Q4 2023 Nucor Corp Earnings Call

Unnamed Speaker: Corporate Strategy, Greg Murphy, Business Services, Sustainability, and General Counsel, Dan Needham, Commercial, Rex Query, Sheet and Talent Resources, and Chad Udemark, New Markets and Innovation. We've posted our fourth quarter earnings release and presentation on the Nucor Investor Relations website. We encourage you to access these materials, as we will cover portions of them during the call.

Coffee business services sustainability, and general Counsel, Dan Needham commercial Rex query sheet and talent resources, and Chad you to Mark new markets and innovation.

We've posted our fourth quarter earnings release and presentation to the <unk> Investor Relations website. We encourage you to access these materials as we will cover portions of them. During the call. Today's discussion will include the use of non-GAAP financial measures and forward looking information within the meaning of securities laws.

Unnamed Speaker: Today's discussion will include the use of non-GAAP financial measures and forward-looking information within the meaning of securities laws. However, actual results may be different from forward-looking statements and involve risks outlined in our Safe Harbor Statement and disclosed in NUCOR's SEC file. The appendix of today's presentation includes supplemental information and disclosures, along with a reconciliation of non-GAAP financial measures. So with that, I'll turn the call over to Leon.

Actual results may be different than forward looking statements and involve risks outlined in our safe Harbor statement and disclosed in Nucor's SEC filings.

Appendix of today's presentation includes supplemental information and disclosures along with a reconciliation of non-GAAP financial measures.

So with that let's turn the call over to Leon.

Thanks, Jack, and welcome, everyone. I'd like to begin by congratulating our 32,000 Nucor teammates for delivering another strong year of financial results. We closed out 2023 with solid performance, earning $3.16 per share in the fourth quarter, on our way to $18 per share for the full year. This represents the third most profitable year in New Course history, behind 2022 and 2021. In fact, Nucor's combined net earnings over the past three years exceed its combined net earnings over the last 20 years.

Leon: Thanks, Jack and welcome everyone I'd like to begin by congratulating, our 32000 Nucor teammates for delivering another strong year of financial results.

Leon: We closed out 2023 with solid performance, earning $3 16 per share in the fourth quarter on our way to $18 per share for the full year.

This represents the third most profitable year in Nucor's history behind 2022 and 2021.

In fact, nucor's combined net earnings over the past three years exceeds the combined net earnings of the last 20 years. This is a testament to the focus and dedication of our team as we execute our strategy to grow the core expand beyond and live our culture.

This is a testament to the focus and dedication of our team as we execute our strategy to grow the core, expand beyond, and live our culture. In keeping with our commitment to shareholders and our balanced approach to capital allocation, Nucor invested $2.2 billion in CapEx and returned $2.1 billion to shareholders in 2023, representing 46% of our net earnings. We're coming off the three best years in New Course history, but in spite of that, we're even more excited about what lies ahead.

Leon: In keeping with our commitment to shareholders and our balanced approach toward capital allocation Nucor invested $2 2 billion in Capex and returned $2 1 billion to shareholders in 2023, representing 46% of our net earnings.

Leon: We're coming off the three best years in Nucor's history, but in spite of that we're even more excited about what lies ahead.

The U.S. economy continues to be resilient, and steel-intensive megatrends are starting to drive increased demand for the products we make, and our focus on Expand Beyond Businesses downstream is generating excellent returns. Turning to our safety performance, 2023 statistically was the safest year in Nucor's history, making five straight years of improvement. We also had 29 divisions going the entire year without a recordable injury.

Leon: The U S economy continues to be resilient and steel intensive mega trends are starting to drive increased demand for the products, we make and our focus on expand beyond businesses downstream are generating excellent returns.

Leon: Turning to our safety performance 2023 statistically was the safest year in Nucor's history, making five straight years of improvement. We also had 29 divisions going the entire year without a recordable injury.

We finished the year with a company-wide injury and illness rate of 0.79, which is 17% lower than 2022 and well below the steel industry average. However, with that said, Nucor will not internally acknowledge 2023 as a record year in safety and will not celebrate 2023 as a record year because, on November 3rd, we lost a New Corps team member to a workplace accident. Subsequently, on November 9th, we had a company-wide safety stand-down. It was a chance to honor our fallen team member and his family, reflect on our most important value, safety, and reinforce that the health, safety, and well-being of every New Corps team member is what matters most. Our team members come to work each and every day to support themselves, and their loved ones, and they must go home each and every day.

Leon: We finished the year with a companywide injury and illness rate of zero point, 79, which is 17% lower than 2022 and well below the steel industry average.

However, with that said Nucor will not internally acknowledged 2023 as a record year in safety will not celebrate 2023 is a record year because on November three we lost our nucor team member to a workplace accident.

Leon: Subsequently on November 9th we had a company wide safety stand down.

Leon: It was a chance to honor our fallen team member and his family.

Leon: Reflect on our most important value safety.

Leon: And reinforce that the health safety and wellbeing of every Nucor team member is what matters most.

Leon: Our team members come to work each and every day to support themselves their loved ones and they must go home each and every day.

That is our greatest responsibility to all 32,000 team members who make up our Nucor family. Every leader inside of Nucor is committed to delivering our mission to become the world's safest steel company, and there is no doubt in my mind that we will achieve our goals together. Nucor is the largest and most diversified steel producer in North America. We pioneered the commercial application of EAEF steelmaking over 50 years ago, and today, we own and operate 30 electric arc furnaces with four more under construction.

That is our greatest responsibility to all 32000 team members, who make up our Nucor family.

Leon: Every leader inside of Nucor is committed to delivering our mission to become the world's safest steel company and there is no doubt in my mind, we will achieve our goals together Nucor is the largest and most diversified steel producer in North America, we pioneered the commercial application of Eas steelmaking over 50 years ago.

And today, we own and operate 30 electric arc furnaces with four more under construction.

EAF steelmaking and our unique entrepreneurial culture have made us an industry leader, and our current strategy will keep Nucor out in front as we continue to deliver the financial results and capabilities our investors and customers have come to expect. Today, Nucor leads the North American steel industry across financial, operational, and environmental criteria. Value creation for shareholders through prudent capital deployment is our primary financial objective.

Leon: Eas steelmaking and our unique entrepreneurial culture have made us the industry leader and our current strategy, we will keep nucor out in front as we continue to deliver the financial results and capabilities, our investors and customers have come to expect.

Leon: Today Nucor leads the north American steel industry across financial operational and environmental criteria.

Leon: <unk> creation for shareholders through prudent capital deployment as our primary financial objective since.

Since the beginning of 2020, we have invested over $12 billion in CapEx and strategic acquisitions to grow our core and expand beyond. During this same time, our average annual ROE has exceeded 30 percent, and our annualized EPS growth rate has exceeded 40 percent. In terms of operations, Nucor makes approximately one out of every four tons of steel produced in the United States.

Leon: Since the beginning of 2020, we have invested over $12 billion in Capex and strategic acquisitions to grow our core and expand beyond during the same time, our average annual ROE is.

Has exceeded 30% and our annualized EPS growth rate has exceeded 40%.

Leon: Terms of operation nuclear makes approximately one out of every four tons of steel produced in the United States, We have a highly efficient business model and our unrivaled breadth of products and capabilities serve the widest range of end markets.

We have a highly efficient business model, and our unrivaled breadth of products and capabilities serves the widest range of end markets. Sustainability is a key differentiator for Nucor and a major part of our growth strategy. We are the largest recycler in the Western Hemisphere and among the lowest in greenhouse gas intensity across global steelmaking, and we're taking steps to position us even better for the future, supplying customers with the sustainable solutions they've come to expect. That's why we helped create the Global Steel Climate Council and announced a commitment to net-zero steelmaking by 2050 across scopes 1, 2, and 3.

Sustainability is a key differentiator for Nucor and a major part of our growth strategy. We are the largest recycler in the western hemisphere, and among the lowest in greenhouse gas intensity across global steelmaking, and we're taking steps to position us even better for the future supplying customers with the sustainable solutions they have.

Leon: Come to expect.

Leon: That's why we help create the global steel climate Council and announced a commitment towards net zero steelmaking by 2050 across scopes, one two and three.

