Good morning, ladies and gentlemen, and thank you for standing by. My name is Kelvin, and I will be your conference operator today. At this time, I would like to welcome everyone to Ternium's Third Quarter 2025 Results Call. [Operator Instructions] I would now like to turn the call over to Sebastian Marti. Please go ahead. Sebastián Martí: 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 third quarter and first 9 months of 2025. This call is meant to provide additional context to that presentation. I'm joined today by Maximo Vedoya, Ternium's Chief Executive Officer; and Pablo Brizzio, 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 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.

Thank you, Sebastian. Good morning, and thank you all for joining our quarterly conference call. In the third quarter of the year, Ternium continued to improve its performance. We saw an increase in EBITDA, driven mainly by a decrease in cost per ton supported by the continued execution of Ternium's competitiveness plan. Our cash generation remains strong with operating activities contributing over $0.5 billion during the quarter. Additionally, Ternium's Board of Directors declared an interim dividend of $0.90 per ADS, which keeps the payment level the same as last year. Meanwhile, the business environment continues to be marked by uncertainty, largely resulting from the ongoing changes in the U.S. tariff framework. Within this environment, the U.S.-Mexico trade agreement stands out as particularly significant for our business. In recent weeks, we have engaged in dialogue with stakeholders on both sides of the border. This conversation had revealed support for policies that strengthen the USMCA framework and promote deeper regional integration. The Fortress North America concept is gaining traction, highlighting the importance of deeper economic and industrial ties among the USMCA members. As trade negotiations progress, the focus remains on maintaining fair competition, addressing imbalances and reinforcing rule of origins, all of which are important to ensure the long-term resilience and growth of the industry in the region. Along these lines, the first formal step have already been taken for the planned USMCA review with consultations launched to obtain feedback on the agreement from interest parties. In Mexico, uncertainty resulting from U.S. trade policies has had a significant impact on steel demand during 2025. Recognizing the challenges created at this period of trade volatility, the Mexican government is prioritizing efforts to fortify the country's value chain, aiming to promote greater self-sufficiency and resilience against external competitive pressures. These incentives are closely aligned…

Okay. Thanks, Maximo, and thank you, everybody, for sharing today this conference with us. Let me review our operational and financial performance following the webcast presentation. Beginning on Page 3, adjusted EBITDA increased sequentially in the third quarter, driven by improved margins. Looking ahead, we expect a slight decline in adjusted EBITDA for the fourth quarter, primarily driven by the usual seasonal slowdown in shipments across all our markets. Adjusted EBITDA margin should remain consistent with the previous quarter as the expected decrease in revenue per ton in Mexico and Argentina is projected to be largely offset by continued reduction in cost per ton. Let's move on to the next slide. Our net result for the third quarter of 2025 was a loss of $270 million. This figure reflects, firstly, a $405 million non-cash loss related to the write-down of deferred tax assets at Usiminas. And secondly, a $32 million loss related to the quarterly update of the value of a provision for ongoing litigation concerning our acquisition of stake in Usiminas. This was driven by interest accrual and by the appreciation of the Brazilian real in the quarter. Without these effects, net income would have been $167 million in the fourth (sic) [ third ] quarter, and earnings per ADS would have been $0.73. You can also see that compared to the second quarter of 2025, the largest impact was related to the write-down of deferred tax at Usiminas and also to $143 million decrease in income tax results, mainly due to lower deferred tax results in the third quarter, our significant gain in the second quarter, driven by the appreciation of the Mexican peso against the U.S. dollar. Let's move to Page 5 to review our steel segment performance. Shipments posted the most increase during the quarter, driven…

[Operator Instructions] Your first question comes from the line of Carlos De Alba of Morgan Stanley.

My 2 questions. One is, given the results of the elections -- mid-term elections in Argentina, what sort of strategic opportunities do you see in trying to make more efficient the ownership structure of the company with potential stakes in Siderar or Ternium Argentina and Ternium Mexico?

Yes. I mean, I think the election doesn't change the project that we -- what you have. You remember that we have an opportunity now. We analyze simplifying the structure. It couldn't be done. We are not seeking that right now. but the things that can come online, but not because of the election. I think that the change in the election is that, well, we are going to left behind the noise of everything that will happen in the market in Argentina. I think with this election, there are going to come structural reforms in Argentina that probably will make more competitive the industry. I mean, Argentina is in need of these reforms. And I think we can see in the future a market -- a growth in the market, but also a growth in the competitiveness of Ternium Argentina, which is what we need in Argentina. I think those are the change of the election.

And then, under what circumstances would you try that initiative that you presented in the past that didn't work to make the structure more efficient?

I think it doesn't depend on us. Remember that a good part of the share of Ternium Argentina is in the ANSeS. So that -- it doesn't depend on us to do that. I don't know, Pablo, if you want to add anything else to that.

Yes. Carlos, you know that -- as Maximo mentioned, we have tried in the past doing that. It's also, as he mentioned, nothing that we can do at this moment. But this is a project that continues to be in our mind. So, if there is, in the future, an opportunity to move forward with this, it's something that we will take in consideration. It will require a full analysis on the process and on the project, but it's clearly something that we may consider. I think that, first of all, you need to see in order to start thinking about this kind of project, the reforms that the government will try to pass, how these are evolving -- how are this evolving and the way they are approved in Congress. So, with all of that behind us, probably opportunities could appear to further analyze this project. So, again, a lot of things moving on in Argentina. We need to see if this evolution is going on the positive direction. And probably after that, there will be a possibility to further analyze this project.

Great. And then my second question is related to what would -- I mean, I know that you guys are talking to the government in Mexico and in the U.S. The Mexican government is still negotiating with the U.S. government. But what would be Ternium's planned, or action planned if the U.S. keeps the melt and pour conditions for steel using products that are imported into the U.S.

Well, we are going to continue with the plan we already put forward. I mean, the new investment was exactly because of this. Remember, we have 2.5 million tons of flat products, not including long products there of melt and pour. And with the new steel shop, we are going to have 2.6 million additional to that. So, we are investing because I think that the melt and pour, in some cases, as in the automotive industry, is something that is going to stay or it can be increased. So that's why we made those huge investments, Carlos.

All right. I understood that right now, it has to be melt and pour in the U.S., not in Mexico that's included…

Well, yes, you're right about that. That is not to pay -- you're right, I misunderstand the question. I thought you were talking about the USMCA. I mean, if the negotiation or looking forward, that if we are going to have a USMCA, that has to change. The vision or the path we see is that it has to be melt and pour in the region. It cannot be melt and pour only in the U.S. if we have to have a negotiation. You cannot have an agreement where you only have U.S. melt and pour. In the meantime, there are some customers of us -- probably your question also goes through that. There are some customers of us that are -- as you said, are -- well, some I don't know, some affections because of it because there are some steel derivative products, you said that if there are melt and pour in the U.S., they have discounting in the tariff they pay. But we are working with each of these customers for each of these products in particularly to support their sales so that we don't lose any volume. But this is a temporary thing, I guess.

Your next question comes from the line of [ Rich Emerson ] of Goldman Sachs.

Can you hear me?

Yes, Rich.

Okay. I have 2 questions. The first one, looking at the 4Q outlook, I'd like to understand a little bit more on, first, the cash cost outlook. You guys mentioned that there are ongoing efficiencies in the operation. But could you please just break this down between the cash cost performance at Usiminas and at Mexico and Argentina? So, looking ahead, you guys expect cost to improve also in the operations in Mexico and Argentina. So, this is the first one. And the second one, in terms of prices, I understand that Mexico is undergoing a subdued activity in the construction segment. And prices in Argentina continue to be subdued as well. So, what can you guys share in terms of what you expect on prices for Argentina and Mexico going forward? So this is the second point on the first question. And just another point on CapEx. In this quarter, there was a small decline. So, just trying to understand if you guys still plan to reach the $2.5 billion for this year or indeed we should see lower CapEx for the year, considering that we saw this decline in 3Q?

Thank you, Rich. I'll start from the third one and going up. CapEx, yes, we had said that 2Q was the highest of our CapEx. It was around $800 million (sic) [ $800 million ]. This quarter it's $7 million (sic) [ $700 million ]. Probably in the fourth quarter, the number we are seeing is around $600 million, putting the total CapEx of the year between $2.5 billion and $2.6 billion. For 2026, CapEx will be probably $1.9 billion. So probably every quarter will be around $500 million. And in the 2027, probably will return to $1.11 billion. So, as I said before, the peak of all this CapEx investments, of all this CapEx plan was in the second quarter. That -- I hope I answered the third one with that. Second, you're talking about prices. Prices for the fourth quarter are going to have a little bit of a decrease in Mexico and Argentina, but only slightly and some part of that is because of the mix. Remember, the fourth quarter is usually a low volume quarter and also the mix change a little bit. So, prices -- when you see our prices in the fourth quarter, could be a little bit low, but not very much. Prices in the North American region are stable and prices in Mexico has recovered a little bit from the U.S., but we are not seeing any decrease and probably we are going to start seeing some increases in some of the sectors in Mexico late in the fourth quarter or early in the first quarter. And the first one, Pablo?

