Ternium S.A. (NYSE:TX) Q1 2023 Earnings Call Transcript April 26, 2023 8:00 AM ET

Company Participants

Sebastian Marti - Investor Relations

Maximo Vedoya - Chief Executive Officer

Pablo Brizzio - Chief Financial Officer

Conference Call Participants

Caio Greiner - BTG Pactual

Caio Ribeiro - Bank of America

Timna Tanners - Wolfe Research

Thiago Lofiego - Bradesco

Carlos Alba - Morgan Stanley

Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Ternium First Quarter 2023 Results Call. I would now like to turn the call over to Sebastian Marti. Please go ahead.

Sebastian Marti

Good morning. And thank you for joining us today. My name is Sebastian Marti and I am Ternium's Global Investor Relations and Compliance Senior Director.

Ternium released yesterday its financial results for the first quarter of 2023. This call is complementary to that presentation.

Joining me today are Ternium's Chief Executive Officer, Maximo Vedoya; and the Company's Chief Financial Officer, Pablo Brizzio, who will discuss Ternium's business environment and performance. After 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 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 2, 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.

With that, I'll turn the call over to Mr. Vedoya.

Maximo Vedoya

Thank you, Sebastian. And good morning to everyone and thank you for your participation in today’s conference call. Ternium recorded a good set of results in the first quarter of 2023 with an EBITDA $0.5 billion. This is equivalent to $166 per ton and to a 14% margin. We also have had a healthy cash generation with free cash flow of $414 million in the quarter. Further on, Pablo will go more in depth on our performance in the first quarter.

Let's review you the business environment in our main markets beginning with Mexico, apparent steel demand in the Mexican market remains healthy. In the commercial market, our restocking in the value chain which began in the fourth quarter of last year continue into the first quarter of this year and we are not seeing signs of it finalizing yet. In the industrial markets, we are seeing steady steel demand with less volatility than what we see in the commercial market. The auto industry supply chain disruptions eased significantly and most OEMs plan to increase production. On the other hand, manufacturing industries driven by US housing market like white goods and HVAC industries are currently softer.