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OFFON

TERNIUM S.A.

(TX)
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Ternium Announces Third Quarter and First Nine Months of 2021 Results - Form 6-K

11/02/2021 | 03:37pm EST
Ternium Announces Third Quarter and First Nine Months of 2021 Results

Luxembourg, November 2, 2021 - Ternium S.A. (NYSE: TX) today announced its results for the third quarter and first nine months ended September 30, 2021.

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 US dollars ($) and metric tons. This press release includes certain non-IFRS alternative performance measures such as EBITDA, Net Debt and Free Cash Flow. The reconciliation of these figures to the most directly comparable IFRS measures is included in Exhibit I.

Summary of Third Quarter of 2021 Results
3Q21 2Q21
3Q202
Steel Shipments (tons) 3,071,000 3,068,000 0 % 2,845,000 8 %
Iron Ore Shipments (tons) 850,000 906,000 -6 % 869,000 -2 %
Net Sales ($ million) 4,592.0 3,919.8 17 % 2,138.6 115 %
Operating Income ($ million) 1,735.4 1,271.4 36 % 7.0
EBITDA ($ million) 1,880.6 1,420.2 32 % 353.4 432 %
EBITDA Margin (% of net sales) 41 % 36 % 17 %
EBITDA per Ton ($) 612.4 462.9 124.2
Equity in earnings of non-consolidated companies ($ million)
84.4 171.1 13.2
Income Tax Result ($ million) (486.0) (307.1) (27.5)
Net Result ($ million) 1,366.4 1,158.3 (21.0)
Equity Holders' Net Result ($ million) 1,202.1 1,022.1 (48.5)
Earnings (losses) per ADS1 ($)
6.12 5.21 (0.25)

•EBITDA of $1.9 billion on steel shipments of 3.1 million tons, with EBITDA margin of 41% and EBITDA per ton of $612.4.
•Equity holders' net income of $1.2 billion, equivalent to earnings per ADS of $6.12.
•Net cash provided by operating activities of $586.0 million, including working capital increase of $1.1 billion mainly due to the impact of higher realized steel prices and costs, and higher inventory volumes.
•Free cash flow of $475.4 million after capital expenditures of $110.6 million.
•Net cash position of $0.3 billion at the end of September 2021, up from net debt position of $0.2 billion at the end of June 2021.

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Ternium's shipments in the third quarter of 2021 were 3.1 million tons, stable sequentially as higher finished steel shipments in the US market were offset by slightly lower volumes elsewhere. During the third quarter of 2021, Ternium continued ramping-up its new hot-rolling mill in Pesquería, although at a slower pace than anticipated reflecting energy-related bottlenecks that have already been worked out. The strength of steel prices in the company's main steel markets led to new record-high realized steel prices in the period.

On an year-over-year basis, shipments in the third quarter of 2021 were up by 8%, reflecting a recovery of 17% in Mexico and 14% in the Southern Region as Ternium's markets were affected in 2020 by restrictions implemented to contain the COVID-19 pandemic, partially offset by a 12% decrease in the Other Markets region. The decrease in the Other Markets region was due mainly to lower slab volumes shipped to third parties as the company's slab facility in Brazil increased its integration with other Ternium's mills, partially offset by higher finished steel shipments in Colombia and the US market.

EBITDA per ton in the third quarter of 2021 increased $149.5 sequentially, to $612.4. On an year-over-year basis, EBITDA per ton increased $488.2. The sequential and year-over-year improvements in the third quarter of 2021 were mainly the result of higher realized steel prices, partially offset by higher costs of raw materials and purchased slabs. The company's net income in the third quarter of 2021 was $1.4 billion on operating income of $1.7 billion and an effective income tax rate of 26%.

