Commercial Metals Company · NYSE:CMC
Commercial Metals — Q2 2022 Earnings Presentation
23 slides from Commercial Metals's earnings presentation, Mar 17, 2022
Slide 1: Commercial Metals Company Q2 FY'22 Supplemental Slides
RE COMMERCIAL METALS COMPANY Q 2 F Y ’ 2 2 S u p p l e m e n t a l S l i d e s
Slide 2: Forward-Looking Statements
Forward-Looking Statements Q2 FY22 Supplemental Slides │ March 17, 2022 2 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
Slide 3: A Clear Path to Value Creation
3 ✓ Vertical structure optimizes returns through the entire value chain ✓ Disciplined capital allocation focused on maximizing returns for our shareholders Q2 FY22 Supplemental Slides │ March 17, 2022 ✓ Leading positions in core product and geographical markets ✓ Focused strategy that leverages capa
Slide 4: Key Takeaways From Today's Call
Continued record-level financial performance • All-time high margins achieved on steel products and raw materials • Current rate of earnings made possible by past strategic actions Progress made on key growth projects • Tensar acquisition expected to close in fiscal Q3 • Arizona 2 construction on sc
Slide 5: A Clearly Sustainable Future – Proud of Our Progress
7.8% achieved 2.7 % currently C o n te n t 0.82 MT CO2e / MT 1.89 MT CO2e / MT 20.62 GJ / MT 28.60 m3 / MT 69.5% of content 0.197 0.698 3.710 1.241 2.0% Scope 1 Scope 1-3 Energy Intensity Water Intake Virgin Material G H G E m is s io n s E n e rg y U s e W a te r U s e Industry AverageCMC Performan
Slide 6: Our People Are Our #1 Asset
Our People Are Our #1 Asset 6 Source: CMC 2021 Sustainability Report Note: BLS refers to the U.S. Bureau of Labor Statistics; ISRI refers to the Institute of Scrap Recycling Industries; SMA refers to Steel Manufacturers Association Q2 FY22 Supplemental Slides │ March 17, 2022 CMC’s mission is to ens
Slide 7: Building for the Future – Executing on a Disciplined Growth Plan
Building for the Future – Executing on a Disciplined Growth Plan • CMC’s 3rd micro mill – second at Mesa, AZ site • First merchant bar-capable micro mill in the world • Replaces rebar production from higher- cost former Steel CA plant • Will further optimize mill network and provide access to large
Slide 8: FY 2022 Outlook
• Based on CMC’s current view of the marketplace, FY 2022 financial results are expected to be strong • Volumes in North America should be supported by a replenished downstream backlog, as well as broad end market strength • Downstream backlog is expected to reprice higher throughout fiscal 2022 • E
Slide 9: Q2 2022 Consolidated Operating Results
171 323 91 65 (7) (273) 3 273 0 100 200 300 400 500 600 Q2 2021 NA Segment EBITDA Europe Segment EBITDA Corp & Eliminations Gain on CA Land Sale Other Non- Op Items Q2 2022 Consolidated Operating Results 9Q2 FY22 Supplemental Slides │ March 17, 2022 Q2 ‘21 Q3 ‘21 Q4 ‘21 Q1 ‘22 Q2 ‘22 External Finish
Slide 10: North America
100 125 150 175 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Q2 '22 Adjusted EBITDA per ton Wgt Avg Finished Steel ASP Wgt Avg Finished Steel Mgn Over Scrap Controllable Costs 158 173 179 244 268 663 619 645 658 741 351 425 466 548 605 0 50 100 150 200 250 300 0 100 200 300 400 500 600 700 800 Q2 '21 Q3 '21 Q4 '21 Q
Slide 11: Europe
0% 10% 20% 30% 40% 50% Rebar Wire Rod Merchant Bars Russia Ukraine Belarus 46 124 147 219 180 204 288 315 435 407 0 50 100 150 200 250 100 150 200 250 300 350 400 450 500 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Q2 '22 Adjusted EBITDA per Ton Steel Products Margin Over Scrap Key Performance Drivers Q2 2022 vs Q2
