Ternium S A : First Quarter 2024 Financial Statements

TERNIUM S.A.

Consolidated Condensed Interim Financial Statements as of March 31, 2024

and for the three-month periods ended on March 31, 2024 and 2023

26 Boulevard Royal, 4th floor L - 2449 Luxembourg R.C.S. Luxembourg: B 98 668

INDEX

		Page
Consolidated Condensed Interim Income Statements	2
Consolidated Condensed Interim Statements of Comprehensive Income	3
Consolidated Condensed Interim Statements of Financial Position	4
Consolidated Condensed Interim Statements of Changes in Equity	5
Consolidated Condensed Interim Statements of Cash Flows	7
Notes to the Consolidated Condensed Interim Financial Statements
1	General information and basis of presentation	8
2	Accounting policies	8
3	Acquisition of business - Increase of the participation in Usiminas Control	9
	Group and new governance structure of Usiminas
4	Segment information	14
5	Cost of sales	16
6	Selling, general and administrative expenses	16
7	Finance expense, Finance income and Other financial income (expenses), net	17
8	Property, plant and equipment, net	17
9	Intangible assets, net	17
10	Investments in non-consolidated companies	18
11	Income tax - Pillar Two	18
12	Contingencies, commitments and restrictions on the distribution of profits	19
13	Related party transactions	21
14	Financial instruments by category and fair value measurement	22
15	Foreign exchange restrictions in Argentina	23

Page 1 of 25

TERNIUM S.A.

Consolidated Condensed Interim Financial Statements as of March 31, 2024 and for the three-month periods ended March 31, 2024 and 2023

(All amounts in $ thousands)

Consolidated Condensed Interim Income Statements

		Three-month period ended
		March 31,
	Notes	2024	2023
		(Unaudited)
Net sales	4	4,778,297	3,623,371
Cost of sales	5	(3,674,744)	(2,980,751)
Gross profit		1,103,553	642,620
Selling, general and administrative expenses	6	(431,166)	(292,924)
Other operating income (expense), net		2,469	7,694
Operating income	4	674,856	357,390
Finance expense	7	(44,879)	(16,200)
Finance income	7	82,554	41,446
Other financial (expense) income, net	7	(200,225)	(17,419)
Equity in earnings of non-consolidated companies	10	19,560	34,875
Profit before income tax credit (expense)		531,866	400,092
Income tax (expense) credit	11	(40,435)	79,428
Profit for the period		491,431	479,520
Attributable to:
Owners of the parent		361,436	374,374
Non-controlling interest		129,995	105,146
Profit for the period		491,431	479,520
Weighted average number of shares outstanding		1,963,076,776	1,963,076,776
Basic and diluted earnings per share for profit attributable to the
equity holders of the company (expressed in $ per share)		0.18	0.19

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2023.

Page 2 of 25

TERNIUM S.A.

Consolidated Condensed Interim Financial Statements as of March 31, 2024 and for the three-month periods ended March 31, 2024 and 2023

(All amounts in $ thousands)

Consolidated Condensed Interim Statements of Comprehensive Income

Profit for the period

Items that may be reclassified subsequently to profit or loss: Currency translation adjustment Currency translation adjustment from participation in non-consolidatedcompanies Changes in the fair value of financial instruments at fair value through other comprehensive income Income tax related to financial instruments at fair value Changes in the fair value of derivatives classified as cash flow hedges Income tax related to cash flow hedges Other comprehensive income items from participation in non- consolidated companies Items that will not be reclassified subsequently to profit or loss: Remeasurement of post employment benefit obligations Remeasurement of post employment benefit obligations from participation in non-consolidatedcompanies

Other comprehensive income for the period, net of tax

Total comprehensive income for the period

Attributable to:

Owners of the parent

Non-controlling interest

Total comprehensive income for the period

Three-month period ended
March 31,
2024	2023
(Unaudited)
491,431	479,520
(100,278)	1,649
(11,785)	20,305
269,729	(28,026)
111,581	10,021
(15,393)	-
4,618	-
-	452
(5,414)	-
53	184
253,111	4,585
744,542	484,105
610,462	383,937
134,080	100,168
744,542	484,105

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2023.

