Commercial Metals Company · NYSE:CMC
Commercial Metals — Q1 FY2022 Earnings Presentation
23 slides from Commercial Metals's earnings presentation, Jan 10, 2022
Slide 1: Q1 FY'22 Supplemental Slides
COMMERCIAL METALS COMPANY Q1 FY’22 Supplemental Slides RE
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “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 actions, the effects of continued pressu
Slide 3: A Clear Path to Value Creation
A Clear Path to Value Creation ✓ Leading positions in core product and geographical markets ✓ Vertical structure optimizes returns through the entire value chain ✓ Focused strategy that leverages capabilities and competitive strengths ✓ Disciplined capital allocation focused on maximizing returns fo
Slide 4: Key Takeaways From Today's Call
Key Takeaways From Today’s Call ✔ Unprecedented financial performance • Achieved record quarterly Adjusted Earnings from Continuing Operations and 3rd consecutive quarterly record Core EBITDA • Previous efforts to strategically transform CMC made recent profit levels possible $327 $199 million milli
Slide 5: A Clearly Sustainable Future – Proud of Our Progress
A Clearly Sustainable Future – Proud of Our Progress With GHG emissions intensity already below the 2040 Paris Climate Agreement industry target, CMC continues to set new lower emissions targets CMC Performance Industry Average 2030 Goals1 Progress on 2030 Goals1 GHG Emissions Scope 1 0.197 0.82 MT
Slide 6: Our People Are Our #1 Asset
Our People Are Our #1 Asset CMC’s mission is to ensure our team members leave each workday in the same condition in which they started. We strive to not only create a safety focused work environment, but a culture of shared accountability that carries that mission to the shop floor. CMC FY 2021 Tota
Slide 7: Building for the Future – Executing on a Disciplined Growth Plan
Building for the Future – Executing on a Disciplined Growth Plan Now Operating Early CY 2022 Early CY 2023 Fiscal 2025 Polish Expansion Tensar Acquisition (pending) Arizona 2 Micro Mill 4 (MM4) • Utilized previous excess melt capacity • Industry leader in specialty early-phase • CMC’s 3rd micro mill
Slide 8: Performance Drivers
Operational Update • Significant increase in steel product margins over scrap in North America and Europe − Margins up $82 per ton sequentially ($202 y/y) in North America, up $120 per ton in Europe ($236 y/y) • Margins per ton on sales of raw materials increased for the fourth consecutive quarter,
Slide 9: Consolidated Operating Results
Consolidated Operating Results Performance Summary Core EBITDA Bridge – Q1 2021 to Q1 2022 Units in 000’s unless noted otherwise $ Millions Q1 ‘21 Q2 ‘21 Q3 ‘21 Q4 ‘21 Q1 ‘22 350 (8) (0) External Finished Steel Tons Shipped1 1,518 1,436 1,601 1,646 1,464 300 65 Core EBITDA2 $156,561 $171,087 $230,46
Slide 10: North America
North America Performance Summary North America – Key Margins Units in 000’s unless noted otherwise $ / ton Q1 ‘21 Q2 ‘21 Q3 ‘21 Q4 ‘21 Q1 ‘22 800 300 697 663 645 658 700 619 External Finished Steel Tons Shipped1 1,121 1,083 1,197 1,186 1,099 250 DP and SP Margin Over Scrap 600 Adjusted EBITDA per t
Slide 11: Europe
Europe Performance Summary Europe – Key Margins Units in 000’s unless noted otherwise $ / ton Q1 ‘21 Q2 ‘21 Q3 ‘21 Q4 ‘21 Q1 ‘22 500 250 435 450 Steel Product Margin Over Scrap External Finished Steel Tons Shipped1 397 353 404 460 365 200 Adjusted EBITDA per ton 400 350 315 150 288 Adjusted EBITDA $
Slide 12: Disciplined Capital Allocation Strategy
Disciplined Capital Allocation Strategy 17% increase to quarterly dividend to Shareholder Cash Distribution $350 million share repurchase $0.14 per share in Q4 FY 2021 Programs in Place program in place CMC intends to distribute a meaningful portion of free cash flow to shareholders with share buyba
Slide 13: Cash Generation Profile
Cash Generation Profile Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders 1 $600 $541 $500 $400 $380 $300 $279 $200 $155 $140 $100 $37 $5 $11 $0 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 L12M (to Q1 '22) CMC’s cash flow capabilities have been greatl
Slide 14: Balance Sheet Strength
Balance Sheet Strength Debt maturity profile provides strategic flexibility Debt Maturity Profile Q1 FY’22 Liquidity 1 (US$ in millions) (US$ in millions) $415 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. Account
Slide 15: Leverage Profile
Leverage Profile Net Debt 1,2 / EBITDA 3 Net Debt-to-Capitalization 4 4.5x 50% 4.0x 45% 40% 3.5x 35% 3.0x 30% 2.5x 25% 2.0x 46% 3.9x 42% 20% 3.2x 37% 1.5x 33% 32% 15% 2.5x 1.0x 24% 1.9x 10% 21% 22% 18% 20% 18% 1.6x 17% 1.2x 1.1x 1.2x 0.5x 0.9x 1.0x 5% 0.8x 0.7x NM 0% Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 16: Appendix: Non-GAAP Financial Reconciliations
Appendix: Non-GAAP Financial Reconciliations Q1 FY22 Supplemental Slides │ January 10, 2022 16
Slide 17: Adjusted EBITDA and Core EBITDA
Adjusted EBITDA and Core EBITDA 3 MONTHS ENDED Figures in thousand $ 11/30/2021 8/31/2021 5/31/2021 2/28/2021 11/30/2020 Earnings from continuing operations $232,889 $152,313 $130,408 $66,233 $63,911 Interest expense 11,035 11,659 11,965 14,021 14,259 Income taxes 28,872 40,444 38,175 20,941 21,593
Slide 18: Adjusted Earnings from Continuing Operations
Adjusted Earnings from Continuing Operations Figures in thousand $ 3 MONTHS ENDED 11/30/2021 8/31/2021 5/31/2021 2/28/2021 11/30/2020 Earnings from continuing operations $232,889 $152,313 $130,408 $66,233 $63,911 Loss on debt extinguishment – – – 16,841 – Gain on sale of assets – – (4,457) (5,877) –
Slide 19: Return on Invested Capital
Return on Invested Capital 3 MOS ENDED Figures in thousand $ 11/30/2021 Earnings from continuing operations before income taxes $261,761 Plus: interest expense 11,035 Plus: acquisition and integration related costs 3,165 Operating profit $275,961 Operating profit $275,961 1 65,679 Less: income tax a
Slide 20: Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders
Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders 12 MONTHS ENDED 3 MONTHS ENDED Figures in thousand $ 11/30/2021 8/31/2021 8/31/2020 8/31/2019 8/31/2018 8/31/2017 8/31/2016 8/31/2015 11/30/2021 11/30/2020 Earnings from continuing operations $581,843 $412,865 $27
Slide 21: Net Debt to Adjusted EBITDA and Net Debt to Capitalization
Net Debt to Adjusted EBITDA and Net Debt to Capitalization 3 MONTHS ENDED Figures in thousand $ 11/30/2021 8/31/2021 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 11/30/2018 8/31/2018 5/31/2018 Long-term debt $1,007,801 $1,015,415 $1,020,129 $1
Slide 22: 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 23: Thank You
Thank You Q1 FY22 Supplemental Slides │ January 10, 2022 23
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