The following discussion and analysis of our financial condition and results of operations is based on, and should be read in conjunction with, our consolidated financial statements and the related notes included in this annual report. This discussion and analysis presents our financial condition and results of operations on a consolidated basis. In its annual report for the year 2023, the company reported its results in three operating segments: Steel, Mining and Usiminas. This was the result of the consolidation of Usiminas beginning in July 2023. As of March 31, 2024, following the acquisition of an additional participation in Usiminas on July 3, 2023, the Chief Operating Decision Maker performed a review of the new business structure to decide on the allocation of resources and the assessment of performance, and decided to organize the Company in two operating segments: Steel and Mining. For additional information see note 5 to the consolidated financial statements included in this annual report. Certain information contained in this discussion and analysis and presented elsewhere in this annual report, including information with respect to our plans and strategies for our business, includes forward-looking statements that involve risks and uncertainties. For further information, see “Cautionary Statement Concerning Forward-Looking Statements.” In evaluating this discussion and analysis, you should specifically consider the various risk factors identified in Item 3.D. “Key Information – Risk Factors” in this annual report and others that could cause results to differ materially from those expressed in such forward-looking statements. 87 Overview For a description of Ternium’s profile, business strategy and sustainability approach, see Item 4. “Information on the Company—Overview”, “Information on the Company—B. Business Overview—Our Business Strategy” and “Information on the Company—B. Business Overview—Environmental, Social and Governance.” Ternium’s revenues are affected by general global trends in the steel industry and more specifically by the economic conditions in the countries in which it has manufacturing operations and where its customers are located. Ternium’s revenues are also impacted by events that affect the price and availability of raw materials, slabs, energy and other inputs needed for its operations. Furthermore, due to the highly cyclical nature of the steel industry, recent results may not be indicative of future performance, and historical results may not be comparable to future results. Investors should not rely on the results of a single period, particularly a period of peak prices, as an indication of Ternium’s annual results or future performance. The variables and trends mentioned below could also affect the results of its investments in steel related companies. Ternium’s primary source of revenue is the sale of steel products. Management expects sales of steel products to continue to be Ternium’s primary source of revenue. The global market for such steel products is highly competitive, with the primary competitive factors being price, cost, product quality and customer service. The majority of Ternium’s sales are concentrated in the Americas. Specifically, Ternium’s largest markets are Mexico, Brazil and Argentina. Ternium’s results are sensitive to economic activity and steel consumption. Ternium’s results of operations, which primarily depend on economic conditions in Mexico, Brazil and Argentina, are also influenced by economic conditions in international and regional markets such as the United States, Mercosur and the Andean Community. Historically, annual steel consumption in the countries where Ternium operates has varied at a rate that is linked to the annual change in each country’s gross domestic product and per capita disposable income. A protracted global recession or a depression would have a material adverse effect on the steel industry and Ternium. Ternium’s results are also sensitive to prices in the international steel markets. Steel prices are volatile and are sensitive to supply conditions and to trends in cyclical industries, such as the construction, automotive, appliance and machinery industries, which are significant markets for Ternium’s finished steel products. For example, U.S. prices of hot-rolled coils bottomed in 2020 to $485 per ton, peaked at $2,135 per ton in 2021, and then showed significant volatility. As a result of steel price volatility, among other factors, Ternium’s operating income decreased by 44% year-over-year in 2025 after decreasing 43% year-over-year in 2024, 19% year-over-year in 2023 and 49% year-over-year in 2022, and increasing 388% year-over-year in 2021. Persistently low steel prices would have a material adverse effect on Ternium’s results, as could price volatility. Trends in the steel industry may also have an impact on Ternium’s results. In addition to economic conditions and prices, the steel industry is affected by other factors such as worldwide and regional production capacity, fluctuations in steel imports/exports and tariffs. Historically, the steel industry has suffered, especially on downturn cycles, from substantial over-capacity. Over-capacity has been particularly severe in China. In addition, there has been a trend toward steel industry consolidation among Ternium’s competitors, and