Page 3 of 25

TERNIUM S.A.

Consolidated Condensed Interim Financial Statements as of March 31, 2024 and for the three-month periods ended March 31, 2024 and 2023

(All amounts in $ thousands)

Consolidated Condensed Interim Statements of Financial Position

								Balances as of
		Notes			March 31, 2024		December 31, 2023
					(Unaudited)
ASSETS
Non-current assets
Property, plant and equipment, net		8		7,855,930					7,637,687
Intangible assets, net		9		1,024,919					996,048
Investments in non-consolidated companies		10		524,051					517,265
Other investments				35,154					210,930
Deferred tax assets		3		1,694,109	12,128,330		1,713,385	12,148,560
Receivables, net			994,167	1,073,245
Current assets
Receivables, net				817,457					686,394
Current income tax assets				403,627					486,470
Derivative financial instruments				7,257					15,406
Inventories, net				5,059,476					4,948,376
Trade receivables, net				2,181,102					2,065,499
Other investments				2,282,781	12,532,164		1,975,646	12,023,804
Cash and cash equivalents			1,780,464	1,846,013
Assets classified as held for sale							8,841				6,740
						12,541,005			12,030,544
Total Assets						24,669,335			24,179,104
EQUITY
Capital and reserves attributable to the owners of						13,029,057			12,418,595
the parent
Non-controlling interest							4,527,344				4,393,264
Total Equity						17,556,401			16,811,859
LIABILITIES
Non-current liabilities
Provisions				806,417					839,921
Deferred tax liabilities				23,068					170,820
Other liabilities				1,139,472					1,148,998
Trade payables				6,383					12,030
Lease liabilities				185,766		3,337,002		188,913		3,566,643
Borrowings			1,175,896		1,205,961
Current liabilities
Current income tax liabilities		11		120,306					137,388
Other liabilities				489,560					429,713
Trade payables				2,194,917					2,232,654
Derivative financial instruments				1,916					8,220
Lease liabilities				50,051		3,775,932		52,174		3,800,602
Borrowings				919,182			940,453
Total Liabilities						7,112,934			7,367,245
Total Equity and Liabilities						24,669,335			24,179,104

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2023.

Page 4 of 25

TERNIUM S.A.

Consolidated Condensed Interim Financial Statements as of March 31, 2024 and for the three-month periods ended March 31, 2024 and 2023

(All amounts in $ thousands)

Consolidated Condensed Interim Statements of Changes in Equity

			Attributable to the owners of the parent
	Capital stock	Treasury	Initial public	Reserves	Capital stock	Currency	Retained		Non-
	shares	offering	issue discount	translation	Total	controlling	Total Equity
	(1)	(2)	earnings
	(1)	expenses	(3)	adjustment		interest
Balance as of January 1, 2024	2,004,743	(150,000)	(23,295)	965,211	(2,324,866)	(1,963,827)	13,910,629	12,418,595	4,393,264	16,811,859
Profit for the period							361,436	361,436	129,995	491,431
Other comprehensive income (loss) for the period
Currency translation adjustment						(21,685)		(21,685)	(90,378)	(112,063)
Remeasurement of post employment benefit obligations				(1,216)				(1,216)	(4,145)	(5,361)
Cash flow hedges and others, net of tax				(9,616)				(9,616)	(1,159)	(10,775)
Others (4)				281,543				281,543	99,767	381,310
Total comprehensive income (loss) for the period	-	-	-	270,711	-	(21,685)	361,436	610,462	134,080	744,542
Balance as of March 31, 2024 (unaudited)	2,004,743	(150,000)	(23,295)	1,235,922	(2,324,866)	(1,985,512)	14,272,065	13,029,057	4,527,344	17,556,401

1. The Company has an authorized share capital of a single class of 3.5 billion shares having a nominal value of $ 1.00 per share. As of March 31, 2024, there were 2,004,743,442 shares issued. All issued shares are fully paid. Also, as of March 31, 2024, the Company held 41,666,666 shares as treasury shares.
2. Includes legal reserve under Luxembourg law for $ 200.5 million, undistributable reserves under Luxembourg law for $ 1.4 billion and reserves related to the acquisition of non-controlling interest in subsidiaries for $ (72.4) million.
3. Represents the difference between book value of non-monetary contributions received from shareholders under Luxembourg GAAP and IFRS.
4. Includes mainly the changes of the fair value of financial instruments at fair value through other comprehensive income, net of tax.

