Commercial Metals Company · NYSE:CMC
Commercial Metals — Q1 2025 Earnings Presentation
28 slides from Commercial Metals's earnings presentation, Jan 6, 2025
Slide 1: Q1 FY 2025 Supplemental Slides
Q1 FY 2025 Supplemental Slides
Slide 2: Forward-looking statements
2Q1 FY25 Supplemental Slides January 6, 2025 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
Slide 3: Increasing Shareholder Value With a Winning Formula
3 Q1 FY25 Supplemental Slides January 6, 2025 Leading positions in core solutions 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
Slide 4: Q1 highlights
4 Uncertainty continued to impact new construction activity • Long steel pricing and metal margins softened during the quarter • Encouragingly, customer optimism has improved in recent months Positive underlying fundamentals remain intact • CMC downstream bids and Dodge Momentum Index point to resil
Slide 5: Structurally Improved Margins and Return Profile
5 6% 6% 6% 10% 8% 9% 9% 12% 12% 17% 16% 13% – 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% • Strategic transformation has brought significant scale and earnings growth • Industry landscape has dramatically improved over the last five years • CMC has leveraged growth to generate higher, more sustainable margi
Slide 6: Temporary Uncertainty Impacting Results, But Sentiment Is Improving
6 Temporary Uncertainty Impacting Results, But Sentiment Is Improving Construction industry sentiment has improved in recent months Q1 FY25 Supplemental Slides January 6, 2025 20 30 40 50 60 70 80 ENR Construction Confidence Index1 • The ENR Construction Confidence Index reached its highest level in
Slide 7: Highway Construction Outlook Remains Positive
7 Infrastructu re 4 0 % Privatenon-re s 3 7 % R e si de ntia l 24% Highways and stre e ts Individual markets Broad market segmentD o m e s ti c R e b a r C o n s u m p ti o n B re a k d o w n 3 Highway Construction Outlook Remains Positive Q1 FY25 Supplemental Slides January 6, 2025 27 0 5 10 15 20
Slide 8: Powerful Structural Trends Remain Intact
8 Forecasted Construction Starts – inflation adjusted (% change compared to average of 2019 to 20222) (10%) – 10% 20% 30% 2023 2024 2025 2026 2027 – 10% 20% 30% 40% 2023 2024 2025 2026 2027 – 10% 20% 30% 40% 50% 60% 2023 2024 2025 2026 2027 (5%) – 5% 10% 15% 20% 25% 2023 2024 2025 2026 2027 Estimate
Slide 9: The Path Ahead – Running and Growing a Great Business
9 The Path Ahead – Running and Growing a Great Business Q1 FY25 Supplemental Slides January 6, 2025 • Focus on people to ensure safety and provide talent development opportunities • Enact operational and commercial excellence (TAG program) efforts that span all levels of the enterprise • Drive to ac
Slide 10: European Market Environment Remains Challenging
10 GDP Growth Outlook Polish economy is expected to grow by 3.3% in 2025 per S&P Recent Market Developments European Market Environment Remains Challenging [1] Data from S&P Global manufacturing PMI report [2] Data from Statistics Poland for August 2024 to October 2024 vs. August 2023 to October 202
Slide 11: Outlook and segment commentary
11 • Consolidated financial results in the second quarter are anticipated to decline from the first quarter level • North America Steel Group finished steel shipments should follow typical seasonal patterns in the second quarter, while adjusted EBITDA margin is expected to decline sequentially • Adj
Slide 12: Q1 Consolidated Operating Results
12 314 211 (79) (13) (8) (5) 2 0 50 100 150 200 250 300 350 Q1 2024 NA Steel Group EBITDA Europe Steel Group EBITDA Emerging Businesses Group EBITDA Corp & Eliminations Other Non- Op Items Q1 2025 Q1 Consolidated Operating Results Q1 ’24 Q2 ’24 Q3 ’24 Q4 ’24 Q1 ’25 External Finished Steel Tons Shipp
Slide 13: Q1 North America Steel Group
