Ternium S.A.

And welcome to Ternium's second quarter 2025 results conference call. Please note that this call is being recorded. I would now like to hand the call over to Sebastian Marti. Please go ahead, sir.

Good morning and thank you for joining us. My name is Sebastian Marti and I'm Ternium's Global IR and Compliance Senior Director. Yesterday we announced our financial results for the second quarter and the first half of 2025. This call is meant to provide additional context to that presentation. I'm joined today by Maximo Bedoya, Ternium's Chief Executive Officer and Paolo Grigio, the company's Chief Financial Officer who will discuss Ternium's business environment and performance. After our prepared remarks, we will open up the floor to your questions. Before we begin, I would like to remind you that this conference call contains forward looking 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 compiled IFRS measures in the press release issued yesterday. With that, I'll turn the call over to Mr. Bedoya.

Good morning and welcome to Ternium's conference call. In the second quarter of the year, we delivered an improved EBDA relative to the first quarter. This better performance was mainly driven by higher realized prices in Mexico and a relatively stable cost per ton, despite a slight dip in shipments. The operating environment remains uncertain and volatile and our main markets are no strangers to these developments. In this context, our focus is on reducing cost to strengthen the competitiveness of our company. We are positive on the outcome of these initiatives and on the future of Ternium. In line with this, we are already anticipating a sequential improvement in EBDA. In the third quarter, we expect a slightly increase in shipments, lead primarily by Mexico with the possibility of some additional support from Argentina and relatively stable volumes in Brazil. In Mexico, the business environment is currently marked by cautious, pending clear information regarding US trade policy and the conclusion of ongoing tariff negotiations with the United States. In response to this volatile environment, the Mexican government has taken some measures to increase domestic production defense against unfair trade practices, especially from Asian countries. These actions have recently contributed to some decrease in steel imports in Mexico, creating a more level playing field in local markets. This supports our expectations of higher sequential shipments in Mexico in the third quarter. I remain confident that ongoing negotiations between the US and Mexico will eventually yield a reasonable and mutually beneficial agreement. This conviction strengthens our commitment to the steady progress of our expansion project in Pesquerea. We continue as planned and serve as a cornerstone of our growth strategy. Unlike the recent developments in Mexico, the Brazilian steel market is facing significant challenges due to a surge of unfair imported steel. Imports continue to flow this market, undermining the competitiveness of local manufacturers and erasing their margins. It is crucial in our view that the Brazilian government responds precisely to this unfair trade practice. The impact expands well beyond the steel industry, affecting the wider manufacturing sector and putting at risk investments, jobs, and the long-term stability of these industries. Concrete measures are urgently needed to defend Brazil industrial base, ensure a level playing field, and foster a sustainable market environment. In this challenging context, Uximena is actively working on its cost structure in order to improve its competitiveness. Moving to Argentina, the country has experienced a significant increase in shipments during the second quarter, driven by seasonal factors as well as a gradually recovering macroeconomic environment. The automotive industry continues to operate at a healthy level of activities, and the agricultural machine sector is experiencing good demand. By contrast, the construction sector is not improving significantly, and certain market segments such as home appliances and packaging are being affected by an increase in imports of finishing goods. In face of ongoing uncertainty and volatility in global trade, we continue to focus on strengthening the operation efficiency and improving margins. Throughout 2025, we have concentrated our strategy approach to cost management, seeking opportunities to optimize Ternion's production process and supply chain and eliminate inefficiencies. Our competitive improvement plan centers of optimizing our logistic network to streamline transportation and reduce cost, improving our procurement for better supply and negotiation and cost control, enhancing production facility process for a greater efficiency, and boosting labor productivity by incorporating technology and innovation across our pre-production lines. These measures support our goal of strengthening profitability and fortifying our competitive position in a dynamic market environment. Before I wrap up my remarks, I would like to take a moment to highlight the release of our sustainable report in affirming our commitment to the creation of a long-term value throughout sustainable industrial development. The report details our efforts to advance environmental performance, foster social responsibility, and promote transparency across our operations. I encourage you to review it for a comprehensive overview of Ternion's strategies supporting long-term sustainability. In conclusion, trade policy continue to evolve rapidly. We are seeing the United States adopt a more assertive approach in negotiating bilateral agreements and implementing targeted trade action. While this ship has introduced a high degree of volatility, we recognize the US government's intention to address predatory trade practices by many Asian countries, most notably China, and to work towards restoring fair competition across the region. Mexico shares this perspective and is following a similar path. Even in this uncertain environment, Ternion's strong position in the region help us face this challenge. I expect that our ongoing project and focus on improving operations will enable Ternion to adjust to market changes and reach our goals. All right, this concludes my prepared remarks. Pablo, please go ahead with your comments about our performance last quarter.