Commercial Metals Company · NYSE:CMC
Commercial Metals — Q4 FY2021 Earnings Presentation
26 slides from Commercial Metals's earnings presentation, Oct 14, 2021
Slide 1: Q4 FY 2021 Supplemental Slides
Q4 FY 2021 SUPPLEMENTAL SLIDES OCTOBER 14, 2021
Slide 2: Cautionary Statements
CAUTIONARY STATEMENTS This presentation contains or incorporates by reference a number of "forward-looking statements" within the meaning of the federal securities laws with respect to general economic conditions, key macro-economic drivers that impact our business, the effects of ongoing trade acti
Slide 3: A Clear Path to Value Creation
A CLEAR PATH TO VALUE CREATION ✓ Leading positions in core product and geographical markets ✓ Focused strategy that centers on key capabilities and competitive strengths ✓ Vertical structure that optimizes returns through the entire value chain ✓ Strong financial position with flexibility to execute
Slide 4: Key Takeaways from Today's Call
KEY TAKEAWAYS FROM TODAY’S CALL Fiscal 2021 was a record year Q4 Core EBITDA1 • Saw continued significant benefits of strategic transformation of $256M • Invested to build for the future Up 45% y/y Favorable outlook for FY 2022; business conditions are strong in all major end markets • Positioned to
Slide 5: Fiscal Year 2021 Accomplishments
FISCAL YEAR 2021 ACCOMPLISHMENTS ➢ Record consolidated Core EBITDA and segment level Adjusted EBITDA - ROIC of 14.9% ➢ Tightly managed factors directly within CMC’s control ➢ Achieved reduction in North America controllable costs per ton of finished product despite inflationary pressures ➢ Responded
Slide 6: Sustainable from the Start, Naturally
SUSTAINABLE FROM THE START, NATURALLY CMC IS AN INDUSTRY LEADING PERFORMER, AND IS COMMITTED TO ACHIEVING AMBITIOUS FUTURE ENVIRONMENTAL GOALS CMC Industry Performance Average 2030 Goals GHG Emissions Scope 1 0.20 0.82 MT CO2e / MT Reduce our Scope 1 Scope 1-3 CMC Micro Mill 0.68 1.83 MT CO2e / MT a
Slide 7: Operational Update and Performance Drivers
OPERATIONAL UPDATE • Significant increase of steel product margins over scrap in North America and Europe − Margins up $41 per ton sequentially ($103 y/y) in North America, up $27 in Europe ($119 y/y) PERFORMANCE DRIVERS • Strong margins on sales of raw materials; average selling price up for 5th co
Slide 8: Consolidated Operating Results – Quarterly
CONSOLIDATED OPERATING RESULTS – QUARTERLY Performance Summary Core EBITDA Bridge – Q4 2020 to Q4 20212 Units in 000’s unless noted otherwise $ Millions Q4 ’20 Q1 ‘21 Q2 ‘21 Q3 ‘21 Q4 ‘21 300 External Finished 1,541 1,518 1,436 1,601 1,646 Steel Tons Shipped1 1 (3) 250 45 Core EBITDA $175,994 $156,5
Slide 9: North America – Quarterly
NORTH AMERICA – QUARTERLY Performance Summary North America – Key Margins Units in 000’s unless noted otherwise $ / ton Q4 ’20 Q1 ‘21 Q2 ‘21 Q3 ‘21 Q4 ‘21 800 731 180 697 663 645 160 External Finished 700 619 DP and SP Margin Over Scrap Steel Tons 1,161 1,121 1,083 1,197 1,186 140 Adjusted EBITDA pe
Slide 10: Europe – Quarterly
EUROPE– QUARTERLY Performance Summary Europe – Key Margins Units in 000’s unless noted otherwise $ / ton Q4 ’20 Q1 ’21 Q2 ‘21 Q3 ‘21 Q4 ‘21 350 160 315 140 Steel Product Margin Over Scrap External Finished Steel 288 380 397 353 404 460 300 Tons Shipped1 Adjusted EBITDA per ton 120 250 100 Adjusted E
Slide 11: Consolidated Operating Results – Annual
CONSOLIDATED OPERATING RESULTS – ANNUAL Performance Summary Core EBITDA Bridge – FY 2020 to FY 20212 Units in 000’s unless noted otherwise $ Millions 900 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 6 (14) External Finished Steel 3,952 4,322 5,791 5,923 6,201 800 Tons Shipped1 86 700 85 Core EBITDA $288,
Slide 12: North America – Annual
NORTH AMERICA – ANNUAL Performance Summary North America – Key Margins Units in 000’s unless noted otherwise $ / ton FY 2018 FY 2019 FY 2020 FY 2021 800 731 180 700 160 External Finished Steel 602 DP and SP Margin Over Scrap 2,822 4,331 4,451 4,587 140 Tons Shipped1 Adjusted EBITDA per ton 600 522 6
Slide 13: Europe – Annual
EUROPE – ANNUAL Performance Summary Europe– Key Margins Units in 000’s unless noted otherwise $ / ton FY 2018 FY 2019 FY 2020 FY 2021 300 100 246 240 External Finished Steel 250 1,500 1,460 1,472 1,614 80 Tons Shipped Adjusted EBITDA per ton 202 255 SP Margin Over Scrap 200 60 Adjusted EBITDA $131,7
