Commercial Metals Co (CMC) 2024 Q1 法說會逐字稿

Hello, and welcome, everyone, to the first quarter fiscal 2024 earnings call for CMC. Joining me on today's call are Peter Matt, CMC's, President and Chief Executive Officer, and Paul Lawrence, Senior Vice President and Chief Financial Officer. Today's materials, including the press release and supplemental slides that accompany this call can be found on CMC's Investor Relations website. Today's call is being recorded After the Company's remarks, we will have a question and answer session, and we'll have few instructions at that time. I would like to remind all participants that during the course of this conference call, the Company will make statements that provide information other than historical information, and we'll include expectations regarding economic conditions, effects of legislation, US steel import levels, construction activity, demand for finished steel products, the expected capabilities, benefits and timeline for construction of new facilities, the Company's future operations, the time line for execution of the Company's growth plan, the Company's future results of operations, financial measures and capital spending. These and other similar statements are considered forward looking and may involve certain assumptions and speculation and are subject to risks and uncertainties that could cause actual results to differ materially from these expectations. These statements reflect the company's beliefs based on the current conditions, they are subject to certain risks and uncertainties, including including those that are described in the Risk Factors and Forward-Looking Statements section of the company's latest filings with the Securities and Exchange Commission, including the Company's latest annual report on Form 10 K. Although these statements are based on management's current expectations and beliefs, CMC offers no assurance that these expectations or beliefs will prove to be correct, and actual results may vary materially. All statements are made only as of this date, except as required by law, CMC does not assume any obligation to update, amend or clarify these statements in connection with future events, changes in assumptions, the occurrence of anticipated or unanticipated events, new information or circumstances or otherwise. Some numbers presented will be non-GAAP financial measures and reconciliations for such numbers can be found in the Company's earnings release under supplemental slide presentation or on the Company's website. Unless stated otherwise, all references made to year or quarter end are references to the Company's fiscal year or fiscal quarter.

大家好，歡迎大家參加 CMC 2024 財年第一季財報電話會議。與我一起參加今天電話會議的還有 CMC 總裁兼執行長 Peter Matt 和資深副總裁兼財務長 Paul Lawrence。今天的資料，包括本次電話會議附帶的新聞稿和補充幻燈片，可以在 CMC 的投資者關係網站上找到。今天的電話正在錄音中。公司發言後，我們將進行問答環節，屆時我們將有一些指示。我想提醒所有與會者，在本次電話會議期間，公司將發表聲明，提供歷史信息以外的信息，我們將包括對經濟狀況、立法影響、美國鋼鐵進口水平、建築活動的預期、成品鋼材的需求、新設施建設的預期能力、效益和時間表、公司未來的營運、公司成長計畫的執行時間表、公司未來的營運績效、財務措施和資本支出。這些和其他類似的陳述被認為是前瞻性的，可能涉及某些假設和猜測，並受到可能導致實際結果與這些預期有重大差異的風險和不確定性的影響。這些陳述反映了公司基於當前情況的信念，它們受到某些風險和不確定性的影響，包括公司向美國證券交易委員會提交的最新文件的風險因素和前瞻性陳述部分中描述的風險和不確定性，包括公司最新的 10 K 表格年度報告。儘管這些陳述是基於管理層當前的期望和信念，但 CMC 不保證這些期望或信念將被證明是正確的，並且實際結果可能存在重大差異。所有陳述僅截至本日期作出，除非法律要求，CMC 不承擔任何更新、修改或澄清與未來事件、假設變化、預期或意外事件發生、新資訊有關的這些陳述的義務或情況或其他情況。提供的一些數據將是非公認會計原則財務指標，這些數據的調節可以在公司收益發布的補充幻燈片演示中或在公司網站上找到。除非另有說明，否則所有提及年末或季末的內容均指本公司的財政年度或財務季度。

And now for opening remarks and introductions, I would like to turn the call over to Peter.

現在，我想將電話轉給彼得進行開場發言和介紹。

Good morning, everyone, and thank you for joining CMC's First Quarter Earnings Conference Call. I hope each of you had a wonderful holiday season.

大家早安，感謝您參加 CMC 第一季財報電話會議。我希望你們每個人都度過了一個美好的假期。

As we reported in our press release issued this morning, the first quarter of fiscal 2024 marked another period of strong financial performance with core EBITDA, core EBITDA margin, and free cash flow continuing at historically high levels. I would like to thank CMC's 13,000 employees who make these results make results like these possible. Your hard work and focused efforts for customers are the driving force behind CMC's success.

正如我們在今天早上發布的新聞稿中所報導的那樣，2024 財年第一季標誌著又一個財務業績強勁的時期，核心 EBITDA、核心 EBITDA 利潤率和自由現金流繼續保持在歷史高位。我要感謝 CMC 的 13,000 名員工，是他們讓這些成果成為可能。你們的辛勤工作和對客戶的專注是CMC成功的動力。

I will start today's call with a few comments on CMC's first quarter performance and then discuss the rationale behind the realignment of our reportable segments and then provide an update on the current market environment and our strategic growth investments. Paul will cover the quarter's financial information in more detail, and I will conclude with our outlook for the second fiscal quarter and beyond. We will then open the call to questions.

我將在今天的電話會議開始時對 CMC 第一季的業績發表一些評論，然後討論我們可報告部門調整背後的理由，然後提供有關當前市場環境和我們的戰略增長投資的最新信息。保羅將更詳細地介紹本季的財務信息，最後我將介紹我們對第二財季及以後的展望。然後我們將開始提問。

Additional information regarding the quarter is provided in the supplemental slides that accompany this call, which can be found on CMC's Investor Relations website.

有關本季度的更多資訊在本次電話會議隨附的補充幻燈片中提供，這些幻燈片可以在 CMC 的投資者關係網站上找到。

Before commenting on CMC's financial performance during the quarter, I would like to highlight our exceptional safety performance. Our incident rate was the best on record, meaning we work safer than ever before. Keeping our employees safe is a core tenet of our culture and priority number one for every team member from the shop floor to executive leadership performance in the first quarter demonstrates how seriously we take this responsibility despite records being set, there is more work to be done to push forward our ultimate goal of zero incidents.

在評論 CMC 本季的財務表現之前，我想先強調我們卓越的安全表現。我們的事故發生率是有史以來最好的，這意味著我們的工作比以往任何時候都更安全。確保員工安全是我們文化的核心原則，第一季從車間到執行領導層的每位團隊成員的首要任務表明，儘管創下了記錄，但我們仍然認真對待這一責任，還有更多工作要做推動我們零事故的最終目標。

As I mentioned, CMC's first quarter financial results were among the strongest in our company's history, though down from recent record levels. CMC generated net earnings of $176.3 million or $1.49 per diluted share on net sales of $2 billion. Excluding the impact of nonoperational items, which Paul will cover in detail, adjusted earnings were $192.7 million or $1.63 per diluted share. CMC generated consolidated core EBITDA for the quarter of $325.3 million, producing a core margin of 16.2% and an annualized return on invested capital of 14.9%.

