Nucor Corporation

Good morning and welcome to NUCOR's third quarter 2023 conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Jack Sullivan, General Manager, Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Welcome to Nucor's third quarter 2023 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, including Dave Samosky, Chief Operating Officer, Al Baer, responsible for plate and structural products, Brad Ford, over fabricated construction products, Noah Hanners, raw materials, John Hollitz, bar and rebar fabrication, