Commercial Metals Company · NYSE:CMC
Commercial Metals — Q4 FY2020 Earnings Presentation
22 slides from Commercial Metals's earnings presentation, Oct 15, 2020
Slide 1: Q4 FY 2020 Supplemental Slides
Q4 FY 2020 SUPPLEMENTAL SLIDES OCTOBER 15, 2020
Slide 2: Cautionary Statements
CAUTIONARY STATEMENTS This presentation contains or incorporates by reference a number of "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 acti
Slide 3: Key Takeaways from Today's Call
KEY TAKEAWAYS FROM TODAY’S CALL Health and safety of our employees is always our top priority Change to segment reporting made to reflect vertically integrated operating Q4 Core EBITDA model of $176M Up 11% y/y Fiscal 2020 was a momentous year • Seeing the significant benefits of strategic transform
Slide 4: Change in Segment Reporting
CHANGE IN SEGMENT REPORTING Realigned reporting structure from four operating segments to two − North America and Europe Previous Americas operating segments are now one North America segment Reflects the way in which CMC manages the business and seeks to maximize returns for the integrated wh
Slide 5: Fiscal Year 2020 Accomplishments
FISCAL YEAR 2020 ACCOMPLISHMENTS Reacted quickly to COVID-19 outbreak, resulting in no major business interruptions, disruptions to customer service, or loss of productivity Grew Core EBITDA by 30% year-over-year, and generated ROIC of 12% Generated $604 million of free cash flow, further fort
Slide 6: Consolidated Operating Results – Quarterly
CONSOLIDATED OPERATING RESULTS – QUARTERLY Performance Summary Core EBITDA Bridge – Q4 2019 to Q4 2020 Units in 000’s unless noted otherwise $ Millions Q4 ’19 Q1 ’20 Q2 ’20 Q3 ’20 Q4 ‘20 200 External Finished 1,547 1,462 1,445 1,475 1,541 180 0 Steel Tons Shipped1 22 (35) 160 30 Core EBITDA $159,181
Slide 7: North America – Quarterly
NORTH AMERICA – QUARTERLY Performance Summary North America – Key Margins Units in 000’s unless noted otherwise $ / ton Q4 ’19 Q1 ’20 Q2 ’20 Q3 ’20 Q4 ‘20 800 717 750 728 727 733 180 External Finished 700 160 Steel Tons 1,159 1,124 1,065 1,101 1,161 Adjusted EBITDA per ton 600 140 Shipped1 120 500 1
Slide 8: Europe – Quarterly
EUROPE– QUARTERLY Performance Summary Europe – Key Margins Units in 000’s unless noted otherwise $ / ton Q4 ’19 Q1 ’20 Q2 ’20 Q3 ’20 Q4 ‘20 260 70 235 240 External Finished Steel 60 388 338 380 374 380 217 Adjusted EBITDA per ton Tons Shipped 220 198 198 196 50 200 40 Adjusted EBITDA $22,666 $11,359
Slide 9: Consolidated Operating Results – Annual
CONSOLIDATED OPERATING RESULTS – ANNUAL Performance Summary Core EBITDA Bridge – FY 2019 to FY 2020 Units in 000’s unless noted otherwise $ Millions FY 2017 FY 2018 FY 2019 FY 2020 800 External Finished Steel Tons 3,952 4,322 5,791 5,923 1 700 Shipped (38) (14) (4) Core EBITDA $288,092 $412,237 $501
Slide 10: North America – Annual
NORTH AMERICA – ANNUAL Performance Summary North America – Key Margins Units in 000’s unless noted otherwise $ / ton FY 2018 FY 2019 FY 2020 800 737 160 700 621 140 External Finished Steel Tons Shipped1 2,822 4,331 4,451 Adjusted EBITDA per ton 600 120 497 500 100 Adjusted EBITDA $323,993 $456,296 $
Slide 11: Europe – Annual
EUROPE – ANNUAL Performance Summary Europe– Key Margins Units in 000’s unless noted otherwise $ / ton FY 2018 FY 2019 FY 2020 300 100 246 240 250 External Finished Steel Tons Shipped 1,500 1,460 1,472 80 Adjusted EBITDA per ton 202 200 60 Adjusted EBITDA $131,720 $100,102 $62,007 150 40 SP Margin Ov
