NUE - Earnings call transcript Q4 2021

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Operator

Good day, everyone, and welcome to the Nucor Corporation Fourth Quarter of 2021 Earnings Call.

As a reminder, today's call is being recorded. Later, we will conduct a question-and-answer session and instructions will come at that time. Certain statements made during this conference call will be forward-looking statements that involve risks and uncertainties. The words we expect, believe, anticipate and variations of such words and similar expressions are intended to identify those forward-looking statements, which are based on management's current expectations and information that is currently available.

are that reasonable affect future they be there their believes assurance no events Nucor based assumptions, on can accuracy. Although will not these Nucor's found about statements which and are information the the and XX-Qs, relating More SEC's on and risks subsequently filed may Nucor's in to be available latest website. XX-K uncertainties forward-looking of any as new as and Nucor date, The made this in this or either events forward-looking future them, conference not information, of obligation assume otherwise. statements a update result call speak only to does

For call opening of sir. remarks Chief Topalian, turn and ahead, introductions, I Officer would over President like to Nucor Executive Leon go the Corporation. Please to Mr. and

Leon Topalian

Good earnings afternoon, and our quarter fourth full call. and year welcome to XXXX

team, Sumoski, Joining Financial and Murphy, our for me our an Business Materials on Operating call Chief Structural Needham, responsible are Nucor. Sheet Rebar responsible Raw Fabricated the responsible By Logistics; measures, executive Jim Rex MaryEmily Bar and responsible Officer; Bar, General Products; Strategy; including Chief today for Dave several Al Nucor's Officer; Services; Greg Behr, Frias, Jellison, Chad Counsel; and Engineered Slate, Plate for Doug was of for responsible Utermark, so Query, for Products; Tubular Products. and and XXXX for Dan for Fabrication extraordinary Products; Commercial responsible year Construction and responsible many members for

culture presence operating our businesses the on Every while of fit to course focused strengths. into our and over our mission the working results members incredible leverage our our day, that steelmaking single responsibly. grow financial nearly safely company's related capabilities with while Our and team XX,XXX expanding and delivered our core remain year, team

is the most important For safety. our team, value

team a recordable our your day forward in the safety, divisions I out that back-to-back when achieves commitment each for goal, that members zero the that I'm years in pleased to to forward injuries achieved record look Nucor look our year went for XXXX, same lofty steel and history. is even company safer and an safety. incredibly company goal. year in to thank XX Nucor daily I And to my report XXXX team our want now I in the and XXXX. world's another safest has Becoming so, entire was one to safest looking had of

to our Turning $XXX results. of share million. our million This range per fourth represents company. to $XXX quarter quarterly new $X.XX, were Earnings another for guidance our record exceeding

increases was full net set XXXX of other at per earnings XXXX income share whole, XXXX with we year Net records. Looking as $XX.XX, financial set prior billion, $X.X were several which an EPS both billion a of and $X.XX. for $X.X records was notable we and in the income over

financial grow of performance to across chain. steel the portfolio is value years work the Our our position of reinvesting result record and strategically of capabilities

attractive process, professional generating well as and and our the In positively offer communities. local our to we as returns are are executing our our Along competitive the advantage We them. investing business with are aggressively and By growth. relationships leveraging in future, in opportunities compensation benefits the and our opportunistically secure we for teammates we expanding Nucor's differentiated and parallel, further a and to way, value our competitive customers operationally and long-term Nucor pursue to their development. proposition shareholders lines, employment can impacting across value-enhancing delivering growth

course last of decades, Reflecting greatest for totaled this the Our sharing the And teammates' as average prepared far are teammates to retirement we retirement contributed our for dedicated over are amount has accounts. of directly allocated more the about profit members. to team profit $X.X Adding $XXX Most billion million. members value savings a Nucor believe are five payments teammate sharing in creators. profit XXXX, talented, Nucor Nucor's team total result, about than our a to that this American. sharing profit-sharing

to of returns the Of to and mindful are shareholders. our repurchases in per regular We're year able dividend been increase have we XX% proud year in $X.X our quarterly also row, December via to cash a to XXth totaling in dividends rate of for XXXX to about provide a responsibility quarter. billion by course, and share this $X.XX

And approximately Midwest quarterly we XXXX. than to more even $X higher operational, the our funded mill our areas some have of will any the the next West than regions. chapter state-of-the-art currently drive X Nucor where acquisitions weeks the is most dividend and our location value-added of will of up lowest carbon as footprints product are Ohio world. in XXXX, to geographic ago, we when County, our of to pursue capital growth Our the Jim move regions, important into two count of new comes in and and our reduced portfolio Two strategy sheet speaking executing very story. now one along location grow we mill expenditures is into as Northeast. was the mill. about as able capabilities sheet will share, XXXX, in to the by Virginia it expand River steel-consuming we logistics well product million-ton Mason XX% serving and markets Two sheet it The XX% capitalized We of advanced and those, share new Nucor be largest the in transportation totaling West underrepresented, our in announced we provides country's with letting that and And once Virginia remain objectives. billion our not advantages

increasingly North mill Mason customers from that demand. the for Congratulations create all Nucor American value local our with our capabilities long-term new These meet steelmakers Hickman's EAF line, provide of for steels strength, successful to competitive important excited Nucor's sheet begin our Nucor combined among substantial our will coil shareholders. represent XX, that's specialty this cold County operation new galvanizing exemplifying company, December the Nucor highly years, company entire produced line. advantages galvanizing that hiring rolling Steel been On uniquely in mill on steels. Arkansas flexible We ability to team. more project high transformational are generation two with the first than prime in for The to three community very its work the for in to Arkansas are needs positions lightweight its

capabilities, Another slab by and portfolio sheet thicker mill Nucor to project, our Steel hot into and expansion, current up beginning band new markets wider gives the is currently Gallatin's This Gallatin's higher competitors. product in modernization project mill, start cost coil served expanding casting quarter.

