The paragraph is an introduction to Nucor's Fourth Quarter 2024 Earnings Call, led by Jack Sullivan, Vice President of Investor Relations, and featuring remarks from CEO Leon Topalian and CFO Steve Laxton. The call discusses the company's earnings and business updates, including safety performance, which is emphasized as a core value. Nucor reports 2024 as its safest year ever, with a decrease in recordable injuries for the seventh consecutive year. The discussion includes non-GAAP financial measures and forward-looking statements with potential risks outlined in the company's SEC filings.

The CEO of Nucor expresses pride in the team's safety performance amid company growth and outlines a goal to become the world's safest steel company by 2025. Financially, the company saw strong earnings and EBITDA in 2024, with a robust balance sheet and significant capital investments in CapEx and acquisitions. The company also returned $2.7 billion to shareholders through share repurchases and dividends. Over the past five years, Nucor has followed a mission to grow and improve, which includes extensive capital deployment. The CEO is optimistic about realizing the earnings potential of these investments, emphasizing a focus on improving for shareholders, customers, and team members.

The paragraph discusses the long-term growth plans and investments of Nucor, focusing on enhancing value for customers and shareholders. Investments are being made in raw materials technology to improve scrap recovery and reduce the carbon footprint, in steel mills to increase the product mix toward higher-margin products, and in automation for steel products to boost efficiency and safety. Additionally, Nucor is investing in new products and downstream platforms in steel-adjacent businesses. The largest growth initiatives, making up about 65% of the 2025 CapEx budget, include progress on the West Virginia sheet mill, the company's largest capital project, aiming for completion by late next year. As it ramps up by 2027, it will produce advanced sheet steels for various markets. The sheet group is also investing in enhanced finishing capabilities, such as new galvanizing lines in Crawfordsville, Berkeley County, and a construction grade line at the CSI joint venture, with completion dates ranging from 2025 to 2027.

The paragraph discusses Nucor's progress on key construction projects, including a new rebar micro mill in North Carolina and a melt shop in Arizona, set for 2025 completion to serve growing infrastructure markets. It also highlights plans for automated tower manufacturing plants, one in Utah by 2027, targeting power transmission and telecommunication markets. These investments aim to double through-cycle earnings while adhering to Nucor's cultural values of trust, communication, and teamwork. Nucor has returned $12 billion to shareholders and reinvested $16 billion in CapEx and acquisitions over five years, maintaining a strong credit profile and advancing sustainability. The company anticipates further growth and collaboration with President Trump's administration to promote fair trade and economic growth.

The domestic steel industry is facing challenges due to unfairly traded imports and global overcapacity, which affect profitability. Existing measures like Section 232 tariffs, critical for industry support, have weakened over time and need to be strengthened, including replacing exemptions and quotas with tariffs and extending measures to downstream products. Urgent legislative action, like passing the Leveling the Playing Field Act 2.0, is needed to offer relief to affected industries. Despite recent challenges, the U.S. steel industry remains advanced and environmentally friendly, and with ongoing investments in American manufacturing and supportive policy from the new administration, it is poised for growth. Demand for steel is anticipated to grow in 2025, fueled by strong consumer confidence, moderated inflation, low unemployment, and robust infrastructure and institutional construction activity.

The paragraph discusses the anticipated growth in the residential and commercial construction sectors due to potential looser lending and supportive regulatory environments under a new administration, which could boost demand for steel products. Nucor expects to benefit from these conditions as a leading steel producer. The company's CFO, Steve Laxton, reports that Nucor achieved net earnings of $287 million in the fourth quarter and approximately $2 billion for the full year, exceeding guidance due to strong operating performance and favorable corporate and tax factors. Higher-than-expected shipments and solid demand fundamentals, along with strong operating margins, contributed to these results.