Our business strategy and investments are driving growth for shareholders. In raw materials, we are leveraging our market intelligence and flexible supply chain to provide more sustainable inputs. We're investing in advanced scrap separation technologies and near-zero-emission ironmaking, and we've partnered with ExxonMobil to capture and store up to 800,000 tons of CO2 per year at our Louisiana DRI facility beginning in 2026.

Leon: Our business strategy and investments are driving growth for shareholders and raw materials, we are leveraging our market intelligence and flexible supply chain to provide more sustainable inputs, we're investing in advanced scrap separation technologies and near zero emission and I are making and we've partnered with Exxonmobil to.

Leon: To capture and store up to 800000 tons of Cotwo per year at our Louisiana <unk> facility beginning in 2026.

In our steel mill segment, we are shifting the mix toward higher-margin, value-added products. We continue to ramp up Brandenburg, the most capable EAF plate mill in the world. We're constructing a state-of-the-art sheet mill in West Virginia, and we're expanding our rebar micromill footprint, targeting some of the highest-growth regions in the U.S. As for steel products, we have a strategic advantage on the supply side, given the integration between our mills and steel product teams. We'll continue to leverage this advantage while pursuing more cross-selling and companion tons through our solutions team, and we're investing in automation and technology to improve efficiency and reduce the risk of injuries. And finally, our Expand Beyond strategy into its steel-adjacent platforms is paying off. We are leveraging our core competencies to grow into higher-margin businesses aligned with steel-intensive megatrends. We're executing this strategy through a combination of acquisitions and organic growth, including the construction of two new utility structure production facilities. For 2023, our Expand Beyond platforms contributed roughly $415 million in EBITDA, led by overhead doors and insulated metal panels. We remain confident in hitting our $700 million EBITDA run rate goal for Expand Beyond Divisions in the coming years.

Leon: In our steel mill segment, we are shifting the mix towards higher margin value added products, we continue to ramp up Brandenburg. The most capable AAF plate mill in the world. We're constructing a state of the art sheet mill in West Virginia.

Leon: And we're expanding our rebar micro mill footprint targeting some of the highest growth regions in the U S. Turning to steel products, we have a strategic advantage on the supply side given the integration between our mills and steel product teams will continue to leverage this advantage, while pursuing more cross selling and companion tons through our solutions teams.

And we're investing in automation and technology to improve efficiency and reduce the risk of injuries.

Leon: And finally, our expand beyond strategy into a steel adjacent platforms is paying off we are leveraging our core competencies to grow into higher margin businesses aligned with steel intensive megatrends. We're executing this strategy through a combination of acquisitions and organic growth, including the construction of two new.

Leon: Utility structure production facilities for.

Leon: For 2023 or expand beyond platforms contributed roughly $415 million in EBITDA led by overhead doors in insulated metal panels, we remain confident in hitting our $700 million EBIT run rate goal for expand beyond divisions in the coming years.

We believe the American steel industry is still on the front end of megatrends working their way into steel markets. We are starting to see some increased activity in certain markets like bridges and highways, semiconductor chip plants, EV factories, and renewable energy. And, as we've shared before, Nucor expects the federal programs that support these megatrends to add somewhere between 5 to 8 million tons of incremental annual demand for steel over the next several years. But while the long-term trends look favorable, we've seen some pockets of slower-than-expected activity. For instance, adoption rates for electric vehicles are tracking lower than some have predicted, and several offshore wind projects have been canceled or delayed due to supply chain challenges as well as higher costs.

Leon: We believe the American steel industry is still on the front end of Mega trends working their way into steel markets.

Leon: We are starting to see some increased activity in certain markets like bridge and highway semiconductor chip plants, EV factories and renewable energy.

Leon: And as we've shared before Nucor expects the federal programs that support these mega trends to add somewhere between five to 8 million tons of incremental annual demand for steel over the next several years.

Leon: While the long term trends look favorable we've seen some pockets of slower than expected activity for instance adoption rates for electric vehicles are tracking lower than some of predicted and several offshore wind projects have been canceled or delayed due to supply chain challenges as well as higher costs.

Warehouse starts are expected to decline again in 2024, but we still expect them to stay above pre-pandemic levels. And despite some of these near-term headwinds, Nucor remains optimistic about the longer-term prospects for these end markets. Non-residential construction is our largest in market, and it is proven to be incredibly resilient.

Leon: Our house starts are expected to decline again in 2024, but we still expect them to stay above pre pandemic levels.

Leon: And despite some of these near term headwinds nuclear remains optimistic about the longer term prospects for these end markets.

Leon: Non res construction is our largest end market and it has proven to be incredibly resilient.

Steve: Some of the strongest growth is coming from the sharp rise in advanced manufacturing and infrastructure investment, both expected to rise double digits over the next two years, according to the Dodge Construction Forecast. This is helping to offset some of the softness we're seeing from more rate-sensitive sectors, which should begin to pick up later in the year if interest rate cuts occur as many expect. Before turning it over to Steve, I'd like to share a few thoughts on how Nucor's business model continues to deliver attractive returns for our shareholders. From 2020 to 2023, we've generated a combined EBITDA of over $30 billion. Net earnings of nearly $20 billion in return, nearly $10 billion to our shareholders. Throughout it all, we've maintained the strongest balance sheet of any North American steel producer, allowing us to grow the company by investing in higher-margin, less volatile businesses. As our results demonstrate, Nucor is a growth company, and given our investment plans and the long-term outlook for steel in the U.S., we see more opportunities for growth in the years ahead. With that, I'll turn it over to Steve, who will share additional details on our financial results and near-term outlook. Steve?

Leon: Some of the strongest growth is coming from the sharp rise in advanced manufacturing and infrastructure investment both expected to rise double digits over the next two years according to Dodge construction forecasts.

Leon: This is helping to offset some of the softness we're seeing for more rate sensitive sectors, which should begin to pick up later in the year if interest rate cuts occur as many expect.

Speaker Change: Before turning it over to Steve I'd like to share a few thoughts on how nucor's business model continues to deliver attractive returns for our shareholders.

From 2020 to 2023, we've generated a combined EBITDA over $30 billion.

Speaker Change: Net earnings of nearly $20 billion and returned nearly $10 billion to our shareholders.

Speaker Change: Throughout it all we maintain the strongest balance sheet of any north American steel producer, allowing us to grow the company by investing in higher margin less volatile businesses.

Speaker Change: As our results demonstrate nucor as a growth company and given our investment plans in the long term outlook for steel in the U S. We see more opportunities for growth in the years ahead.

Speaker Change: With that I'll turn it over to Steve who will share additional details on our financial results and near term outlook Steve.

Steve: Thank you, Leon, and thanks to our shareholders for joining us this morning. Nucor ended 2023 on a strong note, with fourth-quarter consolidated net earnings of $785 million, including $127 million of pre-operating startup costs. We exceeded the midpoint of our guidance due primarily to better than expected performance from our steel mill segment in the month of December. In addition to solid earnings for the quarter, the power of Nucor's business model allowed us to generate more than a billion and a half dollars of operating cash flow during the quarter, with working capital contributing about $250 million of that total. Turning to our operating segment results, our steel mills group generated $588 million of pre-tax earnings in the fourth quarter, a decrease of 33% from the third quarter. Total steel mill shipments declined 4% from the prior quarter, and realized pricing for the segment was lower across all major products.

Steve: Thank you Leon and thanks to our shareholders for joining US. This morning, Nucor ended 2023 on a strong note with fourth quarter consolidated net earnings of $785 million, including $127 million of pre operating startup cost.

We exceeded the midpoint of our guidance due primarily to better than expected performance from our steel mill segment in the month of December.

In addition to solid earnings for the quarter the power of Nucor's business model allowed us to generate more than 1 billion $5 of operating cash flow during the quarter.

Steve: With working capital contributing about $250 million of that total.

Steve: Turning to our operating segment results, our steel Mills' group generated $588 million of pre tax earnings in the fourth quarter, a decrease of 33% from the third quarter.

Steve: Total steel mill shipments declined 4% from the prior quarter and realized pricing for the segment was lower across all major products.

Steve: Our meal utilization rate was 74%, down from 77% in the prior quarter, but higher than the 70% in the fourth quarter of 2022. In the back half of the fourth quarter, we saw an uptick in customer confidence, as the UAW strikes were resolved and the Federal Reserve signaled the end to interstate hikes. Shipment volumes increased as the quarter progressed, and we began to realize higher pricing for sheet steel, consistent with pricing trends in the published industry. We're expecting further improvements in both shipments and realized pricing to favorably impact results in the first quarter of 2024. Our steel product segment delivered another strong quarter with pre-tax earnings of $656 million. This represented just over half the total segment earnings for the fourth quarter and is the sixth consecutive quarter that steel products contributed at least 40% of our total segment earnings.

