Nucor Corporation · NYSE:NUE
Nucor — Investor Presentation (May 2021)
33 slides from Nucor's investor presentation, May 2021
Slide 1: Powerful Partnerships. Powerful Results. May 2021
NuUcCoR POWERFUL PARTNERSHIPS. POWERFUL RESULTS. May 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements made in this presentation are forward-looking statements that involve risks and uncertainties. The words “believe,” “expect,” “project,” “will,” “should,” “could” and similar expressions are intended to identify those forward-looking statements. These fo
Slide 3: Nucor Overview
Nucor Overview • North America’s largest & most Results 2018 2019 2020 diversified steel & steel products Net Sales $25B $23B $20B company Steel 27.9M 26.5M 23.0M • 25 scrap-based steel mills with annual Shipped Tons Tons Tons production capacity of 27 million tons EPS $7.42 $4.14 $2.36 • North Amer
Slide 4: Q1-2021 Performance
Q1-2021 Performance • Record quarterly net income of $942 million and diluted EPS of $3.10 • Completed growth projects performance exceeding expectations – Hickman specialty cold rolling mill; Marion bar mill modernization; Gallatin galvanizing line; Sedalia rebar micro mill • Cash returned to share
Slide 5: Our Strengths
Our Strengths • Nucor's Culture • Market Leadership Positions • Diversified Product Portfolio • Low & Highly Variable Cost Structure • Strong Cash Generation Through The Cycle • Strong Balance Sheet 5
Slide 6: Principles of Nucor's Culture
Principles of Nucor’s Culture SAFETY FIRST Trust Open Communications Teamwork Community Stewardship Results 6
Slide 7: Safety – Our First Priority
2 6 8 10 12 0 4 1996 10.00 1997 9.30 1998 9.00 1999 7.52 2000 7.24 2001 6.12 2002 5.11 2003 4.08 2004 3.83 2005 3.40 2006 2.54 2007 2.15 2008 2.04 2009 2.73 2.29 Safety – Our First Priority 2010 2011 2.02 2012 1.82 Nucor Injury & Illness Rates 1996 - 2020 2013 1.94 2014 1.80 2015 1.63 we have more w
Slide 8: Market Leadership
Market Leadership Steel Joist & Deck #1 Structural Steel Merchant Bar Steel Steel Piling Distribution North American Metal Buildings Market Cold Finish Bar Steel Steel Electrical Conduit Pipe #2 Rebar Steel & Fab Plate Steel Hollow Structural Section (HSS) Steel Tubing North American Market SBQ Bar
Slide 9: Diversified Product Mix
Diversified Product Mix 2020 Volumes Sold to Outside Customers Growing Steel Products Portfolio Bar Structural 23% 8% Plate 7% Sheet Steel 33% Products 19% Raw materials 10% 2020 Total Sales Volume: 25.5 Million tons 9
Slide 10: Low, Highly-Variable Cost Structure
Low, Highly-Variable Cost Structure $1,000 Sustainable Profitability / Highly Variable Cost Structure / Stable Metal Spread $900 $800 $700 U.S. Dollars per ton $600 $500 $486 $456 $434 $400 $393 $375 $388 $381 $356 $359 $353 $369 $338 $300 $200 $100 $0 2010 2011 2012 2013 2014 2015 2016 2017 2018 20
Slide 11: Strong Balance Sheet
Strong Balance Sheet Low Financial Leverage $6.0 30% $5.0 26.4% 25% 22.6% 21.7% $4.0 20% Billions of U.S. Dollars 20.0% 19.2% 17.1% $3.0 16.5% 15% 13.4% 12.8% $2.0 10% $1.0 5% $0.0 0% 2013 2014 2015 2016 2017 2018 2019 2020 Q1-2021 Debt Cash Net Debt / Capital 11
Slide 12: Ample Financial Flexibility
Ample Financial Flexibility Operating Cash Flow Net Income Current liquidity of $3.0* $3.0 billion in cash and an Strong Cash Generation Though the Cycle undrawn $1.5 billion $2.5 credit facility maturing in 2023 No material debt Billions of U.S. Dollars $2.0 maturities $1.5 until 2022 $1.0 Stronges
Slide 13: Looking Ahead
Nucor NUCOR LOOKING AHEAD
Slide 14: Enhanced Environmental Stewardship
Enhanced Environmental Stewardship Nucor’s greenhouse gas intensity is approximately half the global average Nucor is leveraging renewable power to further reduce its GHG intensity Nucor’s products are enabling the transformation of the electrical grid and the light-weighting of autos 14
Slide 15: Evolving Sheet Steel Supply Landscape
Evolving Sheet Steel Supply Landscape Sheet Mills Capacity US & Canada Raw Steel Capacity 80 Top 4 producers now Cold Idled ('13 - '20) -11 account for more than 75% of the domestic supply Hot Idled ('19 - '20) -23.1 Re-Started ('20 - '21) 19.5 2021 Current Capacity 65.4 SDI (Sinton - 2021) 3 In 200
Slide 16: Imports' Shrinking Market Share
Imports’ Shrinking Market Share Imports’ Share of U.S. Finished Steel Market (2009-2020) 30% 29% 28% 28% 27% 3.8 26% 26% million tons Fewer Finished 24% 24% 23% 23% Steel Imports 22% in 2020 vs. 2019 22% 21% 21% (-23.2%) 19% 20% 18% Lowest annual import 18% market share since 2003 16% 2009 2010 2011
Slide 17: Strategic Growth Program Continues
Strategic Growth Program Continues Value Added Steelmaking Adjacencies Processing Midwest Plate Mill 1.2 Million tons of New Industrial Gas Initiative Cost, quality leadership Galvanizing Capability Broad product line Consistently strong demand for coated product Gallatin Expansion Enhanced capabili
Slide 18: Value Added Execution in Sheet
