Commercial Metals Company · NYSE:CMC
Commercial Metals — Q2 FY2024 Earnings Presentation
26 slides from Commercial Metals's earnings presentation, Mar 21, 2024
Slide 1: Q2 FY 2024 Supplemental Slides
Q2 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 Second quarter financial results remained historically strong • Core EBITDA and core EBITDA margin well above long-term averages Downstream contract awards improved significantly leading to sequential backlog increase $86 $0.73 $224 • Highest second quarter awards on
Slide 6: Structured to Maximize Value Creation
Structured to Maximize Value Creation Bringing increased focus on business development and operational and commercial excellence North America Steel Group Europe Steel Group Emerging Businesses Group (EBG) Steelmaking operations supported by a Steelmaking operations supported by a Engineered solutio
Slide 7: Structural Trends Expected to Support North America Construction
Structural Trends Expected to Support North America 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-scale
Slide 8: Europe Market Environment Remained Challenging
Europe Market Environment Remained Challenging Conditions during the second quarter continued to be difficult, but several green shoots have emerged that could bolster activity in the quarters ahead. Recent Market Developments Demand Supply Costs Macroeconomic Backdrop Manufacturing Long Product Pro
Slide 9: Q2 Operational Update: Performance Drivers
Q2 Operational Update • Demand conditions in North America remained supportive though impacted by seasonality and severe weather − Finished steel shipments increased 3.6% y/y, while rebar shipments (mill direct rebar and downstream) improved 4.9% from the prior year period • North America Steel Grou
Slide 10: Q2 Consolidated Operating Results
Q2 Consolidated Operating Results Performance Summary Core EBITDA Bridge – Q2 2023 to Q2 2024 Units in 000’s except per ton amounts and margin $ Millions Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 350 External Finished Steel Tons Shipped1 1,411 1,599 1,533 1,441 1,285 Corp and Eliminations 300 were reduced
Slide 11: Q2 North America Steel Group
Q2 North America Steel Group Performance Summary North America Steel Group – Key Margins Units in 000’s except per ton amounts and margin $ / ton Q2 ‘23 Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 1,200 350 1,096 1,106 1,044 1,048 1,015 1,000 300 External Finished Steel Tons Shipped1 975 1,170 1,144 1,098 1,010 SP
Slide 12: Q2 Europe Steel Group
Q2 Europe Steel Group Performance Summary Europe Steel Group – Key Margins Units in 000’s except per ton amounts and margin $ / ton Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 400 367 Margin Over Scrap and Adjusted EBITDA 350 326 External Finished Steel Tons Shipped1 436 429 389 343 275 284 279 300 268 250 2
Slide 13: Q2 Emerging Businesses Group
Q2 Emerging Businesses Group Performance Summary Contribution to Net Sales Change – Q2 2023 to Q2 2024 Units in 000’s except margins Quarterly net sales figures in $ million, contribution to net sales changes provided in percentages Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 170 Net sales up 1.6% Net sales
Slide 14: Disciplined Capital Allocation Strategy
Disciplined Capital Allocation Strategy CMC will prudently allocate capital while maintaining a strong and flexible balance sheet CMC Capital Allocation Priorities: 1 Value-Generating Growth 2 Shareholder Distributions 3 Debt Management 2024 Sources and Potential Sources of Cash 2024 Uses and Potent
Slide 15: 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 $697 $600 $380 $400 $279 $200 $141 $155 $37 $5 $2 $0 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 20
Slide 16: Balance Sheet Strength
Balance Sheet Strength Debt maturity profile provides strategic flexibility Debt Maturity Profile Q2 FY’24 Liquidity (US$ in millions) (US$ in millions) Revolving $638 Cash and Cash Equivalents Credit Facility 4.125% 3.875% 4.375% Notes Notes Notes $599 Revolver $600 4.0% Bond1 $300 $300 $300 $149 P
Slide 17: Leverage Profile
Leverage Profile Net Debt 1,2 / EBITDA 3 Net Debt-to-Capitalization 4 Transformational rebar asset acquisition Transformational rebar asset acquisition 4.5x 50% 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 T
Slide 18: 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 19: Appendix: Non-GAAP Financial Reconciliations
Appendix: Non-GAAP Financial Reconciliations © CMC
Slide 20: Adjusted EBITDA and Core EBITDA – Last 5 Quarters
Adjusted EBITDA and Core EBITDA – Last 5 Quarters [1] See page 25 for definitions of non-GAAP measures Q2 FY24 Supplemental Slides [2] Net of depreciation 20 March 21, 2024
Slide 21: Adjusted Earnings
Adjusted Earnings [1] See page 25 for definitions of non-GAAP measures Q2 FY24 Supplemental Slides 21 March 21, 2024
Slide 22: Annualized Return on Invested Capital
Annualized Return on Invested Capital 2 [1] Federal statutory rate of 21% plus approximate impact of state level income tax [2] See page 25 for definitions of non-GAAP measures Q2 FY24 Supplemental Slides 22 March 21, 2024
Slide 23: Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders
Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders [1] See page 25 for definitions of non-GAAP measures Q2 FY24 Supplemental Slides 23 March 21, 2024
Slide 24: Net Debt to Adjusted EBITDA and Net Debt to Capitalization
Net Debt to Adjusted EBITDA and Net Debt to Capitalization [1] See page 25 for definitions of non-GAAP measures Q2 FY24 Supplemental Slides 24 March 21, 2024
Slide 25: 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 settlement of New Market Tax Credit transactions, asset impairments, mill operational commissioning costs, including the estimated income tax effects there
Slide 26: CMC.COM
CMC.COM
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