PAOLO ROCCA, CHAIRMAN
READ THE LETTER
PAOLO ROCCA
While 2024 saw Ternium continue to build its position as the leading steelmaker in Latin America, these achievements unfolded against the backdrop of mounting uncertainty in global markets, presenting new challenges and opportunities for continued growth. At our Pesquería complex in Mexico, we completed a new pickling line at the end of the year. In Brazil, Usiminas successfully resumed production at its Ipatinga blast furnace following its relining and modernization during 2023, and, in Argentina, we began operations at our new wind farm in December, which will supply 90% of the purchased energy requirements for our operations in the country.
Net sales amounted to $17.6 billion, in line with 2023, as we consolidated the results of Usiminas for the full year. Although shipments rose, steel prices fell through the year in our most relevant markets. EBITDA declined to $2.0 billion with a margin of 12%. Net income was $174 million, affected by a provision following an adverse court ruling in Brazil, which we continue to dispute. Our balance sheet remains solid with a net cash position of $1.6 billion at year-end. At our shareholders’ meeting, an annual dividend of $2.70 per ADS was approved, reflecting our commitment to maintain a competitive dividend payout over the years. This dividend considers a lower net income level in 2024, net of the provision for litigation in Brazil, and our extensive investment program over the next two years.
Our investment program is centered on our Pesquería complex in Mexico, where we are integrating advanced electric steelmaking and natural gas-based direct reduction facilities while expanding our downstream processing capacity for high-value flat steel products. Once these investments are complete, the Pesquería complex will be one of the most advanced steelmaking and processing sites in North America, compliant with USMCA “melted and poured” requirements and able to supply the ultra-high-strength steel products required by the automotive industry and other demanding industrial and construction applications.
Tariffs and trade tensions in recent months have created a climate of uncertainty, impacting business confidence and economic growth in North America and more widely. To the extent that the tariffs are intended to address unsustainable trade imbalances and China’s unfair trading practices, we are confident that Mexico will be recognized by the United States as a valuable ally and partner in strengthening manufacturing activity and addressing trade imbalances across North America and that the USMCA will be renewed with a favorable tariff treatment for its members and stricter rules of origin to prevent unfairly traded imports in the region.
In Mexico, amidst the current uncertainty concerning tariffs and the economy, the government is pursuing a “Plan Mexico” strategy to attract investment and increase the local and regional content of manufactured goods through nearshoring, infrastructure development and support for SMEs. Ternium is well placed to contribute to this strategy: it continues to consolidate its leading position in the domestic market as a supplier of advanced steel products for local industry and infrastructure projects, it is investing in developing capacity and products to replace imports, and it has its own ProPymes program which is designed to support the development of SMEs. Once the uncertainty concerning tariffs is lifted, we expect to see the Mexican industrial economy emerge stronger as part of a revitalized USMCA trading block.
In Brazil, the industrial markets that Usiminas serves have been growing strongly and, following the modernization of its Ipatinga blast furnace, it has increased sales and production while reducing costs. We continue to see, however, the pressure from unfairly traded steel imports as China increases its exports of surplus steel production to Latin America, where Brazil is its largest regional trading partner. Although the government has taken some measures to limit such imports, their effectiveness is still to be seen.
In Argentina, the economy has started to recover following the government’s measures to reduce inflation and liberalize the economy. The transformation that is being undertaken is having profound effects on the economy and is expected to lay the foundations for growth for the years ahead following 15 years of stagnation. Last year, our sales in the Southern Region declined 33% compared to 2023 as volumes were affected by a contraction in the industrial and construction sectors. As 2025 progresses, we are seeing a recovery in demand in some sectors, such as energy, agriculture and mining, although some other sectors like construction continue to show subdued activity levels.
For Ternium, like other companies operating in the steel industry, decarbonization is a major challenge that will take many years and substantial investments to accomplish. The integration of state-of-the-art electric furnace steelmaking and direct reduction facilities into our operations in Pesquería, Mexico, represents a significant part of our plans to reduce the emissions intensity of our operations in line with our 2030 decarbonization target and prepare for further reductions thereafter. Our investment in a 99 MW wind farm, completed during 2024, to replace 90% of our purchased electric energy requirements in Argentina is an additional step towards that target. Usiminas has also established a 2030 target to reduce its emissions intensity by 15% compared to a 2019 baseline to which the recent modernization of the Ipatinga blast furnace will contribute. At the same time, we need to identify and develop economic, scalable technologies that will enable further decarbonization of our operations beyond 2030. In this respect, we are participating in a pilot plant to produce turquoise hydrogen through methane pyrolysis and are partnering with Vale to develop raw material products with lower carbon emissions intensity.
As an industrial company with a long-term perspective, the safety of our people, protection of the environment and support for the inclusive development of our communities are an integral part of our management agenda. In addition to our decarbonization program, we are advancing with a multi-year $550 million investment plan to enhance our environmental performance through improving the management of water and air emissions and maximizing the recycling and reuse of resources at our industrial facilities. This reflects our commitment to setting an example on managing environmental issues within our communities. Among the projects already implemented under this plan are the installation of a dome and iron ore silos to control dust emissions at our Guerrero plant in Mexico, the incorporation of technology for the measuring and control of air emissions in our plants in Argentina and Brazil and improvements in the settling ponds and water treatment systems throughout our industrial system.
In 2024, we invested a further $60 million in projects aimed at improving our safety performance. Many of our safety investments over the past four years have been in automation to reduce human participation in high-risk operations, such as continuous casting. This has resulted in a significant reduction in human exposure to hazardous conditions. This year, we received a Health & Safety Excellence Recognition from worldsteel for this safety program. Our performance during 2024, however, was affected by two fatalities. This is a major setback for Ternium, which has an absolute commitment to safety with its employees and its communities. We deeply regret the loss of life and are reinforcing all our actions on preventive activities with a focus on critical risks.
As we engage with our communities, our educational programs are at the forefront of our efforts to support inclusive growth. They are designed to open opportunities, encouraging merit and an entrepreneurial spirit. We accompany the development of students from a young age with our Roberto Rocca After School Program and are strengthening our network of Roberto Rocca Technical Schools. Early this year, we opened a new school in Santa Cruz, Brazil, which will receive 576 students over the next three years and will share curriculum and best practices with its sister schools in Pesquería, Mexico, and Campana, Argentina. These schools open their doors not only to their enrolled students but also act as professional training centers for their communities offering various Industry 4.0 training courses and certifications licensed by companies such as Festo and Siemens. The educational institutions are obtaining excellent results and the new school in Santa Cruz has created high expectations in the community surrounding our Brazilian slab mill.
Our employees are always at the center of our achievements. Our aim is to offer them the opportunities to develop their skills and potential in a respectful and dynamic working environment in which they are recognized for their contribution to our goals. We are also focused on enhancing diversity and improving the gender balance among our employees and in managerial positions, recognizing the positive benefits to our industrial culture that diversity can bring.
In closing, I would like to give a special thanks to them for their ongoing efforts and achievements over the past year. I would also like to thank our customers, suppliers, shareholders and communities for their continuing support for our project.
July 2025
MÁXIMO VEDOYA, TERNIUM CEO
PROJECTS EXECUTED
PROJECTS ANNOUNCED OR UNDER EXECUTION
PROJECTS UNDER ANALYSIS
| INITIATIVES | MEXICO | BRAZIL | ARGENTINA | PROGRESS DURING 2024 |
|---|---|---|---|---|
Energy efficiency initiatives |
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Scrap in the metallic mix |
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Alternative raw materials-biomass |
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Renewable energy |
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Carbon Capture and Usage |
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Low carbon technologies |
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GOVERNANCE
Code of Conduct
It incorporates guidelines and standards of integrity and transparency that apply to all directors, officers and employees. It was recently revised and is effective as of March 11, 2024.
Environmental and energy policy
It serves as the primary framework guiding the company’s environmental efforts. Among its key principles is a commitment to reduce emissions intensity and the ambition to achieve carbon neutrality.
TARGET
In 2024 the company updated its decarbonization target for 2030 to a 15% reduction in the CO₂e intensity up to hot rolling from a 2023 baseline, considering Scopes 1, 2 and 3 (category 1 and 10) under GHG Protocol methodology.
RISKS
Climate-related risks are identified and assessed locally. Risks are reviewed at least three times a year, and those classified as significant, very significant, or critical are analyzed in the Critical Risks Committee, chaired by the CEO.
