Ternium S.A.

of noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star 1, followed by the number 1 on your telephone keypad. If you would like to withdraw your question again, please press star 1. I would now like to turn the conference call over to Sebastian Martin. Please go ahead.

Good morning, and thank you for joining us today. My name is Sebastian Marti, and I am Turing's Global IR and Compliance Senior Director. Turing released yesterday its financial results for the first quarter of 2024. This call is complementary to that presentation. Joining me today are Turing's Chief Executive Officer, Maximo Bedoya, and the company's Chief Financial Officer, Pablo Maurizio, who will discuss Turing's business environment and performance. At the conclusion of our prepared remarks, there will be a Q&A session. Before we begin, I would like to remind you that this conference call contains forelooking information and that actual results may vary from those expressed or implied. Factors that could affect results are contained in our filings with the Securities and Exchange Commission and on page two in today's webcast presentation. You will also find any reference to non-IFRS financial measures reconciled to the most directly comparable IFRS measures in the press release issued yesterday. I'll turn the call over to Mr. Veloso.

Thank you, Sebastian. Good morning to everyone, and thank you very much for participating in today's call. Turing began 2024 with strong performance and a healthy cash flow generation. We delivered good results across all regions, despite some macroeconomic challenges in some of them, as we will discuss later on. Our adjusted EBITDA margin reached a recurring level of 17% driven by higher steel prices and cost efficiency. We also continue showing a strong financial position, increasing our net cash to $2 billion at the end of March. Our operation in Mexico, our main market, continued to show a positive performance, ensuring in North America is intensifying as more manufacturing capacity relocates or expands in the region, driven by advantages of geographical proximity, lower logistics costs, and shorter lead times. This trend is particularly favorable for our company as we have a strong presence and a diversified product portfolio in this market. Demand from the industrial sector grew in the first quarter compared to both the previous quarter and the same period last year. The auto industry looks especially healthy with good production levels and expectations of reaching 4 million units in 2024, which would be a new record. On the other hand, the home appliances and electric motor industries face some demand headwinds. Finally, the commercial market is resuming activity after this stocking phase in the first quarter triggered by a downturn in steel benchmark prices in North America. Due to these positive trends, we are expecting to see a sequential increase in shipments in the second quarter of the year. Another positive development is a recent implementation of a new import tariff by the Mexican government to prevent unfair competition in the local market. Over 500 products across various industries are subject to duties ranging from 20 to 35 percent. These tariffs target imports from countries that have no trade agreement with Mexico, such as China. and aim to level the playing field for local producers. I believe this is an important development that sets a positive example to other countries in the region. Moving to Brazil, steam consumption started 2024 on a positive note, showing a slight improvement over the previous year. The construction sector is slowly picking up, driven by lower interest rates, improved consumer confidence, and infrastructure projects. In the auto industry, the latest production forecast points to a 6% increase in this year. With a medium-term view, this should benefit Usiminas' activity as it is the largest supplier of steel to the automobile industry in Brazil. Usiminas has a competitive edge in terms of quality, service, and logistics. as it operates two mills strategically located in the southern region of Brazil, close to the main auto clusters. On the other hand, the Brazilian steel industry faces a significant challenge from the surge of imports in its steel market under unfair trade conditions, increasing by 16% in the first quarter compared to last year. Most of these imports are coming from China. To address this challenge, Brazil's Executive Management Committee recently decided to raise import tariffs to 25% for several steel products that support a certain quota level. This is expected to take effect in 30 days once officially published and to be valid for 12 months. This measure is perhaps less comprehensive than what other countries in the region have implemented. but we consider it is a first step in the right direction. Together with the recovery of its domestic market, Cosiminas has been focused on restoring its operational efficiency following the restart of its main blast furnace in the last quarter of 2023. This furnace is now operating at the expected level for this stage, resulting in lower steel production costs than in the previous quarters. Despite the challenges that Usiminas faces, it is determined to improve its operational efficiency by applying benchmarking and implementing best practice in various areas across the company. Usiminas' new management has shown remarkable leadership and competence since they took office less than a year ago. However, we must be realistic and acknowledge that this is a gradual process. I am confident that Usiminas will achieve its goal and overcome its difficulties. Usiminas has also announced a decarbonization goal, which is to reduce scope one and two emissions intensity rate by 15% by 2030, relative to 2019 baseline, following the World Steel methodology. This goal reflects its commitment to global effort to mitigate climate change and to the sustainable development of the steel industry. During 2024, we will work on formulating a consolidated decarbonization roadmap with UCMinas. Turning now to Argentina, shipments declined sharply in the first quarter, reflecting the negative short-term impact of the government's economic stabilization measures on the construction and industrial sectors. Argentina's medium-term outlook still remains uncertain, but we anticipate a gradual recovery in steel shipment as the economy adjusts to the new policy framework and inflation moderates. In the second quarter, we expect the agribusiness and the energy and mining sector to lead this recovery. We remain confident in the long-term potential of Argentina, a country that has abundant natural resources, a diversified economy, industrial base and a highly skilled workforce. If the government succeeds in stabilizing the macroeconomic situation and deregulating the economy, Argentina will offer many opportunities for growth and development in various sectors that are relevant for our operations. Before I conclude my remarks, I would like to highlight some key aspects of our strategy and performance that will shape our future in the next few years. A crucial part of our strategy plan is to deliver our upstream and downstream projects at our industrial center in Pesqueria on time and within budget. We are making good progress in building a significant increase in value added capacity from breaking nine from pickling to galvanizing and customizing. The first stage of this project will come to function in 2024 with the pickling line and the first line in our customized process in the second half of the year. Moreover, the new slab making mill will complement an integration process that was started more than a decade ago with the construction of the cold roll and galvanized line Pesqueria, our first greenfield facility in Mexico. The new facility will be capable of producing the whole range of automotive grade seals with the lowest carbon emission level in the Americas. These projects are vital for our long-term success in the region, as they will allow us to benefit from the nearshoring of manufacturing capacity, advance our CO2 emissions roadmap, and reinforce our strong competitive position to replace imports in the Mexican steel market. Another key aspect or key element of our strategy for the coming years is to unlock the full potential of Usiminas. We believe that Usiminas has a great opportunity to enhance its profitability in the long run. It will require a steady and consistent effort, and we will stand by Usiminas management to help them achieve this goal. Okay, Pablo, please give us an overview of Ternio's performance in the first quarter.