Q1 2024 Nucor Corp Earnings Call

April 23, 2024

Jack Sullivan: We posted our first quarter earnings release and presentation on the Nucor Investor Relations website, and we encourage you to access these materials as we'll 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 law. Actual results may be different from Ford-looking statements and involve risks outlined in our Safe Harbor Statement and disclosed in Nucor's SEC filing. The 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.

Jack Sullivan: We posted our first quarter earnings release and presentation on the Nucor Investor Relations website, and we encourage you to access these materials as we'll 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 law. Actual results may be different from Ford-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, let's turn the call over to Leon.

Quarter earnings release, and presentation to the <unk> Investor Relations website, and we encourage you to access these materials as we'll 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 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 the appendix of today's presentation.

<unk> supplemental information and disclosures along with a reconciliation of non-GAAP financial measures, so with that let's turn the call over to Leon.

Leon J. Topalian: Thanks, Jack, and welcome, everyone. I'd like to begin by congratulating our 32,000 Nucor teammates on a safe and profitable start to 2024. In the first quarter, we generated EBITDA of approximately $1.5 billion and net earnings of $845 million, or $3.46 per diluted share. For the quarter, we shipped a total of 6.2 million tons to outside customers, up 5% from the prior quarter and in line with our average quarterly shipments for 2023.

Leon: Thanks, Jack and welcome everyone I would like to begin by congratulating, our 32000, nucor teammates for a safe and profitable start to 2024.

Leon: In the first quarter, we generated EBITDA of approximately $1 5 billion and net earnings of $845 million or $3 46 per diluted share for the quarter. We shipped a total of $6 2 million tonnes to outside customers up.

Leon: Up 5% from the prior quarter and in line with our average quarterly shipments for 2023.

Leon J. Topalian: Pricing also remained strong in the first quarter. Average steel mill pricing per ton was up nearly 10% compared to the prior quarter and slightly ahead of the average for all of 2023. For steel products, realized prices continue to moderate. However, prices have held consistently above pre-pandemic levels and will continue to generate robust returns.

Leon: Pricing also remains strong in the first quarter average steel mill pricing per ton was up nearly 10% compared to the prior quarter and slightly ahead of the average for all of 2023.

Leon J. Topalian: For steel products, realized prices continue to moderate. However, prices have held consistently above pre-pandemic levels and will continue to generate a robust return. In keeping with our commitments to shareholders and our balanced approach to capital allocation, Nucor returned over $1.1 billion to shareholders through dividend payments and share repurchases in the first quarter. We made good progress on key capital investment projects during the quarter, and, as we have mentioned previously, our capital spending will increase this year as we get further along in the construction phase of our West Virginia sheet mill and our Lexington, North Carolina rebar micromill.

For steel products realized prices continue to moderate however prices have held consistently above pre pandemic levels and we will continue to generate robust returns.

Leon: And keeping with our commitments to shareholders and our balanced approach to capital allocation Nucor returned over $1 1 billion to shareholders through dividend payments and share repurchases in the first quarter.

Leon J. Topalian: In keeping with our commitments to shareholders and our balanced approach to capital allocation, Nucor returned over $1.1 billion to shareholders through dividend payments and share repurchases in the first quarter. We made good progress on key capital investment projects during the quarter, and, as we have mentioned previously, our capital spending will increase this year as we get further along in the construction phase of our West Virginia sheet mill and our Lexington, North Carolina rebar micromill.

Leon: We made good progress on key capital investment projects during the quarter and as we've mentioned previously our capital spending will increase this year as we get further along in the construction phase of our West Virginia sheet Mill, and our Lexington, North Carolina Rebar Micro mill. We're also advancing work on two downstream production facilities that are part of our Nucor tower.

Leon J. Topalian: We're also advancing work on two downstream production facilities that are part of our Nucor Towers and Structures growth platform. On the safety front, our team delivered the safest quarter in Nucor's history, with an injury and illness rate roughly 30% lower than that of Q1 last year.

Leon: And structures growth platform.

Leon: On the safety front, our team delivered the safest quarter in Nucor's history, with an injury and illness rate roughly 30% lower than that of Q1 last year I'm incredibly.

Leon J. Topalian: I'm incredibly proud of the steady progress we've been making since 2017 to drive down the number of safety incidents we experience. Our goal to become the world's safest steel company will require steadfast determination, innovation, and continuous improvement in how we operate. We have the most capable team assembled anywhere in the world who are all focused on delivering these results and taking great care of one another, our customers, and shareholders. Building on our leadership position in sustainability continues to be a high priority, and we kicked off 2024 with several exciting initiatives. In March, we signed an agreement with Mercedes-Benz to supply Iconic RE for vehicles produced at its Tuscaloosa, Alabama, manufacturing plant.

Leon J. Topalian: I'm incredibly proud of the steady progress we have been making since 2017 to drive down the number of safety incidents we experience. Our goal to become the world's safest steel company will require steadfast determination, innovation, and continuous improvement in how we operate. We have the most capable team assembled anywhere in the world who are all focused on delivering these results and taking great care of one another, our customers, and shareholders.

Leon: Really proud of the steady progress we've been making since 2017 to drive down the number of safety incidents we experience.

Leon: Our goal to become the world's safest steel company, who will require the steadfast determination innovation and continuous improvement in how we operate.

Leon: The most capable team assembled anywhere in the world who are all focused on delivering these results and taking great care of one another our customers and shareholders.

Leon J. Topalian: Building on our leadership position in sustainability continues to be a high priority, and we kicked off 2024 with several exciting initiatives. In March, we signed an agreement with Mercedes-Benz to supply Iconic RE for vehicles produced at its Tuscaloosa, Alabama, manufacturing plant.

Leon: Building on our leadership position in sustainability continues to be a high priority and we kicked off 2024 with several exciting initiatives in March we signed an agreement with Mercedes Benz to supply iconic R. E for vehicles produced at its Tuscaloosa, Alabama manufacturing plant.

Leon J. Topalian: The Konig RE is made with 100% renewable energy and has a greenhouse gas intensity less than half that of extractive blast furnace-based steel production across scopes 1, 2, and 3. Our agreement with Mercedes-Benz is another example of how we're partnering with world-class customers to reduce carbon emissions within their supply chain. We also announced a new initiative with Google and Microsoft to scale the adoption of clean energy technology. Developers of such technologies often struggle to find creditworthy and large-scale energy customers to advance early-stage projects.

Leon J. Topalian: A conical RE is made with 100% renewable energy and has a greenhouse gas intensity less than half that of extractive blast furnace-based steel production across scopes 1, 2, and 3. Our agreement with Mercedes-Benz is another example of how we're partnering with world-class customers to reduce carbon emissions within their supply chain. We also announced a new initiative with Google and Microsoft to scale the adoption of clean energy technologies. Developers of such technologies often struggle to find creditworthy and large-scale energy customers to advance early-stage projects.

Leon: <unk> has made with 100% renewable energy and has a greenhouse gas intensity less than half that of extractive blast furnace based steel production across scopes, one two and three are.

Leon: Our agreement with Mercedes Benz is another example of how we're partnering with world class customers to reduce carbon emissions within their supply chain.

Leon: We also announced a new initiative with Google and Microsoft to scale, the adoption of clean energy technologies developers of such technologies, often struggled to find creditworthy and large scale energy customers to advance early stage projects.

Leon J. Topalian: We aim to lower these obstacles by aggregating our energy needs with others, like Google and Microsoft, that will seek affordable, reliable, and cleaner forms of energy. Going forward, we'll be working with energy providers, policymakers, and other large energy consumers to advance this work. Nucor continues to receive recognition for our sustainability efforts. Earlier this year, Barron's Magazine designated Nucor the only steel company ranked among its top 100 most sustainable companies. Congratulations to our entire Nucor team for this well-deserved recognition of your commitment to operating sustainably each and every day.

Leon: We aim to lower these obstacles by aggregating our energy needs with others like Google and Microsoft that will seek affordable reliable and cleaner forms of energy going forward will be working with energy providers policymakers and other large energy consumers to advance. This work Nucor continues to receive.

Leon: Recognition for our sustainability efforts earlier this year Barron's magazine designated Nucor, the only steel company ranked among its top 100, most sustainable companies congratulations to our entire Nucor team for this well deserved recognition of your commitment to operating sustainably each and every day.

Leon J. Topalian: Turning to our commercial strategy, we're always looking for better ways to serve our customers, which has led us to introduce weekly pricing updates for our Hot Rolled Coil Sheet product. Nucor's Consumer Spot Price, or CSP for short, will provide customers with reliable, real-time pricing information for Hot Roll Coil. The CSP will provide our customers with better information to make better decisions to meet their needs. Having real-time pricing coupled with shorter lead times will help our customers reduce the risks inherent in price speculation. While the CSP pricing framework has only been in place for a few weeks, customer feedback thus far has been positive.

Leon: Turning to our commercial strategy, we're always looking for better ways to serve our customers, which has led us to introduce weekly pricing updates for our hot rolled coil sheet products nucor's consumer spot price or CSP for short will provide customers with reliable real time pricing information for her role.

Leon: Will the CSP will provide our customers with better information to make better decisions to meet their needs, having real time pricing coupled with shorter lead times will help our customers reduce the risks inherent in price speculation.

Leon: While the CSP pricing framework has only been in place for a few weeks the customer feedback thus far has been positive.

Leon J. Topalian: On the corporate strategy front, 2024 is off to a productive start. We recently announced the acquisition of Southwest Data Products, a reputable manufacturer and installer of data center infrastructure with an impressive blue chip customer base. With that, I'd like to welcome the 147 team members at Southwest Data Products to the Nucor family. In conjunction with this transaction, we're launching a new business unit, Nucor Data Systems, to better serve the data center market.

Leon J. Topalian: On the corporate strategy front, 2024 is off to a productive start. We recently announced the acquisition of Southwest Data Products, a reputable manufacturer and installer of data center infrastructure with an impressive blue-chip customer base. With that, I'd like to welcome the 147 team members at Southwest Data Products to the Nucor family. In conjunction with this transaction, we're launching a new business unit, Nucor Data Systems, to better serve the data center market.

Leon: On the corporate strategy front 2024 is off to a productive start we recently announced the acquisition of southwest data products are reputable manufacturer and installer of data center infrastructure with an impressive blue chip customer base with that I'd like to welcome. The 147 team members at southwest data products to the Nucor family.

Leon: In conjunction with this transaction, we're launching a new business unit Nucor data systems to better serve the data center market.

Leon J. Topalian: Southwest Data Products gives Nucor expanded capabilities in airflow containment structures, which help data centers run more efficiently by separating cold air from the heat generated by racks of server equipment. The team at Southwest Data Products has a strong reputation for engineering and manufacturing high-quality products and installing them in a timely and professional way. They also have deep relationships with many of the largest data center co-developers and hyperscalers, which Nucor can leverage to cross-sell our other downstream products.

Leon: Southwest data products gives nucor expanded capabilities and airflow containment structures, which helped data centers run more efficiently by separating cold air from the heat generated by racks of server equipment the.

Leon: The team at southwest has a strong reputation for engineering and manufacturing high quality products and installing them in a timely and professional way.

Leon: They are also deep relationships with many of the largest data center co developers and Hyperscale, which nucor can leverage to cross sell our other downstream products.

Leon J. Topalian: The rise of artificial intelligence and the growing reliance on cloud computing are driving strong demand for next-generation data centers, and this market is expected to grow at double-digit annual rates through the end of this decade.

The rise of artificial intelligence and the growing reliance on cloud computing are driving strong demand for the next generation data centers and this market is expected to grow at double digit annual rates through the end of this decade, we continue to evaluate other acquisition opportunities in high growth sectors, and we have a robust pipeline.

Leon J. Topalian: We continue to evaluate other acquisition opportunities in high-growth sectors, and we have a robust pipeline of compelling prospects aligned with steel-adjacent growth trends. Before turning it over to Steve, I'd like to take a moment to comment on recent updates to our nation's trade enforcement policy. Earlier this month, I attended a World Steel Association meeting, where I currently serve as chairperson. During that meeting, we discussed the ongoing challenges posed by global production overcapacity.