current competitors in the steel market could become larger in the future. Intense competition could impact Ternium’s share in certain markets and adversely affect its sales and revenues. Ternium’s production levels and costs are sensitive to the price and availability of raw materials, semi-finished steel and energy, which reflect supply and demand factors in the global steel industry. Ternium purchases substantial quantities of raw materials (including iron ore, coal, ferroalloys and scrap) and slabs for use in the production of its steel products. The availability and price of these and other inputs vary, sometimes significantly, according to multiple factors, including market conditions, government regulations or intervention, including import controls and international sanctions, allocation by suppliers and interruptions in production. In addition to raw materials and slabs, natural gas is an important component of Ternium’s cost structure. Ternium generally purchases these inputs at market or market-based prices; accordingly, price fluctuations in these inputs (which may also vary according to the above-mentioned factors) impact Ternium’s production volume and production cost. Purchased slabs are a key component of Ternium’s production process. Industry consolidation and integration of slab making facilities into finished steel products have been reducing the availability of slabs in the global market. For example, in 2023 ArcelorMittal acquired Companhia Siderúrgica do Pecém (CSP), a Brazilian slab maker that used to be a significant supplier of slabs in the international markets. In addition, it gradually integrated its slab facility in Lázaro Cárdenas, Mexico, with the steel processing facilities in other locations. Furthermore, in 2021 it inaugurated a new hot-rolling mill in Lázaro Cárdenas that led to a further integration of its slab facility in that site. Additionally, the wave of trade sanctions imposed by the United States, the United Kingdom, and the EU, among other countries, 88 following the Russian invasion of Ukraine, against certain Russian institutions, companies and citizens, resulted in a disruption to the global supply of slabs and other inputs consumed in the steel production process. The resolution of the Russian-Ukraine armed conflict and its consequences in the global markets is still uncertain. New international sanctions against Russian steel companies or citizens could result in slab scarcity and/or increases in slab prices in the market, which would have a material adverse effect on Ternium’s business and results of operations. Ongoing geopolitical tensions involving Iran, the United States and Israel present significant risks to global stability and trade. Escalation of this conflict could disrupt energy markets, increase raw material costs and impair supply chain reliability. Heightened sanctions or military actions may also create volatility in currency and commodity prices. These developments could adversely affect Ternium’s sales, results of operations and net results. While we monitor these risks closely, we cannot predict the duration or ultimate impact of this conflict on our company. Ternium’s export revenues could be affected by trade restrictions and its domestic revenues could be affected by unfair competition from imports. Currently, there are a significant number of anti-dumping, countervailing, safeguard measures, tariffs and other trade-restrictive actions. Ternium’s ability to profitably access the export markets may be adversely affected by trade restrictions, including anti-dumping duties, tariffs and countervailing measures, in certain markets. In addition, Ternium’s ability to sell some steel products in its principal markets could be affected by unfair competition from imports of those steel products from certain countries if measures against unfair trade are not in force. These trade measures could stimulate aggressive export offers elsewhere, exerting downward pressure on sales and margins of steel companies operating in other markets and regions, including those in which Ternium operates. For further information, see Item 4. “Information on the Company—B. Business Overview—Regulations—Trade Regulations.” Ternium’s results are sensitive to changes to trade regulations in the USMCA region. Mexico maintains a significant trade relationship with the United States through the United States–Mexico–Canada Agreement (USMCA), which over time has fostered regional supply-chain integration, contributing to Mexican economic growth. However, a wave of U.S. trade measures against several of its trading partners in 2025, including Mexico, has created significant uncertainty. Our business could be materially and adversely affected by changes to trade regulations in the USMCA region. For further information on changes in existing trade arrangements between Mexico and the U.S. see Item 3. “Risk factors—Risks Relating to the Countries in Which Ternium Operates—Mexico—Changes in existing trade arrangements between Mexico and the United States and controversies or disputes between USMCA member countries could adversely impact Ternium’s results of operations and net results”. Changes in prevailing exchange rates could impact results from consolidated companies with net short or long positions in currencies other than their functional