正如我所提到的，CMC 第一季的財務表現是我們公司歷史上最強勁的，儘管低於最近的創紀錄水平。 CMC 淨利潤為 1.763 億美元，即每股攤薄收益 1.49 美元，淨銷售額為 20 億美元。排除保羅將詳細介紹的非營運項目的影響，調整後收益為 1.927 億美元，即稀釋後每股收益 1.63 美元。 CMC 本季的綜合核心 EBITDA 為 3.253 億美元，核心利潤率為 16.2%，年化投資資本回報率為 14.9%。

Results in our North America Steel Group were supported by healthy construction activity and near record margins on downstream products. Our Europe Steel Group performed well against a difficult market backdrop, benefiting substantially from the recognition of $66.3 million related to energy cost rebate programs. The Emerging Businesses Group was a solid contributor to profits during the quarter, driven by supportive conditions in our North American markets. Customers continued adoption of our high margin proprietary solutions solutions and the recent acquisition of EDSCO Fasteners, industry leading portfolio of anchoring systems.

健康的建築活動和下游產品接近創紀錄的利潤率支撐了北美鋼鐵集團的表現。我們的歐洲鋼鐵集團在困難的市場背景下表現良好，受益於與能源成本回扣計劃相關的 6,630 萬美元的認可。在北美市場的支持性條件的推動下，新興業務集團為本季的利潤做出了堅實的貢獻。客戶繼續採用我們的高利潤專有解決方案以及最近收購的行業領先的錨固系統產品組合 EDSCO Fasteners。

I would like to next cover the recent realignment of CMC's reportable segments. This decision fall's important changes we have made to our organizational structure to better facilitate the execution of our strategy. From a financial point of view, our objectives are to drive higher through the cycle margins and accelerate value accretive growth. The new structure also better reflects the varying characteristics and needs of our business groups internally.

接下來我想介紹 CMC 報告部門最近的調整。這項決定是我們對組織結構所做的重要改變，以便更好地促進我們策略的執行。從財務角度來看，我們的目標是提高週期利潤並加速價值增值成長。新的結構也更能反映了我們內部業務集團的不同特徵和需求。

We believe these changes will greatly enhance visibility into our key value drivers, helping unlock commercial and operational synergies across the business, optimize capital resource planning and better focus our decision-making on value creation externally, CMC's realigned segment reporting should provide enhanced insights into the factors that drive value creation across the Company and enhance the investment community's understanding of our strategy, future growth plans and capital allocation.

我們相信這些變化將極大地提高我們關鍵價值驅動因素的可見性，幫助釋放整個業務的商業和營運協同效應，優化資本資源規劃並更好地將我們的決策集中在外部價值創造上，CMC 重新調整的分部報告應提供對推動整個公司創造價值並增強投資界對我們的策略、未來成長計畫和資本配置的理解的因素。

Slide 5 of the supplemental presentation offers a brief outline of the strategic focus for each business group. Our North America and Europe steel groups operate in large, more mature markets where they have a high degree of penetration and strong positions. Their primary focus areas will be operational and commercial optimization to produce higher through the cycle margins with less volatility and value accretive growth that strengthens our core operations and enhances CMC's customer value proposition.

補充簡報的幻燈片 5 簡要概述了每個業務部門的策略重點。我們的北美和歐洲鋼鐵集團在規模更大、更成熟的市場開展業務，在這些市場中擁有高度的滲透力和強大的地位。他們的主要重點領域將是營運和商業優化，以在整個週期中產生更高的利潤，波動性較小，並實現價值增值成長，從而加強我們的核心營運並提高 CMC 的客戶價值主張。

The businesses in our emerging business group or EBG, while often serving mature markets can bring innovative solutions with relatively low levels of penetration that typically have higher, more stable margins as an example, we estimate current penetration of CMC's tens. Our geogrid solutions is around 10% to 15% of the addressable market with margins that are higher than our overall group margin.

我們的新興業務集團或EBG 中的業務雖然通常服務於成熟市場，但可以帶來滲透率相對較低的創新解決方案，通常具有更高、更穩定的利潤率。例如，我們估計CMC 目前的滲透率約為數十。我們的土工格柵解決方案約佔潛在市場的 10% 至 15%，利潤率高於我們集團的整體利潤率。

Our new structure will provide the attention and stewardship to these businesses to enable them to realize their full potential in the CMC portfolio. Accordingly, we expect that over time EBG will grow faster and maintain higher through the cycle margins compared with the more mature steel groups, driven by an increasing levels of market penetration.

我們的新架構將為這些企業提供關注和管理，使他們能夠充分發揮 CMC 投資組合的潛力。因此，我們預計隨著時間的推移，在市場滲透率不斷提高的推動下，與更成熟的鋼鐵集團相比，EBG 將增長更快，並在整個週期利潤率中保持更高水平。

Commercial synergies across our portfolio, organic investment and acquisitions. A key role of EBG. will be to strengthen our core steel business through the creation of commercial solutions that enhance the value of our steel offerings to customers.

我們的投資組合、有機投資和收購之間的商業綜效。 EBG 的關鍵角色。我們的目標是透過創建商業解決方案來增強我們的核心鋼鐵業務，從而提高我們為客戶提供的鋼鐵產品的價值。

In summary, we are excited about what these organizational and reporting changes will mean for the future of CMC. We believe tremendous value can be realized over time by optimizing how we manage each group and by working as a group to strengthen CMC's commercial proposition. We are committed to providing updates on the evolution of this strategy over time Turning now to CMC's markets in North America, construction activity remained healthy during the first quarter, providing a good demand environment for our reinforcing products. Total finished steel volumes increased on a year-over-year basis, as did combine rebar shipments from our mill and downstream operations. Activity levels across our geographies and into our various customer groups were consistent with recent quarters. Overall, seasonal volume pattern, but seasonal volume pattern was normal.

總之，我們對這些組織和報告變化對 CMC 的未來意味著什麼感到興奮。我們相信，隨著時間的推移，透過優化我們管理每個團隊的方式以及作為一個團隊加強 CMC 的商業主張，可以實現巨大的價值。我們致力於提供有關該策略隨時間演變的最新資訊 現在轉向 CMC 在北美的市場，第一季的建築活動保持健康，為我們的加固產品提供了良好的需求環境。成品鋼材總量較去年同期成長，我們工廠和下游業務的螺紋鋼出貨量也較去年同期成長。我們各個地區和各個客戶群的活動水準與最近幾季一致。整體來看，成交量季節性規律，但季節性成交量規律正常。

Last quarter, we discussed the pressures that increased import competition exerted on CMC's steel product margins. This trend continued during much of the first quarter, but has since abated. We expect that recent developments, including domestic price announcements and higher global rebar pricing will support an inflection in steel product margins over the next few months.

上個季度，我們討論了進口競爭加劇對CMC鋼鐵產品利潤率造成的壓力。這一趨勢在第一季的大部分時間持續存在，但此後有所減弱。我們預計，近期的事態發展，包括國內價格公告和全球螺紋鋼定價上漲，將支持未來幾個月鋼鐵產品利潤率的變化。

Turning to a key external forward-looking indicators. The indices we track point to stability in nonresidential construction overall and the likelihood of increasing levels of infrastructure activity in the quarters ahead. The Dodge Momentum Index, which measures the value of nonresidential projects entering the planning phase generally leads on the ground activity by approximately 12 months, while off highs above 200, it has registered four consecutive months of stability around 180, which is still within the top decile of all historical readings.