Value Added Execution in Sheet Current Nucor (2018) • Nucor’s sheet mills are well Industry Mix positioned to serve key end use markets 19% 11 • Our new capabilities will 16% million 50% enhance existing facilities for tons better efficiency, returns and 37% 58 9% meeting customer requirements 43% 6
Slide 19: Capital Allocation Priorities
Capital Allocation Priorities 3. Share 1. Investing In 2. Base Dividend Repurchases Profitable Growth or Growth Commensurate Supplemental Opportunities With Earnings Dividends We expect to return a minimum of 40% of our earnings to shareholders, while maintaining our strong investment grade (Baa1/A-
Slide 20: $6.1 Billion Returned – Five Year Period Ended 2020
$6.1 Billion Returned – 10 Year Period Ended 2020 $1,400 120% $1,200 100% $1,000 80% Millions of U.S. Dollars $800 60% $600 40% $400 20% $200 $0 0% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Dividends Repurchases Payout Ratio 20
Slide 21: Investing in High Return Growth
Investing in High Return Growth • Nucor seeks opportunities to deploy growth capital 1. Investing In at an IRR substantially above our cost of capital Profitable Growth Opportunities • In 2021, we expect our capital expenditures to be approximately $2 billion 1. Investing In • Major growth projects
Slide 22: Growth Investments – In Production
Growth Investments – In Production Capex Project Product Startup ($ millions) Ohio Rebar Rolling Mill Modernization Bar 2019 $85 2020 Cost & Profit Performance well above budget Gallatin, KY Hot Band Galvanizing Line Sheet 2019 $200 2020 was first full year of production – 40% ahead of plan Arkansas
Slide 23: Growth Investments – Pipeline
Growth Investments – Pipeline Budgeted Amount Project Product Startup (millions of $USD) Gallatin, KY Hot Band Capacity Expansion Expands annual capacity by 1.4 million tons to 3.0 mm tons Late Sheet $650 Expanded capabilities to supply heavier gauge, wider coils. 2021 Arkansas Gen 3 Flex Galvanizin
Slide 24: Appendix
NUCOR APPENDIX 24
Slide 25: Market Channels & End Markets
Market Channels & End Markets Nucor Channels to Market End-use Markets Served Nucor 2020 Direct / Known Energy End Use, 10% 52% Construction Heavy 56% Equipment & Agriculture 6% Machinery & Service Industrial Centers, Equipment 27% 10% Others 0% Nucor Transport & Downstream, Logistics 21% Appliances
Slide 26: Imports' Shrinking Market Share – Subject Countries
Imports’ Shrinking Market Share Driven by trade case successes – Total Imports from Subject Countries Discrete Plate Rebar Hot Rolled Sheet 2,602,103 Net Tons of Imports Net Tons of Imports Net Tons of Imports 1,151,530 2017 AD & CVD Duties + 2018 2017 AD & 2016 AD & 1,924,269 Korean Quotas CVD Duti
Slide 27: Imports' Shrinking Market Share – Total Imports
Imports’ Shrinking Market Share Driven by trade case successes – Total Imports Discrete Plate Rebar Hot Rolled Sheet 1,770,428 Net Tons of Imports Net Tons of Imports Net Tons of Imports 2017 AD & CVD Duties + 2018 2,108,697 2017 AD & 4,304,701 2016 AD & Korean Quotas CVD Duties CVD Duties 1,081,009
Slide 28: Strategic Investments: Brandenburg, Kentucky Plate Mill
Strategic Investments Brandenburg, Kentucky Plate Mill • State of the art mill situated on the Ohio River in the middle of the largest plate consuming region in the U.S. • Positions Nucor for market leadership in plate products with an ability to produce 97% of those consumed domestically Existing N
Slide 29: Strategic Investments: Gallatin, Kentucky Projects
Strategic Investments Gallatin, Kentucky Projects Brownfield Investments Aimed at Enhanced Competitiveness in the Heart of the Flat Rolled Market • Hot band galvanizing line o Widest in North America o Capability to serve growing automotive applications • Cost effective modernization and doubling of
Slide 30: Strategic Investments: Hickman, Arkansas Projects
Strategic Investments Hickman, Arkansas Projects 1. Cold Mill Expansion Adding a specialty cold rolling complex, utilizing existing melt capacity Expands Nucor’s capability to produce Motor Lamination (ML), High Strength Low Alloy (HSLA), & Advance High Strength Steel (AHSS) products Flexible
Slide 31: Strategic Investments: Long Products
Strategic Investments Long Products Improving Scale, Diversification and Earnings Power Nucor Marion Rolling Mill Nucor Kankakee Modernization of rolling mill at Build a full range merchant bar mill at existing Illinois Ohio steel bar mill steel mill leveraging existing melt capacity Updated t
Slide 32: EBITDA Reconciliation
EBITDA Reconciliation 2020 2019 2018 2017 2016 2015 Net earnings 836 1,371 2,481 1,381 900 193 Net Interest expense 153 121 136 174 169 174 Provision for income taxes - 412 748 369 398 49 Depreciation expense 702 649 631 636 613 626 Amortization expense 83 86 89 91 74 74 Impairments and losses on as
Slide 33: Powerful Partnerships. Powerful Results.
33 POWERFUL PARTNERSHIPS. POWERFUL RESULTS.