Commercial Metals Company · NYSE:CMC
Commercial Metals — Q3 FY2024 Earnings Presentation
29 slides from Commercial Metals's earnings presentation, Jun 20, 2024
Slide 1: Q3 FY 2024 Supplemental Slides
Q3 FY 2024 Supplemental Slides
Slide 2: Forward-looking statements
2Q3 FY24 Supplemental Slides June 20, 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 co
Slide 3: Increasing Shareholder Value With a Winning Formula
3Q3 FY24 Supplemental Slides June 20, 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 ret
Slide 4: Continued Progress in Keeping Our People Safe
4 YTD 2022 YTD 2023 YTD 2024 YTD 2022 YTD 2023 YTD 2024 YTD 2022 YTD 2023 YTD 2024 YTD 2022 YTD 2023 YTD 2024 CMC Incident Rate U.S. Steel Industry Continued Progress in Keeping Our People Safe [1] Domestic steel industry data is for Iron and Steel Mills (NAICS – 3311) from the Bureau of Labor Stati
Slide 5: Third quarter financial results highlights
5 Third quarter financial results at levels well above long-term averages • Net earnings, core EBITDA, core EBITDA margin, cash flows, and return on invested capital at historically strong levels Solid seasonal demand and healthy underlying market fundamentals in North America • Experienced typical
Slide 6: Structurally Improved Margins and Return Profile
6 6% 10% 8% 9% 9% 12% 12% 17% 16% 13% – 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% FY '15 FY '16 FY '17 FY '18 FY '19 FY '20 FY '21 FY '22 FY '23 FY '24 (YTD) • Strategic transformation has brought significant scale and earnings growth • Industry landscape has dramatically improved over the last five years
Slide 7: The Path Ahead – Running and Growing a Great Business
7 The Path Ahead – Running and Growing a Great Business Q3 FY24 Supplemental Slides June 20, 2024 • Focus on people to ensure safety and provide talent development opportunities • Enact operational and commercial excellence efforts that span all levels of the enterprise • Drive to achieve sustainabl
Slide 8: Structural Trends Expected to Support North American Construction
8 Forecasted Construction Starts – inflation adjusted (% change compared to average of 2019 to 20222) – 5% 10% 15% 20% 25% 2023 2024 2025 2026 – 10% 20% 30% 40% 50% 60% 70% 2023 2024 2025 2026 – 5% 10% 15% 20% 25% 30% 2023 2024 2025 2026 Estimated Potential Impact on Rebar Demand1 Government Support
Slide 9: Rebar Demand Growth from Highway Construction Has Begun
9 Individual markets Broad market segmentDo m es tic R eb ar C on su m pt io n Br ea kd ow n3 Rebar Demand Growth from Highway Construction Has Begun Q3 FY24 Supplemental Slides June 20, 2024 27 0 5 10 15 20 25 30 Im pr ov em en ts Si ng le fa m ily M ul ti- fa m ily Pu bl ic u til ity Ed uc at io n
Slide 10: Europe Market Environment Remained Challenging
10 GDP Growth Outlook Polish economy is expected to grow by 2.8% 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 February 2024 to April 2024 vs. February 2023 to April 2023
Slide 11: Fourth quarter outlook
11 • Consolidated financial results in the fourth quarter are anticipated to be similar to third quarter levels • North America Steel Group finished steel shipments should be flat on a sequential basis, while adjusted EBITDA margin is also expected to be stable • Europe Steel Group adjusted EBITDA i
Slide 12: Q3 Consolidated Operating Results
12 384 256 (121) (10) 1 2 0 50 100 150 200 250 300 350 400 Q3 2023 NA Steel Group EBITDA Europe Steel Group EBITDA Emerging Businesses Group EBITDA Corp & Eliminations Other Non- Op Items Q3 2024 Q3 Consolidated Operating Results Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 Q3 ’24 External Finished Steel Tons Shippe
Slide 13: Q3 North America Steel Group
13 314 217 8 (60) (50) 5 100 125 150 175 200 225 250 275 300 325 Q3 '23 Adj EBITDA per Ton Raw Materials Steel Products Downstream Controllable Cost & Other Q3 '24 Adj EBITDA per Ton 314 294 243 220 217 1,106 1,044 1,051 1,015 951 595 594 549 526 538 0 50 100 150 200 250 300 350 0 200 400 600 800 1,