轉向關鍵的外部前瞻指標。我們追蹤的指數顯示非住宅建築整體穩定，以及未來幾季基礎設施活動水準增加的可能性。衡量進入規劃階段的非住宅項目價值的道奇動量指數通常領先地面活動約 12 個月，雖然脫離了 200 以上的高點，但已連續四個月穩定在 180 左右，仍處於頂部範圍內所有歷史讀物的十分之一。

On the infrastructure side, the value of projects in predefined and design phases reflects by strong multiyear pipeline of future work. Data provided by Dodge Analytics indicate that projects in these stages of development increased more than tenfold during the three months ended in November compared to the same period of the prior year. This indicator has a long lead time because once a project has been designed, it generally moves to budgeting funding and leading phases. It is in the leading phases that contracts are awarded, resources are scheduled and the on the ground activity can begin.

在基礎設施方面，預先定義和設計階段專案的價值反映在未來工作的多年管道中。 Dodge Analytics 提供的數據表明，在截至 11 月的三個月內，處於這些開發階段的項目與去年同期相比增加了十倍以上。該指標的準備時間很長，因為一旦專案設計完成，它通常會進入預算資金和領導階段。在主要階段，合約被授予、資源被安排並且實地活動可以開始。

The Dodge Analytics data has now been running at an elevated level for the past nine quarters. We are seeing average increases in state Department of Transportation budgets of around 15% and continued strong growth in highway contract awards. We expect this to drive increasing infrastructure activity during the upcoming construction season.

道奇分析公司的數據在過去九個季度一直處於較高水準。我們看到州交通部的預算平均增長了 15% 左右，並且公路合約授予持續強勁增長。我們預計這將在即將到來的施工季節推動基礎設施活動的增加。

Although the construction pipeline is robust, we have continued to experience a slower rate of contract awards. This in turn has caused some reduction to the volume and the value of CMC's quarter ended downstream backlog, which declined 13% by volume compared to the prior year. We believe this weakness is temporary and would note that we saw a pickup in award activity during December.

儘管施工管道強勁，但我們的合約授予速度仍持續放緩。這反過來導致 CMC 季度末下游積壓訂單量和價值減少，與去年同期相比，數量下降了 13%。我們認為這種疲軟是暫時的，我們注意到 12 月獎勵活動有所回升。

Looking beyond these near-term dynamics, we remain very confident in the long-term outlook for our business, which is driven by powerful structural trends that are remaking much of our economy and will bolster construction activity for years to come.

除了這些近期動態之外，我們對我們業務的長期前景仍然充滿信心，這是由強大的結構性趨勢推動的，這些趨勢正在重塑我們的經濟，並將促進未來幾年的建築活動。

Enormous investments have been announced with some already underway to improve our nation's transportation infrastructure, reshoring, vital manufacturing, electrified vehicle fleets and upgrade the electrical transmission grid to facilitate the transition to renewable energy.

巨額投資已經宣布，其中一些投資已經開始，以改善我們國家的交通基礎設施、回流、重要的製造業、電動車隊和升級輸電網，以促進向再生能源的過渡。

As seen on slide 8, we estimate that these structural trends could lead to incremental rebar consumption equal to 20% or more of the current domestic market. So even with the challenges in some areas of construction such as office, retail and hospitality; we anticipate higher overall rebar demand over a multiyear period. Additionally, the benefit won't be limited to rebar. We also expect a meaningful tailwind for many of the value-added solutions within our emerging businesses group.

如投影片 8 所示，我們估計這些結構性趨勢可能導致螺紋鋼消費增量相當於目前國內市場的 20% 或更多。因此，即使辦公、零售和酒店等某些建築領域面臨挑戰；我們預計未來多年螺紋鋼總體需求將會上升。此外，好處不僅限於螺紋鋼。我們也預期新興業務集團內的許多增值解決方案將獲得有意義的推動。

I'll now turn to Europe where market conditions remain challenging. Sluggish demand put pressure on pricing and margins during the quarter. General economic uncertainty continues to negatively impact sentiment and activity levels across our construction and industrial end markets. The Polish long steel industry has responded to market imbalances by meaningfully reducing production and rightsizing inventory levels. These supply-side adjustments appear to be having an impact as long steel pricing has begun to rebound from the lows reached in our fiscal first quarter.

我現在將談談歐洲，那裡的市場狀況仍然充滿挑戰。需求疲軟對本季的定價和利潤帶來壓力。總體經濟不確定性持續對我們的建築和工業終端市場的情緒和活動水平產生負面影響。波蘭長材產業透過大幅減少產量和調整庫存水準來應對市場失衡。隨著長材價格已開始從第一財季觸及的低點反彈，這些供給面調整似乎正在產生影響。

Since our last earnings call, to potentially meaningful green shoots have appeared. The first is a rapid increase in new mortgage originations driven by a government program to assist first-time homebuyers. The value of new mortgages taken out in October, improved fourfold from the calendar 2023 low and approached all-time highs. Higher new loan activity since late summer should support Polish residential construction over the next several quarters.

自從我們上次的財報電話會議以來，潛在有意義的新芽已經出現。首先是政府援助首次購屋者計畫推動的新抵押貸款發放迅速增加。 10 月新發放抵押貸款的價值較 2023 年的低點增長了四倍，並接近歷史新高。自夏末以來新增貸款活動的增加應會支持波蘭未來幾季的住宅建設。

The second development is the likely release of approximately $60 billion of European Union COVID relief funds that were held due to disputes with the prior government. Following the Polish elections held in mid-October, the road bikes have been cleared for receipt of the funding. In fact, [$5 billion] has been already released to projects in Poland. Much of this package is earmarked for renewable energy and the modernization of infrastructure, and it should begin impacting construction activity within the next 12 months.

第二個進展是歐盟可能釋放因與前政府糾紛而持有的約 600 億美元的新冠疫情救助基金。十月中旬舉行波蘭選舉後，公路自行車已獲準接收資金。事實上，[50 億美元]已經用於波蘭的計畫。該計劃的大部分專門用於再生能源和基礎設施現代化，預計將在未來 12 個月內開始影響建築活動。

The environment in Europe is currently difficult, but we expect that it will normalize, given our view of market conditions and the steps we have taken to optimize costs, we expect that beginning with the spring construction season, operational EBITDA for our Europe steel group should improve sequentially for the remainder of fiscal 2024.

目前歐洲的環境很困難，但我們預計情況會正常化，考慮到我們對市場狀況的看法以及我們為優化成本所採取的措施，我們預計從春季施工季節開始，我們歐洲鋼鐵集團的運營EBITDA 應該會有所改善。在 2024 財年剩餘時間內將持續改善。

Market conditions for the emerging businesses group were supportive during the quarter, benefiting from good levels of construction in North America, where we derive nearly 90% of our net sales activity remained slow within our European markets, primarily due to the impact of economic uncertainty on construction activity in the region.

本季新興業務集團的市場狀況有利，受益於北美良好的建築水平，我們發現歐洲市場近 90% 的淨銷售活動仍然緩慢，這主要是由於經濟不確定性的影響該地區的建築活動。

Encouragingly, across our global footprint, we continue to see increasing adoption rates for CMC's newest and highest margin tents, our geogrid solutions, driven by a superior customer value proposition that reduces project costs and extend asset life, growing investment in infrastructure, renewable energy and electricity transmission capacity have supported demand for EBG.'s sales stabilization performance, reinforcing steel and anchoring systems solutions.

