium's Adjusted EBITDA Margin rose sequentially to 10% in the second quarter, primarily driven by higher realized steel prices, mainly in Mexico. Sales volumes of steel products declined slightly sequentially, largely due to lower shipments in Mexico and the US, partially offset by higher shipments in Argentina. The uncertain business climate in Mexico related to trade discussions weighed on local steel demand in the period. Sales volumes in the country were also affected by an increase of the US import tariff on steel and derivative products under Section 232 to 50%.Cash from operations in the second quarter totaled $1.0 billion driven by a significant decrease in working capital, consistent with declining sales volumes. Capital expenditures amounted to $810 million in the period, mainly in connection with the ongoing expansion at the company's industrial center in Pesquería, Mexico. In addition, the company paid a dividend of $353 million corresponding to the balance of the total dividend declared for the year 2024. Ternium's net cash position as of the end of June 2025 was $1.0 billion, decreasing by $268 million since the end of March 2025.OutlookTernium expects Adjusted EBITDA to keep improving in the third quarter of 2025, supported by ongoing cost reduction initiatives and operational enhancements. The company is concentrating on a comprehensive plan for cost management, aiming to improve profitability and resilience even as challenging market conditions persist.In Mexico, the steel sector is dealing with uncertainty from ongoing tariff talks with the U.S. In response to shifting market conditions, the Mexican government has begun implementing trade measures intended to defend local producers against unfair trade practices, leading to early declines in steel imports, especially from Asia. Consequently, Ternium expects some increase in shipments in Mexico in the third quarter of 2025 compared to the second quarter of the year.Unlike the recent developments in Mexico, Brazil's steel market continues to struggle with a high level of unfairly traded steel imports, especially from China, which is hurting local producers. In this context, Usiminas keeps working on strengthening its competitiveness and expects to achieve an improved cost per ton in the third quarter of 2025 compared to the second quarter of the year.In Argentina, Ternium anticipates that shipments in the third quarter of 2025 will remain relatively stable after a significant sequential increase during the second quarter driven by seasonal factors as well as a gradually recovering macroeconomic environment.Analysis of Second Quarter of 2025 ResultsConsolidated Net Sales$ MILLION2Q251Q25DIF2Q24DIF1H251H24DIFSteel segment3,8123,8010%4,395-13%7,6139,085-16%Mining segment1351323%11913%26720828%Total net sales3,9473,9330%4,514-13%7,8809,292-15%Adjusted EBITDAAdjusted EBITDA in the second quarter of 2025 equals Net Income adjusted to exclude:Depreciation and amortization;Income tax results;Net financial results;Equity in earnings of non-consolidated companies; andProvision charge for ongoing litigation related to the acquisition of a participation in Usiminas.And adjusted to include the proportional EBITDA in Unigal (70% participation).Adjusted EBITDA Margin equals Adjusted EBITDA divided by net sales. For more information see Exhibit I - Alternative performance measures - "Adjusted EBITDA".Steel SegmentIn the second quarter of 2025, the Steel Segment's net sales remained relatively stable sequentially. Higher realized steel prices were largely offset by reduced sales volumes, reflecting lower shipments in Mexico, Brazil and Other Markets, while shipments increased in the Southern Region.Year-over-year, the Steel Segment's net sales declined by 13% in the second quarter of 2025. Steel revenue per ton fell across all regions due to lower steel prices. Sales volumes decreased as well, reflecting lower shipments in Mexico and Other Markets that were partially offset by higher shipments in the Southern Region.Ternium's sales volume in Mexico declined sequentially in the second quarter due to reduced shipments to industrial customers and a softer commercial market. On a year-over-year basis, the contraction in second-quarter of 2025 volumes was largely driven by the commercial market weakness.In Brazil, shipments in the second quarter of 2025 remained broadly in line with those of the same period in the prior year, while showing a modest sequential decline. Although domestic steel demand maintained its upward trajectory, the expansion was accompanied by an