Good morning, and thank you for joining us. My name is Sebastián Martí, and I am Ternium's Global IR and Compliance Senior Director.

This morning, we released our results for the fourth quarter and full year 2025. Today's call is intended to add context to that presentation.

Joining me today are Máximo Vedoya, our Chief Executive Officer, and Pablo Brizzio, the company's Chief Financial Officer, who will review Ternium's operating environment and performance. Following 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 two in today's webcast presentation.

You will also find any references to non-IFRS financial measures reconciled to the most directly comparable IFRS measures in the press release issued today. With that, I'll turn the call over to Mr.

Vedoya.

Thank you, Sebastián, and good morning, everyone. We appreciate you being here today in our conference call.

Ternium delivered resilient results in 2025, overcoming challenging market conditions by adapting rapidly and acting proactively to protect profitability. The company's cost reduction and efficiency program generated $250 million in savings in 2025 over 2024.

Key initiatives included enhancing blast furnace stability, renegotiating service contracts, optimizing iron ore sourcing, and improving logistics. As a result, our EBITDA margin reached 10%.

Our performance, however, was affected by a fatal accident at Ternium México in 2025 and another at Ternium Brasil during this quarter. Usiminas also experienced a fatality in 2025.

We take safety extremely seriously and consider these events a significant setback. Such outcomes are unacceptable, prompting us to reinforce our safety programs.

In response, we are ramping up preventive actions with a special focus on critical risk. Let me now review the latest changes in the global trade environment.

The United States took significant trade measures in 2025 to counter unfair trade practices from China and other Asian countries, and this is reshaping the global steel market as other countries around the world are following a similar path. In Mexico, the government recently raised import tariffs on more than 1,400 tariff lines for countries without a free trade agreement.

In the case of steel, import tariffs increased from 25% to 35%. Meanwhile, negotiations surrounding the North American region trade framework are ongoing.

Many stakeholders from both sides of the border continue to engage in discussions. We have taken an active role in sharing the concerns and priorities of the manufacturing industry throughout this process.

I see broad support for public policies that promote greater regional integration. The aim is to keep trade fair, address imbalance, avoid transshipment, and reinforce rule of origins.

It is important to mention that an agreement to intensify trade flows should, above all, avoid restrictions on intraregional trade like those based on Section 232. As the USMCA joint review take place, removing restrictions to trade among its members will be essential to ensuring the benefit of deeper integration.

Ternium is also doing its part in this process of greater regional integration. Since our arrival in Mexico over 20 years ago, we have significantly expanded our footprint in the country, investing in state-of-the-art technology to offer a wide range of high-value-added products to our customers in the region's manufacturing industry.

In this line, I'm pleased to share some exciting news. We have started production in our new cold rolling mill and also in our galvanized line at the Pesquería facility.

This achievement completes our downstream expansion at the site, made possible by outstanding teamwork. The entire project also added a pickling line and a finishing line center.

All these facilities are now operational, with the cold rolling and the galvanized lines starting the ramp-up phase. Meanwhile, construction of the slab plant is moving ahead as planned, as we expect to start up the facility by the end of the year.

This new plant will allow us to produce high-quality automotive steel with the lowest CO2 emission per ton in the industry. Adding a touch of color, in 2025, we secured a $1.25 billion loan through a green financing facility to support this project.

The loan received several awards last quarter, including IFR's Sustainable Loan of the Year, IJGlobal Awards' Sustainable Loan Deal of the Year in Latin America and Caribbean, and an honorable mention from LatinFinance. Turning to Brazil, the recent implementation of antidumping measures and the increase in import taxes of nine steel products represent a significant shift in the market environment.

This decisive action signaled a stronger government commitment to support local producers and achieve a balanced competitive landscape. Looking ahead, it will be key to monitor the market closely to prevent attempts to circumvent these measures, ensuring that this new environment continued to support fair competition.

In Argentina, growing concerns have emerged regarding unfair trade practice from China. In this situation, the new trade agreement between Argentina and the United States is important because both countries have agreed to work together to address unfair trade practices from other nations.

While we believe Argentina should further integrate with the global economy, it is crucial to approach this process with caution, particularly in view of China's excess production capacity and predatory trade tactics. Summing up, I'm optimistic about Ternium's outlook for the coming years.