令人鼓舞的是，在我們的全球足跡中，我們不斷看到CMC 最新、利潤率最高的帳篷、我們的土工格柵解決方案的採用率不斷提高，這是由卓越的客戶價值主張推動的，可降低專案成本並延長資產壽命，不斷增加對基礎設施、再生能源和輸電能力支撐了對 EBG. 銷售穩定業績、鋼筋和錨固系統解決方案的需求。

Before turning the call over to Paul, I would like to provide a brief update on CMC's key strategic projects where we made significant progress over the quarter. First after a successful summer startup, production levels at our new state of the art Arizona two Micromill have increased each month and are now routinely setting new daily output records. The team has done an exceptional job commissioning a very technologically advanced operation.

在將電話轉給 Paul 之前，我想簡要介紹 CMC 的關鍵策略專案的最新情況，我們在本季度取得了重大進展。首先，在夏季成功啟動後，我們先進的亞利桑那州兩台微型工廠的生產水準每個月都在增加，現在經常創造新的日產量記錄。該團隊在調試技術非常先進的操作方面表現出色。

However, the learning curve has been more extended than we originally anticipated. We now expect to produce approximately 250,000 tons in fiscal 2024 compared to our previous guidance of 400,000 tons. As a reminder, we are targeting 500,000 tons of output at a full run rate consisting of 350,000 tons of rebar and 150,000 tons of merchant product.

然而，學習曲線比我們最初預期的要長。我們現在預計 2024 財年的產量約為 25 萬噸，而先前的指導產量為 40 萬噸。提醒一下，我們的目標是滿載生產 50 萬噸產量，其中包括 35 萬噸螺紋鋼和 15 萬噸商業產品。

Currently, the mill is focused on increasing rebar production and will begin commissioning merchant products early in calendar 2024. We anticipate monthly EBITDA breakeven for AZ too by the end of the third quarter. Work at CMC's future Steel West Virginia site is progressing well. Civil work is nearly complete after which we will begin setting foundations. We expect to begin commissioning this exciting project in late calendar 2025.

目前，該鋼廠專注於增加螺紋鋼產量，並將於 2024 年年初開始調試商業產品。我們預計 AZ 的月度 EBITDA 也將在第三季末實現盈虧平衡。 CMC 未來的鋼鐵西維吉尼亞工廠的工作進展順利。土建工程即將完成，之後我們將開始打地基。我們預計將於 2025 年底開始調試這個令人興奮的項目。

Finally, we have successfully integrated a number of recent acquisitions, which extend our operational and commercial capabilities and further our strategic position. CMC's mill projects, along with our recent strategic bolt-ons, broaden our exposure to favorable structural trends, powering domestic construction and are expected to drive strong future growth and earnings, cash flow and shareholder value.

最後，我們成功整合了最近的多項收購，擴大了我們的營運和商業能力，並進一步鞏固了我們的策略地位。 CMC 的工廠項目以及我們最近的策略補充擴大了我們對有利結構趨勢的認識，為國內建築業提供動力，並預計將推動未來強勁的成長和利潤、現金流和股東價值。

With that, I will now turn the call over to Paul for more detail on our financial results.

現在，我將把電話轉給保羅，以了解有關我們財務表現的更多詳細資訊。

Thank you, Peter, and good morning to everyone on the call. As noted earlier, we reported fiscal first quarter 2024 net earnings of $176.3 million or $1.49 per diluted share compared to the prior year levels of $261.8 million and $2.20, respectively. Results this quarter include net after-tax charges of $16.4 million related to the ongoing commissioning efforts at Arizona two.

謝謝你，彼得，祝所有參加電話會議的人早安。如前所述，我們報告的 2024 財年第一季淨利潤為 1.763 億美元或每股攤薄收益 1.49 美元，而去年同期分別為 2.618 億美元和 2.20 美元。本季業績包括與亞利桑那二號正在進行的調試工作相關的稅後淨費用 1,640 萬美元。

Excluding these items, adjusted earnings were $192.7 million or $1.63 per diluted share in comparison to adjusted earnings of $266.2 million or $2.24 per diluted share during the prior year period. Core EBITDA was $325.3 million for the first quarter of 2024, representing a decline from recent levels, but still among the most profitable quarters in CMC history.

排除這些項目，調整後收益為 1.927 億美元，即稀釋後每股收益 1.63 美元，而去年同期調整後收益為 2.662 億美元，即稀釋後每股收益 2.24 美元。 2024 年第一季核心 EBITDA 為 3.253 億美元，較近期水準有所下降，但仍屬於 CMC 歷史上利潤最高的季度之一。

Slide 11 of the supplemental presentation illustrates the year-to-year changes in CMC's quarterly results. Financial performance at our North American steel and Europe Steel groups declined from the prior year, while results of the Emerging Business Group were largely unchanged. Consolidated core EBITDA margin of 16.2% remained well above average historical levels.

補充簡報的幻燈片 11 顯示了 CMC 季度業績的同比變化。我們的北美鋼鐵集團和歐洲鋼鐵集團的財務表現較上年下降，而新興業務集團的業績基本上沒有變化。 16.2% 的綜合核心 EBITDA 利潤率仍遠高於平均歷史水準。

Before reviewing our segment results, I would like to make a few comments on how CMC will report and discuss each group for both the North America Steel Group and the Europe Steel Group, we will continue providing the same operating statistics as we did under the previous segmentation. You can find the recast figures on our Investor Relations website. We view these metrics as offering valuable insight into the factors that drive these businesses, including selling prices, margins over scrap, and product volumes. We will also begin highlighting adjusted EBITDA margins as a percentage of net sales to support our focus on higher through the cycle margins across our businesses.

在回顧我們的分部業績之前，我想就 CMC 將如何報告和討論北美鋼鐵集團和歐洲鋼鐵集團的每個集團發表一些評論，我們將繼續提供與之前相同的營運統計數據分割。您可以在我們的投資者關係網站上找到重新調整的數字。我們認為這些指標為推動這些業務的因素提供了寶貴的見解，包括銷售價格、廢品利潤和產品數量。我們也將開始強調調整後的 EBITDA 利潤率佔淨銷售額的百分比，以支持我們對整個業務週期利潤率的關注。

The two key metrics for the emerging business group, our net sales and EBITDA margin. As Peter mentioned, we expect faster growth from this segment over time and a fundamental measure of our success will be the ability to increase top line performance in and in EBITDA and value accretive manner given the high value add proprietary nature of the solutions offered by EBG., we anticipate EBITDA margins will be higher and more stable relative to traditional steel industry levels.