currencies. The functional currency of Ternium Mexico, Ternium Argentina, Ternium Brazil, Ternium Colombia, Ternium Guatemala and Tenigal is the U.S. dollar. In addition, Usiminas, which we began to consolidate in July 2023, has adopted the U.S. dollar as its functional currency for its financial statements from January 1, 2026. These consolidated companies record foreign exchange results on their net non-U.S. dollar positions when the other currencies appreciate or depreciate with respect to the U.S. dollar. In addition, these consolidated companies record deferred tax results when the local currency appreciates or depreciates in relation to the U.S. dollar (their functional currency) as such fluctuations change, in U.S. dollar terms, the tax base used to calculate deferred tax at such subsidiaries. Fluctuations in the value of such local currencies against the U.S. dollar have had, and may also have in the future, an impact on Ternium’s results. The fair value of Ternium’s holdings of Argentine securities could be reduced, and Ternium may be required to record a significant loss in its consolidated income statements, as a result of a significant volatility in the Argentine financial market, foreign exchange restrictions in the country and valuation adjustments resulting therefrom. Existing foreign exchange controls in Argentina currently limit the purchase and transfer abroad of foreign currency for saving purposes, restricting Ternium Argentina’s ability to hold excess cash reserves in foreign bank accounts. Accordingly, Ternium Argentina holds its cash and financial investments in the Argentine financial system. As of December 31, 2025, the fair value of Ternium Argentina’s cash and cash equivalents and other investments was $0.8 billion, a large share of which consisted of bond holdings. The U.S. dollar value of such instruments recorded in Ternium’s consolidated financial statements is based on their Argentine peso local market price, converted to the U.S. dollar at the ARS/$ official exchange rate. The valuation of such investments is subject to the volatility of the Argentine financial market and to the effects of applicable foreign exchange restrictions. For example, the fair value of Argentine securities holdings decreased by $555 million in 2023, mostly as a result of a significant devaluation of the Argentine peso in December 2023, and increased by $457 million in 2024, largely due to the favorable reaction by investors to the reforms undertaken by the Milei administration, which was mostly recorded as changes in the fair value of financial instruments in Other Comprehensive Income. 89 A. Results of Operations The following discussion and analysis of our financial condition and results of operations are based on the consolidated financial statements included in this annual report. Accordingly, this discussion and analysis present our financial condition and results of operations on a consolidated basis. For further information, see “Presentation of Certain Financial and Other Information—Accounting Principles” and notes 2 and 3 to the consolidated financial statements included in this annual report. The following discussion should be read in conjunction with the consolidated financial statements and the related notes included in this annual report. 90 Selected consolidated income statement data For the year ended December 31, In million U.S. dollars (except per share data) 2025 2024 2023 (1) Net sales 15,609 17,649 17,610 Cost of sales (13,256) (14,760) (14,051) Gross profit 2,353 2,889 3,559 Selling, general and administrative expenses (1,601) (1,651) (1,472) Other operating results (46) 25 110 Operating income 705 1,263 2,198 Finance expense (214) (196) (125) Finance income 238 298 255 Other financial expenses, net (49) (296) (6) Equity in earnings of non-consolidated companies 86 69 105 Provision for ongoing litigation related to the acquisition of a participation in Usiminas (117) (410) — Effect related to the increase of the participation in Usiminas — — (171) Recycling of other comprehensive income related to Usiminas — — (935) Profit before income tax expense 648 728 1,321 Income tax expense (345) (554) (334) Profit for the year 303 174 986 Attributable to: Owners of the parent 425 (54) 676 Non-controlling interest (122) 227 310 Profit for the year 303 174 986 Depreciation and amortization 788 743 658 Weighted average number of shares outstanding (2) 1,963,076,776 1,963,076,776 1,963,076,776 Basic earnings per share ($) (3)(4) 0.22 (0.03) 0.34 Basic earnings per ADS ($) (3)(4) 2.17 (0.27) 3.44 Dividends per share ($) (5) 0.27 0.27 0.33 Dividends per ADS ($) (5) 2.70 2.70 3.30 (1)In July 2023, Ternium increased its participation in the Usiminas’ control group and began to consolidate Usiminas. For information on the acquisition of the additional participation in Usiminas, see note 3 “Acquisition of business - increase of the participation in Usiminas control group and new governance structure of Usiminas” to our consolidated financial statements included in this annual report. (2)Of the 2,004,743,442 shares issued as of December 31, 2025, Ternium S.A. held in treasury 41,666,666 shares that were repurchased from Usiminas on February 15, 2011. Such shares were not considered for purposes of the calculation of the weighted average number of shares. Each