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OFFON

COMMERCIAL METALS COMPANY

(CMC)
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Commercial Metals : Q2 Fiscal 2021 Investor Presentation

04/07/2021 | 05:36pm EDT

INVESTOR PRESENTATION

APRIL 2021

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 actions, the effects of continued pressure on the liquidity of our customers, potential synergies and organic growth provided by acquisitions and strategic investments, demand for our products, metal margins, the effect of COVID-19 and related governmental and economic responses thereto, the ability to operate our steel mills at full capacity, future supplies of raw materials and energy for our operations, share repurchases, legal proceedings, the undistributed earnings of our non-U.S. subsidiaries, U.S. non-residential construction activity, international trade, capital expenditures, our liquidity and our ability to satisfy future liquidity requirements, estimated contractual obligations and our expectations or beliefs concerning future events. These forward-looking statements can generally be identified by phrases such as we or our management "expects," "anticipates," "believes," "estimates," "intends," "plans to," "ought," "could," "will," "should," "likely," "appears," "projects," "forecasts," "outlook" or other similar words or phrases. There are inherent risks and uncertainties in any forward-looking statements. We caution readers not to place undue reliance on any forward-looking statements.

Our forward-looking statements are based on management's expectations and beliefs as of the time this presentation, with respect to any document incorporated by reference, as of the time such document was prepared. Although we believe that our expectations are reasonable, we can give no assurance that these expectations will prove to have been correct, and actual results may vary materially. Except as required by law, we undertake no obligation to update, amend or clarify any forward- looking statements to reflect changed assumptions, the occurrence of anticipated or unanticipated events, new information or circumstances or any other changes. Important factors that could cause actual results to differ materially from our expectations include those described in Part I, Item 1A, Risk Factors, of the 2020 Form 10-K, as well as the following: changes in economic conditions which affect demand for our products or construction activity generally, and the impact of such changes on the highly cyclical steel industry; rapid and significant changes in the price of metals, potentially impairing our inventory values due to declines in commodity prices or reducing the profitability of our downstream contracts due to rising commodity pricing; impacts from COVID-19 on the economy, demand for our products and on our operations, including the responses of governmental authorities to contain COVID-19 and the impact from the distribution of various COVID-19 vaccines; excess capacity in our industry, particularly in China, and product availability from competing steel mills and other steel suppliers including import quantities and pricing; compliance with and changes in existing and future government laws, regulations and other legal requirements and judicial decisions that govern our business, including increased environmental regulations associated with climate change and greenhouse gas emissions; involvement in various environmental matters that may result in fines, penalties or judgments; potential limitations in our or our customers' abilities to access credit and non-compliance by our customers with our contracts; activity in repurchasing shares of our common stock under our repurchase program; financial covenants and restrictions on the operation of our business contained in agreements governing our debt; our ability to successfully identify, consummate and integrate acquisitions, and the effects that acquisitions may have on our financial leverage; risks associated with acquisitions generally, such as the inability to obtain, or delays in obtaining, required approvals under applicable antitrust legislation and other regulatory and third party consents and approvals; operating and start-up risks, as well as market risks associated with the commissioning of new projects could prevent us from realizing anticipated benefits and could result in a loss of all or a substantial part of our investment; lower than expected future levels of revenues and higher than expected future costs; failure or inability to implement growth strategies in a timely manner; impact of goodwill impairment charges; impact of long-lived asset impairment charges; currency fluctuations; global factors, such as trade measures, military conflicts and political uncertainties, including the impact of the 2020 U.S. election on current trade regulations, such as Section 232 trade tariffs, tax legislation and other regulations which might adversely impact our business; availability and pricing of electricity, electrodes and natural gas for mill operations; ability to hire and retain key executives and other employees; competition from other materials or from competitors that have a lower cost structure or access to greater financial resources; information technology interruptions and breaches in security; ability to make necessary capital expenditures; availability and pricing of raw materials and other items over which we exert little influence, including scrap metal, energy and insurance; unexpected equipment failures; losses or limited potential gains due to hedging transactions; litigation claims and settlements, court decisions, regulatory rulings and legal compliance risks; risk of injury or death to employees, customers or other visitors to our operations; and civil unrest, protests and riots.