Steve: Our mill utilization rate was 74% down from 77% in the prior quarter, but higher than the 70% in the fourth quarter of 2022.

In the back half of the fourth quarter, we saw an uptick in customer confidence as the UAW strikes were resolved and the federal reserve signaled the end to interest rate hikes.

Steve: Shipment volumes to increase as the quarter progressed, and we began to realize higher pricing for sheet steel consistent with pricing trends and the published indices.

Steve: We are expecting further improvements in both shipments and realized pricing to favorably impact results in the first quarter of 2024.

Steve: Our steel products segment delivered another strong quarter with pretax earnings of $656 million.

Steve: This represented just over half the total segment earnings for the fourth quarter and is the sixth consecutive quarter with steel products contributed at least 40% of our total segment earnings.

Steve: For the year, steel products generated segment earnings of $3.4 billion, its second best year behind 2022. Realized pricing and margins continued to moderate in the fourth quarter, but on an earnings per ton basis for the full year of 2023, they only gave up about 6 percentage points. Our raw material segment posted a pre-tax loss of about $14 million for the quarter.

Steve: For the year steel products generated segment earnings of $3 4 billion.

Steve: Second best year behind 2022.

Realized pricing and margins continued to moderate in the fourth quarter.

Steve: But on an earnings per ton basis for the full year of 2023, only gave up about six percentage points.

Steve: Our raw materials segment posted a pretax loss of about $14 million for the quarter compared to the prior quarter pricing was relatively stable.

Steve: Compared to the prior quarter, pricing was relatively stable, but output was lower, and per-ton cost rose due to planned outages at our DRI facility. Now, turning to capital allocation, with $2.2 billion in capital spending and $2.1 billion in shareholder returns in 2023, Nucor once again demonstrated a measured and balanced approach to its capital deployment. With respect to our shareholder returns, it's worth noting that next week, we'll pay our 203rd consecutive quarterly cash dividend in the amount of $0.54 per share. This represents a 6% increase over the prior dividend.

Steve: It was lower than per ton cost rose due to planned outages at our <unk> facilities.

Steve: Now turning to capital allocation with $2 2 billion in capital spending and $2 1 billion and shareholder returns in 2023, Nucor once again demonstrated a measured and balanced approach towards capital deployment.

Steve: With respect to our shareholder returns, it's worth noting that next week, we'll pay our 203rd consecutive quarterly cash dividend in the amount of <unk> 54 per share.

Steve: This represents a 6% increase over the prior dividend.

Steve: As Leon highlighted, Nucor is taking meaningful steps to grow its earnings power and cash flow potential. Since 2018, we've been able to increase our dividend by 42% and reduce our shares outstanding by 23%. For the foreseeable future, we remain confident we'll continue to be able to return at least 40% of our net earnings to shareholders by way of dividends and share repurchase. A cornerstone of our capital allocation framework is a commitment to a strong investment grade credit rating and liquidity that enables our strategy. New Corp's balance sheet remains well-positioned to enable continued execution of our balanced capital allocation philosophy with a debt-to-capital ratio of 25% and a debt-to-ebit ratio of less than 1.

Steve: As Leon highlighted Nucor is taking meaningful steps to grow its earnings power and cash flow potential since 2018, we've been able to increase our dividend by 42% and reduce our shares outstanding by 23%.

Steve: For the foreseeable future. We remain confident we will continue to be able to return at least 40% of our net earnings to shareholders by way of dividends and share repurchases a cornerstone of our capital allocation framework is a commitment to a strong investment grade credit rating and liquidity that enables our strategy.

<unk> balance sheet remains well positioned to enable continued execution of our balanced capital allocation philosophy with a debt to capital ratio of 25% and a debt to EBITDA ratio of less than one.

Steve: We have a long history of putting capital to use and returning capital to shareholders. Given that principle and our ambitious growth plans, we do expect to end 2024 with a lower cash balance than when we started the year. However, we finish 2023 with a strong cash position for several reasons. First, with more than $7 billion of cash from operations, we generated robust cash flows throughout the year. Second, we experienced some timing delays in our planned capital spending.

Steve: We have a long history of putting capital to use and returning capital to shareholders.

Steve: Given that principle.

Steve: And our ambitious growth plans, we do expect in 2024 with a lower cash balance than where we started the year.

We finished 2023 with a strong cash position for several reasons.

First with more than $7 billion of cash from operations, we generated robust cash flows throughout the year.

Steve: We experienced some timing delays and our planned capital spending and finally, we were preserving liquidity for possible acquisition opportunities, which ultimately did not materialize.

Steve: And finally, we were preserving liquidity for possible acquisition opportunities, which ultimately did not materialize. Now that we've broken ground in West Virginia, the pace of our capital spending should accelerate. For 2024, we expect total capital expenditures of approximately $3.5 billion, with our seven largest growth projects representing approximately two-thirds of this total. In addition, we're firmly committed to growing our portfolio of solutions and expanding beyond our footprint through value-creating acquisitions. We are actively fostering a pipeline of acquisition candidates. As always, we will be selective, opportunistic, and disciplined in our approach. But unlike our organic growth strategy, the timing and size of potential acquisitions are far less predictable.

Steve: Now that we've broken ground in West Virginia, the pace of our capital spending should accelerate for 2024, we expect total capital expenditures of approximately $3 5 billion.

Steve: With our seven largest growth projects represented approximately two thirds of this total.

Steve: In addition, we're firmly committed to growing our portfolio of solutions and expand beyond footprint through value creating acquisitions.

Steve: To that end.

We are actively fostering a pipeline of acquisition candidates.

Steve: As always we will be selective opportunistic and disciplined in our approach, but unlike our organic growth strategy, the timing and size of potential acquisitions is far less predictable.

Steve: Looking ahead to the first quarter of 2024, we expect consolidated earnings to be higher than the prior quarter, with improved performance from the steel mills and raw materials segment, partially offset by weaker earnings from steel products. For the steel mill segment, we expect quarterly earnings to increase due to higher realized pricing and higher volumes, in particular from our sheet mills. In the steel product segment, we expect lower realized pricing compared with prior quarters across most of our steel product groups.

Steve: Looking ahead to the first quarter of 2024, we expect consolidated earnings to be higher than the prior quarter with improved performance from the steel mills and raw materials segments.

Steve: Partially offset by weaker earnings from the steel products segment.

For the steel Mill segment, we expect quarterly earnings to increase due to higher realized pricing and higher volumes in particular from our sheet Mills.

Steve: And the steel product segment, we expect lower realized pricing compared with prior quarter.

Steve: Across most of our steel products group's current backlogs are consistent with historic norms.

Steve: Current backlogs are consistent with historic norms, but margins have remained higher than historic. For the raw materials segment, we expect modest profitability on higher shipments and relatively stable prices. Looking ahead, 2024 appears to have a more stable outlook than may have been expected just a few months ago, with a reasonable probability of seeing the much-discussed soft landing. As Leon mentioned in his opening remarks, the U.S. economy appears relatively healthy, with inflation and unemployment metrics continuing to trend favorably.

Steve: While margins have remained higher than historic averages.

Steve: For the raw materials segment, we expect modest profitability on higher shipments and relatively stable pricing.

Steve: Looking ahead 2024 appears to have a more stable outlook than may have been expected just a few months ago with a reasonable probability of seeing the much discussed soft landing.

As Leon mentioned in his opening remarks, the U S economy appears relatively healthy with inflation and unemployment metrics continuing to trend favorably.

Steve: Market expectations for gradual declines in interest rates could result in more demand for consumer durables, light vehicles, and increased activity across a broad construction sector. As the most diversified producer of steel and steel products, with the widest array of market solutions, these potential expectations bode well for new growth. Looking beyond 2024, several steel-intensive megatrends are only in the early stages.

Steve: Market expectations for gradual declines in interest rates could result in more demand for consumer durables light vehicles and increased activity across a broad construction sector.

Steve: As the most diversified producer of steel and steel products with the widest array of market solutions these potential expectations bode well for Nucor.

Looking beyond 2020 for several steel intensive megatrends are only in the early stages.