Slide 12: Disciplined Capital Allocation Strategy
2 31 Disciplined Capital Allocation Strategy 12Q2 FY22 Supplemental Slides │ March 17, 2022 CMC Capital Allocation Priorities: $350 million share repurchase program in place Quarterly dividend of $0.14 per share (increased 17% in Q4 2021) Shareholder Cash Distribution Programs in Place • Operating c
Slide 13: Cash Generation Profile
Gain on California land sale 5 37 11 140 155 279 380 893 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 L12M (to Q2 '22) Cash Generation Profile 13Q2 FY22 Supplemental Slides │ March 17, 2022 Adjusted EBITDA Less Sustaining Capital Expe
Slide 14: Balance Sheet Strength
69 68 150 399 $847 $330 $300 $300 $300 $145 $400 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2047 Balance Sheet Strength 14Q2 FY22 Supplemental Slides │ March 17, 2022 [1] 2047 tax-exempt bonds were priced to yield 3.5%; coupon rate is 4.0% [2] Availability as of February 28, 2022 exclude
Slide 15: Leverage Profile
46% 42% 37% 33% 32% 24% 18% 21% 22% 20% 17% 18% 14% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 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 NM 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x
Slide 16: Appendix: Non-GAAP Financial Reconciliations
Q2 FY22 Supplemental Slides │ March 17, 2022 16 Appendix: Non-GAAP Financial Reconciliations
Slide 17: Adjusted and Core EBITDA reconciliation
3 MONTHS ENDED 2/28/2022 11/30/2021 8/31/2021 5/31/2021 2/28/2021 Earnings from continuing operations $383,314 $232,889 $152,313 $130,408 $66,233 Interest expense 12,011 11,035 11,659 11,965 14,021 Income taxes 126,432 28,872 40,444 38,175 20,941 Depreciation and amortization 41,134 41,226 42,437 41
Slide 18: Adjusted Earnings from Continuing Operations reconciliation
3 MONTHS ENDED 2/28/2022 11/30/2021 8/31/2021 5/31/2021 2/28/2021 Earnings from continuing operations $383,314 $232,889 $152,313 $130,408 $66,233 Gain on sale of assets (273,315) – – (4,457) (5,877) Loss on debt extinguishment 16,052 – – – 16,841 Facility closure – – – – 5,694 Asset impairments 1,22
Slide 19: Return on Invested Capital
3 MOS ENDED 2/28/2022 Earnings from continuing operations before income taxes $509,746 Plus: interest expense 12,011 Plus: acquisition and integration related costs – Plus: loss on extinguishment of debt 16,052 Plus: asset impairments 1,228 Less: gain on sale of assets (273,099) Operating profit - a
Slide 20: Adjusted EBITDA reconciliation
12 MONTHS ENDED 6 MONTHS ENDED 2/28/2022 8/31/2021 8/31/2020 8/31/2019 8/31/2018 8/31/2017 8/31/2016 8/31/2015 2/28/2022 2/28/2021 Earnings from continuing operations $898,924 $412,865 $278,302 $198,779 $135,237 $50,175 $62,001 $58,583 $616,203 $130,144 Interest expense 46,670 51,904 61,837 71,373 4
Slide 21: Net Debt to Adjusted EBITDA and Net Debt to Capitalization
Net Debt to Adjusted EBITDA and Net Debt to Capitalization Q2 FY22 Supplemental Slides │ March 17, 2022 21 Figures in thousand $ [1] See page 22 for definitions of non-GAAP measures 3 MONTHS ENDED 2/28/2022 11/30/2021 8/31/2021 5/31/2021 2/28/2021 11/30/2020 8/31/2020 5/31/2020 2/29/2020 11/30/2019
Slide 22: Definitions for non-GAAP financial measures
Definitions for non-GAAP financial measures Q2 FY22 Supplemental Slides │ March 17, 2022 22 A D J U S T E D E A R N I N G S F R O M C O N T I N U I N G O P E R A T I O N S Adjusted earnings from continuing operations is a non-GAAP financial measure that is equal to earnings from continuing operation
Slide 23: Thank You
Q2 FY22 Supplemental Slides │ March 17, 2022 23 Thank You