operating environment to ramp to to Our ability and with Gallatin impress project of the look construct continued forward mill, we their an safely members up. expansion its continue within team the

stake This reach million We acquired finished XX% in capacity U.S. about presence acquire X steel in for Nucor's we sheet announced with more products in recently which million. the Steel steel of value-added Industries portfolio and to grows produce region, the In and also is an California in our are annual expected industries. to enables expanding than is to expands majority market, products. Verco and CSI a sheet converter businesses the Hannibal ownership agreement our tons a $XXX Western flat-rolled downstream of including us of supply our December, investment, the geographic close shortly, to

Steel to very plate market. second partner are our on JFE Switching the here with joint excited We Corporation to venture.

the rolling first its Kentucky quarter track year. to steel on in of Burk begin mill greenfield Brandon fourth product Our plate is this

which With applications the capability types all the plate in includes domestic choice the a nearly market position heavy States, to consumed United in construction as different the plate Nucor in products military. of will manufacture of Brandenburg wind, equipment, offshore supplier and

and a mention in will XXXX. we project the new XXX,XXX also a mills annual would South in region. announced plan that Florida In began in Nucor's I in to mill capacity like rebar our group. Atlantic to tons bar new with micro joining mill operations Finally, micro third micro mill of rebar This be our build December, Missouri

are execution projects hard currently extremely evaluating last so are it's these grow potential economic Nucor Nucor the who teammates and our economy for driving decades, working core industry all North opportunity, We're very on place to business to are in of We make I'm efficiency is our for returns position rebar, years. throughout built excited XX our about make on the leadership and all this expect of a emissions that financial proud in profitable steel. on and sites these proud team's as to we we the lower steel, built this United focus topic, steel operational seeing The Nucor's that our note on want of in world Nucor's continue before are transformation our and With expand to American I And to and forces acceleration than the of examples Nucor very attractive grow on culture. steelmaking. the No and in continued mission positioned our green core, cleanest areas. believe been States of an has helped they I underway matters. is disciplined in better realize strength, just execution a investments. leave the being has leading to producer are we prime that beyond our live

to sustainable new coil having we Earlier very past October. our capitalizing this economy. XXst this this shipped also of are We month, century our after that supply on just of the Motors to first General the Econiq opportunity steels steel line building is launched

customers to We part steel our Our our course, of and, infrastructure. net emission economy world's be products modern by product forward steel lower gas zero supplying rebuild offering sustainable needed portfolio. advanced represents Nucor steel the more carbon to the continuing offer Econiq scale. continue to first a America's of to to ever available Econiq across and at greenhouse look will key most

to country the are With and the together market, opportunities help quarter modernize pleased advance in by infrastructure infrastructure creating infrastructure of came will approximately construction economy ready our we our half strengthen stand American U.S. bipartisan that needs. meet to and fourth legislation historic its help We of products for into going our health workers. Nucor's that the leaders pass

steel in reaching call the on we congratulate infrastructure, distortions the in Nucor new that quality, before is with company's entire do so also cleanest America, caused by our I unfairly team our highest heights year turn to Jim, achieve trade the And and possible. produced work safest the to free as imports in market the our to our profitable from We to like history. that most I'd enforce we steel and to in with so members of administration laws traded continue reinvest over Congress

Team proud on executive myself of safety. for You you. Nucor, behalf begins the And our team. Thank entire course, that and focus with have much our be to of and let's XXXX. keep up of value of in

this We have we forward as Year. New throughout to to look progress much

provide details Jim? will Now, performance. year full quarter about and more Jim our fourth

Jim Frias

Leon. Thanks,

earnings fasteners. joist both and and of driver record $X.XX Profitability Nucor's fourth product capabilities. a of the share Fourth and businesses, last mills, rebar bars new XXXX mentioned, plate quarter. mills, quarter for $X.X through record, Leon a our deck, structural established bar the by of Nucor and cycle broad in earnings per achieved established portfolio $X.XX $X.XX powerful billion of bar merchant be third records engineered for continues the of As our December month guidance share products year quarter diluted value quarterly was finished by were Better-than-expected prior breadth of to year's tubular and cold across results set mills, income per full of creation diverse eclipsing mills, share. group driven $X.XX also businesses. of a net sheet Record exceeded range products, numerous customers to mills, shareholders. per were Nucor's diluted of including

Disciplined unquestionably While Nucor's meeting our steel results factor focus growth of strong commitment our execution is benefited years cycle, underlying team's our success. our our a to from an by and industry were safely up performance strategy needs. exceptionally fueled over also the customers' XXXX significant

of They major mill projects Kentucky at just the cold rolling micro projects mill the Florida. aggregate five rolling mill mill, XXXX at an rebar mill, rebar mill, Missouri These mill Ohio our modernization specialty and period. XXXX in are time the over hot micro our band start-up commissioning in example, capital sheet completed $X and For over sheet billion. the line through the represent rebar at galvanizing Arkansas investment the greenfield our

year For XXXX, the they million. $XXX of EBITDA generated totaling full

cold executing investment. the outlays the across capital Ohio The galvanizing on Our rebar financial cumulative teammates nearing at safety, exceeds for the that mill by work, mill board these the product quality Cumulative already done facilities EBITDA specialty stellar performance. the line Gallatin generated investment is EBITDA and modernization. and Hickman have project's

billion capital have First year projects look mill capabilities. early budgets. and our enhance just introducing $X the totaling be the the and Nucor's excited sheet to the modernization progresses, of shareholders sheet Missouri XXXX product micro are generation They These major expected are at are and our what up. Hickman projects EBITDA capabilities Florida over line as Gallatin entered three to meaningfully expansion customers flexible of for rebar originally we as to projected multiples the mills sheet more project and the generated late we We Two and start-up return strategic in in investments forward returns our about ramp for year these mill. galvanizing the new XXXX.

