FORM
6 - K
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Report
of Foreign Private Issuer
Pursuant
to Rule 13a - 16 or 15d - 16 of
the
Securities Exchange Act of 1934
As
of 10/04/2008
Ternium
S.A.
(Translation
of Registrant's name into English)
Ternium
S.A.
46a,
Avenue John F. Kennedy – 2nd floor
L-1855
Luxembourg
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under
cover Form 20-F or 40-F.
Form 20-F
ü Form 40-F ¨
Indicate
by check mark whether the registrant by furnishing the information contained in
this Form is also thereby furnishing the information to the Commission pursuant
to Rule 12G3-2(b) under the Securities Exchange Act of 1934.
Yes ¨ Noü
If “Yes”
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):
Not
applicable
The
attached material is being furnished to the Securities and Exchange Commission
pursuant to Rule 13a-16 and Form 6-K under the Securities Exchange Act of 1934,
as amended.
This
report contains Ternium S.A.’s 2008 investor day presentation.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
TERNIUM
S.A.
By:/s/ Roberto Philipps
Name:
Roberto Philipps
Title:
Chief Financial Officer
Dated:
April 10, 2008
Solomon R.
Guggenheim Museum, New York
April 10, 2008
April 10, 2008
Investor
Day
TERNIUM l Investor Day -
April 10, 2008
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 available to Ternium. Such statements reflect the current views of Ternium
with respect to future events and are subject to certain risks, uncertainties and
assumptions. Many factors could cause the actual results, performance or
achievements of Ternium to be materially different from any future results,
performance or achievements that may be expressed or implied by such forward-
looking statements, including, among others, changes in general economic, political
conditions in the countries in which Ternium does business or other countries which
have an impact on Ternium’s business activities and investments, changes in interest
rates, changes in inflation rates, changes in exchange rates, the degree of growth and
the number of consumers in the markets in which Ternium operates and sells its
products, changes in steel demand and prices, changes in raw material and energy
prices or difficulties in acquiring raw materials or energy supply cut-offs, changes in
business strategy and various other factors. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect, actual
results may vary materially from those described herein as anticipated, believed,
estimated, expected or targeted. Ternium does not intend, and does not assume any
obligation, to update these forward-looking statements.
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 available to Ternium. Such statements reflect the current views of Ternium
with respect to future events and are subject to certain risks, uncertainties and
assumptions. Many factors could cause the actual results, performance or
achievements of Ternium to be materially different from any future results,
performance or achievements that may be expressed or implied by such forward-
looking statements, including, among others, changes in general economic, political
conditions in the countries in which Ternium does business or other countries which
have an impact on Ternium’s business activities and investments, changes in interest
rates, changes in inflation rates, changes in exchange rates, the degree of growth and
the number of consumers in the markets in which Ternium operates and sells its
products, changes in steel demand and prices, changes in raw material and energy
prices or difficulties in acquiring raw materials or energy supply cut-offs, changes in
business strategy and various other factors. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect, actual
results may vary materially from those described herein as anticipated, believed,
estimated, expected or targeted. Ternium does not intend, and does not assume any
obligation, to update these forward-looking statements.
TERNIUM l Investor Day -
April 10, 2008
3
08:30am
Continental breakfast and registration
09:30am
Presentation by Daniel Novegil, CEO
10:30am Coffee
break
11:00am Q&A
with Ternium’s management
12:00pm
Lunch
Event Schedule
TERNIUM l Investor Day -
April 10, 2008
4
Competitive
Positioning
Conclusions
Ternium
Mexico
Growth
Steel
Market Trends
TERNIUM l Investor Day -
April 10, 2008
5
Competitive
Positioning
Conclusions
Ternium
Mexico
Growth
Steel
Market Trends
TERNIUM l Investor Day -
April 10, 2008
6
Source: IISI
Committee on Economic Studies / Global Insight. 1CAGR:
Compounded Annual Growth Rate. 2PPP:
Purchasing Power Parity
World
Apparent Crude Steel Use (thousand
tons)
Steel Use
Growing Worldwide
TERNIUM l Investor Day -
April 10, 2008
7
• Worldwide capacity
expansion not as strong as anticipated a year ago, and in some
cases already slowing down (e.g. China):
cases already slowing down (e.g. China):
World
Apparent Crude Steel Use (thousand
tons)
Source: IISI /
Credit Suisse / Ternium
• Raw material
availability
• Infrastructure
bottle-necks
• Environmental
issues
• Engineering
resources
• High equipment
costs & long lead times
Capacity utilization rates at record levels
TERNIUM l Investor Day -
April 10, 2008
8
Source: Clarksons
(Panamax - 70000 dwt)
Source:
NYMEX
Source: BMA /
Ternium
Source:
Vale
Iron
Ore Pellet
(US$/ton)
Natural
Gas
(US$/MMBTU)
Freight
(US$
thousand per day)
Coal
(US$/ton)
Key Input
Prices on the Rise
TERNIUM l Investor Day -
April 10, 2008
9
Cost-pushed
Price-pulled
Supply
Driven
Demand
Driven
Privatization
Consolidation
Source: CRU / WSD /
Ternium
*
In
constant US dollars (base April
2008)
**
2008 estimate assumes iron ore pellet and lump price increases of 87% and 66%
respectively and coal increase of 200%
Cost:
Hot rolled band operating costs before overhead
Apr
08: 915
Price Cycle
& Cost Pressures
HRC
price vs. cost
(US$/ton)
TERNIUM l Investor Day -
April 10, 2008
10
US
crude steel production
China’s net steel
exports
US
steel service center inventories
US
steel imports
Source:
IISI/MAR/Merrill Lynch
Source: U.S.
