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Business Context and Reporting Period

This Form 6-K, filed on May 5, 2009, by Ternium S.A., a Luxembourg-based holding company, serves as a notice for the Annual General Meeting of Shareholders scheduled for June 3, 2009. The filing includes the Company's 2008 Annual Report, which covers the fiscal year ended December 31, 2008. Ternium is a leading steel manufacturer in Latin America with operations in Mexico, Argentina, the southern United States, and Guatemala. The 2008 reporting period was characterized by strong demand in the first three quarters followed by a sharp contraction in the fourth quarter due to the global financial crisis, alongside the nationalization of the Company's Venezuelan subsidiary, Sidor.

Key Financial Metrics (Year Ended December 31, 2008)

Note: Financial data is presented in U.S. dollars. EBITDA is defined as operating income plus depreciation and amortization. Free cash flow is net cash provided by continuing operating activities less capital expenditures.

Material Changes vs. Prior Period

• Revenue Growth: Net sales increased 50% to $8.5 billion, driven by the full-year consolidation of Grupo Imsa (acquired in July 2007) and higher revenue per ton ($1,087 in 2008 vs. $789 in 2007).
• Profitability: Operating income doubled to $1.7 billion (19.8% margin) and EBITDA rose 75% to $2.1 billion. However, Net Income attributable to equity holders declined 9% to $715.4 million.
• Foreign Exchange Impact: A significant non-cash foreign exchange loss of $632.7 million occurred due to the 25% devaluation of the Mexican Peso against the U.S. dollar, impacting the Company's USD-denominated debt held by Mexican subsidiaries.
• Discontinued Operations: Results from Sidor (Venezuela) and non-core U.S. assets were classified as discontinued operations. Income from discontinued operations was $157.1 million in 2008, down from $579.9 million in 2007.
• Cash Flow: Free cash flow turned negative at -$70.4 million, compared to $592.1 million in 2007, primarily due to a $1.1 billion increase in working capital (inventory buildup) and higher capital expenditures.
• Debt Reduction: Total financial debt decreased by $0.8 billion to $3.3 billion, aided by proceeds from the sale of non-core U.S. assets ($718.6 million).

Guidance, Outlook, and Risks

• Outlook: Management anticipates a lengthy period of excess industry capacity and depressed demand in 2009. The Company expects sales and margins to be impacted by the global economic slowdown.
• Strategic Actions: Ternium is resizing its capital expenditure program (reducing the 2009 budget to $230 million), reducing inventories, cutting costs, and reducing headcount to strengthen the balance sheet.
• Dividend Policy: No dividend is proposed for 2008 to prioritize balance sheet strengthening.
• Sidor Nationalization Risk: The Venezuelan government nationalized Sidor in July 2008. Ternium retains formal title to the shares and is pursuing compensation through arbitration (ICSID) and bilateral investment treaties. The Company has not recognized an impairment loss on the Sidor asset, estimating its fair value exceeds the carrying amount of $1.3 billion, though the final compensation amount remains uncertain.
• Operational Risks: The Company faces risks related to volatile commodity prices (iron ore, energy), foreign exchange fluctuations, and the global economic downturn affecting steel consumption.

Investor Verification Checklist

• Sidor Compensation: Verify the status of negotiations and arbitration proceedings regarding compensation for the nationalized Sidor assets.
• 2009 Capital Expenditures: Confirm the execution of the reduced $230 million capital expenditure budget and the suspension of expansion projects.
• Working Capital Management: Monitor the reduction of inventory levels and the improvement in free cash flow in 2009.
• Debt Maturity Profile: Review the maturity schedule of the $3.3 billion debt, noting that $941.5 million is due in 2009.
• Foreign Exchange Exposure: Assess the ongoing impact of currency fluctuations, particularly the Mexican Peso, on financial results and debt servicing.