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- **$2.5B Precast Platform**: Acquisitions of Foley and CP&P create $250M EBITDA business with 34%+ margins, targeting $25-30M annual synergies.
- **TAG Program Success**: $50M EBITDA benefits in Q4, with $150M+ annualized run rate by FY26.
- **Free Cash Flow Growth**: 48C tax credit and depreciation reduce 2026 tax rate to 4-8%, enabling $250M+ annual free cash flow from precast.
- **Demand Drivers**: Infrastructure (IIJA), nonresidential (energy, data centers), and housing deficit support long-term construction growth.
- **Leverage Target**: Reduce net debt to <2x within 18 months, enabling resumed share buybacks.

**【CEO Summary Section】**
- Announced acquisition of Foley Products Company and Concrete Pipe & Precast (CP&P), creating a $250 million EBITDA precast platform with 34%+ margins.
- Foley's best-in-class operations enable $25-30 million annual EBITDA synergies by year 3, driven by production planning, manufacturing efficiencies, and support function optimization.
- Fourth quarter North American Steel Group EBITDA of $239.4 million (+18% YoY), driven by TAG program ($50 million EBITDA benefits) and margin expansion.
- Europe Steel Group EBITDA of $39.1 million (+$34.7 million YoY), boosted by $31 million CO2 credit and operational improvements.
- Emerging Businesses Group (EBG) EBITDA of $50.6 million (+19% YoY), driven by geogrid demand and cost management.

**【CFO Financial Commentary】**
- Total acquisition consideration of $2.5 billion (Foley: $1.8 billion, CP&P: $0.7 billion), funded by cash and debt, targeting net leverage below 2x within 18 months.
- Foley's 10.3x EBITDA multiple reflects high-margin, low-capital intensity business; transaction is immediately accretive to EPS and free cash flow.
- Fiscal 2026 capital spending of $600 million includes $350 million for West Virginia mill and high-return EBG projects; precast maintenance CapEx ~$8-15 million annually.
- Effective tax rate expected at 4-8% in 2026 due to 48C tax credit, bonus depreciation, and accelerated depreciation on acquired assets.

**【Q&A Highlights】**
- **Demand Mix**: Infrastructure (strong from IIJA), nonresidential (energy, data centers, hospitals), residential (lagging due to interest rates, but 2-4 million housing deficit supports long-term growth).
- **First Quarter Outlook**: North America Steel Group EBITDA margin expansion, Europe Steel Group seasonal decline (~$15 million CO2 credit), EBG seasonal decline but +19% YoY growth.
- **Precast Growth**: Foley and CP&P have complementary footprints; bolt-on acquisitions likely as platform scales. Foley's 5-7% annual growth rate (vs. 3% market) driven by share gains and new plant openings.
- **Dividend Policy**: No change to dividend; share buybacks will resume once net leverage <2x, supported by $250 million+ annual free cash flow from precast platform.
- **Europe Strategy**: Poland's construction recovery and CO2 credits position Europe Steel Group for sustained profitability; no plans to divest despite strategic shift to U.S. growth.


Commercial Metals Company (CMC) Q4 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

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Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

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Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

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Other Comprehensive Income

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Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

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Basic EPS from Discontinued Operations

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Diluted EPS from Discontinued Operations

CMC

CMC fundamentals

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