Commercial Metals Company · NYSE:CMC
Commercial Metals — Q4 FY2021 Earnings Presentation
26 slides from Commercial Metals's earnings presentation, Oct 14, 2021
Slide 1: Q4 FY 2021 Supplemental Slides
Q4 FY 2021 SUPPLEMENTAL SLIDES OCTOBER 14, 2021
Slide 2: Cautionary Statements
CAUTIONARY STATEMENTS This presentation contains or incorporates by reference a number of "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 acti
Slide 3: A Clear Path to Value Creation
A CLEAR PATH TO VALUE CREATION Q4 FY21 Supplemental Slides | October 14, 2021 3 ✓ Leading positions in core product and geographical markets ✓ Focused strategy that centers on key capabilities and competitive strengths ✓ Vertical structure that optimizes returns through the entire value chain ✓ Stro
Slide 4: Key Takeaways from Today's Call
Notes: [1] Core EBITDA is a non-GAAP measure. For a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures, see the appendix to this document. [2] Return on Invested Capital is a non-GAAP measure. For a reconciliation of non-GAAP financial measures to t
Slide 5: Fiscal 2021 Highlights and Strategic Progress
➢ Record consolidated Core EBITDA and segment level Adjusted EBITDA - ROIC of 14.4% ➢ Tightly managed factors directly within CMC’s control ➢ Achieved reduction in North America controllable costs per ton of finished product despite inflationary pressures ➢ Responded to strong markets – highest ever
Slide 6: Sustainable from the Start, Naturally
0.82 MT CO2e / MT 1.83 MT CO2e / MT 1.83 MT CO2e / MT 19.84 GJ / MT 19.84 GJ / MT 28.60 m3 / MT 0.20 0.68 0.72 2.88 4.02 1.12 Scope 1 Scope 1-3 CMC Micro Mill Scope 1-3 Energy Intensity CMC Micro Mill Energy Intensity Water Intake Q4 FY21 Supplemental Slides | October 14, 2021 6 SUSTAINABLE FROM THE
Slide 7: Outlook
O U T L O O K • Announced sale of Southern California land for ~$300 million on 9/29, transaction expected to close during Q2 fiscal 2022 − Proceeds will be used to partially fund Arizona 2 micro mill project • Arizona 2 project remains on schedule • Significant increase of steel product margins ove
Slide 8: Consolidated Operating Results – Quarterly
176 256 38 45 1 (3) 0 50 100 150 200 250 300 Q4 2020 North America Segment EBITDA Europe Segment EBITDA Corporate & Eliminations Non-Operating Items Q4 2021 Q4 FY21 Supplemental Slides | October 14, 2021 8 CONSOLIDATED OPERATING RESULTS – QUARTERLY Q4 ’20 Q1 ‘21 Q2 ‘21 Q3 ‘21 Q4 ‘21 External Finishe
Slide 9: North America – Quarterly
• Significant increase in steel product margins over scrap − Up $103 per ton y/y and $41 per ton sequentially • Expanded margins on raw material sales • Volumes of finished steel shipped increased 2% from the prior year • Controllable costs negatively impacted by increased freight costs, as well as
Slide 10: Europe – Quarterly
50 100 150 200 250 Q4 ‘20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Steel Product Margins Over Scrap Controllable Costs Adjusted EBITDA per Ton 60 36 46 124 147 196 199 204 288 315 0 20 40 60 80 100 120 140 160 100 150 200 250 300 350 Q4 ‘20 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Adjusted EBITDA per Ton Steel Products Margi
Slide 11: Consolidated Operating Results – Annual
650 814 85 86 6 (14) 0 100 200 300 400 500 600 700 800 900 FY 2020 North America Segment EBITDA Europe Segment EBITDA Corporate & Eliminations Non-Operating Items FY 2021 Q4 FY21 Supplemental Slides | October 14, 2021 11 CONSOLIDATED OPERATING RESULTS – ANNUAL Core EBITDA Bridge – FY 2020 to FY 2021
Slide 12: North America – Annual
115 105 149 163 522 602 731 655 337 397 380 397 0 20 40 60 80 100 120 140 160 180 - 100 200 300 400 500 600 700 800 2018 2019 2020 2021 Adjusted EBITDA per Ton of Finished Steel Shipped Downstream Products Margin Over Scrap Steel Products Margin Over Scrap Q4 FY21 Supplemental Slides | October 14, 2
Slide 13: Europe – Annual
88 69 42 92 246 240 202 255 0 20 40 60 80 100 - 50 100 150 200 250 300 2018 2019 2020 2021 Adjusted EBITDA per Ton of Finished Steel Shipped Steel Products Margin Over Scrap EUROPE – ANNUAL Q4 FY21 Supplemental Slides | October 14, 2021 13 FY 2018 FY 2019 FY 2020 FY 2021 External Finished Steel Tons
Slide 14: Well Balanced Capital Allocation Strategy