Slide 14: Q3 Europe Steel Group
14 (60%) (40%) (20%) – 20% 40% 60% 80% 100% Dwellings Under Construction New Residential Building Permits 326 284 268 279 292 14 (77) 114 (31) (14) (100) (50) 0 50 100 150 200 250 300 350 Q3 '23 Q4 '23 Q1' 24 Q2 '24 Q3 '24 Steel Products Margin Over Scrap Adjusted EBITDA per Ton Key Performance Driv
Slide 15: Q3 Emerging Businesses Group
15 189 189 (0%) (7%) (3%) 5% 6% 100 110 120 130 140 150 160 170 180 190 200 Q3 2023 Geogrids & Geopiers Construction Services Impact Metals Performance Reinforcing Steel Anchoring Systems Q3 2024 Key Performance Drivers Q3 2024 vs Q3 2023 Q3 Emerging Businesses Group Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 Q3 ’
Slide 16: Disciplined Capital Allocation Strategy
16 • Third quarter 2024 capital expenditures of $82.0 million • Year-to-date capital expenditures of $242.8 million • FY 2024 total spend forecasted at $400 million to $425 million − Shortfall to previous guidance related to timing of equipment delivery at Steel West Virginia, which will not impact
Slide 17: Cash Generation Profile
17 539 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 Q3 '24 Cash Generation Profile Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders1 (in millions) CMC’s c
Slide 18: Balance Sheet Strength
18 $45 $150 $599 $698 $300 $300 $300 $145 $600 2024 2025 2026 2027 2028 2029 2030 2031 2032 2047 Balance Sheet Strength [1] 2047 tax-exempt bonds were priced to yield 3.5%; coupon rate is 4.0% Revolver Poland Credit Facilities (US$ in millions) Revolving Credit Facility 4.125% Notes Cash and Cash Eq
Slide 19: Net Debt to Adjusted EBITDA and Net Debt to Capitalization
19 45 % 46 % 42 % 37 % 33 % 32 % 24 % 18 % 21 % 22 % 20 % 17 % 18 % 14 % 24 % 17 % 15 % 15 % 13 % 11 % 8% 10 % 9% 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 0. 4x 0. 5x NM 0.5
Slide 20: 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 Q3 FY24 Supplemental Slides │ June 20, 2024 20 [1] Represents progress on environmental goals as of fiscal year 2023, compared to fiscal year 201
Slide 21: Appendix: Non-GAAP Financial Reconciliations
© CMC Appendix: Non-GAAP Financial Reconciliations
Slide 22: Adjusted EBITDA and Core EBITDA – Last Quarters
22 Adjusted EBITDA and Core EBITDA – Last 5 Quarters [1] See page 28 for definitions of non-GAAP measures Q3 FY24 Supplemental Slides June 20, 2024
Slide 23: Adjusted EBITDA, Core EBITDA, and Core EBITDA margins
23 Adjusted EBITDA, Core EBITDA, and Core EBITDA margins [1] See page 28 for definitions of non-GAAP measures Q3 FY24 Supplemental Slides June 20, 2024
Slide 24: Adjusted Earnings
24 Adjusted Earnings [1] See page 28 for definitions of non-GAAP measures Q3 FY24 Supplemental Slides June 20, 2024
Slide 25: Annualized Return on Invested Capital
25 Annualized Return on Invested Capital [1] Federal statutory rate of 21% plus approximate impact of state level income tax [2] See page 28 for definitions of non-GAAP measures Q3 FY24 Supplemental Slides June 20, 2024
Slide 26: Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders
26 [1] See page 28 for definitions of non-GAAP measures Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders Q3 FY24 Supplemental Slides June 20, 2024
Slide 27: Net Debt to Adjusted EBITDA and Net Debt to Capitalization
27 Net Debt to Adjusted EBITDA and Net Debt to Capitalization [1] See page 28 for definitions of non-GAAP measures Q3 FY24 Supplemental Slides June 20, 2024
Slide 28: Definitions for non-GAAP financial measures
28 Definitions for non-GAAP financial measures ADJUSTED EARNINGS Adjusted earnings is a non-GAAP financial measure that is equal to earnings before asset impairments, including the estimated income tax effects thereof. The adjustment settlement for New Markets Tax Credit transaction represents the r
Slide 29: CMC.COM
CMC.COM