Commercial Metals Co Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Sathish Kasinathan - Bank of America - Analyst : Yeah. Hi. Good morning. Thanks for taking my questions. So my first question is on the guidance for the emerging business group. So you indicated that the segment results could be lower on a sequential basis. But how should we look at it from a year on year basis, given that you are going to see an increase in higher margin makes especially at tensor.

Question: Sathish Kasinathan - Bank of America - Analyst : Okay, thank you. And then my next question is on the long term strategic plan. You talked about some of the examples of the initiatives that the company is working on. When do you think you'll be in a position to quantify those benefits? Are there any low hanging fruits that you could highlight and we should see some immediate benefit in 2025?

Question: Sathish Kasinathan - Bank of America - Analyst : Okay. Thanks Peter for the color and congrats on a solid year. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 17, 2024 / 2:00PM, CMC.N - Q4 2024 Commercial Metals Co Earnings Call

Question: Katja Jancic - BMO Capital Markets - Analyst : Hi. Thank you for taking my question. Staying a bit on the TAG initiative and I can appreciate Peter that you said you don't want to provide specifics right now, but let's say when we look at the current margins, they are above historical levels. When you say that you are targeting higher through the cycle margins, how did those stack up relative to the current margin environment? Are we talking about higher than where we are right now or kind of maintaining the current levels?

Question: Katja Jancic - BMO Capital Markets - Analyst : Thank you for that. And maybe if I may pone more on the backlogs right now, I think you mentioned they're still solid. Can you provide a little more clarity on the value of the backlog currently versus let's say last quarter?

Question: Katja Jancic - BMO Capital Markets - Analyst : Okay. Thank you.

Question: Timna Tanners - Wolfe Research - Analyst : Yeah. Hey, good morning. I wanted to ask two kind of higher level questions. If we take a step back first, I want to ask about Arizona 2 and I look at my notes over the years of what you talked about with regard to the volume contribution. I think it was supposed to be 400,000 and then 250,000. But if you look at volumes in North America 2024 fiscal year, even over two years, we're talking about [150,000] call it. So what's happening that you able to run full out? Are you running less other places? And how do you think about volumes going forward in a software construction market?

Question: Timna Tanners - Wolfe Research - Analyst : Yeah, thanks a lot of parts and I appreciate it. So we'll see more of easy to potentially second half. And then the other question or question is just around Europe. So I get that Germany is particularly weak and you're not getting too much improvement there. And I get that you also talked about on self-help, which is great, but what if, Germany isn't on a quick path to recover and this continues, like what options do you consider that you have? What would you model if you were in our seat? I mean, how should we think about the sustainability of this kind of business it's been tough. I get it. But what are your options that you think higher level?

Question: Timna Tanners - Wolfe Research - Analyst : Okay. Thank you for the color.

Question: Tristan Gresser - Exane BNP Paribas - Analyst : Yes. Hi, good morning and thank you for taking my questions. The first one is on the demand environment. So, I understand that the pocket of weakness, you mentioned that we are in the middle of because of the election. But in your presentation, you downgraded the estimated potential impact on rebar demand from infrastructure, I believe before you were thinking it could increase rebar demand by 15%, 17% roughly 1.5 million ton, 1.4 million ton and now you have it down to 8%, 12%. So 0.6 million tons or 0.9 million ton. So quite a bit downgrade. My understanding that the issue with the infrastructure was more timing than anything, but apparently the scale of it is also, being revised now. So I was curious to see why you're looking at this a bit more cautiously, more than timing. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 17, 2024 / 2:00PM, CMC.N - Q4 2024 Commercial Metals Co Earnings Call

Question: Tristan Gresser - Exane BNP Paribas - Analyst : Yeah. Thank you for that. That's really helpful and clear and I understand it's not an easy estimate to come up with. And my second question on the merchant bar market, it seems de-corelated a bit with rebar I mean, we've seen better pricing performance. It looks like in Europe volumes are better maybe in the US as well. So trying to get a bit, we talk a lot about rebar, but I was interested to get your perspective on the supply and demand dynamics in the US for merchant bar, if it's possible. Thank you.

Question: Tristan Gresser - Exane BNP Paribas - Analyst : All right, perfect. Thank you very much.

Question: Phil Gibbs - KeyBanc Capital Markets Inc - Analyst : Hey, good morning,

Question: Phil Gibbs - KeyBanc Capital Markets Inc - Analyst : Can you just -- I know you may have made comments on it already? But can you just remind us where you're setting your fiscal '25 CapEx budget? And how much of that is dedicated to some of these newer growth projects that you have on the horizon.

Question: Phil Gibbs - KeyBanc Capital Markets Inc - Analyst : And then when you look at in inorganic opportunities, it certainly seems like a pillar or a focus of your team to continue to consummate in the years ahead. Do you have a view of whether or not this is going to be something you necessarily need to do annually? I know that there always has to be a meeting of the minds on the target and timing and valuation. But do you want to do, one a year, two a year, I mean how big of a commitment should we think you're making inorganic opportunities as you grow that profile? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 17, 2024 / 2:00PM, CMC.N - Q4 2024 Commercial Metals Co Earnings Call

Question: Phil Gibbs - KeyBanc Capital Markets Inc - Analyst : Thank you.