ADS represents 10 shares. (3)International Accounting Standard N° 1 (IAS 1) (revised) requires that income for the year as shown in the income statement includes the portion attributable to non-controlling interest. Basic earnings per share and basic earnings per ADS, however, continue to be calculated on the basis of income attributable solely to the owners of the parent. (4)Diluted earnings per share and per ADS (expressed in $ per share or ADS), equals basic earnings per share or ADS, respectively. (5)Dividends for fiscal years 2023 and 2024 have already been paid. In November 2025, Ternium S.A. paid an interim dividend for fiscal year 2025 of $0.09 per share ($0.90 per ADS). On February 17, 2026, the board of directors proposed that an annual dividend of $0.27 per share ($2.70 per ADS), be approved at the annual general shareholders’ meeting, which is scheduled to be held on May 12, 2026. The annual dividend would include the interim dividend of $0.09 per share ($0.90 per ADS), paid in November 2025. If the board of directors’ proposal is approved at the shareholders’ meeting, a net dividend of $0.18 per share ($1.80 per ADS), will be paid on May 15, 2026, with record-date on May 14, 2026. 91 Selected consolidated balance sheet data As of December 31 In million U.S. dollars (except per share data) 2025 2024 2023 (1) Non-current assets 13,819 12,050 12,149 Property, plant and equipment, net 10,406 8,381 7,638 Deferred tax assets 1,039 1,194 1,713 Other non-current assets (2) 2,374 2,475 2,798 Current assets 9,796 11,078 12,031 Cash and cash equivalents 1,531 1,691 1,846 Other current assets 8,257 9,380 10,178 Non-current assets classified as held for sale 8 7 7 Total assets 23,615 23,129 24,179 Capital and reserves attributable to the owners of the parent 11,944 11,968 12,419 Non-controlling interest 4,203 4,163 4,393 Non-current liabilities 3,533 3,158 3,567 Borrowings 1,815 1,560 1,206 Provisions 586 553 840 Deferred tax liabilities 24 89 171 Other non-current liabilities 1,108 956 1,350 Current liabilities 3,934 3,839 3,801 Borrowings 604 670 940 Provision for ongoing litigation related to the acquisition of a participation in Usiminas 528 410 — Other current liabilities 2,802 2,759 2,861 Total liabilities 7,467 6,997 7,367 Total equity and liabilities 23,615 23,129 24,179 Number of shares 1,963,076,776 1,963,076,776 1,963,076,776 (1)In July 2023, Ternium increased its participation in the Usiminas’ control group and began to consolidate Usiminas. For information on the acquisition of the additional participation in Usiminas, see note 3 “Acquisition of business - increase of the participation in Usiminas control group and new governance structure of Usiminas” to our consolidated financial statements included in this annual report. (2)Includes goodwill mainly related to the acquisition of our Mexican subsidiaries for a total amount of $662.3 million as of December 31 of each year. Fiscal Year Ended December 31, 2025 compared to Fiscal Year Ended December 31, 2024 This annual report includes certain non-IFRS alternative performance measures such as “Net Cash” and “Free Cash Flow”. The reconciliation of these figures to the most directly comparable IFRS measures is included in Exhibit 15.1 "Statement explaining alternative performance measures". Overview The year 2025 was characterized by a sharp increase in U.S. trade measures aimed at countering unfair practices from China and other Asian nations, with several countries worldwide adopting similar measures. Steel was a primary focus, with the United States revoking all country-specific exemptions to the 25% tariff on steel imports under Section 232 and raising the tariff to 50%. Uncertainty surrounding tariff negotiations with the United States weighed on steel demand in Mexico, where apparent steel use declined by roughly 10% year-over-year in 2025. In Brazil, the influx of low-priced Chinese steel products continued to pressure Usiminas’ profitability. In Argentina, shipments recovered in 2025 from the depressed levels of 2024. Nevertheless, prevailing conditions in both the Brazilian and global markets weighed on local performance. Despite these challenging dynamics, Ternium delivered resilient results by swiftly adapting to the new environment and implementing a comprehensive cost-reduction and efficiency program. Key initiatives that generated significant 92 savings included enhancing blast furnace stability, optimizing iron ore sourcing, streamlining logistics, and renegotiating service contracts. The Steel Segment’s net sales decreased by 13% year-over-year in 2025. Steel revenue per ton declined by 10%, reflecting lower realized steel prices across Ternium’s main steel markets. Steel shipments decreased by 4% year-over-year, as lower sales volumes in Mexico and Other Markets were partially offset by higher shipments in the Southern Region. Steel Shipments in 2025 Ternium’s shipments in Mexico decreased in 2025 reflecting week construction activity and softer industrial demand, amid the uncertainty caused by ongoing tariff negotiations with the United States. The company continued to advance its expansion program at the Pesquería industrial center in Mexico. In 2025, we made significant progress on the construction of new cold-rolling and galvanizing facilities and, by early 2026, entered the ramp-up phase. With