TXTernium S.A.
Is the business good?
The checks split: nothing decisive, though earnings fully cash-backed (4.2×).
Operating profit is fully backed by cash. Conversion is improving vs a year ago.
Margins have held roughly steady, a stable cost structure.
A balanced mix of margins, efficiency, and leverage. ROE 4% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is TX?
Ternium S.A. earns 4.3% on the capital it employs against a 9.0% cost of capital, so growth costs more than it returns.
Return on invested capital · cost of capital 9.0% · 4.8 points below what the capital costs: growth destroys value
- Operating margin
- 4.5%
Operating margin · Steel median 5.3% · fiscal year to FY2025
- Cash conversion
- 4.15×
Cash conversion · 1.91× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- 0.00%
Share count, year on year · flat: no meaningful dilution
| Year | Operating margin |
|---|---|
| FY2020 | 12% |
| FY2021 | 33% |
| FY2022 | 16% |
| FY2023 | 12% |
| FY2024 | 7.2% |
| FY2025 | 4.5% |
Details›
- Gross marginfiscal year to FY2025
- 15%
- Operating marginfiscal year to FY2025
- 4.5%
- Net marginfiscal year to FY2025
- 2.7%
- Free cash flow margin
- −2.2%
- R&D as % of revenue
- 0.14%
- Revenue, trailing twelve months
- $15.6B
- Free cash flow, trailing twelve months
- −$345M
- Net income, trailing twelve months
- $425M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 4.3%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.