Dividends may be paid by Ternium to the extent distributable retained earnings calculated in accordance with Luxembourg law and regulations exist. Therefore, retained earnings included in these consolidated condensed interim financial statements may not be wholly distributable.

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2023.

Page 5 of 25

TERNIUM S.A.

Consolidated Condensed Interim Financial Statements as of March 31, 2024 and for the three-month periods ended March 31, 2024 and 2023

(All amounts in $ thousands)

Consolidated Condensed Interim Statements of Changes in Equity

			Attributable to the owners of the parent
	Capital stock	Treasury	Initial public	Reserves	Capital stock	Currency	Retained		Non-
	shares	offering	issue discount	translation	Total	controlling	Total Equity
	(1)	(2)	earnings
	(1)	expenses	(3)	adjustment		interest
Balance as of January 1, 2023	2,004,743	(150,000)	(23,295)	1,394,567	(2,324,866)	(2,859,068)	13,803,878	11,845,959	1,922,434	13,768,393
Profit for the period							374,374	374,374	105,146	479,520
Other comprehensive income (loss) for the period
Currency translation adjustment						20,014		20,014	1,940	21,954
Remeasurement of post employment benefit obligations				168				168	16	184
Others (4)				(10,619)				(10,619)	(6,934)	(17,553)
Total comprehensive income (loss) for the period	-	-	-	(10,451)	-	20,014	374,374	383,937	100,168	484,105
Balance as of March 31, 2023 (unaudited)	2,004,743	(150,000)	(23,295)	1,384,116	(2,324,866)	(2,839,054)	14,178,252	12,229,896	2,022,602	14,252,498

1. The Company has an authorized share capital of a single class of 3.5 billion shares having a nominal value of $ 1.00 per share. As of March 31, 2023, there were 2,004,743,442 shares issued. All issued shares are fully paid. Also, as of March 31, 2023, the Company held 41,666,666 shares as treasury shares.
2. Include legal reserve under Luxembourg law for $ 200.5 million, undistributable reserves under Luxembourg law for $ 1.4 billion and reserves related to the acquisition of non-controlling interest in subsidiaries for $ (72.4) million.
3. Represents the difference between book value of non-monetary contributions received from shareholders under Luxembourg GAAP and IFRS.
4. Includes mainly the changes of the fair value of financial instruments at fair value through other comprehensive income, net of tax.

Dividends may be paid by Ternium to the extent distributable retained earnings calculated in accordance with Luxembourg law and regulations exist. Therefore, retained earnings included in these consolidated condensed interim financial statements may not be wholly distributable.

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2023.

Page 6 of 25

TERNIUM S.A.

Consolidated Condensed Interim Financial Statements as of March 31, 2024 and for the three-month periods ended March 31, 2024 and 2023

(All amounts in $ thousands)

Consolidated Condensed Interim Statements of Cash Flows

	Notes
Cash flows from operating activities
Profit for the period
Adjustments for:
Depreciation and amortization	8 & 9
Income tax accruals less payments	11
Equity in earnings of non-consolidated companies	10
Interest accruals less payments/receipts, net
Changes in provisions
Changes in working capital (1)
Net foreign exchange results and others
Net cash provided by operating activities
Cash flows from investing activities
Capital expenditures	8 & 9
Decrease (Increase) in other investments
Proceeds from the sale of property, plant and equipment
Dividends received from non-consolidated companies
Net cash used in investing activities
Cash flows from financing activities
Finance lease payments
Proceeds from borrowings
Repayments of borrowings
Net cash used in financing activities
Decrease in cash and cash equivalents
Movement in cash and cash equivalents
At January 1,
Effect of exchange rate changes
Decrease in cash and cash equivalents
Cash and cash equivalents as of March 31, (2)
Non-cash transactions:
Acquisition of PP&E under lease contract agreements