新興業務集團的兩個關鍵指標是我們的淨銷售額和 EBITDA 利潤率。正如Peter 所提到的，我們預計隨著時間的推移，該細分市場將實現更快的成長，鑑於EBG 提供的解決方案的高附加價值專有性質，我們成功的一個基本衡量標準將是提高EBITDA和價值增值方式的頂線績效的能力.，我們預期 EBITDA 利潤率相對於傳統鋼鐵業水準將更高且更穩定。

With that, I will now review our segments for the first quarter of fiscal 2024. CMC's Steel Group generated adjusted EBITDA of $266.8 million for the quarter, equal to $243 per ton and efficient finished steel shipped. Segment adjusted EBITDA decreased on a year-over-year basis, driven primarily by lower steel product margin over scrap costs as well as higher costs related to the operational startup of Arizona too. The adjusted EBITDA margin for the North American steel group of 16.8% compares to 21% in the prior year period.

接下來，我將回顧 2024 財年第一季的各個部門。CMC 鋼鐵集團本季調整後 EBITDA 為 2.668 億美元，相當於每噸高效能成品鋼材運輸 243 美元。部門調整後的 EBITDA 年比下降，主要是由於鋼鐵產品利潤率相對於廢鋼成本的下降以及與亞利桑那州營運啟動相關的成本上升所致。北美鋼鐵集團調整後的 EBITDA 利潤率為 16.8%，去年同期為 21%。

Turning to Slide 13 of the supplemental deck, our Europe Steel Group reported adjusted EBITDA of $38.9 million for the first quarter of 2024 compared to $61.2 million in the prior year period. The decline was primarily driven by a lower margin over scrap cost and a 27% reduction in shipment volumes, partially offsetting these headwinds was the recognition of energy rebates totaling $66.3 million during the quarter.

轉向補充幻燈片 13，我們的歐洲鋼鐵集團報告 2024 年第一季調整後 EBITDA 為 3890 萬美元，而去年同期為 6120 萬美元。下降的主要原因是廢鋼成本利潤率下降以及發貨量減少 27%，本季能源回扣總額為 6,630 萬美元，部分抵消了這些不利因素。

Of these, $27.7 million is related to an annual CO2 credit under a government program that extends to 2030 and the remaining $38.6 million is structured as a reimbursement by the Polish government for elevated energy costs incurred during the European energy crisis.

其中，2,770萬美元與一項延續到2030年的政府計畫下的年度二氧化碳信用額有關，其餘3,860萬美元是波蘭政府對歐洲能源危機期間能源成本上升的補償。

The prior year period includes $9.5 million related to the annual CO2 program. The first quarter adjusted EBITDA margin for the Europe steel group of 17.3% compares to 15.8% in the prior year period. Despite lowering production levels to meet demand, controllable costs benefited from lower energy costs during the quarter. Emerging Business Group first quarter net sales of $177.2 million decreased 3.9% from the prior year period, driven largely by the addition of anchoring systems previously called EDSCO Fasteners demand conditions were generally positive during the quarter with relative strength in North America and weaker environment elsewhere.

上一年期間包括與年度二氧化碳計劃相關的 950 萬美元。歐洲鋼鐵集團第一季調整後 EBITDA 利潤率為 17.3%，去年同期為 15.8%。儘管為了滿足需求而降低了產量，但本季能源成本的降低使成本可控。新興業務集團第一季淨銷售額為1.772 億美元，較去年同期下降3.9%，這主要是由於增加了以前稱為EDSCO 緊固件的錨固系統，本季度需求狀況總體樂觀，北美相對強勁，而其他地區環境較弱。

Construction activity in the United States drove solid demand for tenants, our geogrid solutions. Construction Services, anchoring systems, and performance reinforcing steels. Adjusted EBITDA for the emerging business group of $30.9 million during the first quarter was flat compared to the prior year period. The adjusted EBITDA margin of 17.4% represented a decline of 100 basis points as the positive impact from the addition of CMC anchoring systems and the benefit of improved adoption rates for the proprietary geogrid solutions in North America were offset by lower construction activity in Europe and the Middle East impacting our geogrid business outside of North America.

美國的建築活動推動了對租戶以及我們的土工格柵解決方案的強勁需求。建築服務、錨固系統和高性能鋼筋。第一季新興業務集團調整後 EBITDA 為 3,090 萬美元，與去年同期持平。調整後的EBITDA 利潤率為17.4%，下降了100 個基點，因為增加CMC 錨固系統帶來的正面影響以及北美專有土工格柵解決方案採用率提高的好處被歐洲和歐洲建築活動的減少所抵消。中東影響了我們在北美以外的土工格柵業務。

Turning to the balance sheet, moving as of November 30, cash and cash equivalents totaled $704.6 million. In addition, we had approximately $820 million of availability under our credit and accounts receivable facilities, bringing total liquidity to just over $1.5 billion.

轉向資產負債表，截至 11 月 30 日，現金和現金等價物總計 7.046 億美元。此外，我們的信貸和應收帳款設施下還有約 8.2 億美元的可用資金，使流動性總額略高於 15 億美元。

During the quarter, we generated $261 million of cash from operating activities. Our free cash flow amounted to $194.1 million, defined as our cash from operations, less $67 million of capital expenditures. Our leverage ratios remain attractive and have improved significantly over the past several fiscal years.

本季度，我們從經營活動中產生了 2.61 億美元的現金。我們的自由現金流為 1.941 億美元，定義為我們的營運現金減去 6,700 萬美元的資本支出。我們的槓桿率仍然具有吸引力，並且在過去幾個財年中顯著改善。

As can be seen on slide 18, our net debt to EBITDA ratio now sits at just 0.3 times with no maturities until 2030. We believe our robust balance sheet and overall financial strength provide us flexibility to finance our strategic organic growth projects and pursue opportunistic M&A while continuing to return cash to shareholders.

如投影片18 所示，我們的淨負債與EBITDA 比率目前僅為0.3 倍，並且到2030 年才到期。我們相信，我們穩健的資產負債表和整體財務實力為我們提供了靈活性，可以為我們的策略性有機成長項目提供資金並尋求機會主義併購同時繼續向股東返還現金。

CMC's effective tax rate for the quarter was 21.6% due to the release of a valuation allowance. Looking ahead for the remainder of fiscal 2024, we currently expect an effective tax rate of approximately 24% with a rate slightly higher in the second quarter.

由於釋放了估價備抵，CMC 本季的有效稅率為 21.6%。展望 2024 財年剩餘時間，我們目前預期有效稅率約為 24%，第二季稅率略高。

Turning to CMC's fiscal 2024 capital spending outlook, we reiterate our previous guidance of between $550 million and $600 million in total. Outside of normal sustaining investments anticipated expenditures in fiscal 2024 includes substantial capital dollars for the construction of steel West Virginia of approximately $250 million.

談到 CMC 2024 財年資本支出前景，我們重申先前的指導，總額為 5.5 億至 6 億美元。除了正常的持續投資之外，2024 財年的預期支出還包括用於建造西維吉尼亞鋼鐵廠的大量資本，金額約為 2.5 億美元。

Lastly, CMC repurchased nearly 622,000 shares during the fiscal first quarter at an average price of $45.70 per share. Transactions since the initiation of the buyback program through the first quarter have amounted to approximately $292 million, leaving $58 million remaining under our current authorization as at November 30, 2023. This concludes my remarks, and I'll turn the call back to Peter for additional comments on CMC's financial outlook.