Operator: While economic cycles will continue to impact the markets, we broadly see positive demand drivers that provide a constructive backdrop to Nucor's midterm growth potential. With that, we'd be happy to take your questions. Operator, if you would, please open the line for Q&A. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touch-tone phone.

Steve: While economic cycles will continue to impact the markets, we broadly see positive demand drivers that provide a constructive backdrop to nucor's midterm growth potential.

Speaker Change: With that we'd be happy to take your questions. Operator, if you would please open the line for Q&A.

Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone if youre using a speakerphone. Please pick up your handset before pressing the keys.

Curt Woodworth: If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been answered and you would like to withdraw your question, please press star then 2. Our first question comes from Curt Woodworth with UBS. Please go ahead. Yeah, thank you. Good morning, Leon and team. And I'm sorry to hear that you guys lost a team member in November.

If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

Our first question comes from Curt Woodworth with UBS. Please go ahead.

Curt Woodworth: Yes. Thank you.

Curt Woodworth: Good morning, Leon and team and I am sorry to hear that you guys walked through the team member in November.

But overall, congratulations on what's been a pretty strong safety performance the past several years. My first question is more market related. So in your slide deck, you did have a constructive, generally constructive outlook, to use your words with regard to commercial construction as well as infrastructure. But when we look at the volume performance of the bar and bean mills and even plate to some degree, it's been pretty choppy to down for almost two years now. So, I guess, you know, what gives you confidence that that market can inflect? What signs are you seeing in terms of either increased bidding activity on the highway bridge side or, you know, how your order book is shaping up? Yeah, Curt, I'll kick it off.

Overall, congratulations on what's been a pretty strong safety performance of the past several years. My first question is.

Curt Woodworth: As more end market related though in your slide deck, you did have the constructive generally constructive outlook to use your <unk>.

Curt Woodworth: Words with regards to commercial construction as well as infrastructure.

Curt Woodworth: But when we look at the volume performance of the bar and beam mills and even play to some degree it's been it's been pretty choppy to down for almost two years now so.

Curt Woodworth: Yes.

Curt Woodworth: Gives you confidence that.

Curt Woodworth: That market can inflect, what signs are you seeing in terms of either increased bidding activity on the highway bridge side or how your order book is shaping up.

Speaker Change: Yes, Kurt I'll kick it off if theres any other comments from cable I'll certainly let them jump in thank you for your indulgence regarding our team member as we've mentioned for decades now.

And, you know, if there's any other comments from our team, I'll certainly let them jump in. And thank you for your condolences regarding our team member. As we've mentioned, for decades now, the health, safety, and well-being of our 32,000 new core team member family is the greatest responsibility we all bear each and every day. They are the ones that are delivering every result we're about to talk about. So again, thank you for acknowledging that.

Speaker Change: Safety and wellbeing of our 32000 Nucor team member families.

Speaker Change: Responsibility, we all bear each and every day. They are the ones that are delivering every result, we're about to talk about so again, thank you for acknowledging that.

You know, it's interesting, there's a lot of talk about new capacity, particularly on the sheet. And we get a lot of questions, Curt, as you know, around, well, as we think about new market entrance or increased demand, will that flattening of the cost curve change the profile and earnings? And what I would point to is what you really asked about the longs, as we look at structural, and while we don't break out the individual structural mills, Newport Yamato or Berkeley Bean, on a financial performance basis, where the individual rebar mills, I would tell you, the performance of our long product divisions has been incredible from a financial result. They're generating incredible returns for our company. Newport Yamato is operating at a much higher utilization rate. And so over the last two or three years, and they had been 10 prior, I think, prior to the pandemic, our average utilization rate at NYS, for example, was in the upper 60s to low 70s, that shifted much higher to the mid to upper 70s, low 80s.

Speaker Change: It's interesting there is a lot of talk about new capacity, particularly in the sheet and we get a lot of questions. Kurt as you know around well as we think about new market entrants or increased demand won't that flattening of the cost curve change their profile and earnings.

Speaker Change: 0.2 is what you really asked about the law, which as we look at structural.

Speaker Change: We don't break out the individual structural mill, Nucor, Yamato or verbally been on our financial performance for the individual rebar Mills I would tell you.

Speaker Change: Performance of our long products divisions has been incredible from a financial result.

They are generating incredible returns for our company.

Speaker Change: Nucor Yamato is is operating at a much higher utilization rate and so over the last two or three years than they had been in prior I think prior to the pandemic our average utilization rate at NYS. For example is in the upper 60 still low seventy's that shifted much higher.

Mid to upper <unk> low <unk> so.

So, you know, that flow through and that run rate is generating great returns. So, I would tell you, the outlook and continued demand for our structural products and loan products remains pretty optimistic. And again, we've seen incredible, incredibly consistent returns in our loan products, divisions, and groups that we think will continue into 2024. This is Dan.

Flow through in that run rate is generating great returns. So I would tell you the outlook and continued demand for our structural products and loan products remains pretty optimistic and again, we've seen incredible incredibly consistent returns and our long products Division.

Speaker Change: We think will continue into 2024.

Dan: I'll give a little perspective on what we see in the markets, in particular with the funding programs as well. If you think of the trends right now, we're seeing activity in some of the reshore and advanced manufacturing. You're seeing it in EV, battery plants, those types of things.

Speaker Change: This is Dan I'll give a little perspective on what we see in the market.

Speaker Change: In particular with the funding programs as well.

Dan: You think of the trends right now we're seeing activity in some of the re shoring the advanced manufacturing as Youre seeing it in EV battery plants those types of things.

Dan: From a standpoint of IRA and chips in the Infrastructure Act, there's more activity going on on the energy side with the IRA and also with the chips. We're active in shipping to multiple chip plants that are under construction today. From an IRA standpoint, we've seen a lot of activity in solar.

Dan: From a standpoint of Irag shifts in the infrastructure Act, there's more activity going on on the energy side with the Iras and also with the chips, we're active in shifting to <unk>.

Dan: Multiple shifts.

Dan: Plants that are under construction today from an IRR standpoint, we've seen a lot of activity in solar.

Dan: Particularly, 2023 was a record shipment year for us on torque tubes that go into these solar projects, and we see that growing into 2024. It was about 22 gigawatts built in 2023.

Dan: Clearly 2023 was a record shipment year for us on towards two to go into these solar projects.

Dan: And we see that growing into 2024. It was about 22 gigawatts built in 'twenty three we go into 'twenty two about 36 Gigawatts in 'twenty four.

Dan: We see it go on to about 36 gigawatts in 2024. What I would say are some of the headwinds. We see the peak of those activities in the volume and demand coming in the next few years, and the reason for that, there's a couple things that are headwinds in that. One is, we've talked about on past calls, labor constraints. That's really out there.

Dan: What I would say is some of the headwinds we see the peak of those active.

Dan: Activities in the volume and demand coming in the next few years and the reason for that there's a couple of things that are that are headwinds and that one is we've talked about on past calls is labor constraints, that's real out there.

Dan: A lot of these projects are competing for the same labor pool, so we do see that having an impact. The other thing that's also impacting the pace of these projects is really around regulations. What I mean by that is getting access to energy for some of these plants is important.

Dan: A lot of these projects are competing for the same labor pool. So we do see that having an impact and then the other thing. That's also impacting the pace of these projects is really around regulation.

Mean by that is getting access to energy for some of these plants is important that's a slow process. The other thing is environmental permitting so we're seeing some headwind.

Dan: That's a slow process. The other thing is environmental permitting, so we're seeing some headwinds with those, but not just delaying the projects. Lastly, around the infrastructure, it can take upwards of 18 months to go from when these projects are announced to actually when they start getting shipped. That's why we still see some optimism and are very positive in the outlook, and we're well-positioned to take advantage of all of these trends going forward. Great.

Dan: A headwind with those but not just delaying the projects.

Dan: Lastly around the infrastructure.

Dan: Take upwards of 18 months to go for when these projects are announced.

When they start getting shift so that's why we still see some optimism.

Dan: Are very positive in the outlook and we're well positioned to take advantage of all of these trends.

Curt Woodworth: And then just as a follow-up for steel products, you noted incremental pricing weakness in the quarter. Can you just comment? Can you give any more specificity around, you know, how you see margins trending in this quarter or, you know, the margin profile of the backlog? And obviously, there are a lot of moving pieces within the steel product segment, but do you have a view on where margins should normalize? And then, with respect to, you know, getting up to that 700 million EBITDA number, can you do that organically, or will you need to acquire as well to reach that? Thank you, and best of luck!

