Commercial Metals Company · NYSE:CMC
Commercial Metals — Q4 FY2022 Earnings Presentation
27 slides from Commercial Metals's earnings presentation, Oct 13, 2022
Slide 1: Q4 FY'22 Supplemental Slides
COMMERCIAL METALS COMPANY Q4 FY’22 Supplemental Slides RE
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 pressu
Slide 3: A Clear Path to Value Creation
A Clear Path to Value Creation Leading positions in core product and geographical markets Vertical structure optimizes returns through the entire value chain Focused strategy that leverages capabilities, competitive strengths, and Disciplined capital allocation focused on maximizing returns
Slide 4: Key Takeaways From Today's Call
Key Takeaways From Today’s Call ✔ Fiscal 2022 was a record year • Solid execution enables CMC to capitalize on very strong market environment ✔ North America segment entering FY 2023 from a position of strength $1.55 $1.22 • Internal and external near-term leading indicators point toward resilience
Slide 5: Fiscal Year 2022 Accomplishments
Fiscal Year 2022 Accomplishments Record Core EBITDA of $1.55 billion; up approximately 90% from previous best On-the-ground humanitarian assistance to Ukrainian refugees − CMC’s team in Poland provided logistics, food, shelter, and comfort to hundreds of refugees; opened their homes and made Com
Slide 6: Adding Another Year To A Track Record of Success
Adding Another Year To A Track Record of Success Annual Consolidated Adjusted EBITDA 2,000 500 Return on Invested 25.5% 1,800 1,746 450 Total Shareholder $27.97 Adjusted EBITDA ($ ‘000s) Capital FY ‘22 1,600 Adjusted EBITDA 400 Equity per Share1 FY ‘22 1,400 Per Ton of Finished Steel Shipped 350 1,2
Slide 7: A Clearly Sustainable Future – Proud of Our Progress
A Clearly Sustainable Future – Proud of Our Progress With GHG emissions intensity already below the 2040 Paris Climate Agreement industry target, CMC has set lower emissions targets CMC Performance Industry Average 2030 Goals1 Progress on 2030 Goals1 GHG Emissions Scope 1 0.197 0.82 MT CO2e / MT Red
Slide 8: Resilient Markets, Resilient Company
Resilient Markets, Resilient Company Construction Market Indicators and Trends Company Positioning Construction Leading Indicators Structural Trends Architectural Billings Index Federal Infrastructure Package Arizona 2 Startup (spring 2023) • Points to expansion in non-residential spending • 65% inc
Slide 9: Favorably Positioned in Europe
Favorably Positioned in Europe Q4 ‘22 Electricity Costs vs. Historical Periods E.U. (ex Poland) and Poland Net Rebar Imports1 CMC Europe vs. European Spot Pricing (May to July 2021 vs. May to July 2022; see footnote for explanation) 800% 600,000 E.U. ex Poland Poland Spot Price (Avg of DE, IT, FR) 6
Slide 10: Q4 Operational Update
Q4 Operational Update • Significant increase in steel product margins over scrap in North America and Europe − Margins up $251 per ton y/y in North America, up $138 per ton y/y in Europe • Margins on sales of raw materials declined on both a sequential and y/y basis, but remained above the historica
Slide 11: Q4 Consolidated Operating Results
Q4 Consolidated Operating Results Performance Summary Core EBITDA Bridge – Q4 2021 to Q4 2022 Units in 000’s except per ton amounts $ Millions Q4 ‘21 Q1 ‘22 Q2 ‘22 Q3 ‘22 Q4 ’22 450 4 0 9 External Finished Steel Tons Shipped1 1,646 1,464 1,429 1,654 1,560 400 350 158 Core EBITDA2 $255,916 $326,806 $
Slide 12: Q4 North America
Q4 North America Performance Summary North America – Key Margins Units in 000’s except per ton amounts (excludes California land sale) $ / ton (excludes California land sale) Q4 ‘21 Q1 ‘22 Q2 ‘22 Q3 ’22 Q4 ’22 1,000 350 876 900 808 300 External Finished Steel Tons Shipped1 1,186 1,099 979 1,178 1,13
Slide 13: Q4 Europe
Q4 Europe Performance Summary Europe – Key Margins Units in 000’s except per ton amounts $ / ton Q4 ‘21 Q1 ‘22 Q2 ’22 Q3 ’22 Q4 ’22 500 300 453 435 437 450 407 Steel Product Margin Over Scrap External Finished Steel Tons Shipped1 460 365 450 476 428 250 400 Adjusted EBITDA per ton 200 350 315 Adjust