I expect Ternium's profitability to improve in 2026, starting from the first quarter. On one hand, we will continue working on reducing costs and enhancing operational efficiency.

On the other, although there are still several important trade issues to be worked out, I am encouraged by the growing support of market economy governments around the world for addressing unfair trade practices. As discussions between the United States and Mexico advance, I am confident that a mutually beneficial agreement will be reached, as a well-structured agreement is good for all parties involved.

Mexico has demonstrated its commitment to reinforce regional defenses against unfair trade practices and encouraging investment within the region, aligning its strategy with that of the United States in ongoing negotiations. In addition, promising changes in Brazil's steel market environment and advancing economic reform in Argentina give us hope for the future in South America.

In this context, we have reached an important milestone in the largest industrial expansion in our company's history. Together, these developments will put us in a unique position as they will help create a stronger foundation for Ternium's growth across the region.

Thank you all for your attention, and before I handing over to Pablo, let me thank especially our colleagues in Brazil, all the analysts there who made it to join us during the Carnival season, I hope you have a very good holiday. Pablo, please go ahead.

Thanks, Máximo, and thank everybody for being today with us in this conference call. Let me begin with a review of our operational and financial performance.

If we look to page three in the webcast presentation, you can see that adjusted EBITDA declined slightly sequentially in the fourth quarter. It was in line with our expectations.

EBITDA margin remained relatively stable, and there was a small seasonal decrease in shipments. As we move into the first quarter of 2026, we anticipate sequentially higher adjusted EBITDA, mainly driven by an increase in EBITDA margin as well as growth in our shipments.

Let's move to the next slide. Net income for the fourth quarter totaled $171 million in the fourth quarter.

We showed a lower operating income, mainly impacted by one-time charges mostly related to an impairment in Las Encinas, one of our mining operations in Mexico. On the other hand, we had a better income tax result along with stronger financial results.

In the sequential comparison, we had deferred tax write-downs in Usiminas registered in the third quarter. Let's turn to page five to review the performance of our steel segment.

Shipments declined mostly during the quarter, primarily due to weaker volumes in other markets, mainly in the US and in Brazil, reflecting seasonally lower activity. This effect were mostly offset by higher volumes in Mexico and in the southern region.

In Mexico, we saw better volumes to the commercial market as a result of government measures aimed at curbing unfair trade practices. Looking forward to the first quarter, we anticipate sequential increase in shipments, mainly as a result of a stronger demand in Mexico.

Turning to page six, steel cash operating income decreased sequentially, driven by slightly lower sales volume and a decline in realized steel prices, which was partially offset by reduced raw material and purchased slab costs, together with efficiency gains. Turning to the next slide, the mining cash operating income increased sequentially, driven by stronger shipments and higher realized iron ore prices, partially offset by higher unit costs.

If we review our cash performance and balance sheet performance on page eight, we will see that in the fourth quarter, we recorded another solid level of cash generation by operations, supported by a reduction in working capital, primarily driven by a decrease in trade and other receivables, partially offset by a decrease in trade payables and other liabilities. We are now past the peak of our capital expenditures, which in the fourth quarter totaled $453 million, primarily reflecting continued progress in the construction of new facilities at the Ternium Industrial Center in Pesquería, Mexico.

Our net cash position remained stable in the fourth quarter of the year, as we had a neutral free cash flow. In addition, dividend payments to shareholders and minority interests were largely offset by an increase in the value of financial securities.

Let's now turn to the final slide to summarize our full-year performance. In a challenging year for the steel industry, we were able to defend profitability as we act proactively to mitigate the impact of the drop of steel prices and volumes, and as a result, our EBITDA margin achieved a two-digit level.

In 2025, cash generated by operations reached strong $2.3 billion, allowing us to finance demanding CapEx requirements as we completed the downstream project in Pesquería and keep working on the slab facility. Looking forward, we anticipate a decrease in CapEx in 2026 to a level of around $2 billion.

In this context, Ternium's Board of Directors has proposed an annual dividend of $2.70 per ADS for fiscal year 2025, keeping at the same level as for the year 2024. Of this total, we have already anticipated and paid 90 cents as an interim dividend in November.