Investor Presentation | April 2021 2

THE LEADER IN CONCRETE REINFORCEMENT

  • Highly focused producer of long steel and wire products
    No. 1 producer of rebar in the U.S. and Poland; Poland operations serve growing economies in Central
    and Eastern Europe
  • Leader in attractive rebar and merchant bar (MBQ) markets with highly flexible, low-cost mills; best-in-class customer service; and track-record
    of product innovation
  • Downstream demand optimizes mill production volumes, regardless of import levels
  • Significant self-funded growth
    • Acquired 4 mills and 33 rebar fabrication facilities creating meaningful long-term value
    • Executing on merchant bar and new product organic growth opportunities
    • Constructing new start-of-the-art micro mill in Arizona; completing expansion in Poland
  • Strong balance sheet supported by enhanced earnings and cash flow capabilities
    • ROIC1 well in excess of cost of capital
    • Net debt-to-EBITDA of 1.2x1

Note:

1. ROIC and net debt-to-EBITDA are non-GAAP financial measures. For a reconciliation of non-GAAP financial measures to theInvestor Presentation | April 2021 3 most directly comparable GAAP financial measures, see the appendix to this document

Q2 HIGHLIGHTS - RESULTS REMAIN STRONG IN THE NEW YEAR

• Domestic construction market remained active

Y

• MBQ demand driven by manufacturing recovery

ACTIVIT

throughout Q2 as price increases were realized

MARKET

Margins on finished steel products expanded

Downstream bidding activity and new awards

improved

• Robust construction related demand in Poland;

Central European industrial activity recovering

• Core EBITDA1 of $171M - record for Q2 results

S

Adjusted EPS1 of $0.66

RESULT

ROIC (annualized)1 of 10%

FINANCIAL

• ROE (annualized)1,2 of 17%

Europe segment Adjusted EBITDA of $16M

North America segment Adjusted EBITDA of

$172M

PROGRES ON BUSINESS STRATEGY

SHEET AND

FLOWS

BALANCE

CASH

  • Completed full closure of Steel California and transition of market supply - cost benefits expected in coming quarters
  • California land sale process underway
  • Finalizing construction of 3rd rolling line in Europe - target commissioning in Q3
  • Further progress in MBQ initiative
  • Cash balance of $367M, up $135M from prior year
  • Last 12-month operating cash flow of $539M
  • Refinanced $300M of long-term debt - action lowered average coupon on CMC indentures by 63 bps, increased average maturity by 1.5 years
  • Net Debt-to-EBITDA ratio1 of 1.2x
  • Net Debt-to-Capitalization1 of 22%
  • Paid 226th consecutive quarterly dividend

Notes:

  1. Core EBITDA, Adjusted EPS, ROIC, ROE, net debt-to-EBITDA, and net debt-to-capitalization are non-GAAP financial measures. For definitions and reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures, see the appendix to this document
  2. Return on equity is calculated as annualized second quarter Adjusted earnings from continuing operations divided by trailing 12-month average Total Stockholders' Equity

Investor Presentation | April 2021 4

BACKGROUND AND STRATEGY

Investor Presentation | April 2021 5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Commercial Metals Company published this content on 07 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 April 2021 21:35:08 UTC.


© Publicnow 2021
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Financials (USD)
Sales 2021 6 061 M - -
Net income 2021 286 M - -
Net Debt 2021 520 M - -
P/E ratio 2021 12,5x
Yield 2021 1,64%
Capitalization 3 536 M 3 536 M -
EV / Sales 2021 0,67x
EV / Sales 2022 0,66x
Nbr of Employees 11 297
Free-Float 91,8%
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Income Statement Evolution
Consensus
Sell
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Mean consensus HOLD
Number of Analysts 8
Average target price 27,94 $
Last Close Price 29,34 $
Spread / Highest target 9,07%
Spread / Average Target -4,76%
Spread / Lowest Target -18,2%
EPS Revisions
Managers and Directors
NameTitle
Barbara R. Smith Chairman, President & Chief Executive Officer
Paul James Lawrence Chief Financial Officer & Vice President
Tracy L. Porter Chief Operating Officer & Executive Vice President
J. David Smith Independent Director
Rhys J. Best Independent Director
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