the commissioning of these facilities, Ternium completed its downstream expansion at the site, which also includes a pickling line and finishing facilities already in operation. Meanwhile, the company advanced the construction of the new direct reduced iron plant and steel slab mill (DRI-EAF) at the same site, expected to start up by the end of 2026. These new facilities will allow Ternium to produce high-quality automotive steel with one of the lowest emission intensity rates in the industry. In support of this project, during the year Ternium Mexico secured a $1.25 billion financing facility, which qualifies as an “eligible green project” under the Green Loan Principles. In Brazil, shipments remained virtually unchanged in 2025. Although domestic steel consumption grew during the year, imports of flat steel products increased significantly amid unfair trade practices. Usiminas advanced several projects aimed at improving the cost structure of its steel production facilities. Key initiatives include a new pulverized coal injection facility, a new gasometer and the hot repair of a coke battery. In the Southern Region, shipments increased driven by the recovery of steel demand in Argentina from a low base in 2024. In early 2025, the company completed its investment in a new wind farm in the country, which contributed to lowering energy costs for Ternium’s operations. In Other Markets, sales volumes declined in 2025 mainly reflecting lower sales in the U.S. market, partially offset by higher sales volumes in other destinations. Operating income decreased year-over-year in 2025 to $705 million, with an operating income over net sales of 5%. The decline in operating income reflected the drop in steel prices together with lower sales volumes, countered by the successful implementation of the competitiveness plan to cut costs and increase efficiency at our operations, as well as by lower raw material and purchased slab costs. Net income in 2025 amounted to $303 million, including a loss of $405 million in connection with the write-down of deferred tax assets at Usiminas and a loss of $117 million resulting from the periodic update of the provision for ongoing litigation related to the acquisition of a participation in Usiminas in 2012. 93 Net income attributable to owners of the parent was $425 million in the year, or $2.17 per ADS, mainly after accounting for the participation of a 76.7% non-controlling interest in Usiminas and a 37.4% non-controlling interest in Ternium Argentina. Dividends paid to shareholders in 2025 amounted to $530 million, and dividends paid in kind to minority interest totalled $112 million. Capital expenditures reached $2.5 billion in the year, the peak of the current investment cycle, with the bulk allocated to the continuing expansion of the industrial center in Pesquería. These capital outflows were largely financed through cash generated by operating activities of $2.3 billion and cash on hand. On February 17, 2026, Ternium S.A.’s board of directors proposed that an annual dividend of $2.70 per ADS be approved at its annual general shareholders meeting, scheduled to be held on May 12, 2026. The annual dividend would include the interim dividend of $0.90 per ADS paid in November 2025. If the board of directors’ proposal is approved at the shareholders’ meeting, a net dividend of $1.80 per ADS will be paid on May 15, 2026, with a record date of May 14, 2026. Net Sales and Shipments The Steel Segment’s net sales for the full year 2025 decreased by 13% compared to 2024. Steel revenue per ton declined by 10%, reflecting lower realized steel prices across Ternium’s main steel markets. Steel shipments decreased by 4% year-over-year, as lower sales volumes in Mexico and Other Markets were partially offset by higher shipments in the Southern Region. In 2025, the Mining Segment’s net sales increased year-over-year primarily as a result of higher iron ore shipments, reflecting better volumes in both Brazilian and Mexican operations, partially offset by lower realized iron ore prices. Segment Information Net Sales ($ million) Shipments (thousand tons) Revenue/Ton ($/ton) 2025 2024 Dif. 2025 2024 Dif. 2025 2024 Dif. Mexico 7,124 8,527 -16 % 7,432 8,200 -9 % 959 1,040 -8 % Brazil 3,695 4,005 -8 % 3,943 3,941 0 % 937 1,016 -8 % Southern Region 2,326 2,401 -3 % 2,180 1,806 21 % 1,067 1,329 -20 % Other Markets 1,590 1,958 -19 % 1,506 1,674 -10 % 1,056 1,170 -10 % Total steel products 14,736 16,892 -13 % 15,060 15,622 -4 % 978 1,081 -10 % Other products 306 329 -7 % Total Steel Segment 15,041 17,220 -13 % Mining Segment - third parties 568 429 32 % 7,658 6,426 19 % 74 67 11 % Mining Segment - intercompany 570 630 -10 % 5,293 4,959 7 % 108 127 -15 % Total Mining Segment 1,138 1,059 7 % 12,951 11,385 14 % 88 93 -6 % Net sales 15,609 17,649 -12 % Note: “Other products” includes mainly electricity sales in Mexico and Brazil. Operating Income Ternium’s operating income decreased year-over-year in 2025 primarily reflecting lower realized steel prices, partially offset by the successful implementation of a competitiveness plan to reduce costs and increase efficiency at our operations, as well as by lower raw material and purchased slab costs. In $ million 2025 2024 Operating income 705 1,263 Net sales 15,609 17,649 Cost of sales (13,256) (14,760) SG&A expenses (1,601) (1,651) Other