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 2022 Sources of Cash 2022 Uses of Cash • Operating cash flow •
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 $1,000 997 $800 $600 380 $400 279 $200 140 155 37 11 5 $0 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 CM
Slide 16: Balance Sheet Strength
Balance Sheet Strength Debt maturity profile provides strategic flexibility Debt Maturity Profile Q4 FY’22 Liquidity (US$ in millions) (US$ in millions) Revolving Credit Facility 4.875% Notes $673 Cash and Cash Equivalents 4.125% 3.875% 4.375% Notes Notes Notes $400 4.0% $330 399 Revolver Bond1 $300
Slide 17: Leverage Profile
Leverage Profile Net Debt 1,2 / EBITDA 3 Net Debt-to-Capitalization 4 4.5x 50% 4.0x 45% 40% 3.5x 35% 3.0x 30% 2.5x 25% 2.0x 46% 3.9x 42% 20% 3.2x 37% 1.5x 33% 32% 15% 2.5x 1.0x 24% 24% 1.9x 10% 21% 22% 18% 20% 18% 1.6x 17% 17% 1.2x 1.2x 14% 0.5x 1.1x 1.0x 0.9x 5% 0.8x 0.7x 0.7x 0.5x 0.5x NM 0% Finan
Slide 18: Appendix: Non-GAAP Financial Reconciliations
Appendix: Non-GAAP Financial Reconciliations Q4 FY22 Supplemental Slides │ October 13, 2022 18
Slide 19: Adjusted EBITDA and Core EBITDA – Last Five Quarters
Adjusted EBITDA and Core EBITDA – Last Five Quarters 3 MONTHS ENDED Figures in thousand $ 8/31/2022 5/31/2022 2/28/2022 11/30/2021 8/31/2021 Net earnings $288,630 $312,429 $383,314 $232,889 $152,313 Interest expense 14,230 13,433 12,011 11,035 11,659 Income taxes 49,991 92,590 126,432 28,872 40,444
Slide 20: Adjusted Earnings
Adjusted Earnings 3 MONTHS ENDED 12 MONTHS ENDED Figures in thousand $ 8/31/2022 5/31/2022 2/28/2022 11/30/2021 8/31/2021 8/31/2022 Net earnings $288,630 $312,429 $383,314 $232,889 $152,313 $1,217,262 Gain on sale of assets – – (273,315) – – (273,315) Loss on debt extinguishment – – 16,052 – – 16,05
Slide 21: Annualized Return on Invested Capital – Q4 2022
Annualized Return on Invested Capital – Q4 2022 3 MOS ENDED Figures in thousand $ 8/31/2022 Earnings before income taxes $338,621 Plus: interest expense 14,230 Plus: acquisition and integration related costs 1,008 Plus: loss on extinguishment of debt – Plus: asset impairments 453 Plus: purchase acco
Slide 22: Return on Invested Capital – FY 2022 & FY 2017
Return on Invested Capital – FY 2022 & FY 2017 12 MONTHS ENDED FISCAL QUARTERS FISCAL QUARTERS Figures in thousand $ 8/31/2022 8/31/2021 8/31/2017 Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021 Q4 2020 Q4 2017 Q3 2017 Q2 2017 Q1 2017 Q4 2016 Earnings before income taxes $1,515,147 $
Slide 23: Adjusted EBITDA and Core EBITDA – FY 2017 to FY 2022
Adjusted EBITDA and Core EBITDA – FY 2017 to FY 2022 12 MONTHS ENDED Figures in thousand $ 8/31/2022 8/31/2021 8/31/2020 8/31/2019 8/31/2018 8/31/2017 Net earnings $1,217,262 $412,865 $278,302 $198,779 $135,237 $50,175 Interest expense 50,709 51,904 61,837 71,373 40,957 44,151 Income taxes 297,885 1
Slide 24: Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders
Adjusted EBITDA Less Sustaining Capital Expenditures and Disbursements to Stakeholders 12 MONTHS ENDED Figures in thousand $ 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 $1,217,262 $412,865 $278,302 $198,779 $135,237 $50,175 $62,001 $58,583 Interest ex
Slide 25: Net Debt to Adjusted EBITDA and Net Debt to Capitalization
Net Debt to Adjusted EBITDA and Net Debt to Capitalization 3 MONTHS ENDED Figures in thousand $ 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 2/28/2019 11/30/2018 8/31/2018 5/31/2018 Long-term debt $1,11
Slide 26: 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 debt extinguishment costs, certain gains on sale of assets, certain facility closure costs, asset impairments, purchase accounting effect on inventory and
Slide 27: Thank You
Thank You Q4 FY22 Supplemental Slides │ October 13, 2022 27
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