The proposal showed our confidence in the company's prospects, even though we are currently undergoing a phase of significant capital expenditure. At the current market price of Ternium ADS, this implies a dividend yield of over 6%.

With this, we conclude our prepared remarks, please let's go to the Q&A session. Please, operator, let's begin with it.

Thanks.

Hello. Good morning, and thanks for taking my questions.

Firstly, I would like to get a bit more color on your outlook for the Mexican market. Demand today is still running well below the peak levels we saw a few years ago, I'm trying to better understand how do you see the recovery path from here.

Specifically, with the recently announced tariffs in Mexico, how should we think about the potential impact on demand growth for 2026? Other than that, how are you thinking about the likelihood of or the timing of a USMCA deal?

What potential impacts if a significant part of these impacts could be captured in 2026 or if it's a more story for 2027 and beyond could be helpful. As a second question, turning to Brazil, I would like to get your thoughts on the recently announced antidumping measures.

How do you expect these measures to translate into pricing dynamics over the next few quarters? Should we think about a relatively quick pass-through into domestic prices or is the impact likely to be a more gradual, depending on inventories and competitive behavior?

If you could even give some color on the magnitude of a potential hikes here. Thanks.

Thank you, Rafael. I'll start with the first question, the Mexican market and demand.

You are quite right, demand was very low in Mexico in 2025. Apparent consumption of steel decreased 10%.

It's a huge decrease. I've never seen something like that in Mexico, to be honest.

This was even worse if you separate long products and flat products. The apparent consumption in flat products, which is our main market, was 14% below that of 2024.

This is a huge decrease. Ternium, in that sense, the decrease was smaller because we managed to gain market share in the flat products, it was an important measure.

I think in 2026, the estimation of CANACERO is that the market is going to grow 4%. I think all these measures are going to allow the local steel mills to gain more market share against imports.

You have to remember that in Mexico, there's still a huge amount, almost 9 million tons of finished products that are imported in Mexico. Our target with all these measures is to gain more market share, as we did in 2025.

Although the market is not growing as much as we expect, gain in our shipments with the market share. In 2026, the timing in the USMCA is very difficult at the moment.

There is a target that in July, USMCA should be renewed. I really don't know at this moment if that is going to be achievable.

In our projections, we are not seeing a lot of increase of the timing of the USMCA for 2026, and we're putting that more into 2027. Of course, we hope that this is sooner, but we have to expect or we are making our plans in order that it's a little bit later.

Then the second question was regarding Brazil and the dumping measures. To give a little bit more color, I think this is a very important step.

If you remember, Brazil hasn't been very much advocate in the last years of defending industries against unfair trade policies, against the predatory tactics by China. This change with four dumping cases, the plate one, the prepainting, and last week the cold rolled and the galvanized.

This is a very important news, a very important first step that Brazil join most of the rest of the economies. From Europe to India to Mexico to the US, all the countries are fighting unfair trade from China and from Asia.

Impact on prices, I think the impact will be gradual. I don't expect a huge increase in prices because of this.

Again, this is a first step, but it's going to be a more gradual, as you said, impact in the future. I think, Rafael, I answered your questions, but I don't know if you want more clarity.

That's perfect. Thank you.

Thanks a lot.

Good morning, everyone. Thank you very much.

Maybe, Máximo, first a clarification. You said that CANACERO sees demand up 4% or down 4% in 2026?

Up 4% in 2026. All right.

Great. Thank you.

Fantastic. Okay.

Then my two questions will be, first, on USMCA, what would be, in the event that there is not a renewal of USMCA and say that Mexico cannot reach a commercial agreement stand-alone with the US, what would be Ternium's plan B given that a lot of particularly on the auto side, of your volumes going to that sector, and then Mexico exports a significant amount of the cars that are produced in the country? My second question, if you can give us maybe a little bit of an outlook on how do you see Ternium's volumes performing in 2026?

What are the expectations in terms of volume growth in the different countries where you are, or operations where you are actively right now?

Yeah. Can you repeat the first question of the USMCA because we didn't hear very well.

Sorry. Just what is Ternium's plan B?

What would be your strategy if there is not a renewal of the trade agreement, and also Mexico doesn't reach an agreement exclusively with the US?

Yeah. We operate all 2025 with these premises.

