Commercial Metals Company · NYSE:CMC
Commercial Metals — Q1 2024 Earnings Presentation
27 slides from Commercial Metals's earnings presentation, Jan 8, 2024
Slide 1: Q1 FY 2024 Supplemental Slides
Q1 FY 2024 Supplemental Slides
Slide 2: Forward-looking statements
2Q1 FY24 Supplemental Slides January 8, 2024 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
Slide 3: Increasing Shareholder Value With a Winning Formula
3Q1 FY24 Supplemental Slides January 8, 2024 Leading positions in core products and geographies Focused strategy that leverages capabilities, competitive strengths, and market knowledge Strong balance sheet and cash generation provide flexibility to execute on strategy Vertical structure optimizes r
Slide 4: Key Takeaways From Today's Call
4 Key Takeaways From Today’s Call Strong first quarter financial results • While down from recent levels, Q1 Core EBITDA still among the best in CMC history • Strong cash flow from operating activities and free cash flow Realigned segment reporting to enhance visibility into value drivers, growth pl
Slide 5: Realignment of Reportable Segments
5 Line of Business Description Strategic Focus Realignment of Reportable Segments Q1 FY24 Supplemental Slides January 8, 2024 Steel vertical value chain • Metals recycling • Steel mills • Rebar fabrication • Fence post fabrication • Post-tension cable Engineered solutions and custom services • Soil
Slide 6: Emerging Businesses Group Characteristics
6 Cash Flow Margin Profile Growth Outlook Emerging Businesses Group Characteristics Q1 FY24 Supplemental Slides January 8, 2024 % • Higher organic growth rate − Relatively low penetration of proprietary solutions and targeted applications − Potential for portfolio synergies • Broad geographical comm
Slide 7: Emerging Businesses Group Description and Business Drivers
7 Description Business Drivers Tensar Geogrid and Geopiers • Geogrids provide soil stabilization for road, foundation, and other construction applications • Geopiers are custom engineered solutions for building foundations in almost all soil types • Commercial access to over 80 countries • Increased
Slide 8: Structural Trends Expected to Support North America Construction
8 Structural Trends Expected to Support North America Construction RESHORING AND SUPPLY CHAIN REALIGNMENT ENERGY TRANSITION AND LNG INVESTMENTS Significant structural investment is expected to power domestic construction and rebar consumption over a multi-year period. In addition to direct investmen
Slide 9: Europe Market Environment Remained Challenging
9 GDP Growth Outlook Polish economy is expected to grow by 3.1% in 2024 per S&P Recent Market Developments Europe Market Environment Remained Challenging [1] Data from S&P Global manufacturing PMI report [2] Data from Statistics Poland for September and October 2023 vs. September and October 2022 [3
Slide 10: Outlook
10 • North America Steel Group shipments expected to decline sequentially on typical seasonality; steel product margins to experience further compression − Beyond the second quarter, recent price announcements should support an inflection in steel product margins • Conditions for Europe Steel Group
Slide 11: Q1 Consolidated Operating Results
11 425 325 (83) (22) (1) 9 (3) 0 50 100 150 200 250 300 350 400 450 Q1 2023 NA Steel Group EBITDA Europe Steel Group EBITDA Emerging Businesses Group EBITDA Corp & Eliminations Other Non- Op Items Q1 2024 Q1 Consolidated Operating Results Q1 ’23 Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 External Finished Steel To
Slide 12: Q1 North America Steel Group
12 322 281 314 294 243 1,012 1,096 1,106 1,044 1,048 695 639 595 594 549 0 50 100 150 200 250 300 350 0 200 400 600 800 1,000 1,200 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1' 24 Adjusted EBITDA per Ton of Finished Steel Shipped Downstream Products Margin Over Scrap (1 Qtr Lag) Steel Products Margin Over Scrap