The paragraph discusses factors driving financial impacts in a company's segments, highlighting cost reductions and gains on investments. In the steel mill segment, pre-tax earnings dropped significantly due to decreased pricing and metal margins, largely affecting the sheet business. The steel product segment also saw a decline in pre-tax earnings but with stable Joist & Deck backlogs extending into the second quarter, though pricing is expected to remain low. Despite challenges, the company anticipates improved demand trends in non-residential construction, which could positively impact downstream businesses. They project double-digit growth for their overhead doors, racking, and insulated metal panels platforms in 2025, with a substantial run rate EBITDA from recent acquisitions.

The company expects its platforms to generate over $450 million in EBITDA by 2025, with further growth potential. Key growth catalysts include the acquisition of Rytec and expanded door technologies offerings, custom-fabricated racking solutions for data centers and warehouses, and increased demand for insulated metal panels. They are also enhancing capabilities in their towers and structures business, planning to start facilities in Alabama and Indiana in 2025, and a new Utah facility in 2027. In the raw materials segment, they reported a pre-tax earnings increase of approximately $40 million from the previous quarter, thanks to a 20% rise in DRI production and reduced operating costs. Capital expenditures are projected to be approximately $3 billion in 2025, continuing their long-term growth strategy.

Nucor plans to allocate about two-thirds of its upcoming year's budget to growth-oriented investments, with the West Virginia sheet mill being a significant project, expected to complete by the end of 2026. Despite high pre-operating and startup costs, Nucor is committed to maintaining a strong balance sheet with a debt-to-capital ratio of about 25% and over $4 billion in liquidity. In 2024, they returned $2.7 billion to shareholders through dividends and share buybacks, with a commitment to continue returning at least 40% of annual net earnings. The company increased its quarterly dividend for the 52nd consecutive year. Looking ahead to the first quarter of 2025, Nucor expects its steel mills and products segment to perform similarly to the previous quarter, with potential signs of strengthening demand.

The paragraph discusses Nucor's financial outlook and projections for 2025. It mentions that due to the current backlog and business lags, pricing and margins may not exceed the previous quarter's results, particularly in the raw materials segment where lower transfer prices for DRI (direct reduced iron) might lead to decreased contributions compared to Q4. While the operating segments have stable fundamentals with potential upside, previous corporate, administrative, and tax benefits that positively impacted Q4 earnings are not expected to recur, possibly resulting in lower net earnings for Q1. Despite these concerns, the company is optimistic about positive trends emerging in 2025, positioning Nucor as a leader in the industry. During a Q&A session, Timna Tanners from Wolfe Research asked about the company's payout ratio and shareholder returns for 2024. They expressed concern over maintaining the pace of stock buybacks given the high capital expenditures and slower start to the year.

Leon Topalian, speaking on behalf of Nucor, begins the paragraph by expressing optimism about the start of the year, emphasizing the remarkable safety achievements in 2024, with record low injuries and illness rates. He credits the company's focus on safety as a key factor in achieving strong results and KPI performance. Topalian highlights that Nucor has experienced significant financial success over the past three years, generating more revenue than the previous twenty years combined, and has made substantial investments for growth. Despite a decrease in free cash flow due to high capital expenditures, he remains confident about the future earnings potential. Topalian assures that shareholder returns, which have been over 60% during his tenure as CEO, will remain a priority. Steve Laxton then takes over the discussion.

The paragraph discusses a company's commitment to returning a minimum of 40% of earnings to shareholders, which can increase when there is excess liquidity. Last year, due to having more than $7 billion in cash, the return to shareholders was 135%. The company adjusts its share buyback pace quarterly based on liquidity and needs, and typically ends buybacks before issuing guidance. There was no unusual break in the fourth quarter buybacks. Additionally, Timna Tanners mentions that despite no intended criticism of Nucor, relative pricing year-over-year seems slower and seeks the company's perspective on tariffs affecting Nucor's operations.

In the paragraph, Leon Topalian discusses the impact of tariffs on trade, particularly concerning steel imports from Canada and Mexico. He notes the increased signing of executive orders related to trade by the President and the continued emphasis on an "America first" trade agenda. Topalian reflects on the positive effects of the 232 tariffs applied in 2018, which helped level the playing field for U.S. competition. He mentions that approximately 40% of U.S. steel imports come from Canada and Mexico and argues that this needs to decrease. He anticipates new tariffs and penalties for countries manipulating currency and pricing. He also highlights that only a small percentage of his company’s exports involve high-value products, while imports from neighboring countries consist mainly of commodity grades.

