Commercial Metals Company · NYSE:CMC
Commercial Metals — Merger or Acquisition (December 2021)
22 slides from Commercial Metals's merger presentation, Dec 7, 2021
Slide 1: Commercial Metals Company Tensar Acquisition
Exhibit 99.2 COMMERCIAL METALS COMPANY T E N S A R A C Q U I S I T I O N
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, with respect to the proposed acquisition of Tensar and the timing thereof, the ability to obtain regulatory approvals and meet other clos
Slide 3: Expanding Our Leadership Position in Construction Reinforcement
Expanding Our Leadership Position in Construction Reinforcement CMC – Leader in Concrete Reinforcement for Infrastructure and Tensar – Leader in Engineered Construction Ground Non-Residential Construction Reinforcement Solutions #1 #1 #1 30% Leading Position in ~80% of the Leader in Environmental Pe
Slide 4: Compelling Strategic Rationale
Compelling Strategic Rationale • Tensar is an industry leader with strong and stable margins, • Deepens and broadens CMC’s exposure to global infrastructure unparalleled innovation capabilities, and a best-in-class investment customer value proposition − Deepens: North American and European concrete
Slide 5: Complementary Offering Expands CMC's Portfolio
Complementary Offering Expands CMC’s Portfolio Industry leader in specialty early phase construction reinforcement 1 Diverse geographical exposure and commercial reach 2 Attractive and growing end markets with significant penetration opportunity 3 Proven innovation leader with substantial proprietar
Slide 6: Industry Leader in Specialty Early Phase Construction Reinforcement
1 Industry Leader in Specialty Early Phase Construction Reinforcement Geogrids Geopiers • Polymer based products for subgrade ground stabilization, soil • Foundation technology to create building foundations on almost all soil reinforcement, and asphalt optimization types, including weak and compres
Slide 7: Diverse Geographical Exposure and Commercial Reach
% of Capacity 2 Diverse Geographical Exposure and Commercial Reach Tensar Sells into Over 80 Countries Globally Revenue Breakdown by Geography Rest of World 3 16% 2 6 5 1 4 Growing in EMEA All Regions North 23% America 61% Geogrid only• Tensar’s geogrid manufacturing footprint is Geogrid and Geopier
Slide 8: Attractive End-Use Markets; Significant Product Adoption Potential
3 Attractive End-Use Markets; Significant Product Adoption Potential 1 Addressable Market Market Size ($ billion) Current Penetration Applications Market Drivers • Subgrade stabilization• Population growth • Asphalt reinforcement• Infrastructure investment Roadways $7.5 2% • Pavement optimization• R
Slide 9: Proven Innovation Leader
4 Proven Innovation Leader Tensar has created an unparalleled portfolio of engineered products Original inventor 140 global geopier and geopier technologies of geogrids holding 14 patents U.S. patents • Strong focus on customer needs • Solutions-oriented product and technology development • Patent-p
Slide 10: Best-in-Class Customer Value Proposition
5 Best-in-Class Customer Value Proposition Project Stakeholders Value Proposition Paths to Achieve Governments Private Owners Proj. Engineers Contractors • Reduced excavated materials volumes Lower • Reduced volumes of aggregates and asphalt required Construction Cost • Reduced time of construction
Slide 11: Strong Secular Tailwinds
6 Strong Secular Tailwinds Shift toward green Impact of recent enacted U.S. infrastructure package Tensar products can reduce project related greenhouse At full run-rate, the bill is expected to increase gas emissions by up to 30% Tensar’s revenue by 20% compared to FY 2020 (assumes no additional ma
Slide 12: Growth-Oriented Go-to-Market Strategy
7 Growth-Oriented Go-to-Market Strategy Multiple Customer Touchpoints at Multiple Levels Proprietary product offerings Product awareness Proprietary data sets and Approach to relationship and education efforts Full suite of products customer relationship management that is unique (e.g. digital marke
Slide 13: Strong Sustainability Profile Aligns with CMC's Values
8 Strong Sustainability Profile Aligns with CMC’s Values Proprietary software designed to calculate construction CO2 emissions reduction Up to 65% Reduction in excavation required Up to 40% Less aggregates consumed 99%+ Of product scrap recycled internally Tensar Acquisition 13
Slide 14: Strategically Aligned Acquisition That Builds-Out Our Core
Strategically Aligned Acquisition That Builds-Out Our Core • Transaction creates powerful global provider of diverse early phase reinforcement solutions Expands into • Extends CMC’s growth runway complementary Leverages CMC’s − Under-penetrated markets with significant long-term product adoption pot
Slide 15: Example of Building CMC's Value Proposition: Distribution Warehouse
Example of Building CMC’s Value Proposition: Distribution Warehouse CMC Wire Rod • Tensar products are used Mill alongside CMC products in many applications Mesh • CMC is expanding its ability to Concrete panels for outer roof structures Producer serve customers and provide a broader range of constr
Slide 16: Financially Attractive Transaction
Financially Attractive Transaction Transaction Valuation and Margin Comparisons Impact on CMC Net Leverage EV / FY ‘21 EBITDA EBITDA Margins 14 x 30% 3.0x 12 x 25% 2.5x 10 x 20% 2.0x 8 x 15% 1.5x 6 x 1.0x 10% 4 x 0.5x 5% 2 x 2.5x 0.9x 0.8x 1.4x 0 x NM – Tensar Building Materials Construction Tensar
Slide 17: Transaction Contributes to CMC's Long-Term Financial Model
Transaction Contributes to CMC’s Long-Term Financial Model Through-the-Cycle EBITDA (TTC EBITDA) $810 $800 $690 $700 Core EBITDA $600 $575 $500 $400 $765 $325 $645 $300 Adjusted $540 EBITDA $200 $300 $100 $0 TTC EBITDA at Tranformational TTC EBITDA at Actions in FY Tensar TTC EBITDA - Pro Arizona 2
Slide 18: Transaction Overview
Transaction Overview • Transaction structured as an equity purchase Key terms • CMC will acquire all related assets, including intellectual property • CMC will also acquire outstanding liabilities • Transaction value of $550 million to be paid at close Consideration and • Subject to customary workin
Slide 19: Appendix
Appendix Tensar Acquisition 19
Slide 20: Core EBITDA Margin and Net Debt to EBITDA Reconciliations
Core EBITDA Margin and Net Debt to EBITDA Reconciliations 12 MONTHS ENDED FY 2016 to FY 2021 Average 8/31/2021 8/31/2020 8/31/2019 8/31/2018 8/31/2017 8/31/2016 Net sales $6,729,760 $5,476,486 $5,829,002 $4,642,723 $3,844,069 $4,177,518 Earnings from continuing operations $412,865 $278,302 $198,779
Slide 21: Definitions for non-GAAP financial measures
Definitions for non-GAAP financial measures CORE EBITDA FROM CONTINUING OPERATIONS Core EBITDA from continuing operations is the sum of earnings from continuing operations before interest expense and income taxes. It also excludes recurring non-cash charges for depreciation and amortization and asse
Slide 22: Thank You
Thank You Tensar Acquisition 22
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