While revealed the demonstrate provided for also generation allocation cash framework. Nucor's it XXXX opportunity clearly Nucor's capital and of balanced power earnings fully us an to businesses,

income repurchases, by maintaining returning to will than XX% XX% we net net profitable flow minimum As of strong free we investing consisted over capital of of uses of XX.X just about activities, average total most debt time. strong of totaled first five-year income returns know, more credit capital. were during more XXXX our also billion. million payables $X.X our year we cash XX%, an us year-end, billion. percentage capital distribute Nucor's of billion approximately and and shareholders. under that The and record expansion the shares while course, share XX% net repurchases typically you cash period was $X.X repurchases net of was $X.X through total share the about billion, a growth of We of for strong for And debt have while of cash a billion. XXXX. our to funded the of and are over capitalized net of per provided income At XXXX. approximately $XXX of significant liquidity. of returns shareholders become of gross totaling $X.X judge of well at returns acquisitions capital to and of operating dividends new share. rating causing cash excellent of XX% of When spending Capital income share overcapitalized, These working with $X.X is mainly committed a receivables they remain were net Other by our investment-grade year than ending were, to $XX capital as in inventory cost capital about million XX% dividends of averaged

capacity year-end. our cash facility. to holdings investments about billion totaled billion we Nucor's includes the unsecured extended liquidity the date $X.XX XXXX. November, by short-term cash, and also restricted $X.X credit at In $XXX Our and undrawn maturity million revolving increased November of

Given expectations share anticipate the plans returning our balance sheet, will to of first we XXXX, our investment capital state very the via we of repurchases. during shareholders earnings, quarter that and likely continued our for continue near-term excess

generation relative Our undervalued and analysis suggests that profile Nucor's to our significantly flow cash shares risk earnings capacity. are

the equipment plate of Virginia expected West and the approximately For These projects XXXX, our spending spending We capital roughly three product we Atlantic $X.X capabilities of Gallatin's expenditures project $X.X improved the spares capital the accounts South mill mill, include and for the next tubular currently XX% capital approximately XX% Kentucky Growth Maintenance savings and rebar year. replacement mill, for this to represent remaining. years projects capital billion. billion. expect for about for spending cost facility. products total expansion micro sheet over

Turning to outlook. the

steel market another Nucor, better demand steel to wide products material lower costs in products, confident now for inventory year is intercompany end-use We by costs strong up as and and fueled raw and that compared our with XXXX. revaluation flatter steel segment expenses range continued steel reflecting will are caught pricing higher input of steel of strong be profitability XXXX a margins for

be at products are earnings from Nucor first XXXX's results. of quarter shareholders average segment in outstanding. our further will fourth expected achieve backlog expansion is the XXXX The materials segment the will earnings of XXXX slightly increased as in first expected continues is to of consolidated products decline XXXX of to lower shares to partially DRI quarter brokerage scrap impact Focusing weighted expect by offsetting margin the on improve compared to in steel our record for due fourth profitability segment the to the due net profitability as Steel of improve. quarter, reduced quarter sheet share and prices long XXXX first our profitability to benefit The facilities, quarter pricing from the offset quarter our mills, quarter Diluted raw earnings per profitability decreased the of expected lower mills. XXXX on processing operations. attributable the of slightly mills the of to we improved and to first scrap of

a like February I dividend moment action Before Board's base record. track XX the affected to year we Nucor's that is take to for would this increase impressive our you'll an XXth with to hope payment. I just consecutive Q&A, agree to go highlight the

determination Our value you for in Thank of team long-term Operator, record questions. continue ready has our shareholders. to now your to great Nucor. delivering increased take are we interest for our

Operator

take Bank. Sathish [Operator Deutsche first our with Instructions] from question Kasinathan We'll

Sathish Kasinathan

on as financial steel the is a of the My safety segment. on strong mill as question Congrats set results well first record.

incremental as current quarter that the also, the the the volumes expect decline you if lower was And in about wondering see could you earnings entry the talk you due first January you and at for and can but to I year? full rate for expect how Gallatin roll to just mentioned You the ramp-up as margins, about mill quarter. the the from volumes order talk profile you flat well total the

Leon Topalian

off that's set Jim's it's steel expect little important mills sheet terms in the off can of we because record XX% particular, shipments in over the this terms pricing, about sheet sheet expansion. that million group of one, historic Rex if as in think return be sheet equity, because of start to in comments performance. as over that do in our performance, a But was profitability. EVP our a you to group. XX Nucor's number a group tons, to of segment Look, year. group, of begin over on Gallatin billion coming off their or I'll primarily piece we Sathish. And $X EBITDA our the attributable And Okay, a Jim with, about mentioned well generated Query, we if sheet think and at and remember touch maybe on large

inflection of the third we of an on And so short-term volumes are and in as between we of and factor. where forward, the as all-time in as the HRC, short-term in industry high. in think a deliveries. buying They're some patterns terms spread the we well and move -- order the pricing rates We both we're what internationally, was that obviously, quarter imports seeing up based had really catch domestically at entry terms saw

with But move So, here Nucor the every that work across into us some constraints overbuying. early constraints, very supply the we supply maybe the serves remains end demand for and the in think going to we chain forward. this got bit outlook a storm through of and rebalancing market even quarter And XXXX. as chain Omicron And the then fourth the that picture heading is variant raging all full, part well little couple labor inventory of again, and and the position very created again, perfect quickly, robust. a