Leon J. Topalian: We continue to evaluate other acquisition opportunities in high-growth sectors, and we have a robust pipeline of compelling prospects aligned with steel-adjacent growth trends. Before turning it over to Steve, I'd like to take a moment to comment on recent updates to our nation's trade enforcement policy. Earlier this month, I attended a World Steel Association meeting where I currently serve as chair, and during that meeting, we discussed the ongoing challenges posed by global production over capacity.

Leon: <unk> of compelling prospects aligned with steel adjacent growth trends.

Speaker Change: Before turning it over to Steve I'd like to take a moment to comment on recent updates to our nation's trade enforcement policy earlier. This month I attended the World Steel Association meeting, where I currently serve as chair and during that meeting we discussed the ongoing challenges posed by global production overcapacity.

Leon J. Topalian: The U.S. Commerce Department recently published a final rule designed to strengthen its anti-dumping and countervailing duty regulations. These rule changes are a positive development for Nucor and the entire steel industry as they strengthen the enforcement of existing trade laws. We appreciate the Commerce Department for making these necessary changes, but we still believe it's crucial for Congress to pass the Level the Playing Field 2.0 legislation to give commerce additional tools that address trade distorting behaviors.

Speaker Change: The U S. Commerce Department recently published a final rule designed to strengthen its anti dumping and countervailing duty regulations. These rule changes or a positive development for nucor and the entire steel industry as they strengthen the enforcement of existing trade laws.

Speaker Change: We appreciate the Commerce department for making these necessary changes, but we still believe it's crucial for Congress to pass the level the playing field to point out legislation to give commerce additional tools that address trade distorting behaviors with that I'll turn it over to Steve who will share some more details on our Q1 financial results.

Steve: With that, I'll turn it over to Steve. He'll share some more details on our Q1 financial results. Steve. Thank you, Leon.

Steve: With that, I'll turn it over to Steve, who will share some more details on our Q1 financial results. Steve. Thank you, Leon.

Speaker Change: Steve.

Steve: Thank you, Leon, and thank you all for joining our call this morning. The first quarter of 2024 saw Nucor advance its growth strategy, make meaningful commercial moves, and continue to differentiate itself. We also had a solid start to the year on the earnings front, with net earnings of $845 million, or $3.46 a share. This was nearly 10% higher than our prior quarter earnings per share but came in roughly 4% below the midpoint of our first quarter earnings guidance range. So I'd like to take a minute to share some color on that.

Thank you Leon and thank you all for joining our call. This morning. The first quarter of 2024 saw Nucor advances growth strategy made meaningful commercial moves and continue to differentiate itself.

Steve: We also had a solid start to the year on the earnings front with net earnings of $845 million or $3 46, a share.

Steve: This was nearly 10% higher than our prior quarter.

Steve: <unk> per share, but came in roughly 4% below the midpoint of our first quarter earnings guidance range.

Speaker Change: I would like to take a minute to share some color on that.

Steve: First, and most important, results from the three operating segments were generally in line with our forecast for the first quarter. However, certain administrative costs and intercompany eliminations exceeded our expectations. Some of the larger drivers of higher than expected administrative costs related to employee benefits, such as medical insurance coverage. Intercompany eliminations had a more pronounced impact. Higher-than-expected eliminations were a function of two things.

Steve: First, and most important, results from the three operating segments were generally in line with our forecast for the first quarter. However, certain administrative costs and intercompany eliminations exceeded our expectations. Some of the larger drivers of higher than expected administrative costs related to employee benefits, such as medical insurance coverage. Higher-than-expected eliminations were a function of two things.

Speaker Change: First and most important results from the three operating segments were generally in line with our forecast for the first quarter.

Speaker Change: However, certain administrative cost and intercompany eliminations exceeded our estimates.

Speaker Change: Some of the larger drivers.

Speaker Change: Of higher than expected administrative cost related to employee benefits such as medical insurance coverage.

Speaker Change: Intercompany eliminations had a more pronounced impact higher than expected eliminations were a function of two things one driver with the delivery of more materials from new core divisions to our own construction projects than expected.

Steve: One driver was the delivery of more materials from Nucor divisions to our own construction projects than expected. This is predominantly a timing difference between our pre-guidance assumptions and what actually materialized. The second driver was more activity and profits than anticipated between our operating divisions. As most of you know, Nucor has a diverse and integrated set of businesses.

Speaker Change: This is predominantly a timing difference between our pre guidance assumptions and what actually materialized.

Speaker Change: The second driver was more activity and profits than anticipated between our operating divisions.

As most of you know Nucor has a diverse and integrated set of businesses. This aspect provides strategic benefit synergies and risk mitigation over long periods of time.

Steve: This aspect provides strategic benefits, synergies, and risk mitigation over long periods of time. However, that same beneficial attribute can result in short-term adjustments to earnings recognition, particularly during periods of higher rates of change in volume and realized pricing, both of which occurred in the first quarter. Generally speaking, these intercompany eliminations are simply timing differences between segment-level earnings recognition and the final sale to our customers. With respect to our operating segment results, our steel mills improved pre-tax earnings nearly 90 percent from the prior quarter, generating approximately $1.1 billion in pre-tax earnings for the first quarter.

Speaker Change: However that same beneficial attribute can result in short term adjustments to earnings recognition, particularly during periods of higher rates of change in volume and realized pricing both of which occurred in the first quarter.

Speaker Change: Generally speaking these intercompany eliminations are simply timing differences between segment level earnings recognition and the final sale to our customers with respect to our operating segment results. Our steel mills improved pretax earnings nearly 90% from the prior quarter generating approximately $1 1 billion and pre tax earnings for the first quarter.

Steve: Improved results in our sheet business were the largest factor driving the quarter-over-quarter gain. That business saw an approximately 11% increase in shipments and 19% higher realized pricing during the quarter. Moving to steel products, this segment delivered pre-tax earnings of approximately $512 million for the quarter. However, total segment shipments were down approximately 4% from the prior quarter. We believe an unusually wet start to the year may have adversely affected some regional construction activity during the period.

Steve: Improved results in our sheet business were the largest factor driving the quarter-over-quarter gains. That business saw an approximately 11% increase in shipments and 19% higher realized pricing during the quarter. Moving to steel products, this segment delivered pre-tax earnings of approximately $512 million for the quarter. However, total segment shipments were down approximately 4% from the prior quarter. We believe an unusually wet start to the year may have adversely affected some regional construction activity during the period.

Speaker Change: Improved results in our sheet business with the largest factor driving the quarter over quarter gains.

Speaker Change: That business saw approximately 11% increase in shipments and 19% higher realized pricing during the quarter.

Speaker Change: Moving to steel products. This segment delivered pretax earnings of approximately $512 million for the quarter.

Speaker Change: Total segment shipments were down approximately 4% from the prior quarter we.

Speaker Change: We believe an unusually wet start to the year may have adversely affected some regional construction activity during the period.

Steve: While margins for downstream steel products have receded from the historically high levels of recent years, the segment continues to generate attractive returns and strong cash flows. Highlighting a few individual product lines, the first quarter saw higher pricing and margin from our tubular products division. This was more than offset by moderating contributions from our Joyston Deck, Metal Buildings, and Rebar Fabrication operations. Our joist and deck business continues to be the largest single contributor to our steel product segment earnings. This business tends to have backlogs and lead times of four to six months.

Speaker Change: While margins for downstream steel products have receded from the historically high levels of recent years. The segment continues to generate attractive returns and strong cash flows.

Speaker Change: Highlighting a few individual product lines, the first quarter saw higher pricing and margin from our tubular products divisions.

This was more than offset by moderating contributions from our joist and deck metal buildings and rebar fabrication operations.

Speaker Change: Our joist and deck business continues to be the largest single contributor to our steel products segment earnings. This business tends to have backlogs and lead times are four to six months.

Steve: Consequently, we believe the earnings profile of our joist and deck business will likely stabilize as we approach the back half of the year, given the relative stability we've seen in pricing over the last quarter. It's worth noting that for the foreseeable future, this business is expected to maintain results that remain considerably higher than pre-pandemic averages. Our raw material segment produced pre-tax earnings of approximately $10 million for the quarter.

Speaker Change: Sequentially, we believe the earnings profile of our joist and deck business will likely stabilize as we approach the back half of the year given the relative stability, we've seen in pricing over the last quarter.

Speaker Change: It's worth noting that for the foreseeable future and this business is expected to maintain results that remain considerably higher than pre pandemic averages.

Speaker Change: Our raw materials segment produced pretax earnings of approximately $10 million for the quarter overall volumes were higher but lower metallics prices compressed margin for this segment.

Steve: Overall, volumes were higher, but lower metallics prices compressed margins for the segment. Let me now turn our attention to the balance sheet and capital allocations. We began the year with a strong cash position and generated $460 million in cash from operating activities in the first quarter.

Speaker Change: Let me now turn our attention to the balance sheet and capital allocation we.

Speaker Change: We began the year with a strong cash position and generated $460 million in cash from operating activities in the first quarter.

Steve: Overall, volumes were higher, but lower metallics prices compressed margins for the segment. Let me now turn our attention to the balance sheet and capital allocation. We began the year with a strong cash position and generated $460 million in cash from operating activities in the first quarter.

Speaker Change: These factors enabled nucor to continue its balanced approach to capital allocation, enabling growth through investment, providing direct shareholder returns and maintaining a strong investment grade rating.

Steve: These factors enabled Nucor to continue its balanced approach to capital allocation, enabling growth through investment, providing direct shareholder returns, and maintaining a strong investment-grade rating. On the growth front, during the first quarter, we continued to advance our strategy of deploying $670 million in capital spending, with progress made on several greenfield and expansion projects described earlier. The first quarter also saw Nucor return over $1.1 billion to its shareholders. This included $134 million in dividends and $1 billion in share repurchases, which reduced our share count by 5.5 million shares.

Speaker Change: On the growth front during the first quarter, we continued to advance our strategy deploying $670 million and capital spending with progress made on several greenfield and expansion projects described earlier.

Speaker Change: The first quarter also saw a new core returned over $1 $1 billion back to shareholders.

Speaker Change: This includes a $134 million in dividends and $1 billion in share repurchases, which reduced our share count by $5 5 million shares.

Speaker Change: It has long been the new course practice to put capital to use or return it.

Speaker Change: This discipline was on display again in the first quarter were repurchasing activity was higher than normal due to our sizable cash balance at the start of the year.

Speaker Change: Today, we continue to have a healthy cash and liquidity position and enabler ever expected near term Capex plans and pipeline of acquisition opportunities Nucor's balance sheet remains robust.

Steve: It has long been Nucor's practice to put capital to use or return it. This discipline was on display again in the first quarter, where repurchasing activity was higher than normal due to our sizable cash balance at the start of the year. Today, we continue to have a healthy cash and liquidity position, an enabler of our expected near-term CapEx plans and pipeline of acquisition opportunities. Nucor's balance sheet remains robust, a financial practice that both maintains a strong investment-grade rating and enables our long-term orientation and success. We ended the quarter with a total debt-to-capital ratio of approximately 24 percent and total leverage of roughly one times trailing 12-month EBITDA.

Speaker Change: The financial practice that both maintains a strong investment grade rating and enables our long term orientation of success. We ended the quarter with total debt to capital ratio of approximately 24% and total leverage of roughly one times trailing 12 month EBITDA.

Speaker Change: Looking ahead to the second quarter of 2024, we expect consolidated earnings to be lower than the first quarter with reduced earnings from our steel mill and steel products segment.

Speaker Change: Partly offset by modest improvements in earnings from our raw materials segment.

Speaker Change: Lower earnings from our steel mill segment are the largest drivers of our reduced outlook for second quarter earnings for this segment, we expect slightly higher volumes to be more than offset by lower realized prices. We anticipate our sheet business will be the largest driver of change in results for the steel mill segment and for the overall company.