Yes. Perfect. Rich, let me try to answer your question by dividing the cash cost from the different operations. But before doing that, in a general view, you have seen that our margin during the third quarter has increased in comparison to the third. That was somewhat practical and something that we announced during our last conference call. And this was due to different things. First of all, of course, there was a reduction in raw material and purchased slabs, which are very important for overall cost structure. But also, there was the implementation of our cost reduction plan that is expected to be fully implemented by the end of this year. So, this is the 2 components of why we have been reducing cost. And if you split up between the different markets where we are, you have an increase of margins in Argentina, somewhat in Mexico and in Brazil, taking into consideration numbers that Usiminas presented to the market last week, you have seen also some increase in margin. The expectation for the fourth quarter is to further increase our cost reduction. And if all other things were equal, our margin should increase. But we know what we have said and Maximo has just answered one question to you, where you will see that our average price, both in the Mexican and the Argentine market will decline a little bit, but we will be able to sustain our margins in the different market. That's why the outlook for the fourth quarter is for sustained EBITDA margin and a small reduction in volumes, and that's where we will see our EBITDA generation. But all in all, we continue or we're expecting to continue to have better margins in the different regions where we operate, and that will be clearly reflected in the cash cost.

Your next question comes from the line of Alfonso Salazar of Scotiabank.

I have 2 questions. The first one is regarding the outlook for demand in Mexico for 2026. I mean, we know that 2025 was pretty weak. And if you think that there is going to be a recovery in 2026, I would like to know what's going to drive that recovery. And more generally, what is your -- the outlook in your view for North America? We know that the situation with tariffs now with Canada an extra 10%. It's very unclear what's going to happen with tariffs the next week and then 1 month from now. But if you can help us to understand, first, how the U.S. has been sourcing all the steel that they need this year so far with the tariffs? And how you think it's going to be once the situation normalizes, let's say, 2 years from now, if we can think of a normalization of the steel trade situation that we are facing today. That would be very helpful. Any comments on that would be very helpful.

Alfonso, I will try to make magic and answer the second question. But first, the outlook of Mexico. Yes, demand in Mexico in 2025 is not good, as you said. Last week, I think the Worldsteel disclosed the SRO for the whole world and apparent consumption in Mexico is probably going to be down 10% in Mexico, steel apparent consumption, which is a very, very big number. What we are seeing for 2026 is a recovery in Mexico demand. We'll still put this at 4%. But probably if the infrastructure -- I mean, part of that decrease in the apparent consumption in 2025 is due to -- well, it's always in a new year from a government, always infrastructure down. Infrastructure is down like 28% to 29% in the first 9 months of the year. So that's a huge number, and it's still intensive. So, this is going to grow next year. Construction will probably start growing again. And the stabilization in the trade between the U.S. and Mexico. I think that's something that is also a driver of improving demand or going back to the demand we have in 2024. So, in the sense for Mexico, we are optimistic that demand is going to recover at least partially in 2026. Outlook for the North America, you said what is going to happen in 2 years? Clearly, I mean, today, imports in the U.S. are decreasing. There are still some countries that are paying the tariff of 50% and shipping to the U.S. But in general, imports are decreasing. I think that at least in the region, I am confident. I don't know if the confident is the word, but I think that USMCA is going to be renegotiated and in at least trade between the USMCA countries is going to be liberalized. I think that the U.S. has a clear vision of that manufacture, industrialization has to come back to the region. And I think that including Mexico and Canada, but I'm speaking about Mexico. In this region was, how to improve the industrialization in the region, I think it's a better outlook for everybody. And everybody, I think, has the same vision. When is this going to happen? It's not clear, but the renegotiation, it's already started. So, I guess that by the mid part of next year, we are going to have an outlook of where this negotiation goes and how tariff between the 2 countries start diminishing. That's at least our vision. I hope that also -- I give some clarity.

Yes. Maybe just a follow-up on what you mentioned. The fact that we already see some bottlenecks for this reshoring of manufacturing, one of them is certainly labor. The second one is energy with data centers consuming so much energy. If you want to make more steel used electric furnaces, that's also going to require a lot of energy.