Speaker Change: Great and then just.

Speaker Change: Follow up for steel products, you noted incremental pricing weakness in the quarter can you just comment.

Speaker Change: Can you give any more specificity around how you see margins trending in this quarter or the margin profile of the backlog and obviously theres a lot of moving pieces within the steel products segment, but do you have a view on.

Where margins should normalize and then with respect to.

Speaker Change: Getting up to that $700 million EBITDA number can you do that organically or would you need to acquire as well to reach that thank you and best of luck.

Yeah, Curt, that's a lot to unpack in there. What I would tell you about the macro, and I'll let Brad Ford share a little bit more of the details. I couldn't be more proud of how our product groups, teams, and divisions have performed over the last several years. The non-res sector of our economy has remained incredibly resilient. We had 10 straight quarters over a billion dollars earned in that business on the downstream side of our portfolio, and while it was a little bit under that in 2023, or Q4 of 23, its continuum performance is strong. We're seeing order entry rates that are strong. As we move into Q1, we see that moving upwards. I'm not going to get detailed on the margins, but we see that improving. And so, Brad, maybe provide a little bit more context to what we're seeing as we enter 2024. Yeah, thanks, Leon.

Speaker Change: Yes, Kurt.

Speaker Change: So a lot to unpack in there what I would tell you on the macro and I'll, let Brett.

Speaker Change: Brad or share a little bit more of the details couldn't be more proud of how our products groups and teams and divisions.

Speaker Change: Formed over the last several years.

Speaker Change: This sector of our economy has remained incredibly resilient.

Speaker Change: We had 10 straight quarters over a $1 billion earned in that business on the downstream side of our portfolio and while it was a little bit under that in 2023 for Q4 of 'twenty three.

Speaker Change: Continuum performance is strong we're seeing order entry rates that are strong as we move into Q1, we see that moving upwards I'm not going to get detailed on the margins, but we see that improving and so maybe provide a little bit more.

Speaker Change: Context.

Seeing as we enter 2008 before yes. Thanks Liana thanks for the question.

And thanks for the question. Like Leon, I couldn't be more pleased with the performance of our downstream product team. The performance and safety, the clear step change in earnings, and the solutions and value we're providing to our customers and our team are executing extremely well. You know, Joyce & Deck tends to get a lot of the headlines, and while it is coming off its second best year ever, Nucor Downstream Products is far more than just Joyce & Deck. For example, our Inflated Metal Panel Group is coming off a record year. Rebar Fabrication also had a record year.

Leon I couldnt be more pleased with the performance of our downstream product teams.

Speaker Change: Performance in safety is a clear step change in earnings and the solutions and value, we're providing to our customers and our team is executing extremely well.

Speaker Change: Yes, joist and deck tends to get a lot of headlines.

Joist and deck is coming off its second best year ever.

Nucor downstream product is far more than just curious.

For example, our insulated metal panel group is coming off a record year rebar fabrication record year pre engineered metal buildings, the second best year ever for our tubular products group second best year ever garage doors fasteners towers structures warehouse system skyline on down the list.

Pre-engineered Metal Buildings, second best year ever. Our Tubular Products Group, second best year ever. Garage Doors, Fasteners, Towers, Structures, Warehouse Systems, Skyline, and on down the list.

This amazing product diversity positions Nucor uniquely to take advantage of strength in a variety of market segments. As Dan mentioned, we see strength in advanced manufacturing and data centers supported by IRA and CHIPS. We also see strength in healthcare, education, and warehousing while demand is still forecasted significantly higher than pre-pandemic levels. Our ability to offer this breadth of downstream products is unparalleled in the industry. These are secure, sustainable solutions for our customers and partners that continue to differentiate Newport as the supplier of choice. We're coming off a period in 21 and 22 of extremely high demand, and while we see demand moderating back towards historical levels. It's still quite strong.

This amazing product diversity positions nucor uniquely to take advantage of strength in a variety of the market segments.

Speaker Change: As Dan mentioned, we see strength in advanced manufacturing and data centers supported by higher end chips.

Speaker Change: Infrastructure supported by the JA, we also see strength in health care education, and warehousing, while down is still forecast is significantly higher than pre pandemic levels.

Speaker Change: Our ability to offer this breath of downstream products unparalleled in the industry.

Speaker Change: These are secure sustainable solutions for our customers and partners that continue to differentiate nucor as the supplier of choice.

Speaker Change: We're coming off a period of 'twenty, one and 'twenty two of extremely high demand.

Speaker Change: We see demand moderating back towards historical levels.

Speaker Change: It's still quite strong.

And while volumes have moderated, our backlog remains very healthy, and pricing has stabilized at levels far higher than the historical average. In fact, Q4 industry-wide bookings in Joyce Bendec were the highest in six quarters and 40% higher than Q4 of last year. So we're optimistic, and we're entering 24 with more market activity and momentum than we had through 2020. Great. Thank you very much. Our next question comes from Katja Jancic of BMO Capital Markets. Please go ahead.

Speaker Change: While volumes have moderated our backlog remains very healthy and pricing has stabilized the levels are higher than historical averages.

In fact, Q4 industry wide bookings and joist and deck were the highest in six quarters, 40% higher than Q4 of last year.

Speaker Change: So we're optimistic and we're entering 'twenty four with more market activity and momentum than we entered 2023.

Speaker Change: Great. Thank you very much.

Speaker Change: Thanks sure.

Our next question comes from capture Jan sick with BMO capital markets. Please go ahead.

Katja Jancic: Hi, thank you for taking my question. At your Investor Day in 2022, you provided an EBITDA bridge that would get you to normalize EBITDA of about $6.7 billion. Can you provide an update on how you're progressing on reaching that goal? Yeah, I'd actually be pleased to.

Capture Jan: Hi, Thank you for taking my question.

Capture Jan: Our Investor day in 2020, Q you provided an EBITDA bridge that would get you to normalized EBITDA of about $6 7 billion.

Jan: Can you provide an update on how you're progressing on reaching that goal.

Yes, actually pleased too so in November of 2022, we showed in New York and rolled out the most comprehensive detail analysis that we've ever published before to show you is the analyst what we were going to do and the accountability by which we're going to hold ourselves to.

So in November of 2022, we stood in New York and rolled out the most comprehensive, detailed analysis that we've ever published before to show you as the analysts what we were going to do and the accountability by which we were going to hold ourselves to that through cycle EBITDA, which, with the completion of our CapEx investments, would yield about a 6.7 billion dollar through cycle EBITDA performance. I tell you, at 7.4 for the third best year in the new quarter, we're doing really well, and that's going to continue to improve because not all those projects have come to fruition yet. We've got galvines being built, we've got our new micro mill being built in Lexington, North Carolina, we've got the investments in Kingman, Arizona that we're making, and we're expanding our resource pool and how we bring these products to market. So I would tell you we're doing incredibly well. Again, we'll look back at times, and what are we coming out of the cycle? Did we hit the trough?

Jan: Through cycle EBITDA with the completion of our Capex investments will yield about $6 $7 billion through cycle EBITDA performance I would tell you had $7 four for the third best year, Nucor, we're doing really well and thats going to continue to improve because not all of those projects have come to fruition, yet we've got outlines being built we've got a new.

Jan: Micro mill being built in Lexington, North Carolina, we've got the investments in.

Jan: Kingman, Arizona that we're making where we're expanding our resource pool and how we bring these products to market. So I would tell you we're doing incredibly well.

Jan: Again, we'll look back.

Jan: At times and look.

Coming out of the cycles, if we hit the trough in what I would tell you is I'm really proud of our earnings are proud of the.

And what I would tell you is I'm really proud of our earnings. I'm proud of the way the team has been able to accomplish this. And then, again, the results that we've been able to see, as we shared with you in the opening remarks, to generate $30 billion over the last four years, $20 billion in net earnings, and 10% or $10 billion given back to our shareholders have been an incredible, well-disciplined growth strategy, and that's going to continue. We're going to be very disciplined in how we think about capital allocation moving forward. Steve, anything you'd like to add on as we continue to grow and look at that run rate of 6.7? Yeah, it's catchy.

