Ternium S.A. · NYSE:TX
Ternium — Investor Day (April 2009)
23 slides from Ternium's investor day presentation, Apr 2, 2009
Slide 1: Ternium Investor Day
ANiernium Investor Da Solomon R. Guggenheim Museum, New York April 2, 2009
Slide 2: Forward-Looking Statements
2 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 availabl
Slide 3: Event Schedule
3 08:00am Breakfast and registration 08:45am Presentation by Daniel Novegil, CEO 09:45am Coffee break 10:00am Q&A with Ternium's management 11:00am Closing remarks Event Schedule
Slide 4: Market Overview: New Competitive Landscape
4 Market Overview: New Competitive Landscape Conclusion Management Initiatives Ternium's Strategic Positioning
Slide 5: Market Overview: New Competitive Landscape
5 Market Overview: New Competitive Landscape Conclusion Management Initiatives Ternium's Strategic Positioning
Slide 6: Market overview: Impact of crisis on world steel consumption
6 Market overview Impact of crisis on world steel consumption Source: WSD(1)/WSA/Ternium Steel capacity utilization (%) Jan '09 Ternium (crude steel): Average 76%, Ternium Mexico 87%, Ternium Siderar 63% World Steel Consumption (million tonnes) (1)
Slide 7: Market overview: International HRC price and cost
7 Source: CRU/WSD/Fed * '09 assuming -30% Iron Ore, -58% Coal, taxes and export costs included HRC price and cost (in constant US$/ton, base March^09) Market overview International HRC price Supply driven market Downward trend in costs Privatization Cost pushed Demand driven market Surge in costs Co
Slide 8: Market overview: New competitive landscape
8 Market overview New competitive landscape From globalization to regionalization, trade barriers; regional focus, value added Uneven reduction in raw material prices and currency devaluation; production flexibility and cost competitiveness Overcapacity in net exporting regions; slab availability Fu
Slide 9: Ternium's Strategic Positioning
9 Market Overview: New Competitive Landscape Conclusion Management Initiatives Ternium's Strategic Positioning
Slide 10: Ternium's strategic positioning
10 Source: Ternium estimates/Corporate Websites/Inda Product mix - Top Players in Latin America (2008 finished steel shipments of Latin American units, in tonnes) Ternium's strategic positioning Regional leadership, strong market share, downstream integration, diversified product mix Cost advantages
Slide 11: Cost advantages relative to competitors
11 Source: WSD/Ternium estimates assuming -30% ore, -58% coal Ternium's Iron Ore supply 2009e (mtpy) Iron ore self-sufficiency at 72% in 2009 Cost reductions Post Crisis (US$/ton) HRC Cash Cost Pre-crisis cost Post-crisis cost Ternium's strategic positioning Cost advantages relative to competitors U
Slide 12: Production flexibility
12 Nat. Gas Scrap 3rd Parties Electricity Mexico Argentina 3rd Parties Slabs Coking Coal Flat steel facilities. Utilization rates as of March'09 Ternium's strategic positioning Production flexibility Iron Ore Market Market
Slide 13: Ternium's strategic positioning: cost competitiveness vs market to capacity
13 Ternium's strategic positioning Cost Competitiveness Market to Capacity High High Low US Latin America CIS Japan Competitive edge in new environment: High market share, downstream integration and high value added Low cost, production flexibility Europe China
Slide 14: Management Initiatives
14 Market Overview: New Competitive Landscape Conclusion Management Initiatives Ternium's Strategic Positioning
Slide 15: Management initiatives
15 Management initiatives Rapid reduction of working capital Production cuts and transfers between Production Units Halting all steel and raw material procurement CAPEX reductions, re-assessment of expansion plans Improvement of financial position Cost reductions, contract renegotiations, headcount
Slide 16: Production and steel purchase reduction
16 Slab purchases (thousand tonnes) Management initiatives Production and steel purchase reduction Crude steel production (million tonnes) Production cuts in line with demand levels and working capital reduction plans Priorization of lower cost inputs and facilities Steel purchasing minimized, in pa
Slide 17: Inventory reduction
17 Management initiatives Inventory reduction De-stocking of raw materials, semis and finished steel Steel inventories (thousand tonnes) Raw material inventories (thousand tonnes) Source: Ternium
Slide 18: Capex reduction
18 Management initiatives Capex reduction Complete re-assessment of capex program Re-negotiating contracts with suppliers Expansion plans being re-evaluated: expansion in Argentina suspended, project in Mexico currently in design stage - -452 Capex (million US$) 2008 2009 ID 2008 Actual Plan Source:
Slide 19: Cost reduction
19 Management initiatives Cost reduction Headcount reduction Comprehensive cost reduction program Contract renegotiations with suppliers Re-assignments, headcount reduction, temporary layoffs Source: Ternium
Slide 20: Net debt reduction
20 Cash position of US$1.2 billion as of March 31, 2009 Net Debt of US$1.8 billion as of March 31, 2009 Management initiatives Net debt reduction Net debt position (billion US$) Source: Ternium
Slide 21: Conclusion
21 Market Overview: New Competitive Landscape Conclusion Management Initiatives Ternium's Strategic Positioning
Slide 22: Conclusion: Ternium will weather the storm
22 Conclusion: Ternium will weather the storm and will succeed in new competitive landscape Local focus, strong market share in domestic markets, downstream integration Flexible producer, cost advantages relative to competitors Rapid response to downturn, productive re-configuration, cost reduction
Slide 23: ANiernium
ANiernium