Steve: Looking ahead to the second quarter of 2024, we expect consolidated earnings to be lower than the first quarter, with reduced earnings from our steel mill and steel product segments, although partly offset by modest improvements in earnings from a raw material segment. Lower earnings from the steel mill segment are the largest drivers of a reduced outlook for second quarter earnings.

Speaker Change: Our steel products segment continues to moderate from historically high record levels of performance.

Speaker Change: For this segment in the second quarter, we expect higher volumes and lower realized pricing with a net effect being slightly lower earnings for the segment.

Steve: For this segment, we expect slightly higher volumes to be more than offset by lower realized prices. We anticipate our sheet business will be the largest driver of change in results for the steel mill segment and for the overall company. Our steel product segment continues to moderate from historically high record levels of performance. For this segment, in the second quarter, we expect higher volumes and lower realized pricing, with the net effect being slightly lower earnings for the segment.

Speaker Change: For the raw materials segment stable volumes and improved margins should result in an overall higher profitability.

Speaker Change: Overall across all businesses backlogs remain healthy and in line with historic norms.

Speaker Change: However, the anticipated reduction in realized pricing for our steel mills and steel products segment in the second quarter are expected to lead to lower overall cash flows and earnings.

Speaker Change: On a macro level the U S economy appears to demonstrate near term resilience that strength relative to recent past expectations.

Steve: For the raw material segment, stable volumes and improved margins should result in overall higher profitability. Overall, across all businesses, backlogs remain healthy and in line with historic norms. However, the anticipated reduction in realized pricing for steel mills and steel products in the second quarter is expected to lead to lower overall cash flows and earnings.

Speaker Change: And overall positive.

Speaker Change: In addition, select end markets, such as advanced manufacturing data centers and infrastructure continued to show strength from secular trends.

Speaker Change: Taken collectively near term demand appears stable looking further out we remain cautiously optimistic on demand fundamentals given the positive trends of re shoring repowering and rebuilding.

Steve: On a macro level, the U.S. economy appears to demonstrate near-term resilience. That strength, relative to recent past expectations, is overall positive. In addition, select-in markets such as advanced manufacturing, data centers, and infrastructure continue to show strength from secular trends. Taken collectively, near-term demand appears stable. Looking further out, we remain cautiously optimistic on demand fundamentals given the positive trends of reshoring, repowering, and rebuilding. With that, we'd like to hear from you and answer any questions. Operator, please open the line for Q&A.

Speaker Change: With that we'd like to hear from you and answer any questions. Operator. Please open the line for Q&A.

Speaker Change: Thank you Lee.

Speaker Change: Ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star.

Speaker Change: A follow up question number one on your Touchtone phone.

Speaker Change: <unk>.

Speaker Change: That you had has been released.

Speaker Change: Should you wish to decline from the polling process. Please press the star followed by the numbers.

Speaker Change: If you are using a speaker phone please lift the handset before pressing.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the number one on your touchstone. You will hear a thump to let you know your hand has been raised. Should you wish to decline the polling process, please press the star followed by the number. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. So your first question comes from Martin Englert from Seaboard Research Park.

Speaker Change: One moment. Please for your first question.

So your first question comes from Mike <unk>.

Mike: From Seaport research.

Mike: Thank you.

Mike: Yes.

Mike: Hello, Good morning, everyone.

Mike: Good morning, Mark.

Within the steel mill segment, both bar and plate volumes were down double digits versus last year.

Mike: Also overall steel products volumes have gone to a similar degree Judy.

Speaker Change: Do you anticipate a similar trend of kind of double digit declines are and these products are going to continue into Q or is the sequential volume improvement expected youre willing to start to offset thats, where we will see something potentially lower.

Martin John Englert: Hello. Good morning, everyone. Good morning, Mark.

Leon J. Topalian: Within the steel mill segment, both bar and plate volumes were down double digits versus last year. Also, overall steel product volumes were down to a similar degree. Do you anticipate a similar trend of double-digit declines in these products is going to continue in Q2? Or is the sequential volume improvement expected going to start to offset this, where we'll see something?

Speaker Change: Certainly I appreciate your question.

Speaker Change: As we look out.

Markets are moderating.

Speaker Change: One of the important things to keep in mind more broadly when you think about the context.

Martin John Englert: Hello. Good morning, everyone. Good morning, Mark.

Leon J. Topalian: Within the steel mill segment, both bar and plate volumes were down double digits versus last year. Also, overall steel product volumes were down to a similar degree. Do you anticipate a similar trend of double-digit declines in these products? Are they going to continue in Q2? Or is the sequential volume improvement expected going to start to offset this, where we'll see something potentially lower?

Speaker Change: Third years like 'twenty, one 'twenty two 'twenty three we believe 24 is going to be another strong year, maybe not as strong as 2024. However.

Speaker Change: When we.

Speaker Change: Thank you.

Speaker Change: Products, either flat or volumes Q over Q should we expect Q2 volumes.

Speaker Change: To be a little bit.

Speaker Change: Although better achieving slower but it should be.

Speaker Change: Looking at pricing. It is moderating again in context is a really important thing so.

Speaker Change: For example in the product.

Leon J. Topalian: I certainly appreciate your question. We're, you know, as we look out, you know, markets are moderating. And I think one of the important things to keep in mind more broadly is when you think about the context of record years, like 21, 22, 23, we believe 24 is going to be another strong year, maybe not as strong as 2024, however. When we look at our products, either flat or included in volumes, Q over Q. So we expect you to choose volumes that are a little substantial, a little better, excuse me, smaller. But as we look at pricing, it is moderating. But again, context is a really important thing.

Speaker Change: That's coming off the historic highs it is way way above.

Leon J. Topalian: So we expect you to choose volumes that are a little substantial, a little better, excuse me, smaller. But as we look at pricing, it is moderating, but again, context is a really important thing. So, for example, in the product group, while that's coming off the historic highs, it is way, way above what we saw pre-pandemic levels. So we believe we've seen a pretty stable market out there regarding that group. And so, you know, I don't want to break out individual or break out individual pricing within those product groups.

Speaker Change: What we saw pre pandemic levels. So we believe we've seen.

Speaker Change: Pretty stable market out there.

Regarding that.

Speaker Change: I don't want to break out individual breakout individual pricing within those product groups.

Speaker Change: We're expecting Q2 to be a little softer, but again, it's relative I still think there's going to be many of our product groups that are going to generate very robust returns for us and our shareholders.

Speaker Change: And a couple of those that are.

Speaker Change: Steve mentioned in his opening remarks, as we look at markets.

Speaker Change: The segments.

Speaker Change: It really changed.

Leon J. Topalian: You know, we're expecting Q2 to be a little softer, but again, it's relative. I still think there are going to be many of our product groups that are going to generate very robust returns for us and our shareholders, and a couple of those that are, as Steve mentioned in his opening remarks as we look at markets, process segments. Really key, you know, the heavy equipment adding transportation is really the only area that we see declining a little bit from an overall demand picture. Other than that, construction, automotive, energy, service centers, we see flat, stable, or slightly improving as we hit it.

Speaker Change: Heavy equipment transportation, that's really the only area that we see declining a little bit from an overall demand picture other than that construction automotive energy service centers, we see.

Leon J. Topalian: So, for example, in the product group, while that's coming off the historic highs, it is way, way above what we saw pre-pandemic levels. So we believe we've seen a pretty stable market out there regarding that group. And so, you know, I don't want to break out individual or break out individual pricing within those product groups.

Speaker Change: Stable or slightly improving as we head into future.

Speaker Change: Great. Thank you for that.

Speaker Change: Within steel mills, and the estimated conversion costs looks like it declined modestly versus the prior quarter would you expect similar sequential decline in Q2 <unk>.

Leon J. Topalian: You know, we're expecting Q2 to be a little softer, but again, it's relative. I still think there are going to be many of our product groups that are going to generate very robust returns for us and our shareholders, and a couple of those that are... as Steve mentioned in his opening remarks as we look at the market process segment, really keeps the heavy equipment at it. Transportation is really the only area that we see declining a little bit from an overall demand picture. Other than that, construction, automotive, energy, service centers, we see flat, stable, or slightly improving as we hit it.

Speaker Change: Conversion cost per funded given higher volume, maybe something similar to the year ago comparable period.

Speaker Change: Thanks for the question Martin This is Dave.

Dave: Costs are down slightly mainly because of the utilization rates P&L.

Dave: Thank you for that. Within Spiel Mills, the estimated conversion cost looks like it declined modestly versus the prior quarter. Would you expect a similar sequential decline in 2Q on conversion costs per ton given higher volumes, maybe something similar to the year-ago comparable period?

Sure.

Dave: Also in California.

Speaker Change: Growth.

Speaker Change: Yes, I think that Theres, a whole lot more.

Speaker Change: More decline so we think that.

Speaker Change: The costs have stabilized and you can expect it to be maybe a little bit down, but what you saw.

Speaker Change: So on the first quarter.

Martin John Englert: Thanks for the question, Martin. This is Dave.

Speaker Change: Okay.

Speaker Change: Paul.

Paul: If I could one last quick one raw materials are expected to improve into Q on both <unk> and the.

Dave: Our costs are down slightly, mainly because of the utilization rates being up at the sheet goals and also at Gallatin. Gallatin's a big role. We think that there's a whole lot more decline, so we think that the costs have stabilized. You can expect them to be maybe a little bit down, but that's a little bit what you see.

Martin John Englert: Thank you for that. Within Spiel Mills, the estimated conversion cost looks like it declined modestly versus the prior quarter. Would you expect a similar sequential decline in 2Q on conversion costs per ton given higher volumes, maybe something similar to the year-ago comparable period?

Paul: Cycling operation.

Paul: Do you believe is going to drive the improvement in recycling given recent pricing trends and why is that.

Paul: Then challenged from a margin right.

Paul: Alright.

Paul: Speculative in recent quarters.

Speaker Change: Hey, Mark.

Martin John Englert: I don't know what you saw in the first quarter.

Speaker Change: Ill.

Dave: Thanks for the question, Martin. This is Dave.

Mark: Let's talk about recycling first I wanted to go back and just hit on your point about Cri as well.

Noah Hanners: Okay, that's helpful. Thank you. If I could, one last quick one.

Martin John Englert: Our costs are down slightly, mainly because of the utilization rates being up at the sheet goals. And also at Gallatin, that was a big role. We think that there's a whole lot more decline, so we think that the costs have stabilized. You can expect them to be maybe a little bit down, but similar to what you saw in the first quarter.

Mark: Really the answer is margin compression in scrap pricing has been lower we peaked.

Mark: Remember, we see declining prices.

Mark: Yes.

Mark: And we expect those prices to stabilize the stabilizing.

Martin John Englert: Okay, that's helpful. Thank you. If I could, one last quick one.

Thanks Bill.

Martin John Englert: Raw material is expected to improve in 2Q on both DRI and the recycling operations. What do you believe is going to drive the improvement in recycling, given recent pricing trends, and why has that been a challenge from a margin-threat perspective in recent quarters?

Mark: So we expect a normalization of margins there. We also are bringing online.

Mark: Okay.

Mark: Metal recovery plan are pushed out facility in Florida.

Mark: Okay.

Mark: Additional startup costs related to commissioning.

Noah: Hey Mark, this is Noah. Let's talk about recycling first.

Martin John Englert: on your point about DRI as well. Really, the answer is margin compression and scrap pricing has been lower. We peaked in December. We've seen a declining price month over month since, and we expect those prices to stabilize and stabilize in demand, as mentioned in the built-in bar.

Mark: We'll work through those call early in Q2, and you'll see that will be that will contribute to a more normalized margins.

Mark: Well.

Speaker Change: You mentioned Youre right, well I just want to make sure we provide some additional context.

Speaker Change: We executed two extended outages in DRC.

Noah: Ascension, Gilson, Barks, and Fulton.

Speaker Change: In Q3 going into Q4, so we're back to running higher rates higher volumes with Dr. I noticed this plants are back performing consistently.

Noah: We are also bringing online a new advanced metal recovery plant to our Bushnell facility in Florida.