In a sense, the USMCA, if it's renewed, the great benefit is that the Section 232 is going to disappear between Mexico and the US. I don't see a renewal of agreement with the 232 on board, and that would be the biggest benefit of the renewal.

In 2025, we operate without it is a USMCA, but the 232 in steel derivative and a lot of products made it the way to operate if there's not a renewal. Again, I think that some of these measures are going to be taken away, although if the renewal is postponed.

We are operating in this environment, Carlos. The volumes of 2026?

Let me take that one, Máximo. As as you heard in our outlook, we are expecting volumes to start increasing already through the first quarter, and in this case, mainly coming from Mexico.

Let me divide the answer to this question into the different markets where we are because we have different situations. In South America, the first quarter is the seasonally lowest quarter of the year, you are not seeing any increase during the first part of the year, during the first quarter, and the opposite situation is in Mexico, where seasonality is coming at the last part of the fourth quarter.

Taking into consideration what Máximo said, that the expectation is at least an increase of 4% in steel consumption for the year, and the possibility of further increases in our market share because of the volumes that we will be able to increase and produce with the new facilities, and even without taking into consideration the possible outcome of the USMCA negotiations and the consequences of that, we are positive that the increase in the Mexican shipments will be above at least the numbers that Máximo mentioned as expectations for the Mexican market. In the case of Argentina or the southern region, you know that volumes were depressed, especially at the beginning of 2025 because we were getting out from a big recession in Argentina.

Numbers tend to recover, or volumes tend to recover in the second part of the year. We are expecting to have positive number coming out in the southern region initiating in the second quarter of the year, not during the first quarter.

Differently is the situation in Brazil, where we saw volumes at healthy level during 2025 and going with the increase of the GDP growth of the country. Expectation for Brazil is to keep growing at moderate levels, volumes will be more related to these changes in the general economy of the country.

Okay.

Thank you.

Thank you, Carlos.

Hi. Good morning.

I wanted to drill down, if I could please, on the EBITDA margin. In the past, you've guided to a normalized level of 15% to 20%, and in the second-quarter call, you had said you expected that 15%, the low end, by the fourth quarter.

I'm just wondering, the last two years have been challenging. I acknowledge that, but just trying to get a sense of what it takes to get back to that 15% to 20%.

Could we see that in 2026? What are going to be the puts and takes to get there again?

Thanks.

Hi, Timna. This is Pablo.

How are you? Let me try to answer your question, which first of all, you're right, we were expecting further recovery during the last part of last year that at the very end didn't materialize because, among other things, the impact of certain things that happened in different markets: the impact in Brazil because of the imports, especially coming from China, and the lack of antidumping measures at that moment, depressing prices in that market; the impact on the changes in the new rules of trade coming from the US that impacted especially industrial sector during the second semester of the year; and the increase of the 232 margin during the year.

That put a lot of pressure on margins and didn't allow us to reach the original expectation. In the meantime, taking that into consideration, we implemented a cost reduction program that, as Máximo explained, yield more than or around $250 million during the year, and clearly we'll continue doing that.

A kind of explanation why we were not able to reach the number that we were expecting. I probably will say exactly the same, that we have the chance to reach that number by the end of this year because we will not reach that number during the first part of the year for sure, though even we are announcing, and our outlook is very clear on that, that we will increase the margins during this first part of the year because of increases in prices across the board.

Of course, that will also have an impact on costs that will be also increased, but we are expecting to have better margins during the first part of the year. We will continue to work, as I mentioned, in further cost reduction programs to further increase these margins, but a lot will depend on what we have been discussing up to now and Máximo described at length, which is the consequence or the situation related to the negotiations of the 232 and the impact that this will have.

Again, not initially, we will not be able to reach the number. We have a chance, and we will work for that to reach that number, which is, as our goal.

You mentioned between 15% to 20%. All I'm saying is to try to reach initially the 15% and keeping working on that.

As the company is always working with that goal and trying to find ways to reduce our costs and to be able to take advantage of the situations that appear in the market. Again, hopefully this year we will be right.

Okay. Very helpful.

If I could, a follow-up on that. I saw with interest in the Diario Oficial yesterday, we had the announcement that Mexico is doing a dumping investigation into cold rolled imports from the US.