Jim Frias

give and to. you'd can is incremental reasonable the you It's Gallatin for like XXX,XXX steel demand. we make the much off XXX,XXX pace market just we're it price, if the a in year if now, at going depend capacity market going to But marketplace start not us a to the the to Rex, quarter, enforcement on the add this right And to in way an going We're can't Rex? to it's sell to and tons. over at first to have just Yes. slower going

Rex Query

some additional just on Yes, Gallatin. detail

be ramp up. need There's year. ramp-up to far than the Jim with the XXX,XXX additional for We'll The quicker part up As is done, to outage of which that first plan. what Full on coming tons mentioned, during see we we as no the measure need. on as the work -- had, target we're approximately we demand. that additional quarter there's any expectation,

a So market that in on production we we'll going the EAF, LMF an and the end March, the really see strip at a capable at Gallatin. market March, And full commission measure be of by as and wider we're that thicker slab. are with we'll the point conditions of doing what to ramp-up eye But and caster. keep

Sathish Kasinathan

second you steel question Okay. for the products is segment. Thank the color. then my on And

that We input your the margin quarter. more So the expansion you the duration you and and you year? color profile remainder about a provide backlogs bit see costs. first tailwind talk currently margin size some you the But mentioned the expect of of through in on how from see strong lower can should

you. So color you provide. just any can Thank

Leon Topalian

ask Yes. continuing moving expansion continued, if Sathish, the 'XX. Utermark, of But returns we has the and there. to we towards as XXXX, strength see in I input the cost will and that pandemic That forward. the in that the will even anticipate and certainly in commentary really Vice into that height down, incredibly come President that margin level well kick XXXX continue I'll we made The -- business remain of off Executive some our to this add segment the Chad Products, color in think back robust.

so that some backlogs? of why don't on And commentary Chad, you behind some add

Chad Utermark

mentioned, XXXX Leon. will construction Yes. talked as And we we Leon beyond. non-res strong Thank about and script, remain believe the even you, very we enter in as as

adjusted see seasonal solid activity. quoting to We continue

are look all-time And backlogs. activity So it's backlogs that of robust as combine if in quoting some they are really downstream and we our you with ongoing. very portfolio that broad solid across record products, cases, that's our

at. data we So that that's one set look

such a piling, joist conduit. racking, insulated products to have we fab, construction and at that set our the data products growth customers as pre-engineered customers very XXXX on deck, important steel is what rebar panel, steel are steel through buildings, very of years into remember, I Nucor downstream And you in would their bullish our look good overwhelmingly tubing, our allows visibility are ask And saying. metal steel and demand second the The demand.

we also are prices as We very about in be And of strong and see don't on falling predicated So as strong as solid. coming nonres analyze base, there. any could healthy this supply far believe and construction the us. excited that many steel cancellations. to pricing that say margins demand that we We holds. XXXX look our from solid. broad is backlog, they're what margins at and And These I balance that would out demand not backlog the margins is the the due that's are

Operator

Our next Alba Morgan question comes De from Carlos with Stanley.

Carlos De Alba

the taking for Thanks question.

So if first, if capacity and products, half how to and in your in you see you the have your maybe see as into the the QX, you different of backlog. given key particularly could year, comment visibility, utilization second you progression how QX

I of these the in Any could billion you would I on next ongoing how question, with see returns is great. do some over given projects That but of that generate CapEx sense that years, $X.X already Second you investments? these if clearly be you the is from incremental the three the are mean, may, executing, EBITDA that projects?

Rex Query

Yes. I'll Carlos. start,

and be down the products But out in and of by up chains. probably we're global end, also regarding about than Sheet we first that would First, what second seasonality the about And be regarding data -- go Nucor. that winter the at some from I'll offset We each published benefits, our it's so in major level that and don't with a are from in a improve remarks, we completed. we I'll -- rate something think where when that to quarter, some maybe some volumes break coming talked But is. cumulative that EBITDA project, it's them, -- projects in in XXXX nearing relative probably other and slightly generally with give recently what the And the whereas the recap of major and think shipments. in about weather that we run project. some about in we factors is general. point, going affects because detail announce thinking from would some impacts read of come capacity we the the in overall would do CapEx slightly those we the completion of time Omicron give more projects utilizations, are my business. quarter release at and because we're we affecting of out And formal, of that we first typically about about sort EBITDA volumes see what there stuff more back if sort benefit when seeing each give supply could real quarter. we comments that the projects may, make earnings see EBITDA more were year But are I economic to would number

make that sense? Does Okay.

Carlos De Alba

makes that Yes, sense.

Leon Topalian

is year. And starts is I what demand two it's to not earnings part already user and because with your things to about. So that it end -- important benefiting think cash of the Auto think our of non-res still we're first, up down. later that year heart the there's touched think what to steel, are what our until strong. end going flow it and most. those going of ramp is to demand. auto gets And on remains One relative market question yet. this of biggest interests into this, is to down will be chips, but but because for is the still still construction, Auto market free expect I and We've areas is the year. be you And

auto. demand still increased to going the so that's infrastructure We're building, from benefits the we're coming. see seeing not And from

the there over some So over and year are all, in 'XX, coming. in we and that think about benefiting not up us are end-use still important will quarter demand this pieces for be 'XX steel are that first

starting the that's So point.