Noah: And we've incurred some additional start-up costs related to commissioning at that facility. We'll work through those costs early in Q2, and you'll see our...

Speaker Change: It's been advantageous to us through Q1, and we will continue to be in Q2.

Noah: That'll contribute to more normalized margins in the recycling as well. You mentioned DRI as well. I just want to make sure to provide some additional context there. We executed two extended outages in DRI in Q3.

Speaker Change: Do you see.

Speaker Change: Hi high rates of <unk>.

Speaker Change: So we're able to not participate in higher cost pig iron market.

Martin John Englert: We have high rates of DRI, so we're able to participate in higher-cost pig iron markets and run higher rates of DRI.

Speaker Change: Run higher rates from DIY.

Speaker Change: To answer back.

Speaker Change: Performing at levels that we saw before the outages.

Noah: [inaudible]

Speaker Change: The you are adding the advance in recycling separation technology to one facility right now or can you frame up the.

Martin John Englert: Then, you're adding an advance in recycling separation technology to one facility right now. Can you frame up the cost impact as to what it was in one queue for the startup costs there and what you might anticipate?

Speaker Change: Cost impact as to what it was in one Q4, the startup costs, there and what you might anticipate in <unk>.

Noah: Yeah, it was about 9 million additional in Q1. It'll be minimal in Q2. We're nearly fully commissioned. It is a stand-alone facility at Bushnell that allows us to recover higher rates of copper and aluminum, so it's not it's not an add-on to one of our existing processes.

Speaker Change: Yes. It was it was about $9 million additional in Q1, it will be minimal in Q2 were nearly fully commission and it is a standalone facility.

Speaker Change: Bush now that allows us to recover higher rates with copper and aluminum. So it's not it's not an add on to one of our existing processes.

Martin John Englert: How many more of those do you have planned over the course of the year?

Speaker Change: How many more of those planned over the course of the year if any.

Noah: Nothing else this year. We're going to continue to learn from this process. It's really state-of-the-art technology.

Speaker Change: Nothing else. This year, we're going to we're going to continue to learn from this process is really state of the art technology.

Noah: Take this and learn from the best.

Speaker Change: To take this.

Speaker Change: And learn from the <unk>.

Noah: Additional recovery will be realized from this process and then built out across the rest of our recycling platform.

Speaker Change: Additional recovery will realize from this process and then build out across the rest of our recycling platform.

Speaker Change: Looking abroad.

Martin John Englert: And the crux of that is that it allows you some increased optionality as to what you would charge with prime or substitutes at that facility to switch to some degree to an upgraded shred product, right?

Speaker Change: And the crux of that is that allows you to some increased optionality, what you would charge with prime or substitutes.

Speaker Change: I need to switch to some degree to an upgraded shred product right.

Noah: Yeah, that's a different process. This is really for non-ferrous materials. So if you think about upgrading obsolete scrap or shredded scrap, we're doing that at one of our facilities now at Berkeley. We're producing about 2,500 tons per shift, and really, that is an offset of a replacement for prime scrap or pig iron that is processed. So we've got that fully at scale now, and we'll continue to expand that capability to our other bills.

Speaker Change: Yes, that's a different process. This is really for nonferrous material.

Speaker Change: And if you think about upgrading obsolete scrap shredded scrap we're doing that at one of our facilities. Now currently we are producing about 2500 tonnes per shift and really that is an offset or a replacement for prime scrap pig iron process. So we've.

Speaker Change: We've got that fully at scale now.

Speaker Change: And we will continue to expand that capability to other mills as well.

Martin John Englert: Okay. Very helpful. I appreciate it. Thank you, folks.

Speaker Change: Okay very helpful. I appreciate it thank you folks.

Speaker Change: Sure.

Operator: Thank you, and your next question comes from the line of Kurt Woodworth from UBS. Please go ahead.

Speaker Change: Thank you and your next question comes from the line of Craig <unk> from UBS. Please go ahead.

Curtis Rogers Woodworth: Yeah, thank you. Good morning, Leon and team.

Craig: Yes. Thank you good morning, Liana and team thanks for taking my questions.

Curtis Rogers Woodworth: Thanks for taking my questions. I was just hoping to drill down a little bit more into the downstream product categories. Last quarter, you talked about Joyce & Deck order entry being up pretty substantially to start the year. Yeah, we're still seeing, you know, pretty materially negative volume trends. So I'm just curious, did anything maybe change in the quarter? Did that kind of proceed as you expected?

Craig: I was just hoping to drill down a little bit more into.

The downstream product categories last quarter, you talked about joist and deck order entry was up pretty substantially to start the year, yes, we're still seeing.

Craig: <unk> materially negative volume trends, so I'm just curious did anything.

Craig: Maybe changed in the quarter does that kind of proceed as you expected and then you commented that you do expect to see price stabilization in the back half of the year, but can you comment on.

Leon J. Topalian: And then you commented that you do expect to see price stabilization in the back half of the year, but can you comment on, you know, maybe where margins stand today versus historically? You know, I think historically, Joyce & Deck FAB was around 10 to 15% operating margin. I know it's much higher than that now. And then you also talked about Joyce & Deck.

Craig: Maybe where margins stand today versus historical.

Craig: I think historically joy.

Craig: <unk> was around 10% to 15% operating margin I know, it's much higher than that now.

Craig: And then you also talked about joist and deck accounting for the majority of that division could you frame that out anymore. So we can have a better.

Leon J. Topalian: Yeah, Kurt, I'll kick us off and then I'll turn it over to Brad and Steve if there are any comments you'd like to make on the specifics in terms of margins. Look, our downstream products group, in general, has performed incredibly well over the last several years. And I'm not looking at the data in front of me, but we had a run of 10 or 11 quarters where that group generated a billion dollars in net earnings or better.

Craig: Understanding of the EBIT contribution.

Speaker Change: Yes, Kurt I'll kick us off and then I'll turn it over to Brad.

Speaker Change: Interesting comment.

Brad: <unk> in terms of margins look our downstream products group in general is performing incredibly well over the last several years.

Brad: Now looking at the data in front of me, but we had a run up 10.

Brad: 10, or 11 quarters, where that group generated $1 billion of net earnings or better.

Leon J. Topalian: Their performance over the last several years has been nothing short of incredible. And so I'm incredibly proud of what the team has been able to do, how they've come together to provide solutions, not just individual products, but taking care of our customers with the breadth of Nucor. Frank, coming together and again leading, The differentiated capability set is serving that market in a very different way. You know, again, I use the word moderating. We're seeing pricing moderating, but again, I'll let.

Brad: Performance over the last several years has been nothing short of incredible incredibly.

Brad: Credibly proud of what the team has been able to do.

Brad: Come together to provide solutions not just individual products, but taking care of our customers.

Brad: Yes.

Brad: Nucor.

Brad: Great.

Brad: Coming together and again meeting.

Brad: This differentiated capability set ensuring that market in a very different way.

Brad: Again, I used the word moderating, we're seeing pricing moderate, but again I'll, let Brad speaking a little bit or to some of the detail what are you seeing.

Brad: I'll let Brad speak a little bit more about some of the details, what he's seen, and what we're envisioning as we move forward in the future.

As we move forward.

Brad: Brian Yes, thanks, Liana thanks for the question.

Brad: As you know, we produce many different downstream products, and this breadth of product offering continues to be a significant differentiator for us, as we bring multi-product solutions to our customers.

Brad: Yes.

Brian: We produce many different downstream product and this breadth of product offering continues to be a significant differentiator for us.

Brian: As we bring multi product solutions too.

Brian: To our customers.

Steve: Specifically, some areas of strength we're seeing right now in non-res, advanced manufacturing, data centers, and institutional projects in healthcare and education. You know, as Steve noted, quarter one started out a bit slow for us on the product side, driven mainly by some extreme weather and associated job site delays. That said, in light of the current interest rate environment, we remain very optimistic about the resiliency of non-res construction. On the Joyce and Dex sides specifically... Again, start of the year was relatively slow, but we've seen quotient booking activity accelerate pretty rapidly over the last 45 days, with March industry bookings far outpacing what we saw in January and February.

Brian: Some areas of strength were seeing right now in non res advanced manufacturing data centers institutional projects in health care and education.

Speaker Change: Yes, Steve noted quarter, one started out a bit slow for us on the product side, driven driven mainly by some.

Speaker Change: Extreme weather and associated job site delays.

Speaker Change: That said in light of current interest rate environment, we remain very optimistic about the resiliency and non res construction.

Speaker Change: On the joist and deck side specifically.

Speaker Change: Again started the year relatively slow, but we are seeing quoting and booking activity accelerate pretty rapidly over the last 45 days with March industry bookings far outpacing what we saw in January and February.

Steve: Combining that with backlogs that remain strong, we still sit about 25% above pre-pandemic levels, and we expect improved volumes, as we noted in Q2. On the pricing side, again, we've seen market prices stabilize, remaining pretty consistent now for the last two quarters, at levels far higher than historical norms. Would people even better reflect the value of the products and the solutions that we're bringing to the market? As I think about the balance of this year and the megatrends we've been discussing, we're very optimistic about our product breadth and solutions focused approach.

Couple that with <unk>.

Speaker Change: Backlogs remained strong we still see about 25% above pre pandemic levels and we expect improved volumes as we noted in Q2.

Speaker Change: On the pricing side.

Speaker Change: Again, we've seen market price stabilize remaining pretty consistent now for the last two quarters.

Speaker Change: Levels far higher than historical norms.

Speaker Change: We believe better reflect the value of the products and the solutions that we're bringing to the market.

Speaker Change: So as I think about the balance of this year and the Mega trends, we've been discussing we're very optimistic.

Speaker Change: Thanks, Brad and solutions focused approach.

Steve: We're well positioned to take advantage of these megatrends. Like Leon said, I'm extremely proud of how our downstream products teams are executing, working together to take care of customers, and continuing to drive the step change in earnings that we're generating. Hey Kurt, I'll just add to what Brad and Leon have said. This is Steve.

Speaker Change: We are well positioned to take advantage of these megatrends.

Speaker Change: Like Leon said I am extremely proud of how our downstream products teams are executing working together to take care of customers and continuing to drive the step change in earnings that we're generating.

Speaker Change: Yes.

Speaker Change: I'll just add on to.

Steve: Liana this is Steve.

Steve: and you know Leon talked about profitability being in a fundamentally different position. Our segment profits were over a half a billion dollars from that segment this quarter. And if you go back pre-pandemic, we averaged call it $450 million and even down from that segment for a year. So we are fundamentally positioned differently as a company today.

Steve: And <unk> talked.

<unk> talked about the profitability of data in a fundamentally different position.

Steve: Segment profits were over $5 million from that segment this quarter.

Steve: And if you go back pre pandemic average call it $450 million in EBITDA for that segment for a year. So we are fundamentally position different as a company today than we had been in the past when you referenced some moderation.

Steve: It has to be taken in the broader context of those

Steve: It has to be taken.

Steve: Broader context.

Steve: Those, along with demand trends that are, Brad referenced, that are pretty good.

Steve: Those along with demand trends that are.

Steve: Ed referenced that are pretty pretty good.

Steve: We're not going to get into that process.

Steve: Yes.

Steve: We're not going to get into the profitability.

Steve: We have a lot of different products in that segment. But we have not done that.

Steve: The products within that segment, we've not done that but what I will point you to to give you a little bit.

Steve: I will point you to a little bit of an orientation. Again, Brad referenced that we have a very diverse set of downstream businesses. And 20-25% of our volume is from the joist and deck business, and roughly 20-25% is going to be pipe and tube, and about 20-25% is rebar fabrication. So I hope that gives you a good mix of the products that are set in that segment.

Steve: Orientation.

Steve: Yes, Brad referenced that we have a very diverse.

Steve: Downstream businesses.

Steve: 20% to 25% of our volume.

The joist and deck business, and roughly 20% to 25% is going to be pipe and tube and about 20% to 25% as rebar fabrication. So I hope that gives you a good mix.

Steve: Yeah.