Ternium has the ambition to achieve carbon neutrality in its operations and products. With that in mind, we are mapping different alternatives in each region regarding CCUS technologies, the use of biomass, biofuels and hydrogen, aiming to determine the most economically feasible way to decarbonize our operations. One of the recent initiatives in this effort is Ternium’s participation in the Tulum Energy project, aiming to provide a cost-effective and scalable solution for hydrogen production. We have also established a strategic partnership with our supplier Vale in Brazil to explore the development of new products aimed at reducing the carbon footprint of raw materials and diversifying the feedstock for Ternium’s blast furnace and direct reduction operations.
Climate action
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Environmental responsibility in operations
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Occupational health and safety management
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Human resources management
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Community engagement
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Commercial positioning and the value chain
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Corporate governance
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Ternium's strategy in its decarbonization roadmap includes:
We aim to reduce the emission intensity rate per ton of hot-rolled steel by 15% by 2030 compared to the 2023 baseline, considering Scopes 1, 2 and 3 (categories 1 and 10), measured using the GHG Protocol.
At our industrial center in Pesquería, México, we are developing a state-of-the-art steelmaking facility based on Direct Reduced Iron (DRI) and Electric Arc Furnace (EAF) technology. This facility will have a significantly lower carbon intensity compared to conventional steelmaking processes, reinforcing our commitment to reducing emissions and enhancing environmental performance.
Ternium manages different environmental aspects of the production process to minimize the impact of its operations:
In 2024, Ternium’s total water intake, which includes steelmaking, downstream processing, and electricity production, amounted to 754 million m³. Only 2% came from regions classified as having high or extremely high water stress according to the Water Risk Atlas of the World Resources Institute (WRI) version 4.0. Over the years, Ternium has developed various strategies to minimize water usage at its Mexican steel facilities, including the increased use of third-party water. In 2024, the Pesquería facility sourced 95% of its water from treated sewage instead of groundwater. In Argentina, we are advancing in the unification of discharge streams at the San Nicolás facility by channeling and pumping all effluents into a single sedimentation unit, while in Brazil we implemented an online monitoring system to track water reuse across the operations.
We implemented a range of initiatives at the Guerrero facility with the aim of minimizing diffuse emissions, particularly in raw material handling, steelmaking and direct reduction operations. These measures include using dust suppressors with reused water during operations, infrastructure projects like upgrades to the direct reduction iron handling system, and the construction of silos for fume house dust.
At the San Nicolás facility, we have implemented several initiatives to strengthen air quality management. These include the renewal of the steel shop’s dust collection and new igniters installed in the coke batteries to ensure more effective combustion of gases emitted through the flaring system.
As part of a broader technological upgrade, new particulate matter monitors were installed at the three air quality monitoring stations located in the community’s surrounding areas. Additionally, a project was launched to enhance the management of continuous emissions monitoring data, enabling the integration of key process variables associated with emissions into an online platform.
All the steel scrap generated at the company’s facilities is fully recycled. Additionally, Ternium sources scrap from external scrap-processing companies and collection firms. In 2024, the company recycled 2.7 million tons of steel scrap to produce new steel, without affecting the final properties of steel products. Ternium is also committed to minimizing waste and maximizing material efficiency across its operations. For example, fines from raw materials, as well as dust and sludge from effluent treatment systems, are recovered through sintering and briquetting processes to be reused as raw materials.
Ternium is actively participating in a marine biodiversity research project focused on the grey dolphin (Sotalia guianensis), a key species in the local ecosystem.
Following the announcement of its new steelmaking facility in Pesquería, Ternium launched a Wildlife Rescue Program aimed at protecting local flora and fauna prior to construction. As a result, over 16,800 plants were preserved and 50 animals were rescued and relocated.
During the construction of the wind farm, Ternium conducted a baseline analysis of the flying fauna species that could be affected, and will continue seasonal monitoring of birds and bats. We also completed environmental characterization maps, including topography, hydrogeology and vegetation.
Ternium aims to consolidate a strong health and safety-oriented culture within the company and to extend best practices across our value chain, creating a culture under the idea of “Safety First.” This involves promoting an environment where safety is ingrained in every aspect of operations.
The company’s Occupational Health and Safety management system is certified under the ISO 45001 standard. In December 2024, 89% of employees and contractors were working in ISO 45001 certified facilities.
Our process safety management model, referred to as PSM, adheres to global best practices and is structured around three core pillars: technology, facilities and people. Looking ahead, we are implementing a five-year strategic plan integrating objectives from the health and safety team with those of the maintenance departments.
Ternium’s management follows specific protocols when an accident or incident occurs at the company’s workplace. Once the causes have been fully identified and understood, the company implements an action plan structured around a hierarchy of controls.
In 2024, the cross-facility safety plans were redesigned to enhance the effectiveness of company-wide initiatives. A new framework of responsibilities was established, along with a structured roadmap for each plan.
Ternium designs preventive activities to identify and mitigate potential hazards before they escalate into incidents or accidents. In 2024, the company organized:
We have implemented advanced technologies to enhance operational performance and minimize human risk exposure, following the principle of “no people on the floor.” Furthermore, we've embraced cutting-edge technologies to improve risk assessment, incident analysis and staff education.
Ternium University offers a diverse range of training courses on occupational health and safety.
Ternium continues to enhance the visibility of safety issues through its communication platforms.
SAFETY DAY
Held annually in July, this event is at the center of Ternium’s communication strategy. In 2024, over 6,000 people participated in person or in online meetings.
SAFETY TALKS
Open-dialogue instance for plant supervisors and their teams to analyze selected occupational health and safety issues each week. More than 28,200 short interactive sessions were conducted at the beginning of each shift, reaching over 22,500 employees.
Ternium has initiated several programs to promote the adoption of its Safety Vision and goals among all contractors’ employees. From July 2023 to June 2024, Ternium conducted audits of the occupational health and safety programs of 195 contractor companies across four countries, 28 of which were commended for the improvements made during the year.
Ternium demonstrates its commitment to providing a healthy workplace through the implementation of a comprehensive occupational health program. We regularly conduct monitoring activities and risk analysis within our health management system to assess and manage the various factors that may impact employees’ health.
Ternium launched SIASSO Mobile, a digital tool that modernizes safety management by allowing employees to monitor and manage safety processes anytime, anywhere. This mobile application enhances flexibility and speed in risk assessments, with real-time alerts and data enabling proactive responses.
In 2024, Ternium received the Safety and Health Excellence Recognition from worldsteel for its robotic automation initiative in Brazil. Since 2018, Ternium Brazil has leveraged robotic technology in its continuous casting process to eliminate human exposure to high-risk tasks.
Ternium relies on the talent and determination of its people to shape the company in the years to come. From the recruitment process to development stages and training programs, the company aims to foster the development of key competencies among its employees, including attitude of service, collaboration, professionalism and diversity & inclusion.
The company has been enhancing its Human Resources processes by implementing technology across various stages. We have integrated Ternium’s chatbot into all available devices, enabling employees to perform a wide range of tasks. Currently, 98% of Ternium’s active workforce uses the chatbot. We have also continued to advance in People Analytics to generate valuable insights from human resources data. In addition, as part of our 2024 strategy to strengthen employee training, we significantly expanded the range of content available to salaried staff and management through the Ternium University (TU) platform.
Ternium ensures compliance with all labor legal requirements in the countries where it operates. This includes issues such as the number of hours worked, paid vacations, and compensations above legally established levels. Other rights, such as freedom of association, are recognized and respected by the company. Additionally, the company establishes a series of benefits such as discounts at top-tier universities, access to healthcare systems, and work flexibility.
In 2021, Ternium embraced the United Nations Women’s Empowerment Principles (WEPs), reinforcing its commitment to gender equality. Since then, the company has been actively working to increase female participation in leadership roles and in the industry overall. As a result, the company has seen a 42% increase in the number of women in managerial positions since 2021.
At Ternium, the Community Relations team implements programs locally, measures their impact, engages with community stakeholders, and assesses specific local needs to ensure a meaningful and effective contribution. Ternium's community relations strategy is centered around key themes:
We believe that education and culture are the key drivers for individual and social progress. The Roberto Rocca Educational Programs cover the entire cycle, from elementary school to university, helping children and youngsters fulfill their potential. Ternium invested $22 million in the construction of the new Roberto Rocca Technical School in Santa Cruz, Brazil, which started classes in February 2025. It covers high school education from the ages of 15 to 18 and offers Mechatronics and electromechanics specializations.