Slide 12: Cash Flow Profile
CASH FLOW PROFILE ADJUSTED EBITDA LESS CAPITAL EXPENDITURES AND DISBURSEMENTS TO STAKEHOLDERS 1 250 226 200 149 150 100 73 50 0 (4) (50) (26) (100) (108) (150) 2015 2016 2017 2018 2019 2020 CMC’s cash flow capabilities have been greatly enhanced through our strategic transformation − Will fund curre
Slide 13: Balance Sheet Strength
BALANCE SHEET STRENGTH DEBT MATURITY PROFILE PROVIDES STRATEGIC FLEXIBILITY DEBT MATURITY SCHEDULE Q4 FY’20 LIQUIDITY (US$ in millions) (US$ in millions) $542 Cash and Cash Equivalents Revolving 5.750% Credit Facility 4.875% Notes Notes 5.375% Notes 347 Revolver $350 $350 $330 $300 160 U.S. Accounts
Slide 14: Leverage Profile
LEVERAGE PROFILE NET DEBT1,2 / EBITDA3 NET DEBT-TO-CAPITALIZATION4 4.5x 60% 4.0x 50% 3.5x 3.0x 40% 2.5x 30% 2.0x 3.9x 46% 3.2x 42% 1.5x 20% 37% 2.5x 33% 32% 1.0x 1.9x 24% 1.6x 10% 1.2x 18% 0.5x 0.9x NM 0% Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Slide 15: Appendix: Non-GAAP Reconciliations
APPENDIX: NON-GAAP RECONCILIATIONS Q4 FY20 SupplementalQ4FY20 Slides | October 15,2020 15
Slide 16: Free Cash Flow Reconciliation
FREE CASH FLOW RECONCILIATION 3 MONTHS ENDED 12 MONTHS ENDED ($ in thousands) 8/31/2020 5/31/2020 2/29/2020 11/30/2019 8/31/2020 Net cash flows from (used by) operating activities $259,371 $278,417 $106,998 $146,418 $791,204 Capital expenditures (53,526) (37,500) (51,033) (45,559) (187,618) Free Cas
Slide 17: Core EBITDA from Continuing Operations Reconciliation
CORE EBITDA FROM CONTINUING OPERATIONS RECONCILIATION 3 MONTHS ENDED 12 MONTHS ENDED ($ in thousands) 8/31/2020 5/31/2020 2/29/2020 11/30/2019 8/31/2019 8/31/2020 8/31/2019 8/31/2018 8/31/2017 Earnings from continuing operations $67,782 $64,169 $63,596 $82,755 $85,880 $278,302 $198,779 $135,237 $50,
Slide 18: Adjusted Earnings from Continuing Operations Reconciliation
ADJUSTED EARNINGS FROM CONTINUING OPERATIONS RECONCILIATION 3 MONTHS ENDED 12 MONTHS ENDED ($ in thousands) 8/31/2020 5/31/2020 2/29/2020 11/30/2019 8/31/2019 8/31/2020 8/31/2019 8/31/2018 8/31/2017 Earnings from continuing operations $67,782 $64,169 $63,596 $82,755 $85,880 $278,302 $198,779 $135,23
Slide 19: Adjusted Segment EBITDA Margin
ADJUSTED SEGMENT EBITDA MARGIN 3 MONTHS ENDED 12 MONTHS ENDED ($ in thousands) 8/31/2020 5/31/2020 2/29/2020 11/30/2019 8/31/2019 8/31/2020 8/31/2019 8/31/2018 North America Adjusted EBITDA from continuing operations $174,219 $159,394 $152,831 $174,732 $152,450 $661,176 $456,296 $323,993 North Ameri
Slide 20: Adjusted EBITDA Less Capital Expenditures and Disbursements to Stakeholders
ADJUSTED EBITDA LESS CAPITAL EXPENDITURES AND DISBURSEMENTS TO STAKEHOLDERS 12 MONTHS ENDED ($ in thousands) 8/31/2020 8/31/2019 8/31/2018 8/31/2017 8/31/2016 8/31/2015 Adjusted EBITDA from continuing operations $576,608 $424,085 $352,221 $235,822 $305,237 $309,268 Capital expenditures and disbursem
Slide 21: 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 (loss) from continuing operations before certain acquisition settlement costs, labor cost government refunds
Slide 22: Thank You
THANK YOU CORPORATE OFFICE 6565 N. MacArthur Blvd Suite 800 Irving, TX 75039 Phone: (214) 689.4300 INVESTOR RELATIONS Phone: (972) 308.5349 Fax: (214) 689.4326 IR@cmc.com Q4 FY20 Supplemental Slides | October 15, 2020 22