Jan: The way the team has been able to accomplish those and then again the results that we've been able to see as we shared with you on the opening remarks.

Jan: To generate $30 billion over the last four years $20 billion in net earnings, 10% or $10 billion given back to our shareholders has been.

Jan: An incredible.

Jan: Well disciplined growth strategy and Thats going to continue we're going to be very disciplined how we think about capital allocation moving forward, Steve anything you'd like to add.

We continue to grow and looking at that run rate is $6 70.

Just to add to what Leon said, you know, a lot of those projects are still ahead of us. If you take a look at some of the biggest ones in our company's history, like West Virginia, those are only in the early stages of their project life, so they haven't even started to contribute. And in terms of our Expand Beyond investments, we told you that we felt confident those investments would hit $700 million and even more, and we still would reaffirm that today. And we feel very confident we'll hit $700 million at their run rates at the end of there. So there's still more to come in that, and like Leon said, cycles go where they go, but we're continuing to execute on our business on all fronts. I think, and maybe just quickly on the Brandenburg plate mill, what do you think? How much do you expect the mill will produce in 24 hours? I think you were expecting about 500,000 tons. Yeah, this is Al Baer.

Steve: Okay. So just to add onto what we have said.

Steve: Sort of are a lot of those projects are still ahead of us if you take a look at some of the biggest ones in our company's history like West Virginia.

Steve: Those are only in the early stages.

Of their project.

They haven't even started yet.

Steve: Turning to contribute.

Steve: In terms of our expand beyond investments. We told you that we felt confident those investments will get $700 million in EBITDA and we still reaffirm that today and tell you we feel very confident at 700 at their run rates at the end of their so there's still more to come in.

Steve: Likely offset cycles go where they go but we're continuing to execute on our business on all fronts.

Steve: And maybe just quickly on the Brandenburg plate mill, what do you how.

Steve: How much do you expect the mill will produce in 'twenty four I think previously you were.

Steve: We're expecting about 500000.

Steve: <unk> thousand tons.

Steve: Yes, Scott this is out there that's still our number for 2024, I would expect to be there or north of it.

That's still our number for 2024. I would expect to be there or north of it. Yeah, I'm just super proud of that team and how they've worked through the ramp-up there. We continue to be focused on the new part of the market that we can't service out of our existing portfolio. But we remain mindful of the returns we generate through there at Hercard and Tuscaloosa that contribute to the strong results you see in front of you. And we want to add to that out of Brandenburg. So we're going to continue that thoughtful process. But Q4 was a meaningful, productive quarter for that team.

Steve: Yes.

Speaker Change: Super proud of that team and how they've worked through the ramp up there. We continue to be focused on the new part of the market that we can service out of our existing portfolio, but we remain mindful of.

Speaker Change: The returns we generate through there at Hereford and Tuscaloosa that contribute to the strong results you see in front of you we want to add to that outer Brandenburg. So we're going to continue that thoughtful process, but.

Speaker Change: Q4 was a meaningful productive quarter for that team, we continue to set new standards.

We continue to set new standards. We shipped another new quarter of 120-foot long plates to a bridge fabricator, 30 tons apiece. We shipped them by truck and by rail.

Speaker Change: We shipped another nucor first of 120 foot long plates to enrich fabricator 30 tonnes of peace, we shipped them by truck and by rail. So these are the kinds of things that we'll be able to do on our Brandenburg that's never been done before baidu more perhaps the rest of the industry and we're just excited as we roll into this year, but that remains our number and we're confident of that.

So these are the kinds of things that we'll be able to do out of Brandenburg. They've never been done before by Newmore or perhaps the rest of the industry, and we're just excited as we roll into this year. But that remains our goal, and we're confident.

Thank you.

Timna Beth Tanners: Thank you. The next question comes from Timna Tanners with Wolfe Research. Please go ahead. Yeah, hey, good morning team.

Speaker Change: Thank you.

The next question comes from Timna Tanners with Wolfe Research. Please go ahead.

Timna Beth Tanners: Yeah, Hey, good morning team.

Timna Beth Tanners: I wanted to ask a little bit more about capital allocation. I guess first off, the comment on the lower cash balance. What do you think is the right level? Because clearly it's been running kind of high recently. So just to get a little more color there.

Timna Beth Tanners: Wanted to ask a little bit more about capital allocation.

Timna Beth Tanners: I guess first off that comment on lower cash balance.

Timna Beth Tanners: What do you think is the right level, because clearly it's been running kind of high recently, so just to get a little more color. There and secondly, you made mention of preserving liquidity for potential M&A and acquisition that you thought you didn't.

And secondly, you made mention of preserving liquidity for potential M&A and acquisition that you thought didn't. And here at an industry conference, there's a lot of chatter about Nucor's supposed involvement in the acquisition process for U.S. Steel. Just wondering if you can comment on that or give us some more color, perhaps on your M&A pipeline, what that might look like, what types of companies, etc. Yes, and I'll kick it off, and then we'll see. So I'll begin with the second part of your question, which, you know, again, obviously, the proxies out. Nucor took a hard look at some of the select assets within the US field portfolio. But at the end of the day, the Chairman of the Board of Trustees, the President of the Board of Trustees, the Chairman of the Board of Trustees, didn't fully anticipate.

Timna Beth Tanners: And he had an industry conference there's a lot of chatter about nucor's supposed involvement in the acquisition process for U S. Steel just wondering if you can comment on that or give us some more color perhaps on your M&A pipeline, what that might look like what types of companies et cetera.

Speaker Change: Yes, and I'll kick it off and then let Steve Shaw.

Speaker Change: I'll begin with the second part of your question, which again, obviously the proxy is out Nucor took a hard look at some of these select assets within the U S steel portfolio, but at the end of the day.

We're not going to overpay for any assets, we're going to continue to be very disciplined in how we think about growth.

Speaker Change: Some of the cash generated was just stronger results in stronger.

Speaker Change: Shipments and some pricing that flowed through that.

Speaker Change: We didn't fully anticipate but I would tell you again from my perspective, we continue to remain an incredibly undervalued stock as we think about the growth of metrics that of <unk>.

But I would tell you again, from my perspective, we continue to remain an incredibly undervalued stock as we think about the growth and metrics that I've already shared won't repeat again. But at seven and a half times EBITDA, I think we are a great value in terms of the things that we're doing and producing. And regardless of who ends up owning US Fields assets, you know, Nucor's today's market cap is larger than the next three largest combined, is there, and then they expand beyond that, particularly as it's providing some insulation to the traditional cyclicality of steel that we're looking for the steel adjacent downstream businesses that again operate a little counter-cyclical to what we're seeing in steel, and we're seeing those again manifest themselves Hey, Timna, this is Steve.

Speaker Change: <unk> won't repeat again, but at seven five times EBITDA.

I think we're a great value in terms of the things that we're doing in producing and regardless of who ends up owning U S. Steel's assets Nucor today's market cap is larger than the next three largest combined.

Steel companies in North America, we are the industry leader and so again as we look at our strategy and our growth we're going to be incredibly disciplined in making sure.

Speaker Change: And the investments we make in our core and expand beyond are delivering the results our shareholders expect.

And then they expand beyond particularly that is providing some.

Speaker Change: Some insulation to the traditional cyclicality as field that we're looking forward to steal adjacent downstream businesses that.

Again operate a little counter cyclical to what we're seeing in steel and were seeing those again manifest themselves for CACI.

Speaker Change: The Mega trends that we're seeing in towers and structures and some of the other businesses that we've acquired over the last three or four years.

Speaker Change: Hey, Timna.

Steve: I'll just add to what Leon said, that we don't, you know, we have, we have such a good opportunity in front of us, and he highlighted the areas that we think about growth, so we're always going to keep enough liquidity to move on the things we need to move on, and we also highlighted that we will spend around three and a half billion dollars in CapEx in this year, so that's a higher rate than our historic averages, and despite that, we will, we will, you know, at least Leon highlighted this one, too, we still feel like our stock's a good buy here, so you'll see us at a higher pace for share buybacks in Q1 than we did last year. Okay, that's super helpful. Thank you for the color.

Timna: Steve I'll, just add to what we said that we don't.

Speaker Change: We have we have some.

Speaker Change: Hey, good opportunity in front of US you highlighted the areas that we think about growth. So we're always going to keep enough liquidity to move on the things we need to move on and.

Speaker Change: We also highlighted that we will spend around $3 5 billion in capex.