Slide 13: Q1 Europe Steel Group
13 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 426 367 326 284 268 129 26 14 (77) 114 (100) 0 100 200 300 400 500 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Q1' 24 Steel Products Margin Over Scrap Adjusted EBITDA per Ton Key Performance Drivers Q1 2024 vs Q1 2023 Q1 Europe Steel Group Q1 ’23 Q2 ’23 Q3
Slide 14: Q1 Emerging Businesses Group
14 Key Performance Drivers Q1 2024 vs Q1 2023 Q1 Emerging Businesses Group Q1 ’23 Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 Net sales from external customers $170,534 $153,598 $189,055 $208,559 $177,239 Adjusted EBITDA $31,427 $26,551 $38,395 $42,612 $30,862 Adjusted EBITDA Margin 18.4% 17.3% 20.3% 20.4% 17.4% Pe
Slide 15: Disciplined Capital Allocation Strategy
15 2 31 Disciplined Capital Allocation Strategy CMC Capital Allocation Priorities: $350 million share repurchase program ($58 million remaining1) Quarterly dividend of $0.16 per share (last increased 14% in Q4 2022) Shareholder Cash Distribution Programs in Place Value-Generating Growth Shareholder
Slide 16: Cash Generation Profile
16 $803 $5 $37 $2 $141 $155 $279 $380 $1,270 $911 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 LTM Q1 '24 Cash Generation Profile Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders1 (in million
Slide 17: Balance Sheet Strength
17 $300 $300 $300 $145 $600 2024 2025 2026 2027 2028 2029 2030 2031 2032 2047 $72 $149 $599 $705 Balance Sheet Strength [1] 2047 tax-exempt bonds were priced to yield 3.5%; coupon rate is 4.0% Revolver Poland Credit Facilities (US$ in millions) Revolving Credit Facility 4.125% Notes Cash and Cash Eq
Slide 18: Leverage Profile
18 45 % 46 % 42 % 37 % 33 % 32 % 24 % 18 % 21 % 22 % 20 % 17 % 18 % 14 % 24 % 17 % 15 % 15 % 13 % 11 % 8% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 3. 8x 3. 9x 3. 2x 2. 5x 1. 9x 1. 6x 1. 2x 0. 9x 1. 1x 1. 2x 1. 0x 0. 8x 0. 7x 0. 5x 0. 7x 0. 5x 0. 4x 0. 5x 0. 5x 0. 4x 0. 3x NM 0.5x 1.0x 1.5x 2.0x 2.5
Slide 19: Clear Sustainability Leader
2% 69% CMCGlobal Industry 1.18 28.60 CMCGlobal Industry 3.84 20.99 CMCGlobal Industry 0.68 1.91 CMCGlobal Industry 59 % Of goal Clear Sustainability Leader Q1 FY24 Supplemental Slides │ January 8, 2024 19 [1] Represents progress on environmental goals as of fiscal year 2023, compared to fiscal year
Slide 20: Appendix: Non-GAAP Financial Reconciliations
© CMC Appendix: Non-GAAP Financial Reconciliations
Slide 21: Adjusted EBITDA and Core EBITDA – Last Quarters
21 Adjusted EBITDA and Core EBITDA – Last 5 Quarters [1] See page 26 for definitions of non-GAAP measures [2] Net of depreciation Q1 FY24 Supplemental Slides January 8, 2024
Slide 22: Adjusted Earnings
22 Adjusted Earnings [1] See page 26 for definitions of non-GAAP measures Q1 FY24 Supplemental Slides January 8, 2024
Slide 23: Annualized Return on Invested Capital
23 Annualized Return on Invested Capital [1] Federal statutory rate of 21% plus approximate impact of state level income tax [2] See page 26 for definitions of non-GAAP measures Q1 FY24 Supplemental Slides January 8, 2024 2
Slide 24: Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders
24 [1] See page 26 for definitions of non-GAAP measures Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders Q1 FY24 Supplemental Slides January 8, 2024
Slide 25: Net Debt to Adjusted EBITDA and Net Debt to Capitalization
25 Net Debt to Adjusted EBITDA and Net Debt to Capitalization [1] See page 26 for definitions of non-GAAP measures Q1 FY24 Supplemental Slides January 8, 2024
Slide 26: Definitions for non-GAAP financial measures
26 Definitions for non-GAAP financial measures ADJUSTED EARNINGS Adjusted earnings is a non-GAAP financial measure that is equal to earnings before settlement for New Market Tax Credit transactions, asset impairments, mill operational commissioning costs, including the estimated income tax effects t
Slide 27: CMC.COM
CMC.COM