operating income (46) 25 94 Net Financial Results Net financial results in 2025 were a loss of $25 million. Foreign exchange results amounted to a loss of $57 million, primarily reflecting the impact of the Argentine peso’s depreciation against the U.S. dollar on Ternium Argentina’s net long local currency position and the impact of the Mexican peso’s appreciation against the U.S. dollar on Ternium Mexico’s net short local currency position. The change in fair value of financial assets resulted in a gain of $68 million, driven mainly by the positive performance of Ternium Argentina’s short-term financial securities holdings. In addition, net financial results included a charge of $21 million in connection with the accelerated recognition of the purchase of an additional participation in Usiminas from Nippon Steel Corporation and Mitsubishi Corporation. In $ million 2025 2024 Net interest results 23 102 Net foreign exchange result (57) (104) Change in fair value of financial assets 68 (133) Other financial expense, net (60) (58) Net financial results (25) (194) Equity in Results of Non-Consolidated Companies The equity in the results of non-consolidated companies was a gain of $86 million in 2025, mainly related to Ternium’s equity in the results of Techgen, MRS Logística S.A. and Unigal Usiminas Ltda. Provision for Ongoing Litigation Related to the Acquisition of a Participation in Usiminas In 2025, the company recorded a loss of $117 million resulting from the periodic update of the provision for ongoing litigation related to the acquisition of a participation in Usiminas in 2012, on account of interest accruals and the appreciation of the Brazilian real. For more information on this topic, see note 25(i)(a) “Provision for ongoing litigation related to the acquisition of a participation in Usiminas” to our consolidated financial statements included in this annual report. Income Tax Expense Ternium Mexico, Ternium Argentina and Ternium Brasil use the U.S. dollar as their functional currency. As a result, fluctuations between their local currencies and the U.S. dollar have lead to the recognition of deferred tax results. Deferred tax results in 2025 reflected a gain of $222 million, primarily attributable to the appreciation of the Mexican peso during the year. In addition, income tax results included a $405 million charge in connection with the write-down of deferred tax assets at Usiminas in the third quarter of 2025, and a $23 million charge in connection with the write-down of deferred tax assets at Las Encinas in the fourth quarter of 2025, following a recoverability assessment of such assets. In $ million 2025 2024 Current income tax expense (139) (323) Deferred tax gain (loss) 222 (231) Write-down of deferred tax assets at Usiminas and Las Encinas (428) — Income tax expense (345) (554) Net Income In 2025, net income was $303 million, including a deferred tax gain of $222 million, a deferred tax loss of $405 million in connection with the write-down of deferred tax assets at Usiminas and a loss of $117 million in connection with the provision for ongoing litigation concerning the acquisition of a participation in Usiminas, on account of 95 interest accruals and the appreciation of the Brazilian Real. Equity holder’s net income was $425 million in the year, mainly after accounting for the participation of a 76.7% non-controlling interest in Usiminas and a 37.4% non-controlling interest in Ternium Argentina. In $ million 2025 2024 Net income 303 174 Excluding non-controlling interest 122 (227) Owners of the parent 425 (54) For a discussion and analysis of our financial condition and results of operations for the Fiscal Year Ended December 31, 2024 compared to Fiscal Year Ended December 31, 2023, see Ternium’s Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission on March 28, 2025. B. Liquidity and Capital Resources The following table shows the changes in our cash and cash equivalents for each of the periods indicated below: In $ million For the year ended December 31, 2025 2024 2023 Net cash provided by operating activities 2,314 1,906 2,501 Net cash used in investing activities (1,985) (1,375) (1,470) Net cash used in financing activities (501) (488) (766) Increase in cash and cash equivalents (171) 43 264 Effect of exchange rate changes 11 (197) (72) Cash and cash equivalents at the beginning of the year 1,691 1,846 1,653 Cash and cash equivalents at the end of the year 1,531 1,691 1,846 Note: In addition to cash and cash equivalents, at December 31, 2025, 2024 and 2023 Ternium had other investments with maturities of more than three months amounting to $1.6 billion, $2.2 billion and $2.2 billion, respectively, and $2.8 million, $2.7 million and $3.1 million of restricted cash, respectively. Ternium’s position of cash and cash equivalents and other investments at December 31, 2025, included Ternium Argentina’s position of cash and cash equivalents and other investments of $0.8 billion. For information on exchange controls in Argentina, see note 30(i) “Foreign exchange restrictions in Argentina” to our consolidated financial statements included in this annual report. Changes in cash and cash equivalents between December 31, 2024 and December 31, 2025 Overview Ternium’s Net Cash position as of the end of December 2025 was $712 million, a decrease of $932 million