Speaker Change: And this year, so thats, a higher rate than our historic averages despite that.

Speaker Change: Will we will.

Speaker Change: This one two we still feel like our stocks and goodbye here, so you'll see us at a higher pace for share buybacks in Q1 than we did last year.

Speaker Change: Okay. That's super helpful. Thank you for the color I guess, one quick one if I could add I know Theres a question already about Brandenburg run rate, but I was just wondering is there still more room to see gallatin on an annualized basis ramp up or is that already pretty pretty fully running out.

Timna Beth Tanners: I guess one quick one, if I could add, I know there's a question already about Brandenburg's run rate, but I was just wondering, is there still more room to see Gallatin on the annualized basis ramp up, or is it already pretty, pretty fully running out with the expansion? Thanks again. Sorry, Tim, was your question about Gallatin's ramp-up? Yes, the status of that, if you could, please. Okay, yeah, I'll provide some high level. What I would tell you is that in the last three or four months of 2023, the team has executed incredibly well. We've seen daily, weekly, and monthly production records set at that

The expansion.

Sorry, what was your <unk>.

Speaker Change: Question on Galaxy <unk> ramp up.

Yes, the status of that if you can please.

Speaker Change: Okay.

Speaker Change: I'll provide some high level, what I would tell you in the last three or four months of 2023. The team has executed incredibly well we've seen daily weekly monthly production records set at that facility there.

Speaker Change: If we realize the full run rate potential of that mill and now are operating at a at an extremely high level. So they have churned before then turning to the quarter and again are producing.

Speaker Change: At or near our operating capabilities and we'll continue that as we move into 2021.

Speaker Change: Okay. Thanks again appreciate it.

Speaker Change: Okay.

Speaker Change: The next question comes from Bill Peterson with Jpmorgan. Please go ahead.

Bill Peterson: Yes, hi, good morning, Thanks for taking my questions.

Bill Peterson: So I guess first on the plate market I guess what are your views.

Bill Peterson: Blade market given the step up in service center inventories, we saw in December and year on year decline in shipments despite.

Speaker Change: <unk> ramp and I guess following up on that Brandenburg sort of ramp.

Speaker Change: Commentary and when can we expect to see Brandenburg turned profitable this year.

Speaker Change: Yes, Thanks, Bill that's out there again I will comment on the place up.

We did have an increase year over year shipments.

Speaker Change: At 11%.

Speaker Change: And part of that is of course, Brandon Burke.

Speaker Change: Just speaking about the plate market overall.

I'd say, we're reasonably optimistic I mean theres areas.

Speaker Change: Weakness that get some headlines and higher interest rates are a compressive force when it comes to vertical construction of our plate is used but theres plenty of bright spots in other areas like power transmission and railcar manufacturing.

Speaker Change: The equipment is still strong, it's probably declining, but it's still strong and a good pull through for us. So.

Speaker Change: And then of course, you've got the bridge and highway tons that are mostly yet to come and that will come four years into the future. So.

Speaker Change: Our skyline business that Brad mentioned pulls a lot of places us through almost all of their work is infrastructure related not just bridge and highway but many other types of projects. So.

Our view is not that the plate market is going to be wildly robust, but it is going to remain pretty steady. It has plenty of tailwind to offset offset some of the other forces working against us.

Speaker Change: And on my Brandenburg profitability timeline.

Speaker Change: I would expect we'd hit a run rate of breakeven sometime in the middle of the year.

Speaker Change: Okay. Thanks for that second question is a little bit longer longer dated longer focus but.

Speaker Change: Nevertheless through earnings presentations, and Thats, certainly less on the decarbonization efforts, but.

With the team having.

Speaker Change: Our multifaceted approach.

Speaker Change: Across Biochar Red and Green Pig Iron Ccs program, you mentioned power generation Zero mission Iron and so forth I guess R&D would be showing up in 2024 within your investments and Capex. For example, the Ccs program that you have planned for 2006.

Speaker Change: How should we think about these programs in terms of what's meeting and how they flow through over the next several years.

Speaker Change: Yes.

Speaker Change: I'll begin Greg Murphy, our Pvp business services sustainability can jump in as well, but from a high level look at its a great question one of the beautiful things about Nucor and our positioning is this one of the top five cycles of the world and certainly the largest in the western hemisphere.

Speaker Change: Steelmaking technology means that we don't have to take the billions and billions and billions of dollars of profit, we're making in pivot in transition from the old style integrated facilities Youre seeing headlines around the world companies in Europe that are have made the pledge to have 100% switched eef steelmaking technologies.

Speaker Change: Because they have no choice.

<unk>.

Speaker Change: The question in my mind isn't about India.

Speaker Change: This nation is going to move to a greener more sustainable platform as we rebuild re shore and continue to grow the digital economy. The real question in my mind is.

Speaker Change: The pace in which we changed we have the infrastructure we have the grid hardening do we have the resources.

Speaker Change: Across the United States to be able to effectively help the users power of their cars at homes and everything else, but it's a long winded way to get to the answer of your question as you think about the.

Speaker Change: The Ppas that were part of as you think about some of these investment projects in Louisiana partnership and Exxon.

Speaker Change: They didn't cost us anything because of the strength of our balance sheet. The strength of Nucor's leadership position. It wasn't a huge outlay of cash do you think about some of the other investments they're smaller in size. So there is not.

Speaker Change: There are tens of millions rather than hundreds of billions.

Speaker Change: It's positioning ourselves and finding partners out there that are doing different things with.

Speaker Change: Carbon and <unk>, we're looking at technologies.

Speaker Change: In Europe that are producing pig iron at or near net zero.

Speaker Change: Embodied carbon so there is a number of things that were examining that are not at this point large scale from a capex standpoint break anything you'd add to that I guess on the timing issue, we see the Louisiana project beginning to pay dividends probably in 2025.

But as we have said that is not at all in capital intensive investment for Nucor.

Speaker Change: We were able to structure that as an over the fence solution.

Working with a partner, who really understand the geology and the petrochemical attributes there and exxonmobil and with the 45 key tax credit.

Speaker Change: It has proven to be a financial winter for Nucor are really from beginning to end.

Speaker Change: What are the other strategies that we will deploy as an EAA producer.

Speaker Change: Things like our sourcing supply of raw materials, and how we can get lower embodied carbon raw materials, how we can use.

Speaker Change: Obsolete scrap and extract some of the tramp elements from that and use that to replace things like pig iron.

Speaker Change: So from a capital intensity standpoint, Leon nailed it.

Speaker Change: We are in wealth.

Speaker Change: Well positioned place and really what we're trying to do is to take a world class level and make it even better.

And we're very very excited last thing I would mention is scope two emissions thats a big opportunity for Nucor.

Speaker Change: <unk> seen us make investments in.

Speaker Change: Nuclear vision in nuclear fusion technology, we believe that's going to be an essential element in delivering reliable affordable baseload power in the future Thats zero carbon.

Speaker Change: That's still going to be a number of years out into the future, but we believe that's going to be absolutely essential to supplement that solar and wind and other renewable clean sources in the future.

Speaker Change: But again, we don't want to build nuclear power plants, we want to be the off takers and use that power.

Speaker Change: Thanks for the comprehensive answers and good luck.

Speaker Change: With the execution.

Thanks Bill.

Speaker Change: The next question comes from Martin Englert with Seaport Research partners. Please go ahead.

Martin Englert: Good morning, everyone.

Martin Englert: Good morning.

Martin Englert: Question on conversion costs.

Martin Englert: Pretty similar year on year around.

Martin Englert: $465 per tonne.

Martin Englert: Wanted to see.

Martin Englert: Whats your thoughts were if this was a reasonable range to expect on a go forward basis, considering today's operating structure or is this something that has an opportunity to come down.

Speaker Change: Sorry, Paul.

Paul: The system side from some of the growth projects.

Paul: Yes.

Paul: Certainly some of the.

Paul: The growth projects, especially Gallatin.

Paul: That's increased our cost based on some of the things that we've done up there some of the.

Paul: It's a little bit slower startup than we had expected so.

We can expect the cost come down a little bit but not.

Paul: Not a lot.

Paul: If you run it at a really good right now.

Paul: Sure.

Okay.

Paul: Sure.

Paul: Nir near full run rate so.

Paul: We're going to be in a good spot this year.