WELL BALANCED CAPITAL ALLOCATION STRATEGY Q4 FY21 Supplemental Slides | October 14, 2021 14 $350 million share repurchase program 17% increase to quarterly dividend to $0.14 per share Recent Announcements CMC intends to distribute a meaningful portion of free cash flow to shareholders with share buy
Slide 15: Discretionary Cash Flow Profile
$5 $37 $11 $140 $155 $279 $380 $0 $50 $100 $150 $200 $250 $300 $350 $400 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 ADJUSTED EBITDA LESS SUSTAINING CAPITAL EXPENDITURES AND DISBURSEMENTS TO STAKEHOLDERS 1 CMC’s cash flow capabilities have been greatly enhanced through our strategic tran
Slide 16: Balance Sheet Strength
49 73 150 397 $498 $330 $300 $300 $400 2021 2022 2023 2024 to 2025 2026 2027 2028 to 2030 2031 Revolver BALANCE SHEET STRENGTH U.S. Accounts Receivable Facility Poland Credit Facilities Poland Accounts Receivable Facility (US$ in millions) Revolving Credit Facility 5.375% Notes Cash and Cash Equival
Slide 17: Leverage Profile
46% 42% 37% 33% 32% 24% 18% 21% 22% 20% 17% 0% 10% 20% 30% 40% 50% 60% Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 3.9x 3.2x 2.5x 1.9x 1.6x 1.2x 0.9x 1.1x 1.2x 1.0x 0.8x NM 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x 4.0x 4.5x Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 202
Slide 18: Appendix: Non-GAAP Reconciliations
Q4 FY21 Supplemental Slides | October 14, 2021 18 A P P E N D IX : N O N -G A A P R E C O N C IL IA TI O N S
Slide 19: Return on Invested Capital
RETURN ON INVESTED CAPITAL Q4 FY21 Supplemental Slides | October 14, 2021 19 ($ in thousands) Source: Public filings Note: 1. Federal statutory rate of 21% plus approximate impact of state level income tax 2. See page 25 for definitions of non-GAAP financial measures 3 MOS ENDED 12 MOS ENDED 8/31/20
Slide 20: Adjusted and Core EBITDA from Continuing Operations Reconciliation
ADJUSTED AND CORE EBITDA FROM CONTINUING OPERATIONS RECONCILIATION Q4 FY21 Supplemental Slides | October 14, 2021 20 Source: Public filings Notes: 1. Net of interest, taxes, depreciation and amortization, impairments, and non-cash equity compensation 2. See page 25 for definitions of non-GAAP financ
Slide 21: Adjusted and Core EBITDA Reconciliation (continued)
($ in thousands) THREE MONTHS ENDED TWELVE MONTHS ENDED 08/31/2021 5/31/2021 2/28/2021 11/30/2020 8/31/2020 5/31/2020 08/31/2021 8/31/2020 8/31/2019 8/31/2018 8/31/2017 Earnings from continuing operations $152,313 $130,408 $66,233 $63,911 $67,782 $64,169 $412,865 $278,302 $198,779 $135,237 $50,175 L
Slide 22: Adjusted Segment EBITDA Margin
ADJUSTED SEGMENT EBITDA MARGIN Q4 FY21 Supplemental Slides | October 14, 2021 22 Source: Public filings ($ in thousands) 3 MONTHS ENDED 12 MONTHS ENDED 08/31/2021 5/31/2021 2/28/2021 11/30/2020 8/31/2020 08/31/2021 8/31/2020 8/31/2019 North America Adjusted EBITDA from continuing operations $212,018
Slide 23: Adjusted EBITDA Less Sustaining Capex and Disbursements Reconciliation
12 MONTHS ENDED 9 MONTHS ENDED 8/31/2021 8/31/2020 8/31/2019 8/31/2018 8/31/2017 8/31/2016 8/31/2015 Earnings from continuing operations $412,865 $278,302 $198,779 $135,237 $50,175 $62,001 $58,583 Interest expense 51,904 61,837 71,373 40,957 44,151 62,121 76,456 Income taxes 121,153 92,476 69,681 30
Slide 24: Net Debt to EBITDA and Net Debt to Capitalization Reconciliations
Source: Public filings Note: 1. See page 25 for definitions of non-GAAP financial measures NET DEBT TO EBITDA AND NET DEBT TO CAPITALIZATION RECONCILIATIONS Q4 FY21 Supplemental Slides | October 14, 2021 24 ($ in thousands) THREE MONTHS ENDED 08/31/2021 5/31/2021 2/28/2021 11/30/2020 8/31/2020 5/31/
Slide 25: Definitions for Non-GAAP Financial Measures
DEFINITIONS FOR NON-GAAP FINANCIAL MEASURES ADJUSTED EARNINGS FROM CONTINUING OPERATIONS Adjusted earnings from continuing operations is a non-GAAP financial measure that is equal to earnings from continuing operations before debt extinguishment costs, certain gains on sale of assets, certain facili
Slide 26: Thank You
THANK YOU CORPORATE OFFICE 6565 N. MacArthur Blvd Suite 800 Irving, TX 75039 Phone: (214) 689.4300 INVESTOR RELATIONS Phone: (972) 308.5349 Fax: (214) 689.4326 IR@cmc.com Q4 FY21 Supplemental Slides | October 14, 2021 26