extraordinary surge in flat steel product imports.In the Southern Region, shipments rose both sequentially and year-over-year during the second quarter of 2025, reflecting a recovery in steel demand in Argentina and, on a sequential basis, a seasonal rebound in activity.In Other Markets, shipments fell by 14% in the second quarter of 2025, both sequentially and year-over-year, primarily driven by lower sales in the US.The Steel Segment's Cash Operating Income rose sequentially in the second quarter of 2025 supported by stronger margins despite lower sales volumes. The margin improvement was primarily driven by higher realized steel prices, partially offset by a slight increase in cost per ton.Year-over-year, the Steel Segment's Cash Operating Income declined in the second quarter of 2025, reflecting reduced margins and sales volumes. The contraction in margins was primarily attributable to lower realized steel prices, partially offset by decreased raw material and purchased slab costs.Mining SegmentThe Mining Segment's net sales remained relatively stable sequentially in the second quarter of 2025, as higher sales volumes were largely offset by a decrease in realized iron ore prices. Shipment levels in the second quarter were supported mainly by increased iron ore production. Year-over-year, the Mining Segment's net sales rose by 3% in the second quarter of 2025 reflecting higher sales volumes, partially offset by lower realized iron ore prices.In the second quarter of 2025, the Mining Segment's Cash Operating Income decreased sequentially and on a year-over-year basis as a result of lower margins, partially offset by higher sales volumes.The decrease in margins was primarily driven by reduced iron ore realized prices, partially mitigated by lower operating costs per ton.Net Financial ResultsNet financial results for the second quarter of 2025 recorded a $30 million loss. The net foreign exchange result for the period was a $35 million loss, driven mainly by the impact of the Mexican Peso's appreciation against the U.S. dollar on Ternium Mexico's net short local currency position and the impact of the Argentine Peso's depreciation against the U.S. dollar on Ternium Argentina's net long local currency position.$ MILLION2Q251Q252Q241H251H24Net interest result114281566Net foreign exchange result(35)31(49)(4)(90)Change in fair value of financial assets1729(5)46(142)Other financial expense, net(12)(11)(13)(23)(36)Net financial results(30)63(39)33(201)Income Tax ResultsTernium Mexico, Ternium Argentina and Ternium Brasil use the U.S. dollar as their functional currency and are, therefore, affected by deferred tax results.These results account for the impact of local currency fluctuations against the U.S. dollar, as well as for the effect of local inflation.$ MILLION2Q251Q252Q241H251H24Current income tax expense(47)(25)(124)(72)(250)Deferred tax gain (loss)1513(183)154(97)Income tax gain (expense)104(23)(307)82(347)Net IncomeIn the second quarter of 2025, Ternium recorded net income of $259 million, which included a provision adjustment charge of $40 million for ongoing litigation related to the acquisition of a participation in Usiminas. This adjustment accounted for interest accrual and the appreciation of the Brazilian Real versus the US dollar in the quarter. Excluding this, Adjusted Net Income amounted to $299 million, on operating income of $199 million and an income tax gain of $104 million.Adjusted Equity Holder's Net Income was $251 million in the second quarter, or $1.28 per ADS, mainly after accounting for the participation of a 76.7% non-controlling interest in Usiminas and a 37.4% non-controlling interest in Ternium Argentina.$ MILLION2Q251Q252Q241H251H24Owners of the parent21567(728)282(366)Non-controlling interest4475(16)119114Net Income (Loss)259142(743)402(252)Excluding provision for ongoing litigation related to the acquisition of a participation in Usiminas in 2012404578385783Adjusted Net Income29918840487531$ per ADS2Q251Q252Q241H251H24Earnings (Losses) per ADS1.100.34(3.71)1.44(1.87)Adjusted Earnings (Losses) per ADS1.280.55(0.11)1.831.73Cash Flow and LiquidityIn the second quarter of 2025, cash from operations amounted to $1.0 billion after a $787 million decrease in working capital. During the period, inventories declined by $429 million, trade and other receivables decreased by $198 million, and trade payables and other liabilities increased by $161 million.The reduction in the inventory value was driven by decreased stock volumes and costs. Capital expenditures totaled $810 million in the second