Imports Administration
Source:
MSCI
Source:
AISI
Key Industry Trends
TERNIUM l Investor Day -
April 10, 2008
11
Competitive
Positioning
Conclusions
Ternium
Mexico
Growth
Steel
Market Trends
TERNIUM l Investor Day -
April 10, 2008
12
Source: Ternium /
Corporate Websites
Sidor
Hylsa
IMSA
Ternium’s total
steel shipments (1)
(finished
+ semifinished steel in
mtpy)
Top
players in Latin America
(2007
finished steel shipments
(1) in
mtpy)
Siderar
(1)
Imsa included from Jan 07. Shipments from U.S. assets sold to Blue Scope are not
included.
Ternium’s Leadership in Latin America
TERNIUM l Investor Day -
April 10, 2008
13
(1)
Imsa included from Jan 07. Shipments from U.S. assets sold to Blue Scope are not
included.
Strong Market Share in Fast Growing Markets
Shipments by
region
(million
tons)
Source:
Ternium
Ternium’s
Network
+58%
Ternium’s
Markets
*
Coated steel
TERNIUM l Investor Day -
April 10, 2008
14
Impact of 2008 raw
material price increases on
cash cost of produced slab
cash cost of produced slab
Iron
ore supply
(2007
in mtpy)
Source:
Ternium
• One third of
Ternium’s iron ore needs is provided by its own iron ore mines in
Mexico.
• Three quarters of
Ternium’s crude steel production rely on natural gas instead of
coal.
***
self-sufficiency
***
***
***
Ternium’s
Relatively Low Exposure to Raw
Material Price
Increases
TERNIUM l Investor Day -
April 10, 2008
15
• Centralized
& lean functional organization facilitates
know-how and best practice
sharing, accelerates learning and experience curves, and provides economies of scale
and scope.
sharing, accelerates learning and experience curves, and provides economies of scale
and scope.
• Strong focus in IT
& IS (Visual Flash tool, unified SAP, etc.)
• Flexible business
model and experienced management team allowed integration
of
Ternium Mexico in record time.
Ternium Mexico in record time.
Planning &
Operations
Argentina
Mexico
Venezuela
Gua.
USA
North
Center
South
International
Procurement
(Exiros)
IT
& IS
HR
Engineering
Steel
Procurement
Business
Units
Production
Units
Ternium’s
Business Model
TERNIUM l Investor Day -
April 10, 2008
16
Competitive
Positioning
Conclusions
Ternium
Mexico
Growth
Steel
Market Trends
TERNIUM l Investor Day -
April 10, 2008
17
Industrial
Market share in
Mexico
(flat
steel)
Commercial
Ternium’s
shipments in Mexico
(tons)
Ternium Mexico’s
production capacity
Source:
Ternium
Integration of
Ternium Mexico strengthens
leading
position in Latin America
TERNIUM l Investor Day -
April 10, 2008
18
• Local slab
sourcing in Mexico, minimizing logistics costs
Average operating
conditions
(million tons per
year)
Source:
Ternium
*
Slabs & Billets
Ternium
Mexico’s Semifinished Steel* Balance
TERNIUM l Investor Day -
April 10, 2008
19
Source:
CRU
World
Apparent Crude Steel Use
(US$/tons)
Slab-HRC
Spread
TERNIUM l Investor Day -
April 10, 2008
20
— Mills
specialization
— Procurement &
logistics
— Management
reorganization
— Working capital
reduction
— Marketing
consolidation
Larger runs,
dedicated mills, rationalization of attributes, higher
efficiencies
efficiencies
• Pre-tax synergies
estimated to be US$200 million per year in the
medium term:
medium term:
Improved
purchasing through Exiros, efficiencies arising from the supply
chain management system
chain management system
Lower head count,
decrease in administrative & general expenses and
simplified legal & accounting structure
simplified legal & accounting structure
Unified marketing
effort, better use of distribution channels
Reduced
inventories, credit receivables optimization
Source:
Ternium
Integration
Synergies
TERNIUM l Investor Day -
April 10, 2008
21
Competitive
Positioning
Conclusions
Ternium
Mexico
Growth
Steel
Market Trends
TERNIUM l Investor Day -
April 10, 2008
22
Ternium’s
Growth Matrix
TERNIUM l Investor Day -
April 10, 2008
23
Includes
investments under study (e.g., CRC and HDG in Argentina)
Capacity
Expansions
(million
tons)
Capex
Plan
(million
US$)
Source:
Ternium
Capex Plans
(organic growth)
TERNIUM l Investor Day -
April 10, 2008
24
Note:
Proven and Probable Reserves detailed in this slide include
Measured and Indicated Resources
Measured and Indicated Resources
Iron
Ore Reserves Projection
(concentrate
equivalent million tons)
Iron
Ore Mines
Source:
Ternium
Expanding Our
Mining Footprint in Mexico
§ Current reserves
at 130 million tons, representing approximately 30 years of
production at current rates.
production at current rates.
§ New exploration
plan targets 260 million tons of total reserves at a budget of US$38
million.
million.
TERNIUM l Investor Day -
April 10, 2008
25
Competitive
Positioning
Conclusions
Ternium
Mexico
Growth
Steel
Market Trends
TERNIUM l Investor Day -
April 10, 2008
26
• Regional
leadership, strong market share in fast growing markets.
• Cost advantages
relative to competitors.
• Logistical
advantages (short lead-times, lower freight rates, duty
exemptions).
exemptions).
• High vertical
integration, from iron ore mines to service centers.
• Experienced
management team with successful track record.
• Sound financial
position.
• Growth
potential:
• Organic expansion
aligned with market growth and market share goals.
• Balancing
productive structure and enhancing value added (greenfield).
• Pursuit of
strategic M&A opportunities.
Conclusions:
Strengths & Growth Opportunities
TERNIUM l Investor Day -
April 10, 2008
27