For Ternium, art and culture serve as a source of innovation and provide the means for celebrating diversity and exploring the complexities of the human experience. In 2024, the company invested $1.7 million in cultural activities, which include two main programs: Film Festivals and Photographic Archives.
In this special effort, Ternium’s employees team up with local communities to improve the infrastructure of their schools. The goal is to make a lasting impact by refreshing learning spaces, updating furniture, painting and improving shared areas. In 2024, 1,746 volunteers from Ternium worked to transform 11 schools in Argentina, Colombia, Mexico, Guatemala, Uruguay and the US, benefiting 4,890 students.
As part of its commitment to promoting a healthy lifestyle, Ternium has a tradition of organizing the annual 10K Ternium race in the communities surrounding its facilities. In 2024, this event took place in San Nicolás (Argentina), Monterrey (Mexico) and Rio de Janeiro (Brazil), attracting the enthusiastic participation of over 11,600 people. The funds raised in the race, which reached over $200 thousand, were donated to local charitable institutions.
Throughout 2024, Ternium reinforced its commitment to community well-being by organizing health fairs across Mexico, reaching 1,940 people in the Nuevo León, Puebla, and Michoacán states. The year began with the first Dental Health Fair in Aquila, Michoacán, benefiting 245 participants. In October, the 16th Health and Wellness Fair was held in Pesquería, Nuevo León, alongside Hospital Clínica Nova. The event provided free medical Services. In November, Club Ternium in San Miguel Xoxtla, Puebla, welcomed the local community for a day of preventive care. Services included vaccinations, spinal health checks, dental consultations and more.
In 2024, Ternium carried out several initiatives in Mexico and Argentina to promote sustainability and support local well-being. In Mexico, the company installed 47 rainwater harvesting systems in five schools and 42 homes near its plants in Puebla, Michoacán and Nuevo León. These systems benefit over 3,000 people and collect around 3.4 million liters of water annually. At the same time, Ternium worked with local governments to revitalize urban spaces. In Argentina, following severe storms in the Buenos Aires Province, Ternium supported recovery efforts by donating roofing materials to affected communities, demonstrating its continued commitment to community resilience in the face of climate-related challenges.
Three main drivers compose Ternium’s business strategy: a focus on sophisticated value-added products, the pursuit of strategic growth opportunities and a relentless quest for competitive industrial operations. In 2024, the execution of the DRI-EAF upstream project in Pesquería, Mexico, continued in parallel with several downstream lines as part of our strategy to reinforce our presence in the country.
Ternium has a strong track record of growing its business through both strategic acquisitions and organic expansion. We also develop sophisticated value-added products and drive industrial efficiency by implementing Industry 4.0 solutions, developing applications that integrate with customers and improve various operational management aspects, with a focus on safety, maintenance, logistics, planning and administration.
Through the ProPymes program in Argentina and Mexico, Ternium supports small and medium-sized enterprises (SMEs) that are part of its value chain. The goal is to strengthen the competitiveness of customers and suppliers focusing on enhancing productivity, technology, productivity, quality, logistics, layout and maintenance issues.
ProPymes delivers an annual training plan adapted from Techint Group’s management model. It offers courses for executives, managers, professionals and technicians across topics like management, productivity, sustainability. In 2024, ProPymes delivered training to 6,485 participants, totaling over 120,000 hours.
ProPymes connects SMEs with industry associations, banks and government entities to promote common interests. It supports strategies against unfair trade and encourages participation in national events.
Ternium has adopted a comprehensive set of codes, policies and procedures to regulate its activities, ensuring compliance with the legislation of each country. Some of the most important ones include the Code of Conduct, Policy on Business Conduct, the Code of Conduct for Suppliers, the Code of Ethics for Senior Financial Officers, and the Corporate Policy on Securities Trading.
The company developed its Business Conduct Compliance Program (BCCP) focused on the prevention of bribery and mitigation of corruption risks among all its employees. Ternium regularly issues, reviews and validates its codes, policies, procedures and standards following anti-corruption and ethical business regulations and their developments.
Ternium has established and encourages the use of its Compliance Line. This confidential channel is available to all employees, suppliers, customers and other stakeholders who wish to report any type of alleged breach of the Code of Conduct or Ternium’s policies. In 2024, 50% of analyzed complaints were substantiated and resulted in corrective actions.
