Ternium S.A. · NYSE:TX
Ternium — Investor Day (April 2010)
21 slides from Ternium's investor day presentation, Apr 8, 2010
Slide 1: Investor Day
Investor Day Solomon R. Guggenheim Museum, New York April 8, 2010
Slide 2: Forward-Looking Statements
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
Slide 3: Agenda: Market Overview, Competitive Positioning, Performance
Market Overview Competitive Positioning Performance Next Steps Conclusion TERNIUM l Investor Day - April 8, 2010 3
Slide 4: Market Overview
Market Overview Competitive Positioning Performance Next Steps Conclusion TERNIUM l Investor Day - April 8, 2010 4
Slide 5: Apparent steel use recovering worldwide
Market Overview Apparent steel use recovering worldwide Apparent Crude Steel Use Steel Use in the Americas 2010e (y-o-y % growth) (million tons of crude steel) 2009 2010 e World -8% 9% US/Canada -41% 17% EU 27 -37% 12% Japan -32% 14% US/Canada (95 mt) China 25% 5% Mexico & India 7% 12% C. America (2
Slide 6: Recovery in Ternium's main domestic markets
Market Overview Recovery in Ternium’s main domestic markets Apparent Steel Use (ASU) & GDP 160 Mexico 13% 12% 160 Argentina 13% 12% ASU 2007=100 ASU 2007=100 Quarterly GDP y-o-y growth Quarterly GDP y-o-y growth 140 9% 140 9% 120 6% 120 6% 100 3% 100 3% 80 0% 80 0% 60 -3% 60 -3% 40 -6% 40 -6% 20 -9%
Slide 7: Market drivers - Mexico
Market Overview Market drivers - Mexico 110 Industrial Activity 160 Construction Activity 140 105 120 100 100 80 95 60 [Jan'07 = 100] Source: Manufacturing index, INEGI [Jan'07 = 100] Source: Total m2 constructed, BIMSA 90 40 J 07 J 08 J 09 J 10 J 07 J 08 J 09 J 10 Automotive Home Appliances 240 450
Slide 8: Market drivers - Argentina
Market Overview Market drivers - Argentina 115 Industrial Activity 140 Construction Activity 110 130 120 105 110 100 100 95 90 [Jan'07 = 100] Source: Industrial production index, FIEL [Jan'07 = 100] Source: Construya 90 80 J 07 J 08 J 09 J 10 J 07 J 08 J 09 J 10 70 Automotive 80 Home Appliances Auto
Slide 9: Rising input prices
Market Overview Rising input prices 150 Iron Ore Fines (US$/ton) 450 Hard Coking Coal (US$/ton) Brazilian FOB (Contract) FOB (Contract) China FOB (Spot)* +85% FOB (Spot) 120 350 90 250 +75% 60 150 30 Source: *China CIF spot price minus freight from Brazil MBR/SBB Source: Platts 0 50 J 05 J 06 J 07 J
Slide 10: Competitive Positioning
Market Overview Competitive Positioning Performance Next Steps Conclusion TERNIUM l Investor Day - April 8, 2010 10
Slide 11: Flexible production configuration (flat steel)
Competitive Positioning Flexible production configuration (flat steel) Mexico Argentina Pellet Iron Ore Natural Gas Proprietary Iron Ore (Corumba, Mines (4.3 mtpy) Carajas) Pellet Coking Pellet/ Coal Conc./Fines Pet Coke Direct Reduction (1.7 mtpy) Scrap International Blast Furnaces Market (3.7 mtpy
Slide 12: Impact of raw material prices
Competitive Positioning Impact of raw material prices Slab production cash cost estimated impact Ternium’s iron ore supply (2010 vs 2009 in US$/ton) (2010e in million tons per year) Iron Ore Coal / Coke Scrap Natural Gas / Electric Power Iron Ore self-sufficiency at 60% 172 172 169 0.7 Sales 165 Oth
Slide 13: Performance
Market Overview Competitive Positioning Performance Next Steps Conclusion TERNIUM l Investor Day - April 8, 2010 13
Slide 14: Ternium's quick recovery
Performance Ternium’s quick recovery Shipments (million tons) EBITDA (million US$) 2.09 2.06 30% 1.84 1.68 1.65 26% 0.73 24% 0.76 1.55 1.50 1.52 23% 0.77 0.54 20% 0.64 0.65 0.46 16% 0.39 708 636 1.35 464 8% 1.29 1.08 1.12 0.94 0.99 1.00 316 0.86 281 254 4% 95 43 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q
Slide 15: Crisis management – key figures
Performance Crisis management – key figures 4.50 Inventories (million tons) SG&A (million US$) 4.00 200 -25% 3.50 Steel Iron Ore 180 3.00 1.53 160 140 2.50 1.17 120 2.00 1.19 100 0.86 0.94 1.24 185 1.50 80 160 2.30 136 143 138 60 1.00 1.71 115 1.35 1.52 40 0.50 1.18 1.16 20 0.00 0 S 08 D 08 M 09 J 0
Slide 16: Next Steps
Market Overview Competitive Positioning Performance Next Steps Conclusion TERNIUM l Investor Day - April 8, 2010 16
Slide 17: Ternium's growth opportunities
Next Steps Ternium’s growth opportunities Brownfield Greenfield Acquisitions Upstream projects projects Mining Mexico: Concentration exploration plan underway Pelletizing Steelshop & Project Brazil Argentina: Casting crude steel Colombia: capacity from Ferrasa Hot Rolling 2.9 to 4.0 Mtpy Cold Rollin
Slide 18: Colombia - Ferrasa
Next Steps Colombia - Ferrasa • Colombia is experiencing significant growth and is the fifth largest steel market in Latin America • Leading player in the Colombian steel distribution market • Shipments of 300,000 tons/year of steel products • Steel making capacity of 140,000 tons/year Barranquilla
Slide 19: Conclusion
Market Overview Competitive Positioning Performance Next Steps Conclusion TERNIUM l Investor Day - April 8, 2010 19
Slide 20: Conclusion
Conclusion • Recovery underway across Ternium’s markets • Effective business model enabled rapid and precise response to downturn • Regional leadership as core strategy • Vertical integration, flexibility, low cost • Successful track record • Ternium is ready to capitalize on growth opportunities TE
Slide 21: Investor Day
Investor Day Solomon R. Guggenheim Museum, New York April 8, 2010