Three-month period ended
March 31,
2024	2023
(Unaudited)
491,431	479,520
170,858	150,593
(12,653)	(156,847)
(19,560)	(34,875)
(1,562)	(17,845)
(7,284)	(1,037)
(265,710)	218,003
119,957	(1,074)
475,477	636,438
(449,194)	(203,676)
377	(686,203)
554	552
1,023	-
(447,240)	(889,327)
(18,361)	(13,675)
131,380	45,869
(165,649)	(196,040)
(52,630)	(163,846)
(24,393)	(416,735)
1,846,013	1,653,355
(41,156)	(16,471)
(24,393)	(416,735)
1,780,464	1,220,149
9,386	525

1. The working capital is impacted by non-cash movements of $ (60.1) million as of March 31, 2024 ($ 22.2 million as of March 31, 2023) due to the variations in the exchange rates used by subsidiaries.
2. It includes restricted cash of $ 3,409 and $ 31 as of March 31, 2024 and 2023, respectively. In addition, the Company had other investments with a maturity of more than three months for $ 2,317,778 and $ 2,646,378 as of March 31, 2024 and 2023, respectively.

The accompanying notes are an integral part of these consolidated condensed interim financial statements. These consolidated condensed interim financial statements should be read in conjunction with our audited Consolidated Financial Statements and notes for the year ended December 31, 2023.

Page 7 of 25

TERNIUM S.A.

Consolidated Condensed Interim Financial Statements as of March 31, 2024 and for the three-month periods ended March 31, 2024 and 2023

Notes to the Consolidated Condensed Interim Financial Statements

1. GENERAL INFORMATION AND BASIS OF PRESENTATION

Ternium S.A. (the "Company" or "Ternium"), was incorporated on December 22, 2003 to hold investments in flat and long steel manufacturing and distributing companies. The Company has an authorized share capital of a single class of 3.5 billion shares having a nominal value of $ 1.00 per share. As of March 31, 2024, there were 2,004,743,442 shares issued. All issued shares are fully paid.

Ternium's American Depositary Shares ("ADS") trade on the New York Stock Exchange under the symbol "TX".

The name and percentage of ownership of subsidiaries that have been included in consolidation in these Consolidated Condensed Interim Financial Statements are disclosed in Note 2 to the audited Consolidated Financial Statements for the year ended December 31, 2023.

The preparation of Consolidated Condensed Interim Financial Statements requires management to make estimates and assumptions that might affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the statement of financial position, and also the reported amounts of revenues and expenses for the reported periods. Actual results may differ from these estimates. The main assumptions and estimates were disclosed in the Consolidated Financial Statements for the year ended December 31, 2023, without significant changes since its publication.

2. ACCOUNTING POLICIES

These Consolidated Condensed Interim Financial Statements have been prepared in accordance with IAS 34, "Interim Financial Reporting" and are unaudited. These Consolidated Condensed Interim Financial Statements should be read in conjunction with the audited Consolidated Financial Statements for the year ended December 31, 2023, which have been prepared in accordance with IFRS Accounting Standards (International Financial Reporting Standards) as issued by the International Accounting Standards Board and in conformity with IFRS Accounting Standards as adopted by the European Union ("EU"). Recently issued accounting pronouncements were applied by the Company as from their respective dates.

These Consolidated Condensed Interim Financial Statements have been prepared following the same accounting policies used in the preparation of the audited Consolidated Financial Statements for the year ended December 31, 2023.

None of the accounting pronouncements issued after December 31, 2023, and as of the date of these Consolidated Condensed Interim Financial Statements have a material effect on the Company's financial condition or result or operations.

Page 8 of 25

TERNIUM S.A.