Steve: And that in that segment.

Curtis Rogers Woodworth: No, that's helpful. And then, as a follow-up, can you kind of comment on how you see infrastructure spending evolving this year? I mean, looking at kind of the bar and plate volumes, there's still, Can you give us an update on how the Brandenburg plate mill is doing and if you still expect the similar level of volumes you were guiding to last quarter?

Speaker Change: No that's helpful.

Speaker Change: And then as a follow up can you kind of comment on.

Speaker Change: Okay.

How you see infrastructure spending evolving this year I mean, it seems looking at kind of the bar and plate volumes they are still.

Speaker Change: Somewhat static.

Speaker Change: Demand trends going on there and then can you give us an update on how the Brandenburg plate mill is doing and if you still expect that similar level of volumes were guiding to last quarter I will turn it over thank you.

Leon J. Topalian: I'll kick us off, and John, if I miss anything on the bar side, if you want to come out, please jump in, and then I'll maybe touch on Brandenburg's RAM. You know, Kurt, I'll just start with, you know, the three pieces of legislation and the great news that we've been talking about for way too long are passed, right? The money's there; it's in the books. Obviously, the furthest along of the three of those pieces of legislation is the CHIPS Act.

Speaker Change: Alright, I'll kick us off.

Speaker Change: John if I Miss anything on the bar side, you want to comment on please jump in and then.

Speaker Change: Maybe you can touch on Brandenburg ramp.

Speaker Change: Kurt I'll just start with.

Speaker Change: The three pieces of legislation and the great news that we've been talking about for way to all our past right. There. The money is there it's in the books.

Obviously, the furthest along in the three of those pieces of legislation are the chipset and we got 83, new semiconductor products had been announced.

Leon J. Topalian: We've got 83 new semiconductor projects that have been announced worth an estimated $350 billion worth of CAPEX that'll be built out in the coming years. To date, 23 of those have broken ground and begun construction. So that's real.

Speaker Change: Estimated roughly $350 billion worth.

Speaker Change: Capex that will be.

Speaker Change: Built out in the coming years to date 23 of those have broken ground and begun construction. So thats real those orders are coming we're seeing that in.

Leon J. Topalian: Those orders are coming. We're seeing that and it is flowing through into our different product groups. If we look at IRA next, that's sort of the next most advanced behind the chipsack where, again, when we look at renewables, particularly solar torque tubes, we're seeing those orders again on our books, being produced, being shipped, and moving. And then last, and probably the most lagging in that, is IIJA, or infrastructure that, again, funds are there federally, got to flow through the states, and then execute on the individual projects and highway bridges and the like.

Speaker Change: Flowing through into our different product groups, if we look at.

Speaker Change: Irate, Nick that's sort of the next.

Speaker Change: Most advanced behind the chip Zach where again when we look at renewables, particularly solar torque tubes, we're seeing those orders again hit our books.

Speaker Change: Being produced being shipped and moving and then last and probably the most lagging in that.

Speaker Change: Or infrastructure that again funds for their federally kind of flow through the states and then execute on the individual projects highways bridges and alike.

Leon J. Topalian: That's. Still in the very, very early innings, and we're expecting in the years to come, next two, three, four, five, we'll see all three of those continue to ramp. We still estimate that the total between the three is somewhere between five and eight million tons annually over the next four or five years. That, again, will have a positive impact. The thing that... You know, if you look to Nucor and our strategy or growth play, where we're going, focusing, and some of the megatrends are showing more than double-digit growth for the next five years, like data centers, like towers and structures that we're in, that we're incredibly excited about, that we also think is going to be an incredible tailwind, and most of our groups, not the least of which, Barclay, Sheep, Beans, and Products will play a significant, Anything you'd like to add, John, on that?

Speaker Change: That's still in the very very early innings, and we're expecting in the years to come next 2345, we will see all three of those continue to ramp we still estimate that the total between the three is somewhere between five and 8 million tons annually over the next four or five years that again will have a positive impact.

Speaker Change: The thing that.

Speaker Change: And as you look to Nucor and our strategy our growth plays where we're going focusing some of the mega trends are showing more than double digit growth.

Speaker Change: For the next five years like data centers like towers.

Speaker Change: And structures.

Speaker Change: But we're in that we're incredibly excited about that we also think it is going to be an incredible tailwind.

Speaker Change: Most of our groups not the least of which Barclay.

Speaker Change: She'd been Sydney products will play a significant role.

Speaker Change: Hey, thanks.

Jonathan Yes.

Speaker Change: Yes.

Jonathan: Certainly you pointed out known it seeing a slowdown or a slowdown but in the way of the infrastructure.

Leon J. Topalian: Yeah, yeah, Leon, I would add. Certainly, as Leon noted, we are seeing a slowdown, or not a slowdown, but a delay in the infrastructure spending. But as we look at building out, and commissioning our mills in Lexington, North Carolina,

Jonathan: As we look at building out commissioning our mill, so much of North Carolina and Arizona.

Jonathan: We are well positioned to take advantage of these dollars.

Speaker Change: Sure Bob.

John J. Hollatz: and on long products and if you care about work.

Bob: So we're optimistic about the long term demand on long products.

John J. Hollatz: Yeah, Kurt, this is Al Behr. I'll just comment quickly on your question about Brandenburg. The Brandenburg ramp-up continues to go according to plan for this year that we talked about last fall, which is about half a million tons.

Bob: Sure.

Bob: Yes, Kurt this is out there I'll just comment quickly on your question about Brandenburg Brandenburg ramp up continues to go. According to plan for this year that we talked about on the last fall, which is about half a million tons for the year.

Kurt: In Q1 was about 50000 tons, obviously is going to be heavily weighted to the second half I would expect to double that tonnage in Q2 and double that again in Q3 or so.

Allen C. Behr: and doublehead again in Q3 and Q4.

Allen C. Behr: We continue to be a capability story. We shipped our first headplate for a tank rail car customer, so that's something new for us. We weren't able to take care of those customers before. It's a new capability, so we continue to tick off these new firsts for Nucor on how we can take care of our customers due to the game.

Kurt: It continues to be a capability story, we shipped our first <unk> played for a tank railcar customers. So.

Kurt: It's something new for us, we weren't able to take care of those customers before us with new capabilities. So we continue to take up these new first for Nucor on how we can take care of our customers due to the capabilities gives us and the volume will come with it.

Allen C. Behr: gives us, and the volume will come with it in just a second.

Kurt: Todd.

Curtis Rogers Woodworth: Great. Thanks for your time.

Todd: Great. Thanks for your time.

Operator: Thank you. And your next question comes from Tristan Gresser from BNP Paribas. Please go ahead.

Speaker Change: Thank you and your next question comes from Christian <unk> from BNP Paribas. Please go ahead.

Tristan Gresser: Yes, hi, good morning, and thank you for taking my questions. Maybe to start with a quick follow-up on the downstream outlook, with what you said about Joyce Syntec and prices normalizing and the volume direction, is it fair to say that Q2 will mark a drop for the divisions? And when we look at the H2 outlook, given the visibility you have for certain of your products, is it fair to say that we have more of a stable kind of environment from a learning perspective but nothing yet to be more optimistic or positive in terms of earning momentum there?

Christian: Yes, hi, good morning, and thank you for taking my questions.

Christian: Maybe to start with a quick follow up on the downstream outlook.

Christian: With what you said about joist and deck and prices normalizing in.

Christian: The volume direction.

Christian: It's fair to say that Q2 will mark the trough for the divisions.

Christian: When we look at the H two.

Christian: Given the visibility you have a certain of your products.

Christian: Is it fair that we have more of a stable kind of environment from our perspective, nothing yet too to be more optimistic or positive in terms of earning momentum there.

Tristan Gresser: Tristan, I want to make sure I understood the question. Is it really referring to how the Moderation is going to flow through to quarter to quarter earnings?

Speaker Change: Chris I want to make sure I understood. The question is it really framing to.

Speaker Change: How the.

Speaker Change: Moderation is going to flow through to quarter to quarter earnings.

Steve: Yeah, pretty much. And given that you have some visibility on certain RE products that are really big for the division, like Joyce and DECK, and you're saying prices have stabilized, it seemed to me that you have all the elements to say that Q2 would potentially mark the trough for the division. And then given the visibility you have, I'm just trying to understand if we're looking at more of a stable outlook in the second half of the year for the division, the steel product division, or if, given the positive commentary you mentioned on Joyce and DECK, could we see even, I don't know, an uptick in prices, an uptick in margins, and be a bit more positive on the earnings direction for H2

Chris: Yes, pretty much and even if you you have some visibility on certain RV products there really.

Chris: He could a division like Joseph deck, and you are seeing saying prices have stabilized.

Chris: It looks to me that you have all the elements to say that Q2 would potentially marked a trough for the division and then given the visibility you have.

Chris: Just trying to understand if we're looking at more of a stable outlook in the second half of the year for the division the steel product Division.

Chris: Given the positive commentary you mentioned on the joist and deck could we see even I don't know an uptick in prices and uptick in margins and be a bit more positive on the direction for <unk>.

Steve: Hey Tristan, this is Steve. I'll call you back in a minute.

Chris: Yes.

Steve: and Brad can clean up any misses that I've got, but yeah, we, you know, particularly with Joyce and Dec, given the lead time.

Chris: This is Steve I'll field this.

Steve: Brad can clean up any English.

Yes.

Steve: Particularly with Joyce & Deck, given the lead times and backlogs that we've got there that are pretty healthy, we've seen very good price stability, relative price stability over the last quarter or so. That does lead you to have more confidence in what the back half of the year might look like. I've been around too long to say that, you know, we're going to call it a trough at this point.

Steve: Yes.

Steve: Particularly with joist and deck, given the lead times and backlog that we've got out there that are pretty healthy.

Steve: <unk> seen very good price stability relative price stability over the last call a quarter or so that does lead you to have more confidence.

Steve: The back half of the year might look like.

Steve: <unk> been around too long.

Steve: That we're going to call. It trough at this point there is too much variability in our business model overall, but certainly for joist and deck Thats, a very very positive trend in terms of.

Brad: There's too much variability in our business model overall, but certainly for Joyce & Deck, that's a very, very positive trend in terms of stabilization. And just sort of like Kurt's questions earlier around the diversity of the downstream product segment, there are other parts of that part of our portfolio that don't have that much link to their backlogs and lead times. So that's why I'd be a little hesitant to say that, you know, second quarter, it's a trough.

Steve: Stabilization.

Steve: Just sort of like curt's questions earlier around the diversity of the downstream product segment. There is other and other parts of that.

Steve: Part of our portfolio that don't have that much to their backlogs and lead times. So that's why it'd be a little hesitant to say that second quarter trough.

Brad: But I would characterize your question as affirming the relative positive position of Joyce & Deck. Yeah, Steve, the only thing I would add is... From a volume perspective, non-residential construction is somewhat seasonal, so Q1 tends to be a bit lower in volumes on the product side. Q2 and Q3 are usually more robust, and that's what we're seeing right now.

Steve: Characterize your question.

Steve: Fermi.

Steve: Relative positive position of choice in that.

Speaker Change: Yes, Steve the only thing I would add is from a volume perspective, non res construction is somewhat seasonal.

Speaker Change: So Q1 tends to be a bit lower.

Speaker Change: Volumes on the product side.

Speaker Change: Ed.

Speaker Change: Q2, and Q3 are usually more robust and thats what were seeing right now.

Tristan Gresser: All right, that's really helpful. And you discussed a little bit about the data center and your recent acquisition. Am I right to understand that when you talk about the complementarity of certain downstream products, that those data centers will use Joyce and DEC and other products? And could you maybe give us a sense, a quantified sense of how big this could be as a driver right now and maybe in the future? Yeah, I'll kick us off and maybe ask you tomorrow.

Speaker Change: Alright.

Speaker Change: That's really helpful and.

Speaker Change: Can you discuss a little bit data center in your recent acquisition.

Speaker Change: Right to understand that.

Speaker Change: When you talk about.