最後，CMC 在第一財季以每股 45.70 美元的平均價格回購了近 622,000 股股票。自回購計畫啟動以來到第一季的交易額已達約2.92 億美元，截至2023 年11 月30 日，我們目前的授權還剩5,800 萬美元。我的發言到此結束，我將把電話轉回給Peter對 CMC 財務前景的補充評論。

Thank you, Paul. We expect shipment volumes within our North America Steel Group to decline sequentially due to normal seasonality during the winter months. Margins on steel products are likely to experience some further compression during the second quarter. However, recent price announcements on rebar merchant bar and wire rod should support an inflection point in the coming months.

謝謝你，保羅。由於冬季正常的季節性因素，我們預計北美鋼鐵集團的出貨量將較上季下降。第二季鋼鐵產品的利潤率可能會進一步壓縮。然而，最近螺紋鋼商業棒材和線材的價格公告應該會在未來幾個月內支撐轉折點。

Downstream product margins should exhibit good stability sequentially. Conditions in Europe are expected to remain challenging, but adjusted EBITDA, excluding energy rebates should improve from the levels of the past two quarters. Financial results for our emerging businesses group are anticipated to follow a typical seasonal pattern with some slowing of activity in Q2.

下游產品利潤率應呈現良好的穩定性。預計歐洲的情況仍將充滿挑戰，但調整後的 EBITDA（不包括能源回扣）應較過去兩季的水準有所改善。我們新興業務集團的財務業績預計將遵循典型的季節性模式，第二季的活動將放緩。

Looking beyond the second quarter, which is CMC's seasonally slowest period, we expect robust spring and summer construction activity driven by the increased impact of rising infrastructure investment, which should support an already healthy demand backdrop. Both the North America Steel Group and the emerging businesses group should benefit from anticipated strong activity levels.

展望第二季度（CMC 季節性最慢的時期）之後，我們預計，在基礎設施投資增加的影響加大的推動下，春季和夏季建築活動將會強勁，這應該會支撐本已健康的需求背景。北美鋼鐵集團和新興企業集團都應該受益於預期的強勁活動水準。

Regarding the Europe Steel Group, supply-side adjustments and the impact of increasing levels of residential and infrastructure construction should drive sequential improvement in financial results beginning with the spring construction season. It's an exciting time for CMC. We believe the realignment of our organizational and reporting structure will allow us to better execute our key strategic priorities and harvest significant value for shareholders.

對於歐洲鋼鐵集團而言，供給側調整以及住宅和基礎設施建設水準提高的影響應會推動從春季施工季節開始財務業績的連續改善。對 CMC 來說，這是一個令人興奮的時刻。我們相信，組織和報告結構的調整將使我們能夠更好地執行我們的關鍵策略重點，並為股東收穫可觀的價值。

Powerful structural trends in North America should drive construction activity for years to come, and CMC has positioned itself as a key beneficiary. Additionally, the green shoots emerging in Poland and our strong cost position should provide an opportunity for results to rebound going forward. Once again, I would like to thank our customers for their trust and confidence in CMC and all of our employees for delivering yet another quarter of very solid performance.

北美強大的結構性趨勢應該會推動未來幾年的建築活動，而 CMC 已將自己定位為主要受益者。此外，波蘭的萌芽和我們強大的成本地位應該為未來業績反彈提供機會。我要再次感謝客戶對 CMC 的信任和信心，感謝我們所有員工在又一個季度取得了非常穩健的業績。

(Operator Instructions) Phil Gibbs with KeyBanc Capital Markets.

（操作員說明）KeyBanc 資本市場的 Phil Gibbs。

The scrap market for January there. There's been a lot of mixed news on the market over the last couple of weeks. Just curious in terms of what you all are seeing for your key consumer.

一月份的廢鋼市場有。過去幾週市場上有很多好壞參半的消息。只是好奇你們都在為你們的主要消費者看到什麼。

Yes, yes. So thank you, Phil, for the question. We have kind of heard anecdotally seen some of this some of this weakness and honestly not a huge surprise for us given the rapid run-up that we've seen over the last several months in scrap. Some I think it's important to say that as it relates to the price increase that we announced, which I think it may be part of what you're getting at the move in scrap.

是的是的。謝謝菲爾提出這個問題。我們聽說過一些軼事，看到了其中的一些弱點，老實說，考慮到過去幾個月我們看到廢品的快速增長，這對我們來說並不是一個巨大的驚喜。我認為有必要說這一點，因為這與我們宣布的價格上漲有關，我認為這可能是廢品價格上漲的一部分。

The price increase that we announced did not fully cover and the move that we've seen in scrap and the move in scrap was kind of part of what motivated our move on price, but only part and the other part was the strong demand that we're seeing in the market. So in spite of the kind of potentially sideways movement in scrap, we remain I'm very confident in the kind of pricing position that we've taken and our ability to kind of hold onto it and build on it.

我們宣布的價格上漲並沒有完全覆蓋我們在廢鋼中看到的變動，廢鋼的變動是我們價格變動的部分原因，但只有一部分，另一部分是我們對廢鋼的強烈需求。市場上看到的。因此，儘管廢鋼可能出現橫向波動，但我們仍然對我們採取的定價立場以及我們保持並在此基礎上發展的能力非常有信心。

Thank you. And then as it relates to and CapEx, you said your outlook there was an impact. You had $250 million related to West Virginia. How much is left over to spend for West Virginia in 2025 and beyond fiscal 25 and beyond? And what's your sustaining CapEx with all the investments you've made?

謝謝。然後，就資本支出而言，您說您的前景會產生影響。你有 2.5 億美元與西維吉尼亞州有關。 2025 年以及第 25 財年及以後，西維吉尼亞州還剩下多少支出？您所做的所有投資的維持資本支出是多少？

Yes, Phil. As far as the our CapEx, our guidance typically is that our CapEx, our maintenance CapEx, which is a pretty liberal definition of anything not significant enough to call out is around $250 million per year. And this year on top of that, we've got the finishing off of the investments in Arizona, two as well as the West Virginia spend. So we anticipate, given that we anticipate starting up West Virginia of late 2025, that next year's spend will be somewhat similar to this year in West Virginia and then possibly five finishing up the a little bit into 2026.

是的，菲爾。就我們的資本支出而言，我們的指導通常是我們的資本支出，我們的維護資本支出，這是一個相當自由的定義，對任何不夠重要的事情進行定義，每年約為 2.5 億美元。除此之外，今年我們還完成了亞利桑那州的兩項投資以及西維吉尼亞州的投資。因此，考慮到我們預計將於 2025 年末啟動西維吉尼亞州，明年的支出將與西維吉尼亞州今年的支出有些相似，然後可能在 2026 年完成 5 個項目。

Timna Tanners with Wolfe Research.

坦納斯 (Timna Tanners) 與沃爾夫研究公司 (Wolfe Research)。

Hey, guys, good morning and happy new year. Wanted to just ask a little bit more about capital allocation this because of this start reduction in your debt is flat. You point out really nicely. In slide 18, you kept the dividend flat. I think some of us were expecting that you might have raised and then your cabinet is running above trend, at least for the last six quarters.

嘿，夥計們，早安，新年快樂。我想多問一些有關資本配置的問題，因為您的債務開始減少是持平的。你指出得真好。在投影片 18 中，您保持股息不變。我認為我們中的一些人預計您可能會籌集資金，然後您的內閣運行速度高於趨勢，至少在過去六個季度是如此。

So can you talk a little bit more about how you're seeing opportunities in M&A versus or you haven't. And you said you're not going to build anymore steel mills after these next ones, which sounds good. And what else are the types of opportunities that you might be looking at for uses of cash?