I guess it just prompted me to think that, is it enough to have the trade action so far in Mexico and Brazil, especially when you have 50% tariffs in the US, but also the 50% coming in steel action plan in Europe, and the CBAM, of course, already implemented? Even if Mexico and Brazil have started some actions, the rest of the world is picking even more aggressive actions, I'm just wondering if you think these are enough to move the needle as much as necessary to reach those goals you've just enumerated?

Thank you, Timna. Hello.

How are you? You made a very good point.

I think all the things that you're saying are very positive. Again, I think that as I said before, Brazil, this is a very good first step.

As you say, the US, Canada, even Mexico, Europe are much more ahead in this trade measures against unfair trade than Brazil. It changed a lot from last quarter to this one, all this change of mood in Brazil.

Mexico, the dumping case against the cold rolled, it's not only from the US, it's US, Malaysia, and China, remember. I think, again, we will continue presenting dumping cases if we see that they're worth pursuing.

In this case, we think it is, and the Mexican government accept the petition to open it, they see merit in this investigation. Mexico is also going continue probably with some measures to not duplicate, but trying to be similar to the US market.

All these measures are counting, and I think more are coming. You're right, they're not sufficient, but they are in the right path.

Okay. Great.

Thank you.

You're welcome.

Hey, good morning, guys. Thanks for taking my question.

First, I wanted to ask about CapEx. I know you said $2 billion for 2026.

Presumably, that continues to fall as we go into 2027 and in 2028. I'm hoping you can give us a little bit of guidance as to what those numbers might be or what a normalized CapEx number might be as the major CapEx is rolling off and the projects are completed.

Then, what then does that mean for the additional free cash flow that you have, right? You've painted a good picture of increasing demand, increasing prices, improving profitability.

Falling CapEx means there's some free cash flow, I'm wondering about capital allocation, if we should see your net cash position has also fallen over the years as CapEx has ramped up. Should we expect the net cash position to rise or are there other alternatives for this cash?

I guess my second question is kind of related to that. Now that you've sort of completed the acquisition of Nippon's stake in Usiminas, is there any sort of additional consideration about potentially taking out the minorities in Usiminas?

Have you analyzed what sort of benefits or cost savings you would have if you own that 100%? Anything you can tell us there would be great.

Thanks.

Thank you, John. Good morning.

CapEx, as you said, this year will be around $2 billion. 2027 will be around $1.2 billion, it's decreasing.

Then in 2028, we don't have an exact number, but it's going to be around $800 million, the CapEx. That's a regular CapEx.

This is including Usiminas. You're right, the capital allocation for probably the end of 2027, we're going to have a different view.

Today, 2026, we still are going to have a huge CapEx, and probably we have to increase our working capital because the last three quarters, we have a decrease in capital. I don't think it's going to change a lot, but I don't know if you want to add something, Pablo, to that.

Yes. Okay.

Hi, John. How are you?

Let me add a little bit to that because 2026, for sure, will be a year in which we will be using cash and capital because if you add up the $2 billion in CapEx, the dividend that we are paying, and the amount that we, as you mentioned, already paid for the shares of Usiminas from Nippon, this add up more than or close to $3 billion, and most probably the cash generation that we was describing will be in line with this year or even higher, but also taking into consideration that we will reverse the reduction in working capital, and probably we will need to allocate certain cash over there. For sure, we will be reducing our net cash position that we end up at the end of 2025 with $700 million of net cash.

This will be reversed, we will move to a net debt position, but again, at very low levels. Then moving into 2027, as Máximo mentioned, we will be reducing our CapEx.

We will not know yet how the outlook for the working capital will be. We will continue with the dividend payments, probably we will be able to regenerate a little bit or reduce the net debt position at this moment.

We are not seeing significant changes in our capital allocation at the moment. We will continue with the CapEx.

We will continue with the dividends, and we already made an investment in the case of Nippon. Clearly, 2026 will be a year to use cash, and probably 2027 will be a year to recover a little bit of cash.

Máximo, I think that was the second part of the question from John.

Then the Nippon and the minority shares of Usiminas. Today, we are not considering launching a tender offer or buying the rest of the shares of Usiminas to be clear.

Brazil for us, for Ternium, is a very important market. We have already a significant footprint in the country with our stake in Usiminas, with our operation in Ternium Brasil in Rio de Janeiro.