Speaker Change: Complementary to you certain downstream product that those data center will use joist and deck and all the products.

Speaker Change: And if you could maybe give us a sense quantified sense of.

Speaker Change: How big this could be.

Speaker Change: As a driver right now and maybe in the future.

Leon J. Topalian: Yeah, I'll kick us off and maybe ask Chad, you, Mark, who's in charge of our M&A and new businesses that we acquire, Tristan, but what we're really excited about the opportunity that the long-term projections are, you know, Boston Consulting Group is projecting about 12 to 14 percent year-over-year growth in data center construction over the next four or five years. Combining that with, you know, again, just a little bit of a pivot here, the demand for power that many of these large hyperscalers need, you're talking hundreds and hundreds and hundreds of megawatts, so, you know, the infrastructure build-out required and the energy requirements are prompting a few things. One, we're going to continue to grow in this space.

Speaker Change: Yes.

Speaker Change: Kick us off and maybe ask Chuck you Tomorrow, whose overall are.

M&A.

Speaker Change: New businesses that we acquire Tristan.

Chuck: We're really excited about the opportunity that the long term projections are.

Chuck: Boston Consulting group is projecting about 12% to 14% year over year growth in data.

Chuck: Data center construction over the next four or five years, coupled that with.

Yes, just a little bit of a pivot here couple that with the demand of power that many of these large hyperscale orders, meaning youre talking hundreds and hundreds and hundreds of megawatts. So the infrastructure buildout required in the energy requirements are prompting a few things one we're going to continue to grow in the space to under <unk>.

Leon J. Topalian: Two, under Chad's leadership, as we make these acquisitions and I shared earlier in my opening comments, we now have a data center group that will provide holistic solutions to our hyperscalers and other major data center builders, and so, again, these are long-term, long-established relationships that we have in the marketplace, and again, you're going to see Nucor continue to move forward. Many of the questions we often get on these earnings calls are, what are you going to do with the money, what are you going to do with the cash you're generating, we're sitting on, and again, we return, you know, over 130 percent of that back to shareholders in Q1, but our focus, without, you know, getting too far, is going to be in the mega-trends in this economy that we see are going to continue to generate incredibly strong and robust growth and returns for our shareholders, data centers being one of them.

Chuck: Leadership as we make these acquisitions and I shared earlier in my opening comments, we now have a <unk>.

Chuck: Data Center group that will provide holistic solutions to our.

Chuck: Hyperscale orders and other major.

Chuck: Data center builders and so again these are long term long established relationships that we have in the marketplace and again youre going to see Nucor continues to move forward. Many of the questions. We often get on these earnings calls or what are you going to do with the money. What are you going to do with the cash we're generating we're sitting on and again we return.

Chuck: Over 130% of that back to shareholders in Q1, but our focus without.

Chuck: Too far is going to be in the Mega trends in this economy that we see are going to continue to generate incredibly strong and robust.

Chuck: Growth and returns for our shareholders Datacenters being one of them southwest may see.

Leon J. Topalian: Southwest makes the sort of pathways for cool air to come in and hot air to get out. In terms of that data center, the 147 team members that we look forward to welcoming into the Nucor family, but Chad, any other details that you'd share on the market in general in Southwest? Thank you, Leon.

Chuck: I'm just sort of pathways for coal are to come in in order to get out in terms of that data center to 147 team members that we look forward to.

Chuck: Welcoming into the new family into the Nucor family, but any other details you could share on the marketing general and southwest.

Chad: Let me start by saying, you know, we've been in this data center space for a while. Our Nucor Buildings Group, along with our Joyce in Tech and our BEAM products, have supplied a lot of building structures for this space. They will continue to do that. They have great relationships with a lot of the hyperscalers and co-locators. We actually entered what I kind of call the racking or inside the data center, I think it may be the furniture in there, about a year ago through our racking division.

Speaker Change: Thank you Leon.

Leon: Let me start by saying we've been in this data center space for a while our Nucor buildings group, along with our choice of decking and RP.

Leon: <unk> products.

Leon: First of all building structures for the space. They will continue to do that.

Leon: Asian ships, a lot of the Hyperscale players to co locators.

Leon: We actually entered what I kind of call the racking or inside the data center I think it may be the furniture in there about a year ago through our racking Division and then 'twenty three we saw some tremendous growth there and then we were able to acquire SVP freeway.

Chad: wrote there. And then we were able...

Chad: Wire, S.W.D. Three weeks ago, as Leon mentioned, and these 147 team members, I mean, they're right down in the middle of the data center explosion.

Leon: Three weeks ago as Leon mentioned.

<unk> hundred 47 team members I mean, theyre right tab in the middle of the data center explosion.

Chad: This acquisition is going to give us new capabilities to serve our customers.

This acquisition is going to give us new capabilities to serve this growing market and it's kind of hard to put a dollar figure on how big the inside of the data center as furniture space that we're playing in but we estimate it to be probably north of $2 billion growing as Leon mentioned.

Chad: New capabilities to serve this growing market, and it's kind of hard to put a dollar figure on how big the inside of the data Center, this furniture space that we're playing in is, but we have.

Chad: We estimate it to be probably north of $2 billion and growing, as Leon mentioned, double digits. So we really feel like it's going to bolster Nucor's opportunity.

Leon: In double digits. So we really feel like it's going to bolster new course opportunity to be a preferred supplier to many of the nation's hyper scaler.

Chad: So we really feel like it's going to bolster Nucor's opportunity to be a preferred supplier to many of the nation's hyperscalers, the key co-locators who are front and center on the data center build out. As a note, SMDP also installed their products, which we're really excited about.

Leon: The key co locators.

Leon: In the center on the data center build out.

Speaker Change: As a note.

Speaker Change: PDP also install their.

Speaker Change: They are products, which we're really excited to be a part of that.

Chad: and possibly even install other products.

Speaker Change: And bring those assets into new core and.

Chad: So, we're excited about the space. We're excited about the products we have, and we're excited about the relationships we have with the key players. We already have those relationships, but the phones are already ringing, and we're looking at really growing in this space.

Speaker Change: Currently even install other products that we make sprinkler pipe and other things that we produce so we're excited about the space that we're excited about the products. We are excited about the relationships we have with the key players who already have those relationships of the phones are already ringing and we're looking at.

Speaker Change: Really growing significantly in this space.

Tristan Gresser: All right, that's a that's very clear. Thank you. And maybe a final question on PICONIC.

Speaker Change: Alright thats.

Speaker Change: That's very clear thank you and maybe a final question on the clinic.

Leon J. Topalian: Do you have any Can you disclose a little bit on the volume, how much you're selling, or what you target to sell in the coming years? And, you know, if I look at the carbon intensity at which you're selling, if you were to sell that product in Europe, you'd probably get a premium, a selling premium of 150 euros, 200 euros per ton. So it can be pretty significant. The US market is obviously much different, but I was wondering, as some other peers have done, the type of premiums you're looking at for this tonnage. Thank you.

Speaker Change: Do you have any.

Speaker Change: Our volume targets can you disclose a little bit on the volume.

Speaker Change: How much you're selling or your target to sell in coming years.

Speaker Change: I look at the.

Carbon intensity, which youre selling if you were to sell that product to Europe, you probably get a premium is selling premium up to 150.

Speaker Change: 200 <unk>.

Speaker Change: So can be pretty significant to us Mike and he's already see much different I was wondering if you could share as some other peers have done.

Speaker Change: The type of premiums you're looking at for this this village.

Speaker Change: Got it alright, thank you.

Leon J. Topalian: Yeah, Tristan, again, Nucor is excited about the work that we've done and on the entire sustainability front, you know, again, while other nations are looking to revamp their entire portfolio and spend tens of billions of dollars to try and someday, 20, 30, 40 years down the road look like Nucor, we're not standing still. We're able to take the billions and billions that we make today and continue to grow in places like data centers and racking, as well as the investments in towers and structures and automotive and construction, providing solutions and capabilities for our customers for decades to come. But when it comes to sustainability, it really becomes a very nuanced answer to your question.

Mike: Yes Tristan.

Speaker Change: Again Nucor is excited about our work that we've done in regarding the entire sustainability front.

Speaker Change: Again, while other nations are looking to revamp their entire portfolio.

Tristan: Tens of billions of dollars to try and someday 2030, 40 years down the road. It looked like Nucor, we're not standing still we're able to take the billions and billions that we're making today and continue to grow in places like data centers racking in the investments in towers and structures in automotive and construction and providing solutions.

Tristan: <unk> and capabilities for our customers for decades to come but when it comes to sustainability. It really becomes a very new launch.

Leon J. Topalian: For example, the Mercedes-Benz relationship we just announced was very important to them that we looked hard at our scope of emissions, right, that the renewable energy coming to Nucor and how we produce the steels was critically important. But make no mistake, Nucor was the first out of the gate at scale to provide a 100% net zero carbon-free steel, and we can do that at scale. A year ago, I think I calculated that Nucor's capability in that realm was somewhere around the ability to ship at least a million tons.

Tristan: Answer to your question for example, the Mercedes Benz relationship. We just announced was very important to them that we've looked hard at our scope two emissions right that the renewable energy in coming into Nucor, how we produce it.

Tristan: Yields was critically important.

Tristan: Make no mistake Nucor was the first out of the gate at scale to provide a 100% net zero carbon free steel and we can do that at scale.

Tristan: A year ago, I think I use the figure that nucor's capability in that realm with somewhere around.

Tristan: Ability to ship at least a 1 million tonnes.

Leon J. Topalian: We can do more than that, but really, what we're trying to do is identify solutions for our customers that need different things. There are some customers, for example, that don't want us to use credits or offsets to be able to get to that net zero target.

Tristan: <unk>.

Tristan: We can do more than that but really what we're trying to do is identify the solutions for our customers that need different things. So there are some customers for example.

Tristan: I want us to use were exar offsets to be able to get to that next tier of target, okay, well, our starting point already.

Leon J. Topalian: Our starting point is already low, and a 0.4 is hundreds of percentage points below the traditional or extractive steelmaking process in an integrated competitor. So our starting point becomes incredibly low. And then when you look to regional differences, there are different regions across the U.S. and Nucor operating that are able to lower that even further. And then certain steel mills like Sedalia that are operating at 0.09 or in that range.

Tristan: <unk> four is hundreds of percentage points below the traditional or extractive steelmaking process.

Tristan: Our integrated competitors, so our starting point becomes incredibly low and then when you look to regional differences there are different regions across the U S nuclear operating in.

Tristan: We're able to lower that even further and then certain steel mills like Sedalia that are operating at 0.09 or in that range and so you have a peak.

Leon J. Topalian: And so you have a unique opportunity again with the breadth of Nucor across the geographic footprint to really meet the needs today and in the long run. Lastly, and I just make this final comment and Dan, anything you want to add or Greg, is it took Nucor, we were very deliberate before we came out with our net zero target. We didn't just jump out there in 2021, and there was a lot of pressure to do so. We did it only when we believed there was a pathway within our control.

Tristan: Unity again with the breadth of nucor across the geographic footprint to really needs it needs today and long term lastly.

Speaker Change: To make the final comment Dan anything you want to add Greg is.

Speaker Change: It took nucor, we were very deliberate before we came out with our net zero target. We didn't just jump out there in 2021 and there was a lot of pressure to do so we did it when we believed there was a pathway in our control we're not looking for government subsidies are handouts for technologies that would make the.

Leon J. Topalian: We're not looking for government subsidies or handouts or technologies that would make the opex of steelmaking, quite frankly, unsellable. We're looking for things that we can directly control and produce a true net zero product. And again, we're excited about that. We're well on the way to accomplishing that. You'll see continued improvement in our overall performance, but again, leaders lead, and we're gonna be out front. We're gonna stay there. We're gonna continue to make the investments for the long term to position ourselves well for those customers that need and require iconic steel. And Tristan, this is Dan.

Speaker Change: Opex of steelmaking quite frankly, unsellable, we're looking for the things that we can directly control and produced a true.