Summary of First Nine Months of 2021 Results
9M21
9M202
Steel Shipments (tons) 9,238,000 8,292,000 11 %
Iron Ore Shipments (tons) 2,791,000 2,854,000 -2 %
Net Sales ($ million) 11,761.1 6,155.8 91 %
Operating Income ($ million) 3,912.6 208.2 1,779 %
EBITDA ($ million) 4,358.2 879.3 396 %
EBITDA Margin (% of net sales) 37 % 14 %
EBITDA per Ton ($) 471.8 106.0
Equity in earnings (losses) of non-consolidated companies ($ million)
302.0 (0.4)
Income Tax Result ($ million) (1,054.7) (282.5)
Net Result ($ million) 3,231.4 3.2
Equity Holders' Net Result ($ million) 2,827.1 (16.0)
Earnings (losses) per ADS ($) 14.40 (0.08)

•EBITDA of $4.4 billion on steel shipments of 9.2 million tons, with EBITDA margin of 37% and EBITDA per ton of $471.8.
•Equity holders' net income of $2.8 billion, equivalent to earnings per ADS of $14.40.
•Net cash provided by operating activities of $1.5 billion, including a working capital increase of $2.5 billion mainly due to the impact of higher realized steel prices and costs, and higher inventory volumes.
•Free cash flow of $1.1 billion after capital expenditures of $401.7 million.
•Dividends paid to shareholders of $412.2 million.

Ternium's steel shipments in the first nine months of 2021 were 9.2 million tons, up 946,000 tons compared to shipment levels in the same period in 2020 reflecting the impact of the COVID-19 pandemic in the prior-year first nine months. Shipments in the first nine months of 2021 increased 20% in Mexico
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and 48% in the Southern Region, and decreased 19% in the Other Markets region mainly due to lower slab shipments to third parties partially offset by higher finished steel shipments in Colombia.

EBITDA per ton increased $365.7 year-over-year in the first nine months of 2021 to $471.8, mainly due to higher steel prices partially offset by higher costs of raw materials and purchased slabs. The company's net income in the first nine months of 2021 was $3.2 billion on operating income of $3.9 billion and an effective income tax rate of 25%.

Interim Dividend Payment

Ternium's board of directors approved the payment of an interim dividend of $0.08 per share ($0.80 per ADS), or approximately $157.0 million in the aggregate. The dividend will be paid on November 16, 2021, to shareholders on record as of November 15, 2021.

Outlook

Ternium expects to maintain strong performance in the final quarter of 2021, following record EBITDA in the third quarter. The company anticipates a slight sequential decrease in fourth quarter EBITDA, with relatively stable shipments and a lower margin. Ternium anticipates cost per ton to increase in the fourth quarter compared to the third quarter, primarily due to higher raw material and slab costs flowing through the company's inventories. This increase in costs would be partially offset by higher revenue per ton, driven by the quarterly reset of contract prices which reflect, with a lag, higher average prices during the third quarter.

The company anticipates volumes sold in the USMCA region to slightly increase in the fourth quarter. In Mexico, industrial customer steel demand remains solid across the market, with the exception of the automotive industry, which continues to be significantly challenged by global semiconductor scarcity. Steel demand linked to construction activity in the country also continues to weaken into the fourth quarter.

In Argentina, Ternium expects shipments to remain steady in the fourth quarter as compared to shipments in the third quarter, with a slight decrease in December due to seasonality. The country's main steel consuming sectors, including the construction and manufacturing industries, continue to perform well, although unstable macroeconomic variables in Argentina bring uncertainty to this market in 2022.

Looking ahead, after a tight steel market in 2021 the company anticipates a more balanced steel supply-demand environment in 2022, with steady steel demand and a gradual normalization of global supply chains.

Analysis of Third Quarter of 2021 Results

Net sales in the third quarter of 2021 were $4.6 billion, 115% higher than net sales in the third quarter of 2020. The following table outlines Ternium's consolidated net sales for the third quarter of 2021 and the third quarter of 2020:

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Net Sales
(million $)
Shipments
(thousand tons)
Revenue/ton
($/ton)
3Q21 3Q20 Dif. 3Q21 3Q20 Dif. 3Q21 3Q20 Dif.
Mexico
2,594.5 1,065.7 143 % 1,697 1,445 17 % 1,529 737 107 %
Southern Region
936.8 495.6 89 % 626 547 14 % 1,497 906 65 %
Other Markets
984.3 508.0 94 % 748 853 -12 % 1,316 596 121 %
Total steel products 4,515.6 2,069.4 118 % 3,071 2,845 8 % 1,471 727 102 %
Other products*
58.8 45.6 29 %
Steel segment 4,574.4 2,114.9 116 %
Mining segment 131.0 91.3 44 % 850 869 -2 % 154 105 47 %
Intersegment eliminations (113.4) (67.6)
Net sales 4,592.0 2,138.6 115 %
*The item "Other products" primarily includes Ternium Brasil's and Ternium México's electricity sales.

