Commercial Metals Company · NYSE:CMC
Commercial Metals — Q3 2024 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
Forward-Looking Statements 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 continued pressure
Slide 3: Increasing Shareholder Value With a Winning Formula
Increasing Shareholder Value With a Winning Formula 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 opti
Slide 4: Continued Progress in Keeping Our People Safe
Continued Progress in Keeping Our People Safe Continual improvement has resulted from our In FY 2024, we are doing an even better job at keeping our concentrated focus on safety and culture. people safe. CMC and Domestic Steel Industry1 Total Recordable Incident Total Recordable Incident Rate by Seg
Slide 5: Key Takeaways From Today’s Call
Key Takeaways From Today’s Call 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
Slide 6: Structurally Improved Margins and Return Profile
Structurally Improved Margins and Return Profile Margins and return levels are normalizing above historical levels CMC Consolidated Core EBITDA Margin1 CMC Return on Invested Capital1 20% 30% 18% 17% 25% 16% 26% 16% 14% Normalizing above historical levels 20% 12% 13% 12% 12% 10% 15% 17% 10% 15% 8% N
Slide 7: The Path Ahead – Running and Growing a Great Business
The Path Ahead – Running and Growing a Great Business Following the strategic transformation of the last decade, CMC is charting the course for its next phase of growth • Focus on people to ensure safety and provide talent development opportunities Running a Great • Enact operational and commercial
Slide 8: Structural Trends Expected to Support North American Construction
Structural Trends Expected to Support North American Construction Significant structural investment is expected to power domestic construction and rebar consumption over a multi-year period. In addition to direct investments, the follow-on indirect impact should also be meaningful as many large-scal
Slide 9: Rebar Demand Growth from Highway Construction Has Begun
Rebar Demand Growth from Highway Construction Has Begun 2024 should be a strong year for highway investment Domestic Rebar Consumption • Large highway projects associated with the Infrastructure +13% Investment and Jobs Act are entering construction phase Breakdown3 Average increase to State DOT bud
Slide 10: Europe Market Environment Remained Challenging
Europe Market Environment Remained Challenging Conditions during the third quarter were consistent with the second quarter, which were difficult but improved from late fiscal 2023 and early fiscal 2024. Signs are emerging that the Polish economy has reached a positive inflection. Recent Market Devel
Slide 11: Q3 Operational Update
Q3 Operational Update • Demand conditions in North America remained supportive with normal seasonal uplift from winter to spring months − Finished steel shipments decreased 3.0% y/y, while rebar shipments (mill direct rebar and downstream) declined 3.3% from the prior year period • North America Ste
Slide 12: Q3 Consolidated Operating Results
Q3 Consolidated Operating Results Performance Summary Core EBITDA Bridge – Q3 2023 to Q3 2024 Units in 000’s except per ton amounts and margin $ Millions Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 Q3 ’24 400 External Finished Steel Tons Shipped1 1,599 1,533 1,441 1,285 1,432 350 (121) Core EBITDA2 $384,454 $327,73
Slide 13: Q3 North America Steel Group
Q3 North America Steel Group Performance Summary North America Steel Group – Key Margins Units in 000’s except per ton amounts and margin $ / ton Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 Q3 ’24 1,200 1,106 350 1,044 1,051 1,015 951 300 External Finished Steel Tons Shipped1 1,170 1,144 1,098 1,010 1,135 1,000 SP
Slide 14: Q3 Europe Steel Group
Q3 Europe Steel Group Performance Summary Europe Steel Group – Key Margins Units in 000’s except per ton amounts and margin $ / ton Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 Q3 ’24 350 326 284 292 300 279 268 External Finished Steel Tons Shipped1 429 389 343 275 297 Margin Over Scrap and Adjusted 250 200 EBITDA p
Slide 15: Q3 Emerging Businesses Group
Q3 Emerging Businesses Group Performance Summary Contribution to Net Sales Change – Q3 2023 to Q3 2024 Units in 000’s except margins Quarterly net sales figures in $ million, contribution to net sales changes provided in percentages Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 Q3 ’24 200 Net sales flat 190 (0%) Net
Slide 16: Disciplined Capital Allocation Strategy
Disciplined Capital Allocation Strategy CMC will prudently allocate capital while maintaining a strong and flexible balance sheet Focus on Growth Competitive Cash Distributions Targeting value accretive growth that strategically strengthens our business Goal is to provide an attractive rate of cash
Slide 17: Cash Generation Profile
Cash Generation Profile Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders 1 (in millions) $1,400 1,270 $1,200 Gain on California land sale $1,000 911 $800 $600 539 380 $400 279 $200 141 155 37 5 2 $0 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022
Slide 18: Balance Sheet Strength
Balance Sheet Strength Debt maturity profile provides strategic flexibility Debt Maturity Profile Q3 FY’24 Liquidity (US$ in millions) (US$ in millions) Revolving $698 Cash and Cash Equivalents Credit Facility 4.125% 3.875% 4.375% Notes Notes Notes $600 $599 Revolver 4.0% Bond1 $300 $300 $300 $145 $
Slide 19: Leverage Profile
Leverage Profile Net Debt 1,2 / EBITDA 3 Net Debt-to-Capitalization 4 4.5x Transformational rebar asset acquisition 50% Transformational rebar asset acquisition 4.0x 45% 40% 3.5x 35% 3.0x Construction of Arizona 2 30% 2.5x Tensar 25% acquisition Construction of Arizona 2 46% 45% 2.0x 3.9x 42% 3.8x 2
Slide 20: Clear Sustainability Leader
Clear Sustainability Leader CMC plays a key role in the circular steel economy, turning end of life metals into the steel that forms the backbone of modern society Scopes 1&2 Greenhouse Gas Emissions (GHG) Intensity Progress on 2030 Goals (2019 baseline1) 2.2 Reduce our combined Increase our renewab
Slide 21: Appendix: Non-GAAP Financial Reconciliations
Appendix: Non-GAAP Financial Reconciliations © CMC
Slide 22: Adjusted EBITDA and Core EBITDA – Last 5 Quarters
Adjusted EBITDA and Core EBITDA – Last 5 Quarters Q3 FY24 Supplemental Slides [1] See page 28 for definitions of non-GAAP measures 22 June 20, 2024
Slide 23: Adjusted EBITDA, Core EBITDA, and Core EBITDA margins
Adjusted EBITDA, Core EBITDA, and Core EBITDA margins [1] See page 28 for definitions of non-GAAP measures Q3 FY24 Supplemental Slides 23 June 20, 2024
Slide 24: Adjusted Earnings
Adjusted Earnings [1] See page 28 for definitions of non-GAAP measures Q3 FY24 Supplemental Slides 24 June 20, 2024
Slide 25: Annualized Return on Invested Capital
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 25 June 20, 2024
Slide 26: Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders
Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders [1] See page 28 for definitions of non-GAAP measures Q3 FY24 Supplemental Slides 26 June 20, 2024
Slide 27: Net Debt to Adjusted EBITDA and Net Debt to Capitalization
Net Debt to Adjusted EBITDA and Net Debt to Capitalization [1] See page 28 for definitions of non-GAAP measures Q3 FY24 Supplemental Slides 27 June 20, 2024
Slide 28: Definitions for non-GAAP financial measures
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 reco
Slide 29: CMC.COM
CMC.COM
Commercial Metals Company — Q3 2024 Earnings Presentation on 6ix