Commercial Metals Company · NYSE:CMC

Commercial Metals — Q4 2023 Earnings Presentation

29 slides from Commercial Metals's earnings presentation, Oct 12, 2023

  1. Slide 1: Q4 FY 2023 Supplemental Slides

    Q4 FY 2023 Supplemental Slides

  2. Slide 2: Forward-looking statements

    2Q4 FY23 Supplemental Slides October 12, 2023 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

  3. Slide 3: Increasing Shareholder Value....With a Winning Formula

    3 Q4 FY23 Supplemental Slides October 12, 2023 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 optimizes

  4. Slide 4: Key Takeaways From Today's Call

    4 Key Takeaways From Today’s Call Strong fourth quarter financial results • Core EBITDA among the best quarters in CMC history • Resilient North America segment achieved year-over-year growth in adjusted EBITDA for the eleventh consecutive quarter (excluding Q2 2022 gain on CA land sale) Current Nor

  5. Slide 5: Fiscal 2023 highlights

    5 ➢ Record employee safety performance − OSHA recordables and incident rate improved from FY 2022 ➢ Core EBITDA of $1.46 billion was the second best ever; down only 6% from the record set in FY 2022 ➢ Record cash flow from operating activities of $1.3 billion − Free cash flow1 also reached a new rec

  6. Slide 6: Continued Progress in Keeping Our People Safe

    6 Continued Progress in Keeping Our People Safe 1.6 1.5 1.5 1.5 1.3 1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 4.1 0.8 BLS CMC 2.1 1.33 BLS CMC 3.9 1.38 BLS CMC Total Recordable Incident Rate by Line of Business North America Recycling North America Mills North America Dow

  7. Slide 7: FY 2023 Was a Strong Year of Financial Performance

    7 1,460 – 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Core EBITDA Core EBITDA Margin 61 0 50 100 150 200 250 300 350 400 0 50 100 150 200 250 300 350 400 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2

  8. Slide 8: Market Environment in North America Remains Supportive

    8 6.5 7.0 7.5 8.0 8.5 9.0 9.5 10.0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 LTM to July Market Environment in North America Remains Supportive ➢ Dodge Momentum Index continued to expand year-over-year during CMC’s Q4, pointing toward growth in the pipeline for private non-residential constr

  9. Slide 9: Long-Term Outlook Supported by Powerful Structural Trends

    9 Long-Term Outlook Supported by Powerful Structural Trends [1] Rebar consumption data for calendar 2021 from Concrete Reinforcing Steel Institute [2] Rebar intensities equal to consumption by market segment per Concrete Reinforcing Steel Institute divided by total construction spending by market se

  10. Slide 10: Government Support for Investment Construction Activity

    10 Government Support for Investment Construction Activity is At The Heart of U.S. Economic Realignment • 2021 Infrastructure Investment and Jobs Act (IIJA) significantly increases federal support for infrastructure investment − Estimated to increase annual rebar demand by 1.5 million tons at full r

  11. Slide 11: Europe Market Environment is Challenging

    11 Recent Market Developments Europe Market Environment is Challenging [1] Data from S&P Global manufacturing PMI report [2] Data from Statistics Poland for periods matching CMC’s Q4 2022 and Q4 2023 [3] Data from Eurofer and Statistics Poland Conditions are currently challenging, but green shoots a

  12. Slide 12: Q4 performance drivers

    12 • Downstream product margins over scrap1 expanded significantly compared to the prior year period − Improved by approximately $170 per ton y/y • North America finished steel volumes reflected good underlying demand levels; shipments increased slightly year-over-year • North America steel product

  13. Slide 13: Q4 Consolidated Operating Results

    13 419 340 5 (90) (6) 12 0 50 100 150 200 250 300 350 400 450 500 550 Q4 Consolidated Operating Results Q4 ’22 Q1 ’23 Q2 ’23 Q3 ’23 Q4 ’23 External Finished Steel Tons Shipped1 1,560 1,559 1,408 1,598 1,538 Core EBITDA2 $419,021 $424,985 $302,788 $391,718 $340,029 Core EBITDA per Ton of Finished Ste

  14. Slide 14: North America Q4 results

    14 327 327 (4) (40) 21 23 200 225 250 275 300 325 350 Q4 '22 Adj EBITDA per Ton Raw Materials Steel Products Downstream Controllable Cost & Other Q4 '23 Adj EBITDA per Ton 327 348 308 344 327 876 1,012 1,093 1,106 1,045 717 695 639 595 594 0 50 100 150 200 250 300 350 400 0 200 400 600 800 1,000 1,2

  15. Slide 15: Europe Q4 results

    15 0 50 100 150 200 250 300 350 NA Steel Product Margin Premium to Europe FY 2019 to FY 2022 Average 453 426 367 326 284 150 136 30 22 (66) (100) 0 100 200 300 400 500 Q4 '22 Q1 '23 Q2 '23 Q3 '23 Q4 '23 Steel Products Margin Over Scrap Adjusted EBITDA per Ton Key Performance Drivers Q4 2023 vs Q4 20