You're right, Alfonso. That's why I think that a vision of a region more than only the U.S. is what is in the best interest of everybody, including the U.S. I think Mexico can be a partner, if it follows the rule of the USMCA, can be a very, very good partner to help with the vision the U.S. has. And I think that's a common understanding of everybody.

Your next question comes from the line of Alex Hacking of Citi.

I guess just following up on the trade point. Have any of your auto customers started to rebalance production back to the U.S. and away from Mexico?

They still didn't rebalance production. Our discussion with our customers are, how they -- I mean, they are sourcing steel from the U.S. They are sourcing steel from us in Mexico, and they are also sourcing steel from some Asian countries, and we are discussing how to -- if we are able to source that steel that they are bringing from, let's put Asian countries back to Mexico. And so, we have very good discussions with them trying to make a ramp-up of that sourcing. From a broad point of view, I mean, the U.S. consumes somewhere around 16 million units in light vehicles per year. They produce today 8 million and Mexico export 2.5 million; 2.3 million, 2.5 million. I mean, I understand that what the Trump administration is trying to accomplish is to increase that 8 million units. And I think that's possible. But I don't think that this is going to be on taking an account in Mexico production. Probably it's going to take account or it's going to gain market share of production in the U.S. against other suppliers because you have to put that -- every car that is exported from Mexico to the U.S. at least has between 35 and 45 U.S. contents. So, in the interest of everybody, if you're going to produce more in the U.S., you have to substitute imports of cars from outside the region and not from Mexico. So that's the vision I think everybody is looking to. I hope I did answer the question, Alex.

Yes. No, that's very clear, and it makes sense. I guess a second question would just be, I've seen various news reports about Mexico increasing their own steel tariffs. I guess, what is the current proposal and what will be the timing of implementing any changes?

Look, there are several initiatives in Mexico that are following in a sense also what the U.S. -- not because the U.S. is asking, I think, but because this is what a clear vision of this new administration. I think the new President before she was even elected and when she was already elected but not in office, said that the vision of the Plan Mexico was to -- I mean, to increase value-added content in Mexico and in the region. So, there's a lot of initiatives. There's one initiative that I said, I think, in my initial remarks, that there are almost 1,500 products that are ready in Congress to increase tariff. Those include those of steel and some steel derivatives from 25% to 35%. This should be approved in November. And there are also other initiatives I know they're discussing to try to limit imports whenever it's possible to produce that in the region. That's in the North American region.

Okay. And then I guess just one final one, if I may. I mean I assume that Ternium would generally be in favor of sort of creating Fortress North America for steel, where Mexico, Canada, the U.S. have steel import policies -- tariff policies that are fairly aligned with each other, but then relatively free trade amongst each other. I assume that's something that Ternium would generally be in favor of and would be quite positive for Ternium.

Yes. And I have been out talking about that. So yes, I can say it without any doubt. I think that each country has to have some differences because the production matrix of the countries are different. But I think internally to say that we are in favor of a North American fortress, and we are actively asking for that.

Your next question comes from the line of Rafael Barcellos of Bradesco BBI.

So, first question, I would say that over the past few years, you worked to simplify the overall shareholder structure of your subsidiaries, right? So, I just wanted to understand how comfortable you are with the current structure across regions. And the second question, if you could provide an update of the Pesqueria project. I mean, if you can go through the expected start-up CapEx, I mean, after the recent CapEx revision, whether you are now comfortable with your estimate. And given the overall market conditions, if there's any change in your commercial strategy for the project?

Thank you, Rafael. I'll start with the second one, Pesqueria. I mean, you know the Pesqueria has several projects. The first one or the first part is the galvanized, the new galvanized line and the new PLTCM, the cold-rolling mill. The galvanized line is going to start the running curve in December, is in time. We are going to start it in December. And the PLTCM is going to start it in January. Remember, this has -- they are very complicated line. So, the ramp-up curve is not very -- it's not short, but we are going to start production in December, and we are going to start production in January, plus/minus some days. And so -- I mean, we are confident of that. The other project is the DRI and the EAF facility. That is going on time. I mean we have on our budget that is going to start in the fourth quarter of 2026. If you see the site, I mean, it's impressive. It's really worthwhile going to visit the site because it's clearly amazing and the tower and 140 meters of the DRI facility going direct to the EAF without any -- I mean, hot DRI. So, we have a lot of efficiency in energy. But -- and today, we have the same budget as we announced. I think it was $2.7 billion. We are in that budget. Of course, still 1 year until we start the production. But so far, it's going very good. And then, we have the structure, Pablo?

