Business Context and Reporting Period
This Form 6-K filing by Ternium S.A. serves as a notice of the Annual General Meeting of Shareholders scheduled for May 3, 2021. The filing relates to the fiscal year ended December 31, 2020. The document includes the meeting agenda, proxy statement, and letters from the Chairman and the Depositary Bank regarding voting procedures for shareholders and American Depositary Share (ADS) holders.
Key Financial Metrics
The filing references the 2020 Consolidated Management Report for detailed financial data. Specific metrics disclosed in this text include:
- Consolidated Profit: USD 868 million for the year ended December 31, 2020.
- Annual Accounts Loss: The Company's annual accounts (non-consolidated) show a loss for 2020, though the consolidated statements show a profit.
- Proposed Dividend: USD 0.21 per share (USD 2.10 per ADS), totaling approximately USD 412 million (net of Treasury Shares).
- Dividend Source: To be paid from retained earnings; the 2020 annual account loss will be absorbed by retained earnings.
- Share Capital: 2,004,743,442 ordinary shares issued and outstanding; 41,666,666 Treasury Shares held by the Company.
- Legal Reserve: Already equals 10% of subscribed capital, satisfying legal requirements.
Note: This filing does not provide specific values for revenue, operating margins, cash flow, debt levels, or liquidity ratios. These figures are contained in the referenced 2020 Consolidated Management Report.
Material Changes and Corporate Actions
- Board Composition: Proposal to reduce the Board of Directors from nine to eight members.
- Director Compensation: Proposal to award additional compensation for 2020 due to successful performance in a challenging year: USD 15,000 per director, USD 45,000 additional for the Chairman, and USD 10,000 additional for Audit Committee members. 2021 compensation is proposed at USD 115,000 per director, with additional fees for the Chairman and Audit Committee.
- Share Repurchase Authorization: Renewal of authorization to purchase up to 10% of issued and outstanding shares. Purchase prices must be between 75% and 125% of the average closing price over the preceding five trading days.
- Auditor Appointment: Reappointment of PricewaterhouseCoopers as independent auditors for 2021 with fees capped in seven currencies (including USD 54,706).
Guidance, Outlook, and Risks
Management Commentary: The Chairman's letter notes the Company had a "successful performance in a very challenging year," justifying the proposed additional director compensation despite the initial reduction approved in 2020 due to the pandemic.
Risks and Contingencies:
- Meeting Format: The meeting may be held without physical presence due to Luxembourg laws adopted in the context of the Covid-19 pandemic. Voting is permitted via proxy, video conference, or other telecommunication means.
- Voting Deadlines: Strict deadlines apply for proxy submission (April 28, 2021) and ADS voting instructions (April 28, 2021, 12:00 p.m. New York time).
- Shareholder Rights: Shareholders who sell shares between the Record Date and the Meeting date are prohibited from voting, with potential criminal sanctions for breach.
Investor Verification Checklist
- Verify the full 2020 Consolidated Management Report on the company website (www.ternium.com) for detailed revenue, cash flow, and debt metrics not included in this summary.
- Confirm the record date for voting eligibility: April 28, 2021, for registered shareholders; March 29, 2021, for ADS holders.
- Review the specific terms of the share repurchase authorization, particularly the 75%-125% price band relative to the five-day average closing price.
- Check the status of the proposed dividend payment date (May 11, 2021) and ensure it aligns with the approval of the annual accounts.
- Confirm the final composition of the Board of Directors following the proposed reduction from nine to eight members.