Cost of sales was $2.6 billion in the third quarter of 2021, an increase of $864.6 million compared to the third quarter of 2020. This was principally due to a $723.6 million, or 52%, increase in raw material and consumables used, mainly reflecting higher purchased slabs, raw material and energy costs and an 8% increase in steel shipment volumes; and to a $140.9 million increase in other costs, mainly including a $65.6 million increase in maintenance expenses, a $58.5 million increase in labor costs and a $14.5 million increase in services and fees.

Selling, General & Administrative (SG&A) expenses in the third quarter of 2021 were $237.4 million, or 5% of net sales, an increase of $54.3 million compared to SG&A in the third quarter of 2020, mainly due to a $23.0 million increase in freight and transportation expenses, an $18.3 million increase in taxes and a $13.2 million increase in labor costs.

Other operating income in the third quarter of 2021 was $1.9 million. In the third quarter of 2020, other operating expense was $192.0 million, mainly reflecting the derecognition of an asset of $194.1 million arising from Ternium's right to recover 50% of a contingency amount from Thyssenkrupp2. This right expired on September 7, 2020.

Operating income in the third quarter of 2021 was $1.7 billion, or 38% of net sales, compared to operating income of $7.0 million, or 0% of net sales, in the third quarter of 2020. The following table outlines Ternium's operating result by segment for the third quarter of 2021 and third quarter of 2020:

Steel segment Mining segment
Intersegment
eliminations
Total
$ million 3Q21
3Q202
3Q21 3Q20 3Q21 3Q20 3Q21
3Q202
Net Sales 4,574.4 2,114.9 131.0 91.3 (113.4) (67.6) 4,592.0 2,138.6
Cost of sales (2,668.9) (1,762.2) (75.0) (60.2) 122.7 65.9 (2,621.1) (1,756.6)
SG&A expenses (226.5) (175.4) (10.9) (7.7) - - (237.4) (183.1)
Other operating income (loss), net 2.0 (192.2) (0.1) 0.2 - - 1.9 (192.0)
Operating result 1,681.0 (14.9) 45.0 23.5 9.4 (1.7) 1,735.4 7.0
EBITDA 1,809.8 318.7 61.4 36.4 9.4 (1.7) 1,880.6 353.4

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Net financial results were a gain of $32.7 million in the third quarter of 2021, primarily reflecting net financial interest income of $12.9 million, related to investment returns on the company's liquidity position net of borrowing costs, and a gain of $10.5 million related to changes in the fair value of financial assets. Net financial results in the third quarter of 2020 were a loss of $13.8 million.

Equity in earnings of non-consolidated companies was a gain of $84.4 million in the third quarter of 2021, compared to a gain of $13.2 million in the third quarter of 2020 mainly due to better results from Ternium's investment in Usiminas.

Income tax expense in the third quarter of 2021 was $486.0 million, with a 26% effective tax rate, compared to $27.5 million in the third quarter of 2020.

Analysis of First Nine Months of 2021 Results

Net sales in the first nine months of 2021 were $11.8 billion, 91% higher than net sales in the first nine months of 2020. The following table outlines Ternium's consolidated net sales for the first nine months of 2021 and the first nine months of 2020:

Net Sales (million $) Shipments (thousand tons) Revenue/ton ($/ton)
9M21 9M20 Dif. 9M21 9M20 Dif. 9M21 9M20 Dif.
Mexico 6,677.2 3,186.1 110 % 5,131 4,269 20 % 1,301 746 74 %
Southern Region 2,429.1 1,129.2 115 % 1,885 1,270 48 % 1,289 889 45 %
Other Markets 2,433.3 1,654.7 47 % 2,223 2,753 -19 % 1,095 601 82 %
Total steel products 11,539.6 5,970.0 93 % 9,238 8,292 11 % 1,249 720 74 %
Other products*
183.5 132.3 39 %
Steel segment 11,723.1 6,102.3 92 %
Mining segment 366.8 284.8 29 % 2,791 2,854 -2 % 131 100 32 %
Intersegment eliminations (328.9) (231.3)
Net sales 11,761.1 6,155.8 91 %
*The item "Other products" primarily includes Ternium Brasil's and Ternium México's electricity sales.