The paragraph discusses the potential impact of tariffs on Nucor, particularly regarding its operations involving Mexico. Leon Topalian explains that although tariffs could negatively affect Nucor's joint ventures in Mexico, the overall impact on the company's operations is minimal due to the low volume of U.S. exports to Mexico. Noah Hanners adds that Nucor has significant flexibility in sourcing materials for its operations, ensuring competitiveness even in the face of trade challenges. They emphasize the company's focus on high-value products exported to Mexico, contrasting with the commodity products imported into the U.S.

The paragraph discusses the company's comfortable position regarding potential tariff impacts on automotive supply from Mexico, as well as their contingency plans. It reveals the company's focus on growth through a $16 billion capital campaign that includes organic growth, greenfield projects, and mergers and acquisitions (M&A). The CEO, Leon Topalian, emphasizes their disciplined capital allocation and commitment to not becoming over-leveraged while investing in various projects across multiple states. The company remains open to participating in M&A to strengthen their position in the U.S. on the EAF side, and they maintain substantial liquidity with a 1.6 debt-to-EBITDA ratio.

The paragraph discusses Nucor's approach to investment and capital discipline, emphasizing their focus on growth without overpaying for assets. Bill Peterson from JPMorgan inquires about the pricing trends for Nucor's downstream products, particularly Joist & Deck. John Hollatz responds, highlighting the company's success in enhancing the earnings profile of their custom engineered products. He refrains from predicting a specific peak or trough in pricing, noting that the warehouse market, which significantly influences Joist & Deck, has moderated from historic highs due to interest rates but remains healthy. The warehouse market is expected to remain flat for the rest of the year.

The paragraph discusses the company's strong performance in various sectors, such as the Joist & Deck and buildings businesses, despite moderated margins from record highs. It highlights improvements in the rebar fab and doors businesses and mentions substantial backlogs that will sustain them into the second quarter. Bill Peterson inquires about a recent $60 per ton plate price increase, considering lean inventories and slow infrastructure spending. Brad Ford explains that the price hike is based on strong bookings and backlogs and timing factors, expressing optimism about plate demand in 2025. He attributes this optimism to anticipated increases in military and infrastructure spending, particularly in bridges, and the enhanced capabilities of their Brandenburg operations.

The paragraph discusses the impact of imports on the domestic market, highlighting optimism for plate demand due to high backlogs. It shifts focus to the Brandenburg facility, noting significant improvements from Q3 to Q4, with production doubling and conversion costs dropping. The facility produced 150,000 tons in Q4 and entered January with a record backlog. Brandenburg's focus is on capability, not just capacity, and progress in developing products for military, oil, gas, and shipbuilding industries is underway. The combination of Brandenburg with other plate mills provides a wide product range in North America, and there is confidence in achieving consistent EBITDA positive results by mid-2025.

In the paragraph, Steve Laxton discusses the unexpected strength in shipments during the fourth quarter or December, attributing it to steady demand and the timing of the holiday, which allowed for more shipments than anticipated. He also expresses optimism about economic factors such as deregulation, tax relief, tariffs, and reshoring, which are expected to support demand. Katja Jancic then inquires about inventory levels and opportunities for restocking. The conversation shifts to Tristan Gresser from BNP Paribas, who asks about potential M&A activity, particularly regarding a partner bid for USP assets.

Leon Topalian discusses Nucor's strategy for evaluating and potentially acquiring assets, particularly those involving Electric Arc Furnaces (EAF), amid ongoing market changes. As the largest steel producer in North America, Nucor assesses opportunities that align culturally and technologically while ensuring shareholder value. The company's disciplined capital allocation strategy remains central, despite uncertainties like potential legal developments affecting asset availability. Topalian highlights that U.S. Steel's current issues stem from leadership's lack of investment in competitiveness rather than the efforts of its workers, implying there may be some assets of interest to Nucor.