Slide 14: Well Balanced Capital Allocation Strategy
WELL BALANCED CAPITAL ALLOCATION STRATEGY 17% increase to quarterly Recent $350 million share dividend to $0.14 per share Announcements repurchase program CMC intends to distribute a meaningful portion of free cash flow to shareholders with share buybacks supplementing an enhanced dividend stream 1
Slide 15: Discretionary Cash Flow Profile
DISCRETIONARY CASH FLOW PROFILE ADJUSTED EBITDA LESS SUSTAINING CAPITAL EXPENDITURES AND DISBURSEMENTS TO STAKEHOLDERS 1 $400 $380 $350 $300 $279 $250 $200 $155 $150 $140 $100 $50 $37 $5 $11 $0 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 CMC’s cash flow capabilities have been greatly enh
Slide 16: Balance Sheet Strength
BALANCE SHEET STRENGTH DEBT MATURITY PROFILE PROVIDES STRATEGIC FLEXIBILITY DEBT MATURIT Y SCHEDULE Q4 FY’21 LIQUIDIT Y (US$ in millions) (US$ in millions) $498 Cash and Cash Equivalents Revolving Credit Facility 4.875% Notes 5.375% 3.875% Notes Notes 397 Revolver $400 $330 $300 $300 150 U.S. Accoun
Slide 17: Leverage Profile
LEVERAGE PROFILE NET DEBT 1,2 / EBITDA 3 NET DEBT-TO-CAPITALIZATION 4 4.5x 60% 4.0x 50% 3.5x 3.0x 40% 2.5x 30% 2.0x 3.9x 46% 3.2x 42% 1.5x 20% 37% 2.5x 33% 32% 1.0x 1.9x 24% 1.6x 10% 21% 22% 18% 20% 1.2x 1.2x 17% 0.5x 1.1x 1.0x 0.9x 0.8x NM 0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Slide 18: Appendix: Non-GAAP Reconciliations
APPENDIX: NON-GAAP RECONCILIATIONS Q4 FY21 Supplemental Slides | October 14, 2021 18
Slide 19: Return on Invested Capital
RETURN ON INVESTED CAPITAL 3 MOS ENDED FISCAL QUARTERS ($ in thousands) 8/31/2021 FY 20212 Q4 2021 Q3 2021 Q2 2021 Q1 2021 Q4 2020 Earnings from continuing operations before income taxes $192,757 $534,018 Plus: interest expense 11,659 51,904 Operating profit $204,416 $585,922 Operating profit $204,4
Slide 20: Adjusted and Core EBITDA from Continuing Operations Reconciliation
ADJUSTED AND CORE EBITDA FROM CONTINUING OPERATIONS RECONCILIATION ($ in thousands) THREE MONTHS ENDED TWELVE MONTHS ENDED 08/31/2021 5/31/2021 2/28/2021 11/30/2020 8/31/2020 5/31/2020 08/31/2021 8/31/2020 8/31/2019 8/31/2018 8/31/2017 Earnings from continuing operations $152,313 $130,408 $66,233 $6
Slide 21: Adjusted Earnings from Continuing Operations Reconciliation
ADJUSTED EARNINGS FROM CONTINUING OPERATIONS RECONCILIATION ($ in thousands) THREE MONTHS ENDED TWELVE MONTHS ENDED 08/31/2021 5/31/2021 2/28/2021 11/30/2020 8/31/2020 5/31/2020 08/31/2021 8/31/2020 8/31/2019 8/31/2018 8/31/2017 Earnings from continuing operations $152,313 $130,408 $66,233 $63,911 $
Slide 22: Adjusted Segment EBITDA Margin
ADJUSTED SEGMENT EBITDA MARGIN ($ in thousands) 3 MONTHS ENDED 12 MONTHS ENDED 08/31/2021 5/31/2021 2/28/2021 11/30/2020 8/31/2020 08/31/2021 8/31/2020 8/31/2019 North America Adjusted EBITDA from continuing operations $212,018 $207,330 $171,612 $155,634 $174,219 $746,594 $661,176 $456,296 North Ame
Slide 23: Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders
ADJUSTED EBITDA LESS SUSTAINING CAPITAL EXPENDITURES AND DISBURSEMENTS TO STAKEHOLDERS 12 MONTHS ENDED 9 ($ in thousands) 8/31/2021 8/31/2020 8/31/2019 8/31/2018 8/31/2017 8/31/2016 8/31/2015 Earnings from continuing operations $412,865 $278,302 $198,779 $135,237 $50,175 $62,001 $58,583 Interest exp
Slide 24: Net Debt to EBITDA and Net Debt to Capitalization Reconciliations
NET DEBT TO EBITDA AND NET DEBT TO CAPITALIZATION RECONCILIATIONS ($ in thousands) THREE MONTHS ENDED 08/31/2021 5/31/2021 2/28/2021 11/30/2020 8/31/2020 5/31/2020 2/29/2020 11/30/2019 8/31/2019 5/31/2019 2/28/2019 Long-term debt $ 1,015,415 $ 1,020,129 $ 1,011,035 $ 1,064,893 $ 1,065,536 $ 1,153,80
Slide 25: Definitions for Non-GAAP Financial Measures
DEFINITIONS FOR NON-GAAP FINANCIAL MEASURES ADJUSTED EARNINGS FROM CONTINUING OPERATIONS Adjusted earnings from continuing operations is a non-GAAP financial measure that is equal to earnings from continuing operations before debt extinguishment costs, certain gains on sale of assets, certain facili
Slide 26: Thank You
THANK YOU CORPORATE OFFICE 6565 N. MacArthur Blvd Suite 800 Irving, TX 75039 Phone: (214) 689.4300 INVESTOR RELATIONS Phone: (972) 308.5349 Fax: (214) 689.4326 IR@cmc.com Q4 FY21 Supplemental Slides | October 14, 2021 26
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