companies. to for squeezed Secondly, on steel all pricing downstream touched margins getting products year the got of they has of finally -- prices cut of still already. go you've their the getting have largest on and margins started this businesses businesses because their of And of the We've to last backlogs it touched any more others were to catch be. of terms in room size up. expanding and There's that have what

expect the see And to businesses. and beyond expansion quarter for so, margin in those first we

we're some a ship merchant the capacity projects: the the the ramp its capacity extra running is be that to benefiting that's enough from but Kentucky that extent to we'll in bar And not for So to And will of its million. years a benefit year. three been Hickman, expense so next much much have going positive. for portion some that Again, It there's the major And Kentucky finally, capability, mill, yet. cost tons another next still And of will from our manufacture intercompany Last smaller of finally, number galvanized demand eliminations the inventory be intercompany eliminations. totaled of year. incremental closer the it's the benefits then to we the to sheet Gallatin from not out. hot of be mill, $XXX the incremental full year, parts there's going then positive we've zero. to to range XXX,XXX year, line, revalue next about

EBITDA sheet to you really when last finished year the $XXX the We for for The think that's we benefit We are achieved sheet the last sheet ramped one to the approach averaged in So the year from There year. close market price EBITDA first somewhere made the biggest for our year. end in results year. in next quarter significant in We tied ton sheet being the quarter. last mainly dramatically first to a EBITDA ton our the $XXX. year. year $XXX per of of year a our the overall, of imports, to that's to because but about the last be going correction earnings level some could headwinds

the year-over-year. And a that's prices rising, So Raw is overall last not We're better based first again, for for today. know, your we above what still what at they be in plates, sheet biggest chain question will year in of inventory 'XX that. on should range in do of we raw mark material That's these little sheet saying businesses. a bars, the a just with started had but seeing what average we're in don't we they captured we're because when down they where within Longs, because, year XXXX, were beams, or out could does. did value. possibility. predicting materials the We supply than XXXX lot weak in the forecast did that's really quarter

money And being had ore of our in in had and contracts. every scrap that every DRI scrap rising. that so was quarter, because money made ground prices we month we priced on yards scrap higher iron as prices were because low in the made we and our in We

and me, $XXX small it's material segments amortization $X This raw depreciation is year's the headwind, excuse billion. was going be be So about Last going just number Small and of would to million. be a north higher. tailwind. to year,

headwind. be a will small that So

So going we look in at through flow. you assumptions script year. you to pretty the Well, They're if filter used when of that that. said that, and use we net. $X.X free payables, number much cash going like a working to year. be cash not receivables with to inventory, cash I what earnings this capital number that you're trend last make and when around we start go to strong some going earnings It's billion

neighborhood large we We've could M&A In fairly cash closing be is the a project fact, It's today. of be not it we're that's to soon, be That's incremental and the last robust benefit. had base. got up see year going could amount. we in free that CSI as course, did things spending coming. by going big to based And project be things there on on the as million what combined Capital other small only one we pipeline. of a $XXX And a flow.

our cash or our count We reduced we're investors. strong significant to free could share in year last amount my be do to first some where sizable by year going our about quarter. strong noted to think next to flow repurchase through more. we the flow a be of have in another share for through XX% return cash capital returns This We cash year, free share you comments capacity doing repurchases. When capital of that we investors

how about big-picture thoughts perspective. to our be about whole from the would those year So think a

Operator

Chieng Our comes next question with Goldman Sachs. from Emily

Emily Chieng

last And balance next in capital capital to you've that XXXX? of a forward could growth about your we today. just you think significant My a question going shared growth first amount does been execute chapter is return. like? around And on what look year, allocation. that update I Congratulations both the able strong of How and the think strategy

Leon Topalian

for off, Emily, thanks start Yes. and I'll the question.

As capabilities, about we the think of mentioned the and core about the It's to mission not our and of capacity. we and very capabilities. have our is grow If beyond adding live our expand it's previously, talked steelmaking expansions simple. a It's It's core, regional culture. word.

as industry and you the in partnership about rebar. for XX our differentiated of incredibly to our in operation if to So have as to the second micro really continue having one for is leadership and us a the will incredibly again, are customers side that market that XX mill sustainability over in been of in General for us. excited in long-term because, the we the like well Motors. a it JFE on of just value CSI need. rebar our paramount. the again, the shareholder position again, provides the we months about acquisition did offer world our in think world Nucor time is Virginia, California for majority positioned cleanest asking in new in announcement And steelmakers And exciting steels what's The of the ESG, and a West going The mill proposition last is move

going So that to is continue.

Nucor see continue our You're to grow to going capability.

the Metl-Span racking, is the and panels. CENTRIA of a That Hannibal in bounds metal like beyond, steelmaking the to like The about all Industries today give And of projects beyond insulated leadership position that expanding the digital market us economy. those in second is piece traditional range. our

warehousing, is cyclicality As steelmaking. a of we from storage, that happening data think traditional storage, what's cold insulated that about in is really industry the booming

And that capital in balance greatly goals culture, and exceed will deploying can shareholders. return our strategy see you'd continue and we sheet to anything and Jim, capital combine move so, to investment our Nucor projects our our strong invest going to to add? you're where of our cost

Jim Frias

thing that add, And that's with do it, going our that that XX%. model in right start think strong capital -- it's we to to show live good the very quarter. to only And be rating, number when process. that's value a XX% investment-grade intrinsic of but our a now. disciplined to is an There's we in range net want about earnings. We're to every debt capital we I going The that Board XX% below that Emily, use credit We portion of investors, would quarter. the maintain we to published our returning first pretty to

to would And have keep And investors we that we expect investing forward. as go capital to we the so we do both. need both capacity and returning

regarding to want other that's next growth capabilities likely at you our Leon, a that is announcement pipeline. another to on growth around in The are have add that thing, initiative about That's the mix. talk week product Do to all? we again

Leon Topalian

and think Stay that painting. announcement in a we're to us in Yes. rounding in out very announce providing moving in Thanks we sheet the products and tuned around and in expanding value excited coming value days, days, our will you'll businesses. again. continue again, that about that. coming chain offering added better weighting, direction our sheet, see about and particularly Again, up of the portfolio We'll move as we galvanized our our the another