Speaker Change: Net zero product and again, we're excited about that we're well on the way to that Youll see continued improvement in our overall performance, but again leaders lead and we're going to be out front, we're going to stay there and we're going to continue to make the investments for the long term to position ourselves well for those customers that need and require mechanics fields.

Speaker Change: In truth this is Dan.

Dan: What I would add to that is if you think about Econit, we rolled that out a couple years ago, it's about a net zero product for scopes one and two. The market has evolved quite a bit since then. And what I would tell you is that sustainability is absolutely a personal journey for a lot of these companies. And so we've evolved as the market has, and we're offering what the customers need. So we're very flexible, as we just announced to Mercedes, that was an Econit RE product around scope two because that's what the customer desired.

Dan: I would add to that is if you think about a comment.

Dan: We rolled that out a couple of years ago. It was about a net zero product for scopes, one into the markets evolved quite a bit since then.

Dan: What I would tell you that sustainability is absolutely a personal journey for a lot of these companies and so we've evolved as a market has and we're offering what the customers need. So we're very flexible as we just announced a mercedes that was an iconic product round scope.

Dan: Because thats what the customer desire. So we're very flexible as we approach that your last question was around premiums I am not going to get into specifics around what that is but there absolutely are premiums that were achieving and realizing here in the U S and if you look at how that shaping out in Europe I'd say it's.

Dan: So we're very flexible as we approach that. Your last question was around premiums. I'm not going to get into specifics about what that is, but there absolutely are premiums that we're achieving and realizing here in the US. And if you look at how that's shaping out in Europe, I'd say it's similar to what's happening in the United States.

Dan: What's happening in the United States.

Tristan Gresser: All right. Thank you very much. That was really helpful.

Speaker Change: Alright. Thank you very much that that was really helpful.

Operator: Thank you. And your next question comes from Timna Tanners from Wolf Research. Please go ahead.

Speaker Change: Thanks Kristen.

Speaker Change: Thank you and your next question comes from Timna Tanners from Wolfe Research. Please go ahead.

Timna Beth Tanners: Good morning. I was hoping for a little more color on the outlook because we're struggling a bit to get to the decline quarter over quarter. I think it has a bit to do with the fact that you pointed out, which is that, seasonally, demand does improve usually in the second quarter.

Timna Beth Tanners: Hey, good morning.

Timna Beth Tanners: Hoping for a little more color on the outlook as we're struggling a bit to get to the decline quarter over quarter. I think it has a bit to do with the fact that you pointed out which is seasonally demand does improve easily in the second quarter for your key end markets and so in light of that.

Speaker Change: Maybe it would be helpful.

Leon J. Topalian: Okay, Timna, I'll kick us off and, you know, maybe ask Steve to jump in if I go too far into the accounting hole of corporate elims, but, look, it is a good point because one of the incredible strengths of Nucor is our diversity. Our ability to provide a wide variety and a capability set for our customers is unmatched in North America. Well, when you, you know, we had $8 billion in revenue for the quarter.

Speaker Change: Discuss the corporate and eliminations impact is that.

Speaker Change: Vicki into the second quarter of some of those in process inventories to some of your projects are going to remain elevated or how we can think about that is if you can help us a bit with that guidance.

Speaker Change: Okay.

Vicki: I'll kick us off and maybe.

Vicki: Maybe I'll ask Steve to us.

Steve: To jump in if I go too far into the accounting all of corporate <unk>, but look at it.

Steve: That's a good point because one of the incredible strength of new horizontal diversity.

Speaker Change: <unk> provide one.

Steve: Variety of the capability set for our customers is unmatched in North America, well when you.

Steve: For the quarter had $8 billion in revenue for the quarter about one 5 billion of that is internal so it's shifting to hundreds of locations across new quarter. So the magnitude of our strength of having.

Leon J. Topalian: To your point, it's not a miss in terms of, well, you just missed it, and it doesn't come back. It will flow back through into Nucor in the weeks and Monsoon, maybe the next couple of quarters. So you're going to see that boost as they sell their products to their final end customers. So, look, I get your point in sort of, I think the way you're asking it is, would that not balance out?

Steve: About 20% of our overall shipments go internal means that man you tracking down the ebbs and flows of every potential property limit across hundreds of locations in 40 states.

Steve: Inexact science and again, our team worked really hard to try to do that.

Steve: To your point, it's not a miss in terms of what you just missed it and it doesn't come back it will flow back through into new quarter. The weeks months and maybe the next couple of quarters, So youre going to see that boost as they sell their products that they are fine.

Leon J. Topalian: What we're seeing and getting a little more stable in our Q over Q performance. And again, against that backdrop, I would tell you we still see the market softening a little bit into Q2. But again, we're optimistic about the back half of the year sort of stabilizing. And again, I think Steve answered it well. I don't want to call Q2 the trough and the low point at this point.

Steve: And customers so.

Speaker Change: Look I get your point and sort of I think the way you were asking.

Speaker Change: Not balance out.

What we're seeing in getting a little more stable in our Q over Q performance.

Speaker Change: Again against that backdrop.

Speaker Change: I would tell you we still see.

Speaker Change: Market shopping in a little bit into Q2.

Speaker Change: Again.

Speaker Change: Youre optimistic back half of the year sort of stabilizes and again I think Steve answered it well I don't want to call Q2, the trough.

Speaker Change: The low point at this point, however, we do see strengthening and we do think the back half of the year.

Leon J. Topalian: However, we do see strengthening, and we do think the back half of the year and really the overall year for Nucor is going to be pretty strong. Steve, anything you'd add? Yeah. Timna, this is Steve. The only thing I would add to what Leon said is, and you're very knowledgeable about our business and know how our products flow through, the different businesses we have. We do see volume pickups.

We're all year for Newport is going to be pretty strong.

Speaker Change: Anything you'd add.

Speaker Change: Timna. This is the only thing I would add.

Speaker Change: Yeah.

Speaker Change: Yes.

<unk>.

Speaker Change: Our business and know how that power products flow through.

Speaker Change: The different businesses, we have.

Steve: We do see volume pickups in both steel and in products, and so you should reasonably expect that the Corbett-E-Limbs might look different for the second quarter than they did for the first quarter. Having said that, you know, the pricing pressure on both mills and products...

Speaker Change: We do see volume pick ups in both steel and products.

Speaker Change: So you should reasonably expect that the property level.

Speaker Change: Mike looks different for the second quarter than they did the first quarter.

Speaker Change: You said that.

Speaker Change: The pricing pressure.

Speaker Change: Both mills.

Steve: So, I think your question was...

Speaker Change: Alex.

Speaker Change: I expect it to give us a little bit slower results in the second quarter.

Steve: was a correct characterization of... Some of those pluses and minuses as we look at Q2.

Speaker Change: I think your question was.

Speaker Change: Correct characterization of some of those pluses and minuses as we look at Q2.

Timna Beth Tanners: Okay yeah that's that's that's helpful I just said if there's any way to break out any more corporate eliminations guidance or color going forward it's a bit tricky as you mentioned I know it's tricky for you it's tricky for us so my second question is on the buyback cadence because obviously first quarter was a pretty big amount and as you pointed out you have a huge amount on your balance sheet with which you could you know dig into but how do we think about that cadence going forward how do you make those decisions or what what could that look like given that you have the spare capacity but you hadn't chosen to deploy it as aggressively until this quarter

Speaker Change: Okay Yeah.

Speaker Change: That's helpful.

Speaker Change: If there's any way to break out any more corporate eliminations guidance or color going forward at the Smit tricky as you mentioned I know, it's tricky for you its tricky for us.

Speaker Change: My second question is on the buyback cadence because obviously first quarter was a pretty big amounts.

Speaker Change: And as you pointed out you have a huge amount on your balance sheet with which you could.

Speaker Change: Dig into but how do we think about that cadence going forward, how do you make those decisions are.

Speaker Change: That looked like given that you have the spare capacity, but you haven't chosen to deploy it as aggressively until this quarter.

Steve: Yeah, hey Timna, this is Steve again. I think what you, you know, the first quarter is really...

Steve: Yes. This is Steve.

Steve: Again, I think what you.

Steve: An excellent piece of evidence of how Nucor thinks about...

Steve: First quarter is really.

Steve: Excellent piece of evidence of how our new four thinks about managing its balance sheet and October number one it's very long term perspective.

Steve: Number one, it's a very long-term perspective that we've made, but number two, it's rigor and discipline around how we put our capital to use.

Steve: Number two.

Steve: Okay, rigor and discipline around we put our capital to use.

Steve: If we find the right uses for it that create value, we give it back.

Steve: If we can find the right uses for it to create value we give it back to shareholders.

Steve: And that's something that we do for years and years, and that was all in the first quarter. One of the reasons we had a fair amount of liquidity...

Steve: That's something that we've done for years and years.

Steve: The first quarter one of the reasons that we get.

Steve: The reason there was no liquidity at the end of the year last year was because of a potential M&A pipeline.

Steve: A fair amount of liquidity at the end of the year last year was because of potential M&A pipeline activity and we felt comfortable.

Steve: M&A pipeline activity. And we felt comfortable releasing that capital, if you want to call it that, in the first...

Steve: Releasing that capital if you want to call it that in the first.

Steve: At a higher rate than we normally do, but we're still set with it.

Steve: At a higher rate than we normally do.

Steve: We fell set with an excellent balance sheet, a great leverage position, good liquidity, an active M&A pipeline, and a strong commitment to growth, and so we're striking that balance. It looks maybe a little bit choppy because of the amount of money we lost quarter over quarter from the fourth quarter, but we were blacked out for parts of the fourth quarter due to some of the chair buybacks. So that's part of why you're seeing the change if you're thinking about quarters.

Steve: With an excellent balance sheet, great leverage position liquidity.

Steve: Active M&A pipeline.

Steve: Commitment to growth.

We're striking that balance it looks maybe a little bit choppy because of the amount of dollars.

For over quarter for the fourth quarter, but we were blacked out parts of the fourth quarter.

Steve: From from some of the share buybacks. So that's part of why you're seeing the change if youre thinking about quarter over quarter numbers.

Leon J. Topalian: You know Tim, do you have anything else you'd like to tell us? Sorry, I was just going to say, look, to get a little more qualitative, if you asked in sort of a roundabout way, Nucor's probably not going to sit on five and a half, six billion dollars of cash on a normal basis. We're thinking hard about that. There are some other activities in the M&A pipeline we're looking at, but I can't get any further than that to tell you.

Steve: Okay.

Speaker Change: Sorry, I was just going to say look to get a little more qualitative.

Speaker Change: If you asked and sort of roundabout way no new course.

Speaker Change: Are we not going to sit on $556 billion of cash on a normal basis, we're thinking hard about that there are some other activities in the M&A pipeline. We're looking at it can't get any further than that to tell you.

Leon J. Topalian: But, again, you've watched our company long enough to know our return metrics, how we think about rewarding our shareholders through dividends and share repurchases, and you can expect that mindset and focus to continue well into the future.

Speaker Change: Again.

Speaker Change: Watch our company long enough to know our return metrics, how do we think about rewarding our shareholders.

Speaker Change: We did some share repurchases and you can expect that.

Speaker Change: Mindset and focus will continue well into the future.

Timna Beth Tanners: Okay, super. I appreciate the color, and I'll let it go there. Thanks again.

Speaker Change: Okay Super.

Speaker Change: Appreciate the color and I'll, let it go there thanks again.

Operator: Thank you. And your next question comes from Bill Peterson from J.P. Morgan. Please go ahead.

Thank you.

Speaker Change: Thank you.

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

William Chapman Peterson: Yeah, hi, good morning, everyone. And thanks for taking the questions.

William Chapman Peterson: Yes, hi, good morning, everyone and thanks for taking the questions I wanted to kind of come back to the plate market.

William Chapman Peterson: I wanted to kind of come back to the plate market. You know, what are your views on the market given elevated inventories, and apparent consumption turning down for the last 12 months? And then, I guess, is us. You know, I guess, what do you think are the key drivers that will unlock this market? And then, especially, taking into account you are, you know, ramping up Brandenburg, it sounds like you're planning to double over the next few quarters. I just want to get your thoughts on the market as we look ahead over the next several quarters.