那麼您能否多談談您如何看待併購中的機會以及您沒有看到的機會。你說在接下來的這些鋼廠之後你不會再建造更多的鋼廠，這聽起來不錯。您可能還會尋找哪些其他類型的現金使用機會？

Yes. So thank you for the question, Timna.

是的。謝謝你的提問，蒂姆納。

I mean, we continue to plan a balanced capital allocation strategy, and that's going to include given our balance sheet condition is very good. It's going to focus on really growth and then returns to shareholders. We have on the growth side, obviously, we've got the kind of West Virginia project that we're in full for course on at this point in terms of getting that spending ramped up. And there are kind of other smaller organic projects around the company that we're also investing in at this time.

我的意思是，我們將繼續規劃平衡的資本配置策略，考慮到我們的資產負債表狀況非常好，這將包括在內。它將專注於真正的成長，然後回報股東。在成長方面，顯然，我們已經完成了西維吉尼亞州的項目，我們目前正在全力推進該項目，以增加支出。我們目前也在公司周圍投資其他一些較小的有機項目。

On the M&A side, we see a lot of different opportunities, and we're doing a lot of work around strategy to figure out precisely where our priorities are because we want to make sure that the M&A growth that we do pursue is M&A growth. That is number one complementary to the core and number two of growth that we can generate with growth where we can generate returns in excess of our cost of capital.

在併購方面，我們看到了很多不同的機會，我們正在圍繞策略做很多工作，以準確地找出我們的優先事項，因為我們希望確保我們所追求的併購成長是併購成長。這是核心成長的第一補充，也是我們可以透過成長產生的第二大成長，在成長中我們可以產生超過資本成本的回報。

So but we do see a decent amount of M&A opportunity out there. And we're just going to be kind of disciplined about doing that as it relates to returns to shareholders. And we did increase our share buyback in the most recent quarter. And you'll note, as others have noted that we are coming to the end of our authorization on share buybacks. And I would say this is a topic that we discuss on a regular basis with our Board. So I would stay tuned and on share buybacks as a overall piece of the overall piece of the pie.

所以，我們確實看到了相當多的併購機會。我們將嚴格遵守此做法，因為這關係到股東的回報。我們確實在最近一個季度增加了股票回購。您會注意到，正如其他人指出的那樣，我們對股票回購的授權即將結束。我想說這是我們與董事會定期討論的話題。因此，我將繼續關注股票回購，並將其作為整體的一部分。

And on dividends, again, we periodically review the dividend, and we'll continue to we'll continue to do that. But overall, the strategy is balanced capital allocation between kind of growth and return of capital to shareholders.

關於股息，我們再次定期審查股息，我們將繼續這樣做。但總體而言，該策略是在成長類型和股東資本回報之間平衡資本配置。

Okay, great. Thanks for that comprehensive answer. I know I threw a lot in that last question on just the next one is a little hopefully some smaller ones, and we have seen the pace of government awards and highway and highway slowed down a bit. And I know you alluded to that in your commentary. Any just a little more color on what's driving that? Is that just, you know, tough, is that resources availability? Is that anything to be cautious about or is it just kind of the normal cadence after a big spending program coming through?

好的，太好了。感謝您的全面回答。我知道我在最後一個問題上投入了很多精力，只是希望下一個問題是一些較小的問題，我們已經看到政府獎勵和高速公路的步伐有所放緩。我知道你在評論中提到了這一點。有沒有更多的顏色來說明是什麼推動了這一點？這只是，你知道，資源可用性嗎？這是需要謹慎的事情還是這只是大支出計畫實施後的正常節奏？

Yes, we actually feel very confident about where we are on government awards. And actually, we've seen government awards continue at a healthy pace here on what I'd say it's just kind of taking a couple of steps back. If you look at infrastructure spending, infrastructure spending grew in 2023, we expect and all the other prognosticators expect that it's going to grow in 2024. And we can see on both in the form of a kind of a pipeline of projects in the design and pre-design phase significant increases that have been significantly increased over the last literally nine quarters. So so that we think is a kind of evidence that there's more coming through the pipeline.

是的，我們實際上對我們在政府獎上的表現非常有信心。事實上，我們已經看到政府獎項繼續以健康的速度進行，我想說這只是後退了幾步。如果你看一下基礎設施支出，你會發現基礎設施支出在 2023 年會增長，我們和所有其他預測者都預計基礎設施支出將在 2024 年增長。預設計階段顯著增加，在過去的九個季度中顯著增加。因此，我們認為這是一種證據，表明還有更多的產品正在醞釀中。

And lastly, what we're seeing is our state budgets are growing at a healthy, healthy rate. And we commented in the prepared remarks that they're up about 13% on average, and we believe we are seeing some of the IJA. money coming through. Now, remember, it's a little difficult to see precisely when it comes because the funds are co-mingled with state monies, but we do believe we're starting to see that and we believe that's going to grow over the course of 2024.

最後，我們看到我們的國家預算正在以健康的速度成長。我們在準備好的評論中評論說，它們平均上漲了約 13%，我們相信我們正在看到一些 IJA。錢來了。現在，請記住，很難確切地看到它何時到來，因為這些資金與國家資金混合在一起，但我們確實相信我們已經開始看到這一點，並且我們相信這種情況將在2024 年期間增長。

And one thing that I'd also kind of point out on IIJA is remember the way the program is structured. And every year there's a grant, but it doesn't necessarily mean that the spend in that year is the same. So over the course of program, we believe you're going to see kind of an escalating level of spending. So we continue to be very bullish on what infrastructure means for our business and demand for rebar.

我還想在 IIJA 上指出的一件事是記住該計劃的結構方式。而且每年都有補助，但不一定代表當年的支出是一樣的。因此，在整個計劃過程中，我們相信您會看到支出水準不斷上升。因此，我們繼續非常看好基礎設施對我們業務的意義以及對螺紋鋼的需求。

(Operator Instructions) Alex Hacking with Citi.

（操作員指示）Alex Hacking 與花旗銀行。

Yes, hi, good morning. On the emerging business group, which you've highlighted that you see that growing faster than everything else, but are there any long-term targets there for how big you want that business to ultimately get either in absolute terms or as a percentage of the total company?

是的，嗨，早安。關於新興業務組，您強調指出，您發現該業務組的成長速度比其他所有業務組都快，但是您希望該業務最終達到多大的規模（無論是絕對值還是佔總業務的百分比）是否有任何長期目標？總公司？

Yes. Thanks, Alex. Good, good question. We're very excited about the potential of the emerging businesses group. I think it's premature at this point to kind of articulate a specific target for where we think it will be what we like about that business as we said, is it tends that the businesses in there tend to have solid organic growth rates. They tend to have higher margins and they tend to have less volatility, all of which will be kind of helpful in the overall financial profile for our company.