Emily Chieng

helpful just sense trending give at recently around to at progress is Hannibal the acquired made Perhaps including how are expectations Got integration relative us and quickly forward IMP. it, a to that's an today. some they of update. and look I'll very very question that. leave of businesses, it My your second you've

Leon Topalian

our one Emily. and our Thanks, maybe Query, of our then Sheet Tubular, Yes. to the going and who's I'm Rex Metl-Span. and turn Hannibal Industries, at on this CENTRIA to EVP over Chad touched

Rex Query

the for just for companies that we obviously, into And the our fit look but side. has racking in first the first successful, first our Nucor. cultural Industries, also Hannibal for Hannibal is thanks question. step approach place. very been successful are Emily, a

to an leadership and us, that evaluate look and integration company fit we that as well. existing if at So we

racking, growing much a business. what well and But leadership And their Hannibal They and that added Nucor, as it's a the our -- that there, Houston, system with or integrate team, had get comment incorporate the a business. shifted well. and found understand Manager really General company. of in, General to how operations, as we've very that ones business look spectacular existing California, about bonus couple with step we've we there learn in, Nucor. over that. pulling to we're just Hannibal. that so the I'll from of at existing them Manager, But production in leadership tasked hired our in They're much that the fitting We also on includes have really group that's and we Nucor

acquisition greenfield So we're the already potential evaluating business. potential, in racking

expanding business for purposes growing of and stepped our growing we So capabilities that into further and there. the geographically

Chad Utermark

and Nucor. Cornerstone said, about the just we're panel Yes. a to the XXXX to like want welcome the long Rex Leon we're The were to in attractive a team back about IMP start-up a it. metal that actually about space. in been about purchase want space IMP We're time, into very mentioned excited I TrueCore more Cornerstone team little excited Hannibal, acquisition, to But talk And bit and especially the now but we for insulated space has Nucor excited and we have. to equally called that excited company IMP

the onboarding through diligently process. working integration are and We

short-term about still acquisition, is of we some priced While the chemical And in of face with IMP. why and supply inadequately portion there just all, backlog at excited our challenges IMP? future growth. of a First time very significant again, we're

continue U.S. grow and stringent value know, the guys for ESG. also best we've focusing E mentioned medicine. growth believe achieve while those companies, we and Europe. And market $X in are for currently about excess as billion. of developers believe are billion And Furthermore, and industrial we and be owners thermal IMP, requirements. centers, see market, of commercial solutions controlled you the the $X market the to in IMP watched of more it more the earlier that panels there on could building to data food, Leon one buildings and in facilities, insulated environmental and this e-commerce, construction think in out codes country the the across More I

the still So onboarding, future. a but to work few got through, still integrating. challenges about We excited

Leon Topalian

And again, And years Hannibal Nucor to about team panel welcome of we Chad. will hey, excited I'll the businesses the come. insulated opportunities you, metal and close Thank the saying, family. and just in to bring the team those

Operator

question next take BNP Rosenfeld Paribas Seth We'll Exane. our with from

Seth Rosenfeld

I have questions. two

follow First up plate later and please. then I'll on green on steel,

of rolled. that the a break the sheet past, bit supporting start middle a into in have accelerating Can is What's you has balance? the remarkably the resilient plate obviously, plate today? is just on of tight in out been hot concerns prices I'll for think give can even more looking in market fallen market, the of unique reason supply-demand us that? couple seeing color we've On you're be pretty there there, In seen relationship a right weeks plate? the a that Do specifically sustainable you plate please. last what year plate Or How now? a rate. to

Leon Topalian

our EVP that kick Yes, Behr, great and to of our I'm question, to Plate Structural Seth. going now. Al Group

Al Behr

non-residential drumbeat Seth. around more our plate pricing is we don't Thanks, in a demand. than I about what quite And demand. for for market, see is a as about that we've One markets talked bit. product construction. driven know by We've I'd what the a that The I add talked lot the I'd always appreciate three highlight question. consistent us. key

and market very that into extremely demand picture visibility strong. is is the Our good,

market is and be today I which and that's be not of market The is bit If key equipment, last of and with at market supply would oil been energy, a weakness the industrial heavy that Oil That and demand by there's as consumption indication very the well as would weaker years, the now. highlight gas prices oil and day. couple energy, in has equipment. growing around renewables Another includes strong broadly gas. right final chain true would OEMs. any

what to down is picture. comes really very it a that Seth. It's So demand solid just

and buzzy we're the markets price. instituted that rest markets, Our relevant ball but direction keeping to month in that's demand price market. key the do the the know year of published will and look out when to to very in tough what about XXXX, according that. August that pretty is need then we But supply the price good, just the tell, move optimistic we're is transactionally next don't we so. and will a much us that what We're a a based. go We encouraged. for plate the past or of gets in crystal relevant bring, very And The And we may that's as we demand to as committed is demand good.