William Chapman Peterson: What are your views on the market given elevated inventories.

William Chapman Peterson: Their consumption turning down for the last.

William Chapman Peterson: Last 12 months, and then I guess.

William Chapman Peterson: Yes.

William Chapman Peterson: I guess, how do you think what are the key drivers that will unlock this market and then especially.

William Chapman Peterson: Taking into account you are wrapping Brandenburg and it sounds like you're planning to double over the next few quarters.

Speaker Change: Want to get your thoughts in the market as we look out over the next several quarters.

Allen C. Behr: Hey fellas, it's Al Behr.

Speaker Change: Hey, Bill this is out there.

Allen C. Behr: As we look at the platen market, the consumptive part of the market remains pretty steady; when you look at power transmission as an area of strength, bridge work is an area of strength. Bridgeworth is not necessarily related to the infrastructure bill yet, but I think that's coming. That will be coming.

Speaker Change: As we look at the plate market.

William Chapman Peterson: Consumptive part of the market remains pretty steady when you look at.

Speaker Change: Power transmission is an area of strength and bridge work as an area of strength.

Speaker Change: Thats not necessarily related.

Speaker Change: The infrastructure Bill, Yes, I think thats coming that will be coming at Johns comments around rebar.

Allen C. Behr: to the infrastructure bill yet. I think that's coming. That will be coming. Uh, and John shares his comments on the rebar system. As a matter of fact, military work remains.

Speaker Change: Thanks.

Speaker Change: Military work remains strong and will probably pick up some.

Speaker Change: Volume work, but its very high margin work is highly specialized play a lot of it's Barbara.

Allen C. Behr: But there are still some weaker segments of vertical construction.

Speaker Change: But there is still some weaker segments vertical construction or high rise construction.

Allen C. Behr: Highrise Construction remains, you know, very, very weak. Barge is kind of an opportunistic market segment, and there's just not a lot of activity there right now. You look at heat, and Leon had some comments around heat.

Speaker Change: Very very weak.

Speaker Change: Barge is kind of an opportunistic market segment.

Speaker Change: Not a lot of activity there right now if you look at heat.

Allen C. Behr: That's starting to soften. It's coming down from highs, but it's really softened in the last 12 months. So I mean, when we boil that down to the year, it looks probably similar to last year. It's just fairly steady on the consumptive side, and then what comes in and out are the service centers that they buy according to what they feel is best for their business. And we didn't see a lot of restocking in Q1 this year. That's probably the biggest driver of our volumes being down. We saw a lot of that last year, and that drove volumes higher. Well, we looked through the rest of the year, and we think...

Speaker Change: Right.

Speaker Change: That's starting to soften it's coming down, but it's really softened in the last 12 months.

Speaker Change: When we boil that down through the year it looks broadly similar to last year, it's just fairly steady.

Speaker Change: This side and then what comes in it out as a service centers.

Speaker Change: According to what they feel is best for their business and we didn't see a lot of restocking in Q1. This year, that's probably the biggest driver of our volumes down and we saw a lot of that last year and that drove volumes higher.

Speaker Change: When we look through the rest of the year and we think.

Allen C. Behr: Continuing to the second half, just because election cycles on the nonresidential side tend to create some stalls.

Speaker Change: It remains fairly steady with maybe some sliding continuing in the second half just because of election cycles on the non resin instruction sites had to creation of store.

Allen C. Behr: I intend to create some stall, and you just don't get as many decisions until the election happens, and then regardless of the results, now what was not known is known, and people move forward. It's probably a bigger story on the margin side for play anyway, that we continue to see squeeze on the margin side as we fight imports. Imports are a problem. They're higher, they're trending higher, and we continue to have some so-called...

Speaker Change: As many decisions.

Speaker Change: That should happen and then regardless of the results.

Speaker Change: Not only is known to be going forward.

Speaker Change: It's probably a bigger story on the margin side for <unk>.

Speaker Change: To see squeeze on the margin side as we fight imports imports are our problems, they're higher they're trending higher and we can see.

Allen C. Behr: [inaudible]

Allen C. Behr: about our agreements and our trade laws. And we'll continue to fight that commercially. And part of that is just having to convene the marketplace and increase parts. But we'll also compete with that in any other way we know, which is regulatory.

Speaker Change: I need to have some some so called trading partners that continue to abuse countries have talked about our agreements at our trade laws.

Speaker Change: We'll continue to fight that commercially and part of that is just having to compete in the marketplace.

Allen C. Behr: We've got a whole bunch of people that are interested in this story and may be our trade officials and elected officials are aware of it. And we've got a whole...

Speaker Change: Please.

Speaker Change: Also compete with that in any other way, we know which is regulatory and making our trade officials and elected officials aware of it.

Allen C. Behr: And we've got to hold those countries to account to abide by the agreements that we make. So hopefully, that provides some color for you on the plate side. That's all along the backdrop of Brandenburg ramping, and we went through that. But that's the way we look at the plate market and what our outlook is.

Speaker Change: We've got to hold those countries took out to abide by the ingredients that we make so hopefully that provides some color for you.

Speaker Change: <unk> side, that's all on the backdrop of Brandenburg ramping as you went through that.

Speaker Change: That's the way, we look at the plate market and what are what our outlook.

William Chapman Peterson: Thanks, Al, for that. And then, you know, coming to the Customer Spot Index that you employed, I guess, you know, what were you looking to achieve? And how do you address concerns that this could potentially compete with indices? You comment that you're doing it for customers, but is this something customers have been asking for? Can you share any sort of feedback you've received thus far from customers? And, I mean, if we were to take it one step further, are there any expectations to expand this type of thing to other, you know, steel formats? Are customers asking, you know, for other products?

Speaker Change: Yes, Thanks alphabet, and then coming to the customer spot index that you employed I guess, what are you looking to achieve and how do you address concerns.

Speaker Change: Potentially compete with embassies your comment that youre doing it for customers, but is this just something customers have been asking for can you share any sort of feedback you've received thus far from from customers.

Speaker Change: And then I guess, if we were to take it one step further and any expectations to expand this type of thing to other steel formats are customers asking for other products.

Speaker Change: Yes, no great question I'll kick it off.

Leon J. Topalian: Rex Corning heads up our speaking group. Additional comments you'd like to make, please jump in, but we're excited and you asked one great question. A great question, but within that, an important question, and that was, were our customers asking for this? I would tell you unequivocally, yes, they have been asking for this. And so, you know, I'm not going to name other indices. We're obviously aware of

Speaker Change: <unk> heads up our sheet Griffith.

Speaker Change: Additional comments.

Speaker Change: I can make please jump in.

Speaker Change: We're excited you asked one.

Speaker Change: Great question, but within that.

Speaker Change: Important question and that was where are customers asking for this I would tell you unequivocally yes.

Speaker Change: I've been asking for this and so I'm not going to name. Our other indices were obviously aware of the mall. Our goal is simply to provide a more consistent reliable predictable in relevant price on our.

Leon J. Topalian: Our goal was simply to provide a more consistent, reliable, predictable, and relevant price on our, [inaudible] Todd's, Todd's, period. Providing a consistent and shorter lead time window for them and providing real-time pricing on a weekly basis that was relevant. And so, again, the part of that and the driver for that, yes, our customers were asking and also, you know, the whipsaw that we see in ups and down markets to try and shrink that volatility to create more stabilization in the marketplace. Again, giving them better information to make better value decisions for their business and get out of the price speculation that we see all too often in the hot band market. So those really were the drivers.

Speaker Change: Yes.

Speaker Change: Our band.

What time period.

Speaker Change: Providing consistent and shorter lead time window for them and for <unk>.

Speaker Change: Real time pricing on a weekly basis that was relevant and show our commitment to them is to maintain a relevant.

Speaker Change: Each and every week and so again part of that.

Speaker Change: Over for that yes, our customers were asking and also.

Speaker Change: The whipsaw that we see in ups and down markets to try and shrink that volatility to create more stabilization in the marketplace again, giving them better information to make better.

Speaker Change: Value decisions for their business and get out of the press speculation that we see all too often in the hot band market. So those those really were the drivers.

Leon J. Topalian: As we look at, again, it's only been a few weeks, how this evolves and moves forward, we'll wait and see. We'll allow our customers the opportunity to decide that rather than us deciding it. They'll be the ones that tell us, yeah, we love it, we like it, we want to use this, we think it's the right industry, and, again, our job and our goal is to make that incredibly easy and transparent.

Speaker Change: We look at again, it's only been a few weeks.

Speaker Change: This evolves and moves forward, we'll wait and see.

Speaker Change: Now our customers the opportunity to decide that rather than us deciding that they will be the ones that provide the feedback to us that yes, we love it we like it we want to use this we think it's the right industry.

Speaker Change: Again, our job and our goal is to make that incredibly easy and transparent.

Bill: Thank you, Bill. I'll only add a couple of comments. I mean, Leon covered it well. Really, as we develop this...

Speaker Change: Hey, Bill I'll add a couple of comments I mean, Leon covered it well.

William Chapman Peterson: And really as we develop the CSP, we look at the cycles over the last several years.

Bill: We looked at the cycles over the last several years, and they were very predictable. As pricing started to firm, we would see customers...

William Chapman Peterson: And it was very predictable.

William Chapman Peterson: As pricing starting to firm, we would see customers enter into speculative buying they would pull ahead demand lead times within the sand pricing, we generally go up beyond.

Bill: [inaudible]

Bill: Pricing would generally go up beyond really supply-demand balances, inviting imports. Inventories with balloon, and then we had to work that off.

William Chapman Peterson: Really supply demand balances and biting inform sand inventories with balloon and then we had to work that off and you would see order stop.

Bill: Work that off, and you can see the orders.

Bill: Pricing fell dramatically. So as we looked at that, we said, how can we create stability? Potentially avoid speculative buying, and it's through us offering a current look at what we see as spot pricing to our customers in the marketplace and maintaining our lead time so they can count on what's happening. And that's really what we looked at. And we've gotten positive feedback at this point from our customers, as Leon stated.

William Chapman Peterson: And pricing fall dramatically so as we've looked at that.

Speaker Change: How can we create stability.

Speaker Change: Potentially avoid speculative buying and it's true.

Speaker Change: Thus offering a current look at what we see spot pricing to our customers in the marketplace and maintaining our lead times. So they can count on whats happening and Thats really what we looked at.

Speaker Change: And we've got positive feedback at this point from our customers is Leon stated.

Bill: That's a great insight. Thank you for sharing.

Speaker Change: That's great insight thank you for sure.

Leon J. Topalian: Thank you. And that concludes our question and answer session. I would now like to hand over the call to Leon Topalian for closing remarks.

Speaker Change #100: Thank you.

Speaker Change #101: Thank you and that concludes our question and answer session.

Operator: In closing, I just want to thank our Nucor teammates for a great start to 2024. Let's continue to stay focused on our most important values, the health, safety, and well-being of each and every one of our 32,000 team members that make up the Nucor family. And thank you to our customers and shareholders for the trust that you place in us both in the order books, in the orders that you give us, as well as the valuable shareholder capital that you trust us with. We will work hard each and every day to earn your trust in our continued business. Thank you, and have a great day!

Speaker Change #101: I'll now like to hand over the call to Leon Topalian for any closing remarks.

Leon J. Topalian: In closing I, just want to thank our nucor teammates for a great start to 2024, let's continue to stay focused on our most important value to health safety and wellbeing of each and every one of our 32000 team members that make up the Nucor family and thank you to our customers and shareholders for the trust placed in us.

Leon J. Topalian: The order books and the orders that you can give us as well as the valuable shareholder capital They trust us.

Leon J. Topalian: We will work hard each and every day to earn your trust and your continued business. Thank you and have a great day.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.

Speaker Change #103: Ladies and gentlemen. This concludes today's conference call you may now disconnect.

Speaker Change #103: [music].

Q1 2024 Nucor Corp Earnings Call

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