Nucor Corporation

Good afternoon, and welcome to NUCOR's fourth quarter earnings call. All lines have been placed on mute to prevent any background noise, and today's call is being recorded. After the speaker's prepared remarks, I will provide instructions for those wanting to ask questions during the Q&A session. I would now like to introduce Jack Sullivan, General Manager of NUCOR Investor Relations. You may now begin your call.

Thank you, and good afternoon, everyone. Welcome to Nucor's fourth quarter and year-end 2022 earnings review and business update. Leading our call today is Leon Topalian, chair, president, and CEO, along with Steve Laxton, executive vice president and CFO. We also have other members of Nucor's executive team with us who may provide comments during the Q&A portion of the call. They include Dave Samusky, chief operating officer, Al Baer, responsible for plate and structural products. Noah Hanners, responsible for raw materials. John Hollits, bar products and fabrication. Doug Jellison, corporate strategy. Greg Murphy, business services, sustainability, and general counsel. Dan Needham, commercial strategy. Rex Query, sheet and tubular products. And Chad Udemark, new products and innovation. This morning, we posted our earnings release and an updated slide deck to the NUCOR Investor Relations website. We encourage you to access these materials as we will cover portions of them during the call. Today's discussion will include the use of non-GAAP financial measures and forward-looking information within the meaning of securities laws. Actual results may be different than forward-looking statements and involve risk and uncertainties outlined in our safe harbor statement and disclosed in NUCOR's SEC filings. 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.