Consolidated Condensed Interim Financial Statements as of March 31, 2024 and for the three-month periods ended March 31, 2024 and 2023

3. ACQUISITION OF BUSINESS - INCREASE OF THE PARTICIPATION IN USIMINAS CONTROL GROUP AND NEW GOVERNANCE STRUCTURE OF USIMINAS

(a) The participation in Usiminas as of June 30, 2023

On January 16, 2012, the Company's subsidiaries, Ternium Investments and Ternium Argentina (together with its wholly-owned subsidiary Prosid Investments S.A., or "Prosid", and the Company's affiliate, Confab Industrial S.A., a subsidiary of Tenaris, or TenarisConfab), joined the existing control group of Usiminas, a leading steel company in the Brazilian flat steel market, through the acquisition of 84.7, 30.0, and 25.0 million ordinary shares, respectively, and formed the so-called Ternium/Tenaris (T/T) Group.

On October 30, 2014, Ternium Investments acquired 51.4 million additional ordinary shares of Usiminas. On April 20, 2016, Ternium Investments subscribed to 7.0 million preferred shares of Usiminas and Ternium Argentina, together with Prosid, subscribed to an aggregate 1.5 million preferred shares of Usiminas. On July 19, 2016, Usiminas' extraordinary general shareholders' meeting homologated a capital increase, and Ternium Investments acquired 62.6 million additional ordinary shares, and Ternium Argentina and Prosid acquired an aggregate 13.8 million additional ordinary shares. As a result of these transactions, Ternium, through its subsidiaries Ternium Investments, Ternium Argentina and Prosid, owned as of June 30, 2023, 242.6 million ordinary shares of Usiminas (representing 34.4% of Usiminas' ordinary shares) and 8.5 million of Usiminas' preferred shares (representing 1.6% of Usiminas' preferred shares), representing, in the aggregate, 20.4% of Usiminas' share capital.

As of June 30, 2023, the Usiminas control group held, in the aggregate, 483.6 million ordinary shares bound to the Usiminas shareholders' agreement, representing approximately 68.6% of Usiminas' voting capital. The Usiminas control group, which was bound by a long-term shareholders' agreement that governs the rights and obligations of Usiminas' control group members, was composed as of such date of three sub-groups: the T/T Group; the NSC Group, comprising Nippon Steel Corporation ("NSC"), Metal One Corporation and Mitsubishi Corporation; and Usiminas' pension fund Previdência Usiminas. The T/T Group held approximately 47.1% of the total shares held by the control group (39.5% corresponding to the Ternium entities and the other 7.6% corresponding to TenarisConfab); the NSC Group held approximately 45.9% of the total shares held by the control group; and Previdência Usiminas held the remaining 7%. The corporate governance rules reflected in the Usiminas shareholders agreement provided, among other things, that Usiminas' executive board was composed of six members, including the chief executive officer and five vice-presidents, with Ternium and NSC nominating three members each. The right to nominate Usiminas' chief executive officer alternated between Ternium and NSC at every 4-year interval, with the party that did not nominate the chief executive officer having the right to nominate the chairman of Usiminas' board of directors for the same 4-year period. The Usiminas shareholders agreement also provided for an exit mechanism consisting of a buy-and-sell procedure- exercisable at any time after November 16, 2022, and applicable with respect to shares held by NSC and the T/T Group-, which would allow either Ternium or NSC to purchase all or a majority of the Usiminas shares held by the other shareholder.

(b) The acquisition of the additional participation

On March 30, 2023, Ternium S.A. announced that its subsidiaries Ternium Investments and Ternium Argentina, together with Confab, a subsidiary of its affiliate Tenaris S.A., all of which compose the T/T group within Usiminas control group, entered into a share purchase agreement to acquire from Nippon Steel Corporation, Mitsubishi and MetalOne (the "NSC group"), pro rata to their current participations in the T/T group, 68.7 million ordinary shares of Usinas Siderúrgicas de Minas Gerais S.A. - USIMINAS ("Usiminas") at a price of BRL10 per ordinary share.

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