Cost of sales was $7.2 billion in the first nine months of 2021, an increase of $2.0 billion compared to the first nine months of 2020. This was principally due to a $1.7 billion, or 42%, increase in raw material and consumables used, mainly reflecting higher purchased slabs, raw material and energy costs and an 11% increase in steel shipment volumes; and to a $314.4 million increase in other costs, mainly including a $151.4 million increase in maintenance expenses, a $131.6 million increase in labor costs and a $29.5 million increase in services and fees.

Selling, General & Administrative (SG&A) expenses in the first nine months of 2021 were $692.3 million, or 6% of net sales, an increase of $126.1 million compared to SG&A expenses in the first nine months of 2020, mainly due to a $53.2 million increase in taxes, a $51.6 million increase in labor costs and a $42.2 million increase in freight and transportation expenses, partially offset by a $28.9 million decrease in amortization of intangible assets.

Other operating income in the first nine months of 2021 was $18.9 million. In the first nine months of 2020, other operating expense was $195.6 million2.
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Operating income in the first nine months of 2021 was $3.9 billion, or 33% of net sales, compared to operating income of $208.2 million, or 3% of net sales in the first nine months of 2020. The following table outlines Ternium's operating result by segment for the first nine months of 2021 and first nine months of 2020:

Steel segment Mining segment
Intersegment
eliminations
Total
$ million 9M21
9M202
9M21 9M20 9M21 9M20 9M21
9M202
Net Sales 11,723.1 6,102.3 366.8 284.8 (328.9) (231.3) 11,761.1 6,155.8
Cost of sales (7,278.6) (5,223.3) (227.7) (195.0) 331.2 232.5 (7,175.1) (5,185.8)
SG&A expenses (671.8) (547.8) (20.5) (18.4) - - (692.3) (566.1)
Other operating income (loss), net 18.7 (195.0) 0.2 (0.6) - - 18.9 (195.6)
Operating result 3,791.4 136.1 118.8 70.8 2.4 1.2 3,912.6 208.2
EBITDA 4,189.5 771.2 166.3 106.9 2.4 1.2 4,358.2 879.3

Net financial results were a gain of $71.5 million in the first nine months of 2021, mainly reflecting a gain of $41.7 million related to changes in the fair value of financial assets, and net financial interest income of $33.6 million related to investment returns on the company's liquidity position net of borrowing costs, partially offset by net foreign exchange loss of $25.4 million mainly related to the net negative impact of the depreciation of the Argentine Peso against the US dollar (15% in the period) on the net local currency position of Ternium's Argentine subsidiary. Net financial results in the first nine months of 2020 were a gain of $77.8 million.

Equity in results of non-consolidated companies was a gain of $302.0 million in the first nine months of 2021, mainly as a result of Ternium's investment in Usiminas, compared to a loss of $0.4 million in the first nine months of 2020. In addition to better operating and financial results, in the first nine months of 2021 Usiminas recorded a gain related to a favorable Brazilian Federal Supreme Court ruling in connection with the calculation method for certain sales tax credits.

Income tax expense in the first nine months of 2021 was $1.1 billion, with a 25% effective tax rate, compared to $282.5 million in the first nine months of 2020.

Cash Flow and Liquidity

Net cash provided by operating activities in the first nine months of 2021 was $1.5 billion. Working capital increased by $2.5 billion in the first nine months of 2021 as a result of a $1.6 billion increase in inventories and an aggregate $1.2 billion increase in trade and other receivables, partially offset by an aggregate $341.2 million increase in accounts payable and other liabilities. The inventory value increase in the first nine months of 2021 was due to a $735.6 million higher cost of steel, a $525.3 million inventory value increase in raw materials, supplies and others, and a $363.7 million higher steel volume as Ternium ramps-up its new hot-rolling mill in Pesquería, Mexico.