You also know we have a huge commitment to the community, investing $45 million in the new technical school for the community of Santa Cruz near our plant in Rio de Janeiro. We will continue looking to further opportunities.

As I said, we don't have any plans today of doing anything, but we are continuously looking for new opportunities to grow. I hope, John, I answer the question there.

That's great. Thanks, Máximo.

You're welcome.

Hi, everyone. Thanks for taking my question.

I just wanted to get more details on the upstream project in Pesquería. I think that, in the end, increasing volumes relies a lot on the market situation, but do you think there's room for higher steel volumes when you finish the project?

Also, if you could share more details on how much you expect to save in terms of costs with your own slab production versus third-party purchase, that would also be great. Thank you.

Remember the Pesquería project, the upstream project, was always focused for the automotive industry. As you remember, when the USMCA was negotiated, there was a clause for 2027 where most of the automotive industry has to have melt and pour for gaining origin.

This project is going through that. Probably it's going to allow us to sell even more volume to the automotive industry that we are selling today.

We have a footprint of around 2 million tons for the automotive industry, and probably with this project, we will be able to sell much more. This 2 million tons today comes from slabs that we make in Brazil and we ship to Pesquería for the hot rolled, cold rolled, and galvanized.

We are changing that, and probably will allow us to replace more volume from Japan, from Korea, from other region, from even Europe that are selling in Mexico. It's not a safe cost.

Then again, we have more capacity today of hot rolled, if the market improved, we will be able to serve other different sectors with our spare capacity that we have today in Mexico. I hope, Henrique, this was clear, or if you want more on this?

No, I think I just wanted to better understand, when you're producing these slabs in Mexico, how much of that could actually save you in terms of costs, in terms of logistics, maybe? Just to try to better understand, I know it's the motive of the project is also strategic, but just to try to get the benefits from these upstream project apart from increasing volumes in the auto industry.

Hi, Henrique. It's Pablo.

Let me try to add a little bit to that. As I was explaining, we are substituting slabs that we are bringing from some other places or even from Brazil for the ones that we will produce.

There you will gain part of that margin because you will move from buying to produce, which is already an important savings. Then this will be a very efficient and sophisticated facility, and also this will allow us to produce products that we were not able to produce before with our own facility.

That will also add savings in logistics, savings in the way we produce, and also will give us the possibility, of course, probably this will take a little longer to be realized, the possibility to increase volumes of sales because we have a higher capacity than the one that we are utilizing today for the auto sector. If the market continues to grow, as we expect after a good negotiation of the USMCA, this could allow us to further increase volumes.

All in all, is a key project for Ternium for many different reasons, and among that reasons is because of the savings and the reduced costs that we were able to take from that project.

Great. Thank you.

You're welcome.

Hello. Good morning.

Thank you, everyone. Two follow-ups from me.

The first one to Timna's question. I want to understand what do you guys see in terms of margin potential for Ternium that doesn't rely on the US removing or lowering Section 232?

How much more do you see EBITDA margin rising over the next couple of quarters, again, assuming that Section 232 is not withdrawn or is not lowered by the US? The second question, also a follow-up to John's question on capital allocation.

Thank you, guys, for the visibility that you provided for 2026 and 2027. That's really helpful.

I think it would be interesting to hear your thoughts for Ternium post-2027. We still have a hard time understanding what the company looks like in the next 5 years, in the next 10 years, and what are management's priorities.

We do know that in the past, you have talked about corporate simplification, especially with focus on Argentina. Again, John asked specifically about the Usiminas minority stake.

I wanted to know if any of these, again, are your priorities or if you have other priorities going forward, being that growing through M&A, being that working on other projects in Mexico, organic projects, or if management still has little visibility on all of this provided that we still don't have visibility on the USMCA agreement and so on. Be keen to hear your thoughts on this.

Thank you.

Thank you, Caio. You take the first one, Pablo?

Relationship to margins after a good negotiation of the USMCA. Caio, thanks for the question.

As already was mentioned during one of the answers, the real impact of a good negotiation of the USMCA probably will be seen not during this year or just at the very end of this year or fully during 2027. If that's the case, there should be an adjustment on pricing environment in the North American market where there needs to be a reaction on the impact of the tariffs, and this will help reducing that one and increasing margins for Ternium with of course, we never know where this will end up being.