Seth Rosenfeld

A separate green for the question, please, on brand. Econiq steel

us could pricing on GM. obviously, adjust perhaps to degree color side, And materials first a cost volume achievable, very you congrats as rapidly What's think you demand you is power give supply? in you're is then or achieve be tight. to growing delivery compared Can escalation to of one Supply bit able the First, very years? power on raw to now. two your more any the the say, growth of next right the mix scale on pricing perhaps

Leon Topalian

again, out with intensity because the two, sheet We've is think, do And purchase not. transformation four things. starting much balance many have into Econiq. ahead allow some things power is, We've Seth. Xx about this, the last again, competitors. that or recent those than Thanks, industry I two Yes. integrated a done of to Again, got more of of that lower Nucor excited us agreements our carbon virtual today our sustainable able Xx place, three, to We're moving years, be a we're been and our over curve. more that in

even great platform and commitment So cleaner. a from be strength again, a we and even of begin stronger to

by to is a X.XX announced target we've X.XX, That in ton bring reduction of XX% about a low. numbers which, XXXX. the of steel COX produced, So tons us will world, again, per incredibly

to again, been -- said, coil years net Nucor tell offer to to would their a enables few the That it I've what in So picture is first literally that just over demand weeks zero day-to-day. Motors you, CEO, steel ago being factory. two did the of in I what General two we changing markedly,

We're construction, it. outside OEM ask to automotive our beginning just OEMs are of many our automotive for in the of partners that seeing for asking So not this. are of now it's major many that

averages. our out so cannot the without forward achieve move as value significantly many not what is. that I'm going of that than carbon goals customers incoming steel of end And of lower end tell detail to footprint the most we would value you their their stated targets increases an that, is because I reduction world

the we'll that, participates continue tell would you steel there in months and we of value value So XX, fast see of next that And the no terms control and increase. amount Make That how there XX is today. X, of through over will I is but moves we XX mistake. kind escalate that in how that. what to Nucor

to opportunity what's to to demand meet that and continue the We required picture. do enhance that have

Operator

comes next Timna Research. with question Our from Tanners Wolfe

Timna Tanners

how or times for about Is lead and looking conditions? in in both? order ask I what sheet lot bit visibility wanted the a that your for is like a to ramp bit you're first are good to Is into talk price it quarter particular shorter. now your a little up Can visibility what demand? it you about Gallatin,

Leon Topalian

start, Jim you money. as out up. same if mentioned, we're be invested to in I time, I'll with lot want that Rex, Maybe a to ramp Rex, At the expansion, some balancing and Gallatin possibly and add color. Yes. of going maybe the we've think disciplined Look,

progress equipment that sure make we to is as ready want available we So out. and

same team tell how I months, to about marketplace last transact. the need. our season, very contract XX where disciplined and want that feverishly time, been its or approach particularly working XX we is as the would we've you At So, through bring has moved to to the last the over we into capability Nucor

minutes few the not we measured very marketplace. and have produce steel a we're to of the approach a mentioned flood out we're Jim ago, very want to to going because Gallatin, into the as and a So just deliberate market going approach

going I scale we're that So to expect up.

at, Of track one them virtually share, that to we is we look every I of you virtually As markets. used of projected grow. end the we've all track mentioned end end throughout markets the think, we to market numbers and call, imagine. can the And every

of X% estimated our year terms full in fact, about XXXX for increase. is growth overall In shipment

objectives any we other But that meet of additional to So, its capacity. And we the is Gallatin to and up in Rex, as hit terms tons of an see nameplate again, million ramp-up? X.X opportunity. to ramp like which investment, expect and continue color share you'd about that

Rex Query

for Yes, question. Timna, the thanks

and visibility. the Regarding customers the pricing, And correction down. side talk shut up mean the good the things recovery, with on the and I our And to in that visibility, of now have from see is was we right entered we're standpoint. so speak, with what led sheet that started seeing to what to we with COVID, weekly. with XXXX that we XXXX some you contract

keep now thing So come increasing in. opportunity hearing as demand that an and correction considerably demand increase import is sector year from be that's we've you we And temporal some we in our in we late what right of in some mentioned from that XXXX to is automotive as the demand, occurring. key But fairly the do correction the the pricing they year Al come saw runoff. for this strong overall hear seen is in see expect those well. like Frias customers Jim as underlying a we is sectors, short-term are demand. that sectors. Those mentioned much That's to What

correction. time temporal has That been team we what for see quite there. that's So just Gallatin, we're about really work mode an getting now. a opportunity customers. We in as it's stated And Leon as this construction some from done some hear our

ramp So fit. to that we're able up as see we

looking be will we going our sure We're demand. not what It's to be and of to It's make going price we're we so And customers. for a that take for? service demand care the standpoint. looking

Jim Frias

imports more keep add of at Gallatin one We're we're getting is as to comes most one that's competitors, and wrapping now you done that substrate Timna, come one adding Mexico one of before substrate our up look consuming And now. what We've some past in. that's in ready -- got years, thing have our And Arkansas in that. the we've of to few part the at Berkeley up I been over of line we've the band lines. the mill. mind, bit year galvanized a hot would we're at centric than the out announce started We soon. right another where galvanizing

that portfolio were part of band. for So we to perform our better quite a so recognize hot that, that's weighted would

to band why the impacted, things we are of But to reliance So, the hot market. reasons being our with expect try and on is doing the we that. deal keep we're one that's way

Timna Tanners

chatter That was about you've makes sense. I that a shrink there contracts past, My XXXX. just of discounts business other know CRU. into contract on to to about it. against understand question the And of in helped Nucor's was and moving breakdown the how us think lot

if went automotive, update to any in they're So I could was now that contract wondering changes please? And us negotiations you how your on exposure those over.

Leon Topalian

automotive, the update Yes. Maybe contracts. I'll then Rex, on you start the can with and

ton X.X that For million to year a X.X time, we've long a side. automotive been in in million the range

are to around tons. stated million and goals expectation X our Our double that to

and in the that of XX.X tell was units. somewhere grow. million, would that off you, is to million to automotive that I in grew, what continue a in going so XXXX And XX because chip year way Nucor's in shortages share

the in OEMs. clean And will steel, of sheet the opportunity a excitement so a there's capabilities in a capability about of steels be able I lot as being generation three and as steel Hickman transforming the first into able Virginia to Nucor's what do be terms produce to of differentiated net well West mill full EAF can to tell zero you, the

not XX% probably move we're number to about want do in mix so, time, are Rex, looking think, is overall range, in to same to to But to you automotive. contracts? And to move the goals overly to of the the not get I XX% touch our At our on there. right XX% or We're be XX% committed today. weighted.