Capital expenditures in the first nine months of 2021 were $401.7 million, $37.8 million lower than in the first nine months of 2020. Of note during the period were the investments made for Ternium's new hot-rolling mill at the company's Pesquería industrial center in Mexico.

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In the first nine months of 2021, Ternium's free cash flow reached $1.1 billion. The company paid dividends to shareholders of $412.2 million and repaid borrowings for a net $219.7 million. As of September 30, 2021, Ternium had a net cash position of $271.1 million.

Net cash provided by operating activities in the third quarter of 2021 was $586.0 million. Working capital increased by $1.1 billion in the third quarter of 2021 as a result of a $681.1 million increase in inventories, an aggregate $316.2 million net increase in trade and other receivables and an aggregate $144.1 million net decrease in accounts payable and other liabilities. The inventory value increase in the third quarter of 2021 was due to a $283.6 million higher cost of steel, a $222.4 million inventory value increase in raw materials, supplies and others and a $175.1 million higher steel volume. In the third quarter of 2021, Ternium's free cash flow was $475.4 million.

Conference Call and Webcast

Ternium will host a conference call on November 3, 2021, at 10:00 a.m. ET in which management will discuss third quarter of 2021 results. A webcast link will be available in the Investor Center section of the company's website at www.ternium.com.

Forward Looking Statements

Some 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 Ternium

Ternium is Latin America's leading flat steel producer, with operating facilities in Mexico, Brazil, Argentina, Colombia, the southern United States and Central America. The company offers a broad range of high value-added steel products for customers active in the automotive, home appliances, HVAC, construction, capital goods, container, food and energy industries through its manufacturing facilities, service center and distribution networks, and advanced customer integration systems. More information about Ternium is available at www.ternium.com.

7

Consolidated Income Statement

$ million 3Q21
3Q202
9M21
9M202
(Unaudited) (Unaudited)
Net sales 4,592.0 2,138.6 11,761.1 6,155.8
Cost of sales (2,621.1) (1,756.6) (7,175.1) (5,185.8)
Gross profit 1,970.9 382.1 4,586.0 969.9
Selling, general and administrative expenses (237.4) (183.1) (692.3) (566.1)
Other operating income (expense), net 1.9 (192.0) 18.9 (195.6)
Operating income 1,735.4 7.0 3,912.6 208.2
Finance expense (6.5) (9.0) (20.6) (38.9)
Finance income 19.4 15.9 54.2 30.9
Other financial income (expenses), net 19.8 (20.6) 37.9 85.8
Equity in earnings (losses) of non-consolidated companies
84.4 13.2 302.0 (0.4)
Profit before income tax expense 1,852.5 6.4 4,286.1 285.6
Income tax expense (486.0) (27.5) (1,054.7) (282.5)
Profit (loss) for the period 1,366.4 (21.1) 3,231.4 3.2
Attributable to:
Owners of the parent
1,202.1 (48.5) 2,827.1 (16.0)
Non-controlling interest
164.4 27.4 404.3 19.2
Profit (loss) for the period
1,366.4 (21.1) 3,231.4 3.2