  16. Slide 16: Disciplined Capital Allocation Strategy

    16 2 31 Disciplined Capital Allocation Strategy CMC Capital Allocation Priorities: $350 million share repurchase program ($87 million remaining) Quarterly dividend of $0.16 per share (last increased 14% in Q4 2022) Shareholder Cash Distribution Programs in Place Value-Generating Growth Shareholder D

  17. Slide 17: Cash Generation Profile

    17 $5 $37 $2 $141 $155 $279 $380 $1,270 $911 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 Cash Generation Profile Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders 1 (in millions) CMC’s cash f

  18. Slide 18: Balance Sheet Strength

    18 $61 $129 $200 $599 $592 $300 $300 $300 $145 $600 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2047 Balance Sheet Strength [1] 2047 tax-exempt bonds were priced to yield 3.5%; coupon rate is 4.0% Revolver Term Loan Poland Credit Facilities (US$ in millions) Revolving Credit Facility 4.125% No

  19. Slide 19: Leverage and net debt-to-capitalization

    19 2 .0 x 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 NM 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x 4.0x 4.5x 2 5 % 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 8 % 1 4 % 2 4 % 1 7 %

  20. Slide 20: Clear Sustainability Leader

    69 % Of goal Clear Sustainability Leader Q4 FY23 Supplemental Slides │ October 12, 2023 20 [1] Represents progress on environmental goals as of fiscal year 2022, compared to fiscal year 2019 Note: GHG emissions statistics for CMC include only steel mill operations, which represents over 95% of CMC’s

  21. Slide 21: Appendix: Non-GAAP Financial Reconciliations

    © CMC Appendix: Non-GAAP Financial Reconciliations

  22. Slide 22: Adjusted EBITDA reconciliation

    22 Figures in thousand $ 8/31/2023 5/31/2023 2/28/2023 11/30/2022 8/31/2022 8/31/2023 8/31/2022 8/31/2021 8/31/2020 8/31/2019 8/31/2018 8/31/2017 Net earnings from continuing operations $184,166 $233,971 $179,849 $261,774 $288,630 $859,760 $1,217,262 $412,865 $278,302 $198,779 $135,237 $50,175 Inter

  23. Slide 23: Adjusted Earnings

    23 Adjusted Earnings [1] See page 28 for definitions of non-GAAP measures Q4 FY23 Supplemental Slides October 12, 2023 12 MONTHS ENDED Figures in thousand $ 8/31/2023 5/31/2023 2/28/2023 11/30/2022 8/31/2022 8/31/2023 Net earnings from continuing operations $184,166 $233,971 $179,849 $261,774 $288,6

  24. Slide 24: Return on Invested Capital and Free Cash Flow

    24 3 MOS ENDED Figures in thousand $ 8/31/2023 Earnings before income taxes $237,908 Plus: interest expense 8,259 Plus: asset impairments 3,734 Plus: mill operational commissioning costs 16,131 Operating profit $266,032 Operating profit $266,032 Less: income tax at statutory rate1 66,508 Net operati

  25. Slide 25: Core EBITDA reconciliation

    25 FISCAL QUARTERS FISCAL QUARTERS Figures in thousand $ 8/31/2023 8/31/2017 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Q4 2017 Q3 2017 Q2 2017 Q1 2017 Q4 2016 Earnings before income taxes $1,121,967 $55,611 $237,908 $310,070 $235,490 $338,499 $338,621 ($45,551) $51,898 $40,355 $8,909 ($12,061) Plus: i

  26. Slide 26: Adjusted EBITDA Less Sustaining Capital Expenditures

    26 [1] See page 28 for definitions of non-GAAP measures Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders Figures in thousand $ 8/31/2023 8/31/2022 8/31/2021 8/31/2020 8/31/2019 8/31/2018 8/31/2017 8/31/2016 8/31/2015 Net earnings from continuing operations $859,

  27. Slide 27: Total debt and net debt reconciliation

    27 Figures in thousand $ 8/31/2023 5/31/2023 2/28/2023 11/30/2022 8/31/2022 5/31/2022 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 8/31/2019 5/31/2019 Long-term debt $1,114,284 $1,102,883 $1,099,728 $1,093,146 $1,113,249 $1,115,478 $1,445,755

  28. Slide 28: Definitions for non-GAAP financial measures

    28 Definitions for non-GAAP financial measures ADJUSTED EARNINGS Adjusted earnings is a non-GAAP financial measure that is equal to earnings before settlement for asset impairments, New Market Tax Credit transactions, acquisition and integration related costs and other, purchase accounting effect on

  29. Slide 29: CMC.COM

    CMC.COM

COMMERCIAL METALS — Q4 2023 Earnings Presentation on 6ix