Also, if that's the case, there should be and this is not margins, but this is volumes, an increase in volumes that will help us numbers of Ternium going forward. Again, there is still a lot of discussions, negotiations needs to take place, and that is something that we will see during this year.

There is uncertainty on the timing on the agreement, there is uncertainty on the expected results of that agreement. We are positive on the outcome, as Máximo explained very clearly, and so we are positive on the outlook and the possibility of Ternium increasing and enhancing margins.

Again, this was part of the answer, as you mentioned, to Timna in which we are expecting that margins to increase and to get back to the place where we used to be in the past.

Regarding the capital allocation, Caio, for the long term, as you put it, 5, 10 years, simplification is still a goal that we have, and we are going to see when is the best moment when it can be done, depending on which part. It's always in our to-do list in a sense.

I think that return to shareholders will always be a priority in our capital allocation, and I do see further opportunities then in the long term, or the medium term, both in Brazil and Mexico. As both markets are growing, and as I said before, Mexico has a huge opportunity of growing against imports, and the market, our customers have a very willingness to buy from us.

I think there's still opportunities over there. I think it's too early to try to put them on a paper or make it public, but we are always analyzing these opportunities internally in Brazil and Mexico.

I think, Caio, that answers your question, but

Yes, that's great. Just maybe two follow-ups, if I may.

Pablo, I think you mentioned that you see margins recovering towards the normalized range of 15% to 20%, and I'm just not sure if you mentioned that that's including the upside potential from USMCA renegotiations or if that's excluding those factors. My question was if assuming that nothing changes regarding the USMCA agreement, what level of margin upside do you still see that Ternium can reach without that specifically?

Thank you.

Sorry. Probably I didn't answer correctly what you were asking for, but my intention was that because we believe, as Máximo said, that the impact of the USMCA negotiations is positive, as we believe, will not be during this year.

This is more for 2027. My answer before and our intention for answering that we will work and we will be enhancing our margin and we could have a possibility of reaching the 15% of the lower part of the range that we are looking for was without taking into consideration any impact of the negotiation.

We are already expecting an enhance on our margins during the first part of the year, of course not reaching 15%, and we will continue working, and we think there is a chance and a possibility for Ternium to reach, by the end of the year, a better margin than the one that we have during the first part, hopefully reaching that target by the end of the year. Of course, after failings on the projections last year, we will be more conservative and cautious on making the same one during this year, but the chance exists.

Understood. Thank you.

Since I'm the last question, I'll take the opportunity and ask another follow-up and to Máximo on capital allocation. Máximo, from your answer, I can understand that the company still sees great opportunity for growth at its main markets.

Is that going to be a priority instead of potentially raising dividends further or creating a dividend policy that could maybe increase the company's dividend potential growing forward, or even a buyback program? Thank you very much, guys.

Thank you, Caio. I think that the two are priorities for us: increasing dividends, returning to shareholders, and looking opportunities in our main markets that we know that we can value a lot of profitability or added to our business growing in those markets.

I think they're both. As we have discussed in the past, I don't think the share buyback is something we are going to do because of how much shares are in the market.

The other two are one of our priorities. Both are priorities for us, Caio.

Thank you very much, guys.

Hey, guys. Sorry about that.

Thanks for taking my follow-up. Caio's question actually got me thinking a little bit.

You mentioned there were some opportunities to grow in the main markets, and that's kind of one of the things you're looking for. I think I know the answer to the question, but I'll ask it anyways.

CSN have said they're looking for a potential partner or to do something with their steel assets in Brazil. I'm wondering is that a potential opportunity for you to grow or can you sort of rule out any tie-up with them?

Thanks.

Thank you, John. We heard what CSN is doing.

Its main focus is the cement and I think the infrastructure assets they have. Regarding the steel, at this moment, we are not analyzing anything with CSN.

As I said before and I said several times, Brazil is important for us, we are always open to analyze different opportunities if they appear. At this time with CSN, we are not analyzing anything.

Okay. Thank you.

You're welcome, John.

Okay. Thank you all for joining us today, and please feel free to share any comment with us, and goodbye, and have a good day.

Thank you very much.