compared to the end of December 2024. Net Cash is a non-IFRS alternative performance measure. Please see Exhibit 15.1 to this annual report for more information on these measures. Cash from operations reached $2.3 billion. Working capital decreased by $1.0 billion primarily as a result of an $806 million decrease in inventories, a $217 million decrease in trade and other receivables and a $12 million increase in trade payables and other liabilities. Capital expenditures amounted to $2.5 billion, the peak of the current investment cycle, with the bulk allocated to the construction of the new downstream and upstream facilities at its industrial center in Pesquería, Mexico. In addition, the company moved forward with several projects aimed at increasing efficiency, reducing costs and improving environmental and safety conditions throughout its main facilities. In 2025, Ternium paid dividends totaling $530 million to its shareholders and paid a dividend in kind to the company’s minority interest amounting to $112 million. 96 Operating activities Net cash provided by operating activities in 2025 included a decrease in inventories of $806 million reflecting lower steel and raw material inventory volumes and costs. In addition, trade and other receivables decreased by $217 million amid lower realized steel prices and sales volumes. Investing activities Net cash used in investing activities in 2025 was $2.0 billion, primarily attributable to capital expenditures of $2.5 billion partially offset by a $490 million decrease in financial investments with maturities of more than three months. Financing activities Net cash used in financing activities was $501 million in 2025, attributable to dividends paid in cash to Ternium S.A.’s shareholders of $530 million and to finance lease payments of $65 million, partially offset by net proceeds from borrowings of $103 million. For a discussion and analysis of changes in cash and cash equivalents between December 31, 2023 and December 31, 2024, see Ternium’s Annual Report on Form 20-F filed with the SEC on March 28, 2025. Principal Sources of Funding Funding Policy Management’s policy is to ensure a high degree of flexibility in operating and investment activities by maintaining adequate liquidity levels and securing access to readily available sources of financing. When possible, management makes its financing decisions, including the choice of currency, term and type of facility, based on the intended use of proceeds for the proposed financing and on costs. For information on our financial risk management, see note 29 “Financial risk management” to our consolidated financial statements included in this annual report. Ternium maintains non-committed credit facilities and management is confident that Ternium has adequate access to credit markets. Considering our financial position and the funds provided by operating activities, management believes that we have sufficient resources to satisfy our current working capital needs, service our debt and pay dividends. Management also believes that our liquidity and capital resources provide us with adequate flexibility to manage our planned capital spending programs and to address short-term changes in business conditions Financial Liabilities Total financial debt (including principal and interest accrued thereon) was $2.4 billion as of December 31, 2025. Our financial liabilities consist mainly of loans with financial institutions, bonds and debentures. As of December 31, 2025, these facilities were mainly denominated in U.S. dollars and Brazilian reais (70% and 27% of total financial liabilities, respectively). Current borrowings were 25% of total borrowings, none of which corresponded to borrowings with related parties. With cash and cash equivalents of $1.5 billion, other investments of $1.6 billion and total financial debt of $2.4 billion, Ternium had Net Cash position of $712 million as of December 31, 2025. This compares to a Net Cash position of $1.6 billion as of December 31, 2024. Net Cash is a non-IFRS alternative performance measure. Please see Exhibit 15.1 to this annual report for more information on these measures. The following table shows Ternium’s financial liabilities as of December 31 of each of the last three years: In $ million 2025 2024 2023 Bank borrowings 1,263 1,137 925 Bonds 501 440 765 Debentures 655 653 457 Total borrowings 2,419 2,230 2,146 Note: Bank borrowings are net of debt issuance costs. As of December 31, 2025, the cost of bank borrowings (mainly denominated in U.S. dollars) was 5.45%, while the cost of indebtedness represented by bonds (denominated in U.S. dollars) was 7.50% and the cost of debentures (denominated in Brazilian reais) was 16.17%. Bank borrowings, bonds and debentures represented 52%, 21% and 27% of our total borrowings, respectively. 