8

Consolidated Statement of Financial Position

$ million September 30,
2021
December 31,
2020
(Unaudited)
Property, plant and equipment, net 6,462.5 6,504.7
Intangible assets, net 897.0 908.6
Investments in non-consolidated companies 697.3 471.3
Deferred tax assets 154.3 158.7
Receivables, net 164.6 243.3
Other investments 55.7 2.9
Total non-current assets 8,431.4 8,289.5
Receivables, net 327.4 288.6
Derivative financial instruments 1.5 1.6
Inventories, net 3,626.4 2,001.8
Trade receivables, net 2,066.9 918.4
Other investments 768.5 813.5
Cash and cash equivalents 947.6 537.9
Total current assets 7,738.2 4,561.8
Non-current assets classified as held for sale 5.0 5.0
Total assets 16,174.6 12,856.2
Capital and reserves attributable to the owners of the parent 9,704.4 7,286.1
Non-controlling interest 1,561.5 1,157.0
Total Equity 11,265.9 8,443.2
Provisions 87.2 80.6
Deferred tax liabilities 214.4 346.5
Other liabilities 509.3 551.9
Trade payables 1.2 1.1
Derivative financial instruments 0.2 0.5
Lease liabilities 227.8 251.6
Borrowings 772.0 1,327.3
Total non-current liabilities 1,812.1 2,559.5
Current income tax liabilities 715.5 110.5
Other liabilities 385.3 249.8
Trade payables 1,222.3 1,049.3
Derivative financial instruments 0.9 5.8
Lease liabilities 44.2 42.5
Borrowings 728.5 395.6
Total current liabilities 3,096.6 1,853.6
Total liabilities 4,908.7 4,413.1
Total equity and liabilities 16,174.6 12,856.2

9

Consolidated Statement of Cash Flows

$ million 3Q21
3Q202
9M21
9M202
(Unaudited) (Unaudited)
Profit (loss) for the period 1,366.4 (21.0) 3,231.4 3.2
Adjustments for:
Depreciation and amortization 145.2 152.4 445.6 477.1
Equity in (earnings) losses of non-consolidated companies (84.4) (13.2) (302.0) 0.4
ICMS reversal of related asset - 194.1 - 194.1
Changes in provisions 3.6 - 9.6 (0.3)
Net foreign exchange results and others 25.3 58.8 146.2 (28.1)
Interest accruals less payments 1.7 0.8 3.8 4.6
Income tax accruals less payments 269.6 (52.4) 467.1 127.4
Changes in working capital (1,141.5) 140.6 (2,459.4) 628.1
Net cash provided by operating activities 586.0 460.0 1,542.2 1,406.4
Capital expenditures (110.6) (71.1) (401.7) (439.6)
Proceeds from the sale of property, plant & equipment 0.3 0.1 1.3 0.4
Acquisition of non-controlling interest - (2.8) (0.8) (14.1)
Dividends received from non-consolidated companies - - 0.5 -
(Increase) decrease in other Investments (197.1) 84.3 (23.7) (410.5)
Net cash (used in) provided by investing activities (307.3) 10.5 (424.4) (863.9)
Dividends paid in cash to company's shareholders - - (412.2) -
Finance lease payments (11.5) (10.1) (34.0) (30.4)
Proceeds from borrowings 73.5 24.8 205.5 244.3
Repayments of borrowings (146.1) (239.4) (425.2) (558.2)
Net cash used in financing activities (84.1) (224.6) (665.9) (344.3)
Increase in cash and cash equivalents 194.5 245.8 451.9 198.2

10

Shipments
Thousand tons 3Q21 3Q20 2Q21 9M21 9M20
Mexico
1,697 1,445 1,735 5,131 4,269
Southern Region
626 547 636 1,885 1,270
Other Markets
748 853 697 2,223 2,753
Total steel segment 3,071 2,845 3,068 9,238 8,292
Total mining segment 850 869 906 2,791 2,854
Revenue / ton
$/ton 3Q21 3Q20 2Q21 9M21 9M20
Mexico
1,529 737 1,309 1,301 746
Southern Region
1,497 906 1,276 1,289 889
Other Markets
1,316 596 1,093 1,095 601
Total steel segment 1,471 727 1,253 1,249 720
Total mining segment 154 105 124 131 100
Net Sales
$ million 3Q21 3Q20 2Q21 9M21 9M20
Mexico
2,594.5 1,065.7 2,271.9 6,677.2 3,186.1
Southern Region
936.8 495.6 811.5 2,429.1 1,129.2
Other Markets
984.3 508.0 761.3 2,433.3 1,654.7
Total steel products 4,515.6 2,069.4 3,844.7 11,539.6 5,970.0
Other products*
58.8 45.6 65.0 183.5 132.3
Total steel segment 4,574.4 2,114.9 3,909.7 11,723.1 6,102.3
Total mining segment 131.0 91.3 112.5 366.8 284.8
Total steel and mining segments 4,705.4 2,206.2 4,022.2 12,089.9 6,387.1
Intersegment eliminations (113.4) (67.6) (102.4) (328.9) (231.3)
Total net sales 4,592.0 2,138.6 3,919.8 11,761.1 6,155.8
*The item "Other products" primarily includes Ternium Brasil's and Ternium México's electricity sales.