是的。謝謝，亞歷克斯。好，好問題。我們對新興業務集團的潛力感到非常興奮。我認為現在明確一個具體的目標還為時過早，因為我們認為我們喜歡該業務，正如我們所說，那裡的業務往往具有穩定的有機成長率。它們的利潤率往往較高，波動性較小，所有這些都對我們公司的整體財務狀況有所幫助。

So it's an area that we intend to grow, we want to grow but coming back to my comment on M&A, we got to be disciplined about how we grow. And that means that we got to be comfortable that we can generate returns in excess of our cost of capital on the moves that we're making in that space, and we are very optimistic that we can do that. So we're confident that you're going to see some nice growth in that segment but it's a little bit premature to have to call it specifically. What I would say is that our expectation is that it will be a significant contributor to our earnings and cash flow if you look out kind of three, five years.

因此，這是我們打算發展的領域，我們想要發展，但回到我對併購的評論，我們必須對我們的發展方式保持嚴格。這意味著我們必須放心，我們在該領域所做的舉措能夠產生超過資本成本的回報，並且我們對能夠做到這一點非常樂觀。因此，我們相信您會看到該細分市場出現一些不錯的成長，但現在必須具體稱呼它還為時過早。我想說的是，我們的預期是，如果你展望三年、五年，它將對我們的收入和現金流做出重大貢獻。

Okay, thanks. And then something a bit more discreet, the European cost rebates, energy rebates, given where energy prices are today, do you have any estimate what kind of rebate you would expect at the end of this year?

好的謝謝。然後是更謹慎的事情，歐洲成本回扣、能源回扣，考慮到目前的能源價格，您是否估計今年年底您會期望得到什麼樣的回扣？

Yes, Alex, it's a it's a good question. So there's two separate programs as I outlined that we received the first relates to the cost bill CO2 credits that's embedded in the underlying energy costs that are that the operation pace, and that is most closely tied to the CO2 credit costs themselves. And given that demand over time is expected to continue to increase for those credits, we expect that that credit is likely to remain at the level it is today or increase.

是的，亞歷克斯，這是一個很好的問題。因此，正如我所概述的那樣，有兩個單獨的計劃，我們收到的第一個計劃與成本法案二氧化碳信用額有關，該計劃嵌入了基礎能源成本中，即運營速度，並且與二氧化碳信用成本本身密切相關。鑑於隨著時間的推移，這些信貸的需求預計將繼續增加，我們預計這些信貸可能會保持在目前的水平或增加。

The other credit was in relation specifically to higher cost energy. And as you're correct, as you state that energy costs have come down from their peak, they're still elevated. And so while the program itself was simply for 2023 and we have received the full amount of that, it is it could be that the new government that comes in place puts a further program in place. Should they energy costs continue to remain elevated and uncompetitive with other geographic jurisdiction.

另一個功勞具體與較高成本的能源有關。正如你所說的那樣，當你說能源成本已經從高峰下降時，它們仍然很高。因此，雖然該計劃本身只是針對 2023 年的，而且我們已經收到了全額資金，但上任的新政府可能會制定進一步的計劃。如果他們的能源成本繼續居高不下並且與其他地理管轄區相比缺乏競爭力。

Okay, thanks. And sorry, just to clarify, the CO2 program is still in place and is sort of linked to that. The market price of CO2 credits and the energy rebate program is now gone, but potentially could be replaced?

好的謝謝。抱歉，澄清一下，二氧化碳計劃仍然存在，並且與此有某種聯繫。二氧化碳信用額的市價和能源回扣計劃現已消失，但有可能被取代嗎？

That's that's correct. The CO2 is in place through 2030.

就是這樣沒錯。二氧化碳排放將持續到 2030 年。

(Operator Instructions) The next question is a follow-up from Phil Gibbs with KeyBanc Capital Markets.

（操作員說明）下一個問題是 KeyBanc Capital Markets 的 Phil Gibbs 的後續問題。

What's the length of your fabrication backlog right now, if you think about it in terms of months or quarters?

如果您以月或季度為單位來考慮，那麼您現在的製造積壓工作有多長？

Yes, I mean the fabrication backlog tends to run with a duration of about 12 months, and we're kind of that's a weighted average duration. That's I think the good level for where it is today.

是的，我的意思是，製造積壓的持續時間往往約為 12 個月，我們認為這是一個加權平均持續時間。我認為這就是今天的良好水平。

And then as you talk about the typical force more normal seasonality associated with the second quarter versus the first quarter, what does that in your mind? Is that 5%. Is that more or less?

然後，當您談論第二季度與第一季相關的更正常季節性的典型力量時，您的想法是什麼？那是5%嗎？是多了還是少了？

Yes, Phil. Typically, because of the weather and the slowdown in construction activity that occurs, usually it's between 5% and 10% of a reduction in volume, the volumes in the first quarter where we're relatively strong in relation to add to other seasonal impacts. So we would expect somewhere in the middle there around the 7% reduction in volume.

是的，菲爾。通常，由於天氣和建築活動放緩，數量通常會減少 5% 到 10%，第一季的數量相對於其他季節性影響而言相對較強。因此，我們預計成交量會減少 7% 左右。

Now that all depends on what weather occurs. So far, the summer was was a very strong month from a construction activity despite the holidays. However, I think there's an Arctic Blast coming through affecting much of the US this week, so we'll see what happens over the remainder part of the quarter.

現在一切都取決於天氣狀況。到目前為止，儘管有假期，夏季的建築活動仍然非常活躍。然而，我認為本周北極風暴將影響美國大部分地區，因此我們將看看本季剩餘時間會發生什麼。

And when you talk about this 5% to 10% is that for US mills and US fabrication for --

當你談論這 5% 到 10% 時，是指美國工廠和美國製造商——

Yeah, as well as the EBG. businesses, which are construction oriented.

是的，還有 EBG。以建築業為導向的企業。

And then lastly, depreciation, as you guys noted it and carve out stepped up pretty solidly. I would I think based on your disclosure that it was largely for AZ two but is that a good level to be using moving forward that stepped up rate that we saw in Q1?

最後，正如你們注意到的那樣，折舊也穩步上升。我認為根據您的披露，這主要是針對 AZ 2 的，但是使用我們在第一季度看到的加快的速度前進是否是一個很好的水平？

Yes, that that reflects both the AZ to depreciation as well as the acquisitions that we did throughout 2023.

是的，這不僅反映了 AZ 折舊，也反映了我們在 2023 年全年的收購。

At this time there appears to be no further questions. Mr. Matt, I'll now turn the call back over to you.

此時似乎沒有其他問題了。馬特先生，我現在將電話轉回給您。

Okay. Well, thank you for joining us on today's conference call. I just wanted to say in conclusion, CMC has positioned itself to take advantage of the wave of construction spending underway. And in this environment, we are confident in our ability to drive higher through the cycle margins and generate excess returns from our growth initiatives. We look forward to speaking with many of you during our investor calls in the coming days and weeks. Thank you very much.

好的。好的，感謝您參加今天的電話會議。我只想總結一下，CMC 已將自己定位為利用正在進行的建築支出浪潮。在這種環境下，我們對提高週期利潤並從成長計畫中產生超額回報的能力充滿信心。我們期待在未來幾天或幾週的投資者電話會議上與你們中的許多人交談。非常感謝。

This concludes today's CMC conference call. You may now disconnect your lines.

今天的 CMC 電話會議到此結束。現在您可以斷開線路。