97 The following table shows the cost of bank borrowings, the cost of indebtedness represented by bonds and the cost of debentures as of December 31 of each of the last three years: 2025 2024 2023 Bank borrowings 5.45 % 7.15 % 7.28 % Bonds 7.50 % 5.88 % 5.88 % Debentures 16.17 % 13.50 % 12.52 % The weighted average cost of debt in 2025 was 9.17%. This rate was calculated using the rate set for each instrument in its corresponding currency and weighted using the U.S. dollar-equivalent outstanding principal amount of each instrument. Such rate does not include the effect of derivative financial instruments, nor fluctuations in the exchange rate between the instrument’s currencies and the U.S. dollar. For more information on the key terms of our debt instruments, see “- Most Significant Borrowings and Financial Commitments”. As of December 31, 2025, current borrowings were 25% of total borrowings, none of which corresponded to borrowings with related parties. The maturities of our financial liabilities were as follows: In $ million 1 year 1 – 2 3 years At December 31, 2025 or less Years or more Total Bank borrowings 571 297 395 1,263 Bonds 16 — 485 501 Debentures 18 — 638 655 Total borrowings 604 297 1,517 2,419 Note: Total borrowings with third parties, net of debt issuance costs. For information on our derivative financial instruments, see Item 11. “Quantitative and Qualitative Disclosures about Market Risk” and note 22 to the consolidated financial statements included in this annual report. Most Significant Borrowings and Financial Commitments Our most significant borrowings as of December 31, 2025, were those outstanding under Ternium Brasil’s bilateral credit line to finance export activities, and Usiminas’ bonds and debentures, issued to refinance financial debt. On July 23, 2025, Ternium Mexico entered into a $1.25 billion syndicated loan agreement with several financial institutions to finance and/or refinance capital, operating and research and development expenditures, as well as other related investments associated with the construction of its DRI/EAF steelmaking plant in Pesquería, Mexico, which qualifies as an “eligible green project” under the Green Loan Principles. For more information on this topic, see note 24 “Borrowings” to our consolidated financial statements included in this annual report. $ million Principal amount Date Borrower Type Denomination Original Outstanding as of December 31, 2025 Maturity July 2025 Ternium Mexico Syndicated loan U.S. dollar 1,250 300 August 2030 May 2024 Ternium Brasil Bilateral credit lines U.S. dollar 700 700 Up to October 2030 July 2019 Usiminas Bonds U.S. dollar 500 500 January 2032 May 2022 Usiminas Debentures Brazilian real 145 73 November 2029 December 2022 Usiminas Debentures Brazilian real 310 243 December 2032 August 2024 Usiminas Debentures Brazilian real 320 323 September 2031 The main covenants on these loan facilities, bonds and debentures are limitations on liens and encumbrances, restrictions on the sale of certain assets, compliance with financial ratios (e.g., leverage ratio) and, in connection with the “green loan”, compliance with certain information regarding the green project. As of December 31, 2025, Ternium was in compliance with all covenants under its financial instruments. 98 Ternium has various off-balance sheet commitments, including financial commitments, and commitments to purchase raw materials, energy (natural gas and electricity), supplies (air, oxygen, hydrogen, nitrogen and argon), production equipment, logistic services and maintenance services. Off-balance sheet commitments are discussed in note 25(ii) to our consolidated financial statements included in this annual report. For further information on our derivative financial instruments, lease liabilities, borrowings, contingencies, commitments and restrictions in the distribution of profits, and financial risk management, see notes 22, 23, 24, 25 and 29 to our consolidated financial statements included in this annual report. Capital Expenditures For information on Ternium’s capital expenditures, see Item 4. “Information on the Company—B. Business Overview—Capital Expenditure Program.” Dividend Payments For information related to this matter, see Item 8. “Financial Information—Dividend Policy”. C. Research and Development, Patents and Licenses, Etc. For information related to this matter, see Item 4. “Information on the Company—B. Business Overview—Research and Development; Product Development.” D. Trend Information For information related to this matter, see “—Overview.” E. Critical Accounting Estimates This discussion and analysis of our operating and financial review and prospects is based on the audited consolidated financial statements included in this annual report, which have been prepared in accordance with IFRS. IFRS differs in certain significant aspects from U.S. GAAP. The preparation of financial statements in conformity with IFRS requires management to make estimates and judgements that affect the reported amounts of assets, liabilities, revenues and expenses, and the related disclosure of contingent assets and liabilities. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events, that are believed to be reasonable under the circumstances. Management makes estimates and assumptions concerning the future. These estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Although management believes that these estimates and assumptions are reasonable, they are based upon information available at the time they are made. Actual results may differ significantly from these estimates under different assumptions or conditions. An overview of Ternium’s critical accounting policies under which significant judgments, estimates and assumptions are made may be found in note 4(bb) to the consolidated financial statements included in this annual report. 99