11

Exhibit I - Alternative performance measures

These 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.

EBITDA
EBITDA equals operating income (loss) adjusted to exclude depreciation and amortization and certain other non-cash operating results:
$ million 3Q21
3Q202
2Q21 9M21
9M202
Operating income 1,735.4 7.0 1,271.4 3,912.6 208.2
Plus: ICMS reversal of related asset - 194.1 - - 194.1
Plus: depreciation and amortization 145.2 152.4 148.8 445.6 477.1
EBITDA 1,880.6 353.4 1,420.2 4,358.2 879.3

Free cash flow
Free cash flow equals net cash provided by operating activities less capital expenditures:
$ million 3Q21 3Q20 2Q21 9M21 9M20
Net cash provided by operating activities 586.0 460.0 628.4 1,542.2 1,406.4
Less: capital expenditures (110.6) (71.1) (161.4) (401.7) (439.6)
Free cash flow 475.4 388.8 467.0 1,140.5 966.8

Net debt (cash)
Net debt (cash) equals borrowings less the consolidated position of cash and cash equivalents and other investments:
$ billion September 30, 2021 September 30, 2020 June 30,
2021
Borrowings (current and non-current) 1.5 1.9 1.6
Less: cash and cash equivalents3
0.9 0.7 0.8
Less: other investments (current and non-current)3
0.8 0.6 0.6
Net (cash) debt (0.3) 0.6 0.2

Net (cash) debt to last twelve months (LTM) EBITDA
Net (cash) debt as of a given date divided by the EBITDA accumulated in a period of twelve months ending on such date:
September 30, 2021 September 30, 2020 June 30,
2021
Net (cash) debt ($ billion) (0.3) 0.6 0.2
Divided by: LTM EBITDA ($ billion) 5.0 1.1 3.5
Net (cash) debt to LTM EBITDA (#) (0.1) 0.5 0.1

12

Notes

1 American Depositary Share. Each 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.

2 Comparative information as of September 30, 2020 has been adjusted to reflect the derecognition of an asset of $194.1 million arising from Ternium's right to recover 50% of a contingency amount from Thyssenkrupp. As an offsetting adjustment has been included in the fourth quarter of 2020, the Income Statement, Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity and Statement of Cash Flows as of and for the full year ended December 31, 2020, have not been affected. See note 11 "ICMS deferral tax benefit - Action of Unconstitutionality" to Ternium's Consolidated Condensed Interim Financial Statements as of September 30, 2021 and for the nine-months periods ended September 30, 2021 and 2020.

3 Ternium Argentina's consolidated position of cash and cash equivalents and other investments amounted to $0.7, $0.3 and $0.5 billion as of September 30, 2021, September 30, 2020 and June 30, 2021, respectively.
13

Disclaimer

Ternium SA published this content on 02 November 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 November 2021 20:34:21 UTC.


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Sales 2021 16 380 M - -
Net income 2021 3 988 M - -
Net cash 2021 1 208 M - -
P/E ratio 2021 2,06x
Yield 2021 6,48%
Capitalization 8 363 M 8 363 M -
EV / Sales 2021 0,44x
EV / Sales 2022 0,33x
Nbr of Employees 20 173
Free-Float 96,9%
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Technical analysis trends TERNIUM S.A.
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Mean consensus OUTPERFORM
Number of Analysts 13
Last Close Price 42,60 $
Average target price 57,96 $
Spread / Average Target 36,1%
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Managers and Directors
Mßximo Vedoya Chief Executive Officer & Executive Vice President
Pablo Brizzio Chief Financial Officer
Paolo Rocca Chairman
Roberto Demidchuk Chief Information Officer
Sebastißn MartÝ Director-Investor Relations & Compliance
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