Thanks, Jack, and welcome, everyone. I'd like to begin by highlighting some recent organizational changes. Earlier this month, Noah Hanners joined the executive team as EVP for raw materials. Noah is a West Point graduate with his Bachelor's of Science in Mechanical Engineering and his MBA from UNC Chapel Hill. He also served our nation in the United States Army for nine years. Noah began his career with Nucor in 2011 at Nucor Steel Darlington and has worked at several of our divisions, most recently serving as Vice President and General Manager of the David Joseph Company. Doug Jellison, previously EVP of Raw Materials, has accepted the newly created role of EVP for strategy. Doug has been with Nucor for more than 30 years and has a great understanding of all of our business segments. As we continue to grow Nucor, Doug will continue to help ensure we are further leveraging our competitive advantages across the enterprise. Congratulations to both Noah and Doug. Now turning to our year-end review, I'm proud to announce that 2022 was the safest and most profitable year in Nucor's history, breaking prior records set in 2021. In the face of uncertain and at times volatile market conditions, we stayed focused on our goal of becoming the world's safest steel company and our mission to grow the core, expand beyond, and live our culture. In terms of safety, we established another record low injury and illness rate, for the fourth consecutive year. 20 Nucor divisions went the entire year without a single recordable injury, and we set new records across each of the four primary safety metrics that Nucor tracks. And we achieved all of this during a period of rapid growth, welcoming over 2,000 new team members to the Nucor family throughout the year. I'm inspired by the way each member of the Nucor team has embraced our most important value, the health, safety, and well-being of all 31,000 team members who make up our family. Turning to financial performance, we earned $4.89 per share in the fourth quarter of 22 on our way to setting a new earnings record of $28.79 per share for the full year. This represents a 24% increase over the annual EPS record we previously set in 2021. Our operations continue to generate strong cash flow with a record $11.6 billion of EBITDA. This allowed us to advance our strategy along several fronts, while also returning $3.3 billion to shareholders through dividends and share repurchases, consistent with our capital allocation strategy of returning at least 40% of earnings to Nucor shareholders. Our return on invested capital stands at a healthy 35%, and we closed out the year by announcing the 50th consecutive annual increase to a regular dividend following Nucor's original listing on the New York Stock Exchange in 1972. This places Nucor among an elite group of roughly 40 dividend kings, referring to publicly traded companies that have consistently increased annual dividends to shareholders for over half a century. These successes were in large part made possible through the hard work and dedication of the Nucor team who executed our strategy to achieve world-class performance. As most of you know, we share our profits with our team, and in just a few weeks, we will reach a milestone never achieved before in new course history, delivering nearly $1 billion back to our teammates. In 2022, we made considerable progress along all of our strategic initiatives, deploying approximately $2 billion in CapEx and completing five acquisitions, valued at approximately $3.6 billion to grow our core and expand beyond. But we didn't just invest in new assets and business lines. We invested in a more sustainable future. We did this through new partnerships and capital commitments toward technologies that can help reduce our carbon footprint even further. In December, we announced an equity investment in Electra, a Boulder-based startup that has developed a process to produce carbon-free iron used in making steel. In November, Nucor became the first major industrial company in the world to join the United Nations 24-7 carbon-free energy global compact, which aims to accelerate the world's transition to clean, affordable, and reliable electricity. Nucor also co-founded the Global Steel Climate Council, an international coalition advocating for a single, transparent global emissions standard that is focused on steelmaking emissions. And last week, the NRC officially certified NuScale's design to build a small modular reactor, the first of its kind approved for use in the United States. Nucor's minority investment in NuScale will continue to support the development of this technology with the goal of producing 100% carbon-free electricity. Our mission to grow the core, expand beyond, and live our culture is delivering results for our company and our shareholders. In our steelmaking operations, we invested in new capabilities to produce more value-added products and improve operating efficiencies that can earn higher and more sustained margins. In our downstream operations, we continue to expand into new steel-adjacent markets where we can offer differentiated solutions, including overhead doors and utility towers. These represent unique opportunities in faster-growing markets where Nucor can leverage its core competencies, supply chain efficiencies, and market channels to create incremental value for shareholders. And we lived our culture. For over 50 years, Nucor's unique culture has created value for shareholders as it empowers and incentivizes teammates to take ownership of decision-making, drive efficiency, and pursue innovation. Let me provide an update on some of our larger initiatives to grow the core, starting with our Brandenburg Plate Mill. Nearly four years after it was first announced, the Brandenburg team rolled their first steel plate on December 30th. They are now focused on final commissioning of the mill and plan to begin customer shipments by the end of the quarter. Last week, we announced the Brandenburg Mill would produce a new product called Elsion, a sustainable heavy gauge steel plate designed to meet the growing demands of the offshore wind industry. Congrats to the entire Nucor Brandenburg team for delivering one of the safest mill startups in Nucor's history and for completing it on time and on budget. Turning to our sheet operations, we announced plans to build a continuous galv line at California Steel Industries to serve construction markets in the Western United States. Recent closures of galvanizing capacity by other suppliers in the West presented Nucor a unique opportunity to better serve this region. This new Galve line, along with the line we completed at Nucor Gallatin in 2019 and future lines planned for Berkeley and Nucor West Virginia, will position the company as a supplier of choice for the cleaner, value-added sheet products our customers are seeking in several key markets. Investments like this help forge even stronger relationships with our key customers. like Train Technologies, which honored Nucor last week with their 2022 Supplier of the Year award. Now, shifting to our Expand Beyond strategy, I'd like to provide an update on a few of our recent acquisitions we've completed, beginning with our mid-year purchase of CHI Overhead Doors. When we announced this transaction and held a special investor call last May, we spoke about CHI's $230 million LTM EBITDA, its 30% EBITDA margins, and average annual revenue growth of 10%. In the last six months following our June closing, CHI generated record EBITDA of nearly $170 million, finishing the full year with over $320 million of EBITDA and expanding margins. Within the first six months of closing, we've taken our implied trailing EBITDA acquisition multiple down from 13 times to just over 9%. Going beyond the strong financial results, I want to commend the entire CHI team for executing such a quick and seamless integration into Nucor. We're already seeing the benefits of our combined operations, including improvements to CHI's safety performance. Thank you. Thank you, Team CHI and all of the Nucor team members that have come together to make this an incredibly successful transition. And we're starting to realize supply chain synergies as well with CHI. developing plans to source most of its sheet, bar, and tube from Nucor divisions. The sales team at CHI is collaborating with Nucor's regional commercial groups and cross-selling efforts have begun as CHI grows its share of the commercial overhead door market. Last year, we also acquired Summit Utility Structures, producer of steel structures for the utility, telecommunications, and transportation sectors. It's an area that we see considerable growth potential in. Then in December, we announced plans to construct two new state-of-the-art tower production plants. These highly automated facilities will help meet the growing need for utility infrastructure as our nation's electric transmission grid is modernized and hardened. Turning to the broader economic backdrop, we recognize there continues to be uncertainty, but we also see tailwinds that should benefit Nucor as well as the American steel industry throughout this decade, including the Infrastructures Act. the CHIPS Act, and IRA that are all starting to work their way into the steel sector. These programs align perfectly with Nucor's unmatched and unrivaled product capabilities to meet the growing demand of our customers today and well into the future. With that, let me turn the call over to Steve Laxton, who will share more about our Q4 performance. Steve?