Okay and I just wanted to circle back on the disconnect ladies and structural.

Paul: From a mill perspective.

Speaker Change: We welcome you to place volumes.

Speaker Change: Volumes.

Speaker Change: Year on year divergent trends when you look at the quarter, we were just.

Speaker Change: <unk> come down in <unk>.

Speaker Change: <unk> has been growing.

<unk>.

Speaker Change: And structural products anything else to add there.

Speaker Change: As far as color as to why those would have.

Speaker Change: So differently through the course of the year.

Speaker Change: Sure Barton Hey, this is Albert yes, Okay, I'll start with play so yes year over year growth, but you see second quarter year over year, we took a step back.

Albert: Lot of that is just we're not going to chase cheap tons.

In Q4, we had some imports come in and those spreads just got to be where.

Albert: We're not going to load our books with with tons that arent profitable and aren't going to drive returns for us. So.

Albert: I think that will change as we move forward.

Moving to our outlook for 2024 and plate.

Albert: And <unk> you saw a really great quarter EMEA as part of that speaks to the resiliency of the market and Brad spoke to that we spoke to that.

It just remains a resilient market and theres plenty of areas of strength, where we can go and compete and win and you see that but part of that is also the breadth of new course portfolio and some of those trends you see in the <unk> group our tons to our downstream customers skylight being one of them that won some nice projects and youll see that and ship those tons through the first half as they convert.

And and perform so there is just always.

<unk> success is a multi layered story there is always a cylinder firing.

Albert: The numbers that you see I think just reflect that especially on the beam side.

Okay I appreciate the color. Thank you and congratulations on the long term return profile.

Speaker Change: Thank you Martin.

The next question comes from Tristan Dresser with BNP. Please go ahead.

Yes, hi, Thank you for taking my questions.

Tristan Dresser: First one is on capital allocation and thank you for touching on.

The M&A situation, if I could just have a quick follow up there. When you look at the pipeline of opportunities is it fair to assume that most of the well all.

All of those opportunities are inside.

Tristan Dresser: Inside the U S.

Looking at opportunities abroad.

Tristan Dresser: And in the past when you look at them.

Tristan Dresser: The balance between organic and inorganic.

Speaker Change: Wonder if you could comment a little bit worried the priority list Greenfield projects.

Essentially that's my first question. Thank you.

Speaker Change: Yes, Tristan I'll kick it off and certainly let's see.

Accident share any additional comments.

As you look at our.

M&A pipeline do you think about our our strategy as we think about growing the core and expanding beyond what we said is roughly we expect over the next five six years.

Speaker Change: We begin to generate about 20% to 25% of our overall revenues through expand beyond businesses. So we're moving to that so it sort of gives you a rough breakdown to where youre going to see us continue to think about growth, where we're going to continue to.

Speaker Change: Channel are.

Speaker Change: Our capital dollars regarding the <unk>.

Speaker Change: Geographically I would tell you, it's probably a safe bet that Newport is going to stay in North America.

Let's see.

Speaker Change: This economy that we know the best where we have.

Speaker Change: Most advantages to use the strengths of Nucor from our culture, our team our conversion model and understanding.

Speaker Change: As the market leader in 12 of the 14 major steel market and categories.

Speaker Change: We've been in business, a long time, we understand the.

Speaker Change: The boundaries around.

Speaker Change: Sure.

Speaker Change: This industry and we also understand our customers where they are wanting to go we're making investments not for our benefits, we're making investments start to be the largest by volume were being yes.

And those investments to create capabilities.

Speaker Change: Customers.

Continue to grow their businesses and continue to flourish.

Speaker Change: Yeah.

Speaker Change: Alright, that's that's.

Speaker Change: That's helpful.

Speaker Change: Moving on to maybe the rebar market can you discuss a little bit the demand trends you've been seeing there over the past.

Speaker Change: Couple of weeks, we've seen the price hikes coming through putting in into some metal spread compression do you see any reason on the ground to expect.

Speaker Change: Further moderation of your ability to market is now fine, Canada and U equilibrium there. Thank you.

Speaker Change: Yes.

Speaker Change: Yes, Tristan this is John we.

We did see some improved margins on rebar in the fourth quarter and over the course of the year.

Speaker Change: Rebar remained pretty steady.

Speaker Change: As we've talked about these infrastructure projects.

Speaker Change: And other demand in construction continuing to grow.

Speaker Change: We're bullish on the rebar market.

Speaker Change: Sure.

Okay.

Speaker Change: That's clear maybe last question then on <unk> I know it has been discussed a bit.

Speaker Change: <unk>.

Speaker Change: The weakness youre seeing in heavy equipment or earthmoving machinery, how new is that how severe is it.

Speaker Change: And in terms of outlook I think you mentioned something you said he would be steady.

Speaker Change: I understand it as weakness the incoming part of portion of weakness being offset by more supportive construction infrastructure that's coming on.

Speaker Change: Yes.

Speaker Change: Yes Tristan.

Speaker Change: <unk> again is your question, primarily just around that heavy equipment piece I want to make sure I get that right.

Speaker Change: Yes.

Speaker Change: The Red Dot.

Speaker Change: But your.

In the table that includes heavy equipment earthmoving machinery.

Some weakness you're seeing there just trying to figure out if that's new and severe.

And then when you look at the outlook for metal spreads for plate and they've been pretty steady in January is that something you expect to continue or do you think that weakness you've just flagged is.

Potentially imply some further moderation there.

Speaker Change: Okay.

Speaker Change: Let me, let me address the heavy equipment piece.

Speaker Change: My comments about a declining I wouldn't say our new in terms of the decline in that sector. That's been happening through the second half of the year.

Speaker Change: I wouldn't say, we see that as a really strong decline going into 2024, because there's obviously with infrastructure theres going to be some spending in that.

End use market that will keep that somewhat but we do see it continuing to decline a bit as one of several end markets, where we serve with plate. So.

All of that put together with with non res construction and some of the other highlights that we've talked about.

Speaker Change: In those markets our outlook for plate is relatively opt.

Optimistic just in terms of small.

Speaker Change: Low single digit incremental growth year over year that theres plenty of different parts, where we can compete.

Separate from the ramp up that will have in Brandenburg will grab some incremental tonnage just by that alone.

Speaker Change: Okay.

Speaker Change: That's helpful.

Speaker Change: Yes, that's really helpful. Thank you for the call it.

Speaker Change: Yeah.

Speaker Change: The next question comes from Curt Woodworth with UBS. Please go ahead.

Curt Woodworth: Yeah. Thanks, I just had a quick follow up on capital spending outlook. So on the.

Curt Woodworth: Growth capital you've outlined for this year, how much of that will carryover into next year and can you just remind us on the timeline of when you think steel West Virginia Woolf.

Curt Woodworth: We will start to ramp and then you also noted a potential I think new micro mill project in the Pacific Northwest If you could just comment on that thank you.

Yes, Curt this is Steve.

$3 5 billion projection or expectation for.

Curt Woodworth: 2024.

Steve Shaw: And I think if you're trying to extrapolate what future years, we're going to be some of those projects like West Virginia are going to push our capital spending in the 25 higher than historic averages.

Steve Shaw: Likely.

Speaker Change: Sure absolutely not something it's probably below that $3 $5 billion, if youre trying to look for direction.

Speaker Change: But north of three if I would if I would guess and in terms of when West Virginia is completed it'll be.

Speaker Change: In 2026, so that's a project that will keep going for some time for us.

Speaker Change: And then Curt your last question on <unk>.

Speaker Change: <unk> in the Pacific Northwest, but I would tell you is we're doing just that again, it's a market we've been in for two decades.

Speaker Change: <unk>.

Speaker Change: Our team in Seattle continues to do an incredible job and again, we're going to continue to evaluate that market.

Speaker Change: Recognizing the customers that we serve in that market.

Speaker Change: Where does that most makes sense.

Stay tuned.

Okay. Thank you.

Speaker Change: This concludes our question and answer session I would like to turn the conference back over to Leon.

Leon: <unk> for any closing remarks.

Leon: In closing I just wanted to say thank you to our Nucor team members for another great year in 2023 since we began 24, let's make sure we take care of our most important value the health safety and wellbeing of our Nucor family. Thank.

Leon: Thank you to our customers for the trust placed in us with each and every order and thank you to our shareholders for the valuable capital that you entrust us with each and every day and have a great day.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.