Yes. You know that we have been discussing this at length during many conference calls on our idea to simplify the corporate structure. So, clearly, we are not comfortable with the structure that we currently have. We think it would be a plus for Ternium to simplify its corporate structure. But also, you know that it's not a simple proposition. It's not just a decision that from one day to the other, we can achieve. So, we need to be very cautious on the message that we passed that clearly, we are comfortable. Clearly, it's something that at some point, we would like to simplify. But the process to do that is not straightforward, and we will analyze, and we will continue to analyze not only from an economic standpoint, but also from a formal standpoint, how we can achieve that. But again, I guess that we answered this question also from our point of view during this call. It's something that we keep in our short list of things to be done in the future. Nothing that we can do at this specific point, but it's something that we will try at some point to achieve.

[Operator Instructions] Your next question will come from the line of [indiscernible] of J.P. Morgan.

So, I would just like to follow up a little bit on the questions that my colleagues did. And the first one is a little bit about your expectations for '26. So, I think there is like the magical number of EBITDA per ton that we like always discuss, $150 per ton. And I would just like to understand if this is your expectation for next year. If not, what is the level that you guys have confidence that you might deliver? And what is the premises that you have been considering for this number? So, does this include like antidumping structures for Brazil or this is like base case that we are not going to have anything at Usiminas level. So just to understand a little bit your rationale here. And I think lastly, we discussed like every earnings call a little bit on what is the update or the most recent update on Compactos, if this is going to be like a project that you have on your pipeline for Usiminas for coming year. I think the last update that we had is, this is going to be a discuss for 2026. But I would just like to understand if there is a space or room for maybe a postponement since like we don't have the best environment right now in the market? Or if this is a priority since like the iron ore mining project still.

I'll start with the Compactos. As I think I said before in some of the conference, I mean, the decision of the Compactos, we don't have to take a decision until next year, I think it was mid or late next year. In the meantime, we are working on all the alternatives. And we are asking the environmental permissions, and we are going through the analysis of the projects. There are several alternatives now for the Compactos. So, we are analyzing the different alternatives. In the meantime, we are doing some work in MUSA, where we are extending a little bit the life of all the non-Compactos with [ interfit ]. But so, we have some more work to do or more time in feeding Usiminas and selling the rest to the market. So, I mean, again, we are analyzing different options, different plant structure for the Compactos, different way of taking the iron ore out of the mine. And probably we have an update by mid-2026. The first one, Pablo, the EBITDA ratio.

So, you're right that this has been our target. And in fact, we have been above this number for a very long period of time. after the increase of our participation in Usiminas, we mentioned that then you need to sum up both things. And if you take into consideration what Usiminas comment last week in their own conference call, the margin that they presented was 7%. And if you take the margin that I mentioned in answering the previous question of our operations in Argentina and Mexico, we are without Usiminas closer to 12% EBITDA margin. Clearly, it is something that we need to keep working. We already commented that we are expecting to increase our margins marginally or some during the rest of this year, 2025. And also, Usiminas has mentioned exactly the same. So of course, we will not arrive to this number during the rest of this year, meaning the fourth quarter of 2025. It will depend on many different things, the possibility of reaching that number during 2026. You mentioned some of them, the tariff, some reduction of imports in Brazil, improvement. On our side, we are doing a lot of things. We are fully implementing our cost reduction plans in order to sustain the reduction of our own cost. But at the very end, also will depend on the scenario on the trade negotiations, the growth in the different markets where we are. It's very difficult for us, especially with uncertainty related to the trade discussions to put a number today to 2026 EBITDA margins. Clearly, we continue to have this as a goal. Clearly, it's something that we will pursue. We are improving. We are entering into 2026 with a margin above 10%. The last one was 11%, and we will continue to work on to that direction. So, we are not that far for that goal. Clearly, it is one target that we have, and we will keep working to achieve as much as we can during the rest of 2026.

There are no further questions at this time. And with that, I will turn the call back to Ternium's CEO. Please go ahead.

Okay. Thank you to all of you for participating in today's call. We really appreciate your insight and encourage you to share any feedback. And have a great day. See you in 3 months.

Ladies and gentlemen, this concludes today's call. We thank you for participating. You may now disconnect.