The paragraph discusses Nucor's focus on growth and shareholder value through strategies like expanding their presence in underserved U.S. regions, specifically the Midwest and Northeast, via the West Virginia mill. They anticipate competitive costs and new market opportunities there. Additionally, there's a mention of the ongoing review of Section 232 concerning imports and questions about quota deals with countries like Korea, Japan, Europe, and Brazil. However, Nucor has not received clear guidance from the new administration regarding these trade arrangements.

The paragraph discusses the current outlook on U.S. tariffs on steel and aluminum, suggesting an "America first" policy that may involve revisiting trade agreements involving countries like Canada, Mexico, and Brazil. The speaker clarifies that these views are personal interpretations, not insider information from the White House. Additionally, the conversation shifts to the construction of new facilities that will consume steel plate, particularly the Brandenburg facility. This facility is not solely focused on the offshore wind market but is positioned to serve a variety of sectors, including bridge markets and military applications, reflecting its extensive product range and significance in the North American plate market.

The paragraph discusses how the company is focusing on growth in sectors like energy, data centers, and grid transmission in the U.S. Each structure in these areas is uniquely engineered, offering potential for significant organic growth. They plan to start two new tower facilities this year and break ground on a third, aiming to compete with top transmission companies. Chad Utermark mentions that once fully operational, these facilities will consume over 130,000 tons of plate, with strategic plant positioning aligning with their needs. Lawson Winder from Bank of America Securities questions the financial impact of these investments. Leon Topalian responds that they anticipate at least $150 million in incremental EBITDA annually, highlighting excitement about this market potential.

The paragraph discusses Nucor's confidence in its ongoing and new capital expenditure projects, emphasizing their successful execution in staying on track and within budget. The company is expanding its footprint with a new facility in the Western U.S., which is expected to enhance their national presence and efficiency. Although there are concerns about the rebar market potentially becoming oversupplied, Nucor remains committed to its investment plans, particularly highlighting the ongoing success and strategic importance of its Pacific Northwest Mill, which continues to deliver strong returns for shareholders.

The paragraph discusses Nucor's strategy in the rebar market, emphasizing their focus on placing micro mills in major rebar-consuming regions with abundant scrap supply. This approach positions them favorably with lower costs and shorter lead times. The company anticipates that the increased domestic supply of rebar will be absorbed by ongoing infrastructure investments, reshoring of manufacturing, and addressing the housing shortage. Additionally, this supply is expected to replace imports with cleaner, higher-quality American-made steel. The conversation shifts to a question about the outlook for the first quarter in the steel mill segment, suggesting a slight increase in costs due to rising demand and order backlogs.

The paragraph features a discussion between Martin Englert, Leon Topalian, John Hollatz, and Timna Tanners about the steel industry's current state and future. John Hollatz mentions an increase in backlogs, particularly in the Joist & Deck segment, and notes some seasonal variations. Timna Tanners asks about the potential impact of foreign companies like Hyundai Steel and Nippon building plants in the U.S., referencing a comment by President Trump about avoiding tariffs by manufacturing domestically. Leon Topalian acknowledges the rumors and suggests that, ultimately, the best performers in the industry will succeed.

The paragraph discusses Nucor's competitive strategy and market positioning, emphasizing its focus on being the safest, lowest cost, and providing high-quality and differentiated products. The company plans to continue investing in ways beneficial to customers and shareholders and maintains a positive outlook on competition. There is a specific note on the growth of Electric Arc Furnaces (EAFs) in both long products and flat products like sheet and plate, with expectations of increasing automotive demand shifting towards EAF supply. Additionally, while new capacities, such as those from Hyundai, may pose short-term challenges, they are expected to create a healthier long-term operating environment. The conversation concludes with expressions of confidence in Nucor's position in the steel industry and appreciation for the team's achievements, looking forward to further success in 2025.

The paragraph expresses gratitude to customers and shareholders for their trust and participation, concluding a conference call with well wishes and instructions to disconnect.

This summary was generated with AI and may contain some inaccuracies.