quarter, primarily reflecting the progress made in the construction of the new facilities at Ternium's industrial center in Pesquería, Mexico.In the second quarter of 2025, the company paid a dividend of $353 million corresponding to the balance of the total dividend declared for the year 2024. Ternium's net cash position as of the end of June 2025 was $1.0 billion, decreasing by $268 million since the end of March 2025.Conference Call and WebcastTernium will host a conference call on July 30, 2025, at 8:30 a.m. ET in which management will discuss second quarter of 2025 results. A webcast link will be available in the Investor Center section of the company's website at www.ternium.com.Forward Looking StatementsSome of the statements contained in this press release are "forward-looking statements". Forward-looking statements are based on management's current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to gross domestic product, related market demand, global production capacity, tariffs, cyclicality in the industries that purchase steel products, and other factors beyond Ternium's control.About TerniumTernium is a leading steel producer in the Americas, providing advanced steel products to a wide range of manufacturing industries and the construction sector. We invest in low carbon emissions steelmaking technologies to support the energy transition and the mobility of the future. We also support the development of our communities, especially through educational programs in Latin America. More information about Ternium is available at www.ternium.com.Income Statement$ MILLION2Q251Q252Q241H251H24Net sales3,9473,9334,5147,8809,292Cost of sales(3,337)(3,402)(3,758)(6,739)(7,432)Gross profit6105317571,1411,860Selling, general and administrative expenses(403)(396)(435)(799)(866)Other operating (expense) income, net(8)(3)49(11)51Operating income1991323713311,045Financial expense(56)(54)(45)(111)(90)Financial income576873126156Other financial (expense) income, net(31)49(67)18(267)Equity in earnings of non-consolidated companies2516154134Provision for ongoing litigation related to the acquisition of a participation in Usiminas(40)(45)(783)(85)(783)Profit (Loss) before income tax results155165(436)32096Income tax gain (expense)104(23)(307)82(347)Profit (Loss) for the period259142(743)402(252)Attributable to:Owners of the parent21567(728)282(366)Non-controlling interest4475(16)119114Profit (Loss) for the period259142(743)402(252)Statement of Financial Position$ MILLIONJUNE 30, 2025DECEMBER 31, 2024Property, plant and equipment, net9,4868,381Intangible assets, net1,0251,022Investments in non-consolidated companies553469Other investments023Deferred tax assets1,4291,194Receivables, net1,077961Total non-current assets13,57112,050Receivables, net871902Derivative financial instruments1014Inventories, net4,2284,751Trade receivables, net1,7661,562Other investments1,5172,160Cash and cash equivalents1,8581,691Total current assets10,34111,071Non-current assets classified as held for sale87Total assets23,91923,129Statement of Financial Position (cont.)$ MILLIONJUNE 30, 2025DECEMBER 31, 2024Capital and reserves attributable to the owners of the parent12,00411,968Non-controlling interest4,5784,163Total equity16,58216,132Provisions602553Deferred tax liabilities4089Non current tax liabilities3021Other liabilities830766Trade payables15Lease liabilities165164Borrowings1,8121,560Total non-current liabilities3,4803,158Provision for ongoing litigation related to the acquisition of a participation in Usiminas495410Current income tax liabilities32107Other liabilities710630Trade payables2,0221,926Derivative financial instruments150Lease liabilities5146Borrowings546670Total current liabilities3,8573,839Total liabilities7,3376,997Total equity and liabilities23,91923,129Statement of Cash Flows$ MILLION2Q251Q252Q241H251H24Result for the period259142(743)402(252)Adjustments for:Depreciation and amortization197184199381370Income tax accruals less payments(202)(50)283(252)271Equity in earnings of non-consolidated companies(25)(16)(15)(41)(34)Provision for ongoing litigation related to the acquisition of a participation in Usiminas404578385783Interest accruals less payments / receipts, net(9)9(11)0(12)Changes in provisions13(62)4(69)Changes in working capital781(55)169727(97)Net foreign exchange results and others0(56)52(55)172Net cash provided by operating activities1,0442076561,2511,132Capital expenditures and advances to suppliers for PP&E(810)(518)(409)(1,327)(858)Decrease in other investments319243329562329Proceeds from the sale of property, plant & equipment01111Dividends received from non-consolidated companies11122Repayment of additional paid in capital(5)--(5)-Net cash used in investing activities(495)(273)(79)(768)(526)Dividends paid in cash to company's shareholders(353)-(432)(353)(432)Dividends paid in cash to non-controlling interest(2)-(46)(2)(46)Finance lease payments(15)(20)(15)(35)(33)Proceeds from borrowings9573303582434Repayments of borrowings(162)(385)(365)(547)(531)Net cash (used in) provided by financing activities(523)167(556)(356)(608)Increase (decrease) in cash and cash equivalents2610122127(2)Exhibit I - Alternative Performance MeasuresThese non-IFRS measures should not be considered in isolation of, or as a substitute for, measures of performance prepared in accordance with IFRS. These non-IFRS measures do not have a standardized meaning under IFRS and, therefore, may not correspond to similar non-IFRS financial measures reported by other companies.Adjusted EBITDA$ MILLION2Q251Q252Q241H251H24Net income259142(743)402(252)Adjusted to exclude:Depreciation and amortization197184199381370Income tax results(104)23307(82)347Net financial results30(63)39(33)201Equity in earnings of non-consolidated companies(25)(16)(15)(41)(34)Provision for ongoing litigation related to the acquisition of a participation in Usiminas404578385783Reversal of other Usiminas contingencies recognized as part of the PPA--(34)-(34)Adjusted to include:Proportional EBITDA in Unigal (70% participation)7691318Adjusted EBITDA4033225457251,400Divided by: net sales3,9473,9334,5147,8809,292Adjusted EBITDA Margin (%)10%8%12%9%15%Exhibit I - Alternative Performance Measures (cont.)Cash Operating Income - Steel Segment$ MILLION2Q251Q252Q241H251H24Operating Income - Management View (Note "Segment Information" to Ternium's Financial Statements as of the corresponding dates)190244278433871Plus/Minus differences in cost of sales (IFRS)10(116)88(106)147Excluding depreciation and amortization144142134286271Excluding reversal of other Usiminas contingencies--(34)-(34)Including proportional EBITDA in Unigal (70% participation)7691318Cash Operating Income3502764766261,274Divided by: steel shipments (thousand tons)3,7193,8573,8417,5777,735Cash Operating Income per Ton - Steel947212483165Divided by: steel net sales3,8123,8014,3957,6139,085Cash Operating Income Margin - Steel (%)9%7%11%8%14%Cash Operating Income - Mining Segment$ MILLION2Q251Q252Q241H251H24Operating Result - Management View (Note "Segment Information" to Ternium's Financial Statements as of the corresponding dates)(38)(2)(52)(40)(74)Plus/minus differences in cost of sales (IFRS)38176155115Excluding depreciation and amortization5342659599Cash Operating Income545774110140Divided by: mining shipments (thousand tons)3,3233,0592,6746,3825,369Cash Operating Income per Ton - Mining1618281726Divided by: mining net sales281280271561546Cash Operating Income Margin - Mining (%)19%20%27%20%26%Exhibit I - Alternative Performance Measures (cont.)Adjusted Net Income$ MILLION2Q251Q252Q241H251H24Net income (Loss)259142(743)402(252)Excluding provision for ongoing litigation related to the acquisition of a participation in Usiminas404578385783Adjusted Net Income29918840487531Adjusted Equity Holders' Net Income and Adjusted Earnings per ADS$ MILLION2Q251Q252Q241H251H24Equity holders' net income (Loss)21567(728)282(366)Excluding provision for ongoing litigation related to the acquisition of a participation in Usiminas364170677706Adjusted Equity Holders' Net Income (Loss)251108(21)359340Divided by: outstanding shares of common stock, net of treasury shares (expressed in million of ADS equivalent)196196196196196Adjusted Earnings (Losses) per ADS ($)1.280.55(0.11)1.831.73Free Cash Flow$ MILLION2Q251Q252Q241H251H24Net cash provided by operating activities1,0442076561,2511,132Excluding capital expenditures and advances to suppliers for PP&E(810)(518)(409)(1,327)(858)Free Cash Flow234(311)247(77)274Exhibit I - Alternative Performance Measures (cont.)Net Cash$ BILLIONJUNE 30, 2025MARCH 31, 2025JUNE 30, 2024Cash and cash equivalents1.91.81.7Plus: other investments (current and non-current)1.51.92.1Less: borrowings (current and non-current)(2.4)(2.5)(2.0)Net Cash1.01.31.9Note: Ternium Argentina's consolidated position of cash and cash equivalents and other investments amounted to $1.0 billion as of June 30, 2025, $1.1 billion as of March 31, 2025 and $1.3 billion as of June 30, 2024.Sebastián MartíTernium - Investor Relations+1 (866) 890 0443+54 (11) 4018 8389www.ternium.comSOURCE: Ternium S.A.

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