13 243 164 (12) (40) (40) 13 100 125 150 175 200 225 250 Q1 '24 Adj EBITDA per Ton Raw Materials Steel Products Downstream Other Q1 '25 Adj EBITDA per Ton 243 220 217 188 164 1,051 1,015 951 958 938 549 526 538 522 489 0 50 100 150 200 250 300 0 200 400 600 800 1,000 1,200 Q1' 24 Q2 '24 Q3 '24 Q4 '2
Slide 14: Q1 Europe Steel Group
14 191,374 225,182 169,171 234,630 410,863 46% 34% 36% 56% 65% 0% 10% 20% 30% 40% 50% 60% 70% 0 100,000 200,000 300,000 400,000 500,000 Jan-Oct 2020 Jan-Oct 2021 Jan-Oct 2022 Jan-Oct 2023 Jan-Oct 2024 Imports from Germany % of Total Imports 268 279 292 284 269 114 (31) (14) (11) 83 (50) 0 50 100 150
Slide 15: Q1 Emerging Businesses Group
15 177 169 (0.7%) (0.9%) (4.6%) 4.6% (2.8%) 100 110 120 130 140 150 160 170 180 190 Q1 2024 Geogrids & Geopiers Construction Services Impact Metals Performance Reinforcing Steel Anchoring Systems Q1 2025 Key Performance Drivers Q1 2025 vs Q1 2024 Q1 Emerging Businesses Group Q1 ’24 Q2 ’24 Q3 ’24 Q4
Slide 16: Disciplined Capital Allocation Strategy
16 • First quarter 2025 capital expenditures of $118.2 million • FY 2025 capex expected in a range of $630 million to $680 million − $350 million to $400 million related to Steel West Virginia • Targeting growth expenditures on key mill projects that will strengthen market presence and lower cost Di
Slide 17: Cash Generation Profile and Capital Deployment
17 Discretionary Cash Flow1 (in millions) Capital Deployed for Capital Expenditures, Acquisitions, and Cash Distributions to Shareholders (in millions) $5 $37 $2 $141 $155 $279 $380 $997 $911 $450 $349 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 ($400) ($200) $0 $200 $400 $600 $800 $1,000 $1,200 $1,
Slide 18: Balance Sheet Strength
18 $300 $300 $300 $145 $600 2024 2025 2026 2027 2028 2029 2030 2031 2032 2047 $71 $145 $599 $856 Balance Sheet Strength [1] 2047 tax-exempt bonds were priced to yield 3.5%; coupon rate is 4.0% Revolver Poland Credit Facilities (US$ in millions) Revolving Credit Facility 4.125% Notes Cash and Cash Eq
Slide 19: Net debt to EBITDA and capitalization history
19 3 .8 x 3 .9 x 3 .2 x 2 .5 x 1 .9 x 1 .6 x 1 .2 x 0 .9 x 1 .1 x 1 .2 x 1 .0 x 0 .8 x 0 .7 x 0 .5 x 0 .7 x 0 .5 x 0 .4 x 0 .5 x 0 .5 x 0 .4 x 0 .3 x 0 .4 x 0 .5 x 0 .3 x 0 .6 x NM 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x 4.0x 4.5x 4 5 % 4 6 % 4 2 % 3 7 % 3 3 % 3 2 % 2 4 % 1 8 % 2 1 % 2 2 % 2 0 % 1 7 % 1
Slide 20: Clear Sustainability Leader
1.18 28.60 CMCGlobal Industry 3.76 21.27 CMCGlobal Industry 0.73 1.92 CMCGlobal Industry Clear Sustainability Leader Q1 FY25 Supplemental Slides │ January 6, 2025 20 Note: GHG emissions statistics for CMC include only steel mill operations, which represents over 95% of CMC’s emissions footprint Sour
Slide 21: Appendix: Non-GAAP Financial Reconciliations
© CMC Appendix: Non-GAAP Financial Reconciliations
Slide 22: Adjusted EBITDA, Core EBITDA, and Core EBITDA margins – Last 5 Quarters
22 Adjusted EBITDA, Core EBITDA, and Core EBITDA margins – Last 5 Quarters [1] See page 27 for definitions of non-GAAP measures Q1 FY25 Supplemental Slides January 6, 2025
Slide 23: Adjusted Earnings
23 Adjusted Earnings [1] See page 27 for definitions of non-GAAP measures Q1 FY25 Supplemental Slides January 6, 2025
Slide 24: Return on Invested Capital
24 Return on Invested Capital [1] Federal statutory rate of 21% plus approximate impact of state level income tax [2] See page 27 for definitions of non-GAAP measures Q1 FY25 Supplemental Slides January 6, 2025
Slide 25: Discretionary Cash Flows
25 [1] See page 27 for definitions of non-GAAP measures Discretionary Cash Flows Q1 FY25 Supplemental Slides January 6, 2025
Slide 26: Net Debt to Adjusted EBITDA and Net Debt to Capitalization
26 Net Debt to Adjusted EBITDA and Net Debt to Capitalization [1] See page 27 for definitions of non-GAAP measures Q1 FY25 Supplemental Slides January 6, 2025
Slide 27: Definitions for non-GAAP financial measures
27 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 28: CMC.COM
CMC.COM