Rex Query

what's Yes. the up high galv that. or Really, Hickman pleased with on occurred there, going the and to be the line galv an I'll capable strength. of finish additional extra automotive start-up focused with the It's just line.

be we'll So, able that. to into feed

sure mentioned. significant in that. portion So step into Leon be that's business And look is Automotive what to that. Midwest the going that for new as a we of a for for mill,

that you'll occurring. So see growth

we had demand the would going say contract On I we're we from contract in some strength it what the marketplace season, expected, into side, standpoint. was a

some they you as of with from of we're got the our total package, customers, at at will, discuss value. if but see So, great but what things time, extra, look things, the the to those you same

price, service. more It's what just pieces it's but it's than So delivery, are. it's those

So we overall. us, with our typical for contract on service the season side very for center we finished target as percents, well as what contract both

target in the XX% overall we're So, range us. for and

up So season fairly we typical as a standpoint heading contract XXXX. from finish volume for into

Leon Topalian

very had renew. we that to correct? chose not few customers Isn't And that

Rex Query

Yes.

fact, increased requests for volume. would you, more In had tell I we

things. seen We the some of did not in experience their contracts, of not I've running that types information as a So those of company.

it a for we this what saw In other the We customers, performed way contracts. was fact, and we had the renewing in for around. interest That's really season. tight in market our

Operator

JPMorgan. comes Michael from next question Glick our with And

Michael Glick

the questions of couple A market. on

right has And something and exposure. back on band spreads going spread wide expect historically seen keep you spreads do looking at Do that than think hot where been there's your hot-rolled mentioned historically? you to Or You to products. to now, historically? we've we're it value-added contract wider between those

Leon Topalian

you say what to? When value-added referring products, you are

Michael Glick

products. coated and Cold-rolled

Leon Topalian

Got overall a We shrink. with numbers would huge Mexico. I what saw to yesterday. see from Michael, numbers Those is, imports Predominantly correcting. we trend and gap hot I obviously, Look, is band saw, in it. coming of are Canada out you, going mainly that Yes. you're CRU's tell spike think the

we historic things that has a the had think what's off over 'XX, last to norm, on level But Nucor norm. really like touched Coming closer think I set going year. three a right? to I year you're there's see in so, a And

our If XX over trade. rationalization and the last shift XX there's you consolidation, look at XX industry to or significant been in months,

obviously, case just about massive is up over in The years, five we XX different, think XXX. steel. Today, about won had you that's ago, door the If spread. with but opened six that the trade cases were years carbon

there's terms think industry the correction, also lows in of has moved higher as I as forward. highs think continue Nucor move creating I that well while some to higher So and will

would demand In the healthy equilibrium. supply of the you tell and ends I I'm that that terms market, where find be always speculate. functioning how we to going end products. at its of the to And day, up, the not overall the will it's to going drivers price our

Michael Glick

relative side, my the of the pretty been then bigger focus improved given portfolio labor scrap will a question of useful and on? lives And I mills the blast of new on coming on any see be are mean also the on mills costs capacity second end I kind returns flat-rolled furnace you presume of on side has nearing fleet technology and has higher since the dilutive EAF picture. late curtailments [indiscernible] XXXXs. considerably their do just impacts industry and potential The but

Leon Topalian

of reinvest only I like decades the we those I Nucor. back so the sure EBITDA margins, as tell can in mills had and and into term a history X.X of all mills the generate speak long would those reinvesting the we And Look, to just you, long for assets. returns that our Nucor make worth has

our billions facility, Marion that of been and our range. the in portfolio product in So the across the billions has our significant investment modernization entire Kankakee, investments the acquisition

a you And not all. Nucor at I from so tell perspective, would

to for that steel cost also only keep and not on for of our our the do returns delivery we output to a oldest portfolio, it's to have trends because job staying of teams our highest entire great of reinvesting that ensure our the job do products keeping an improvements we technology latest safest lowest mills are the but the to customers. and amazing implement, generating those the the Some in enough of in maintenance steel,

Operator

additional question-and-answer today's will Leon session. time, this for conference And turn Mr. Topalian that I At concludes or the to back any closing remarks.

Leon Topalian

Thank you.

differentiate Nucor call in delivering To supplier I as exceptional I for continue capabilities history our for year provided of to and our across XXXX. entire required finally, XXXX. the conclude the proud choice. of want Thank you. year performance the as all in customers, And our we record in thank And shareholders, our returns trust profitable As we most the continuing and build to today, to to thank partnership Nucor businesses in just we're safest the our to you the the history. family, our look of forward the the

our not we're great entrust past continuing Nucor have on profitability capital focused with. Thank on our The be you us shareholder a resting of to maximizing valuable great and However, the is you, and stewards performance. team day.

Operator

today's conference. We does that And conclude you participation. your thank for

You disconnect. now may

Leon Topalian	President and Chief Executive Officer
Jim Frias	Chief Financial Officer
Dave Sumoski	Chief Operating Officer
Al Behr	Plate and Structural Products
Doug Jellison	Raw Materials and Logistics
Greg Murphy	Business Services and General Counsel
Dan Needham	Bar and Rebar Fabrication Products
Rex Query	Sheet and Tubular Products
MariaEmily Slate	Commercial Strategy
Chad Utermark	Fabricated Construction Products
Sathish Kasinathan	Deutsche Bank
Carlos De Alba	Morgan Stanley
Emily Chieng	Goldman Sachs
Seth Rosenfeld	BNP Paribas
Timna Tanners	Wolfe Research
Michael Glick	JPMorgan

Nucor (NUE) 27 Jan 222021 Q4 Earnings call transcript