CMC Q1 2026 Earnings Call Summary

1Key Financial Results and Metrics

Net Earnings: $1.773 billion or $1.58 per diluted share, compared to a net loss of $175.7 million in the prior year.

Adjusted Earnings: $206.2 million or $1.84 per diluted share, up from $86.9 million in the prior year.

Core EBITDA: $316.9 million, a 52% increase year-over-year and the highest in two years.

Core EBITDA Margin: Expanded to 14.9%.

North America Steel Group Adjusted EBITDA: $293.9 million, with a margin of 17.7%.

Construction Solutions Group Adjusted EBITDA: $39.6 million, a 75% increase year-over-year.

Europe Steel Group Adjusted EBITDA: $10.9 million, down from $25.8 million year-over-year due to lower CO2 credits.

2Strategic Updates and Business Highlights

CMC reported a strong start to fiscal 2026, driven by strategic initiatives from fiscal 2025, including the TAG program aimed at operational and commercial excellence.

The company successfully closed acquisitions of CP&P and Foley, enhancing its portfolio and growth potential.

The North America Steel Group benefited from improved operational performance and scrap optimization initiatives, contributing to higher margins.

The Construction Solutions Group saw record performance, particularly in TENSAR and Commercial Metals Company Construction Services, driven by strong project demand and cost management.

CMC is optimistic about long-term demand driven by infrastructure investments, reshoring, and energy projects.

3Forward Guidance and Outlook

Core EBITDA: Expected to decline modestly from Q1 levels due to seasonal slowdowns but will be partially offset by contributions from the newly acquired Precast businesses.

North America Steel Group: Anticipated lower sequential adjusted EBITDA due to normal seasonal trends and planned maintenance outages.

Construction Solutions Group: Expected to improve, with contributions from the Precast business offsetting seasonal weaknesses.

Europe Steel Group: Expected to be approximately breakeven, with potential margin growth as the carbon border adjustment mechanism takes effect.

4Challenges and Points of Concern

Europe Steel Group: Experienced a decline in adjusted EBITDA due to lower CO2 credits and import pressures, although this is expected to improve with the implementation of the carbon border adjustment mechanism.

Seasonality: Anticipated typical seasonal volume declines of 5% to 10% in Q2, which could impact overall performance.

Counterparty Risk: CMC is taking steps to reduce risks associated with long-term fixed-price contracts in its fabrication business.

New Supply: Concerns about new supply entering the market, although management believes demand can absorb it.

5Notable Q&A Insights

Management expressed confidence in the integration of CP&P and Foley, noting cultural alignment and potential for synergies.

On North American metal margins, management is optimistic about sustaining current levels despite new supply, citing lower imports and stable demand.

The TAG initiative is expected to drive sustainable margin improvements, with a goal of achieving an annualized EBITDA benefit of $150 million by the end of fiscal 2026.

The company is cautious about future pricing and margin pressures but remains focused on maintaining operational excellence and capturing value through strategic pricing and contract management. Overall, CMC reported a strong quarter with significant improvements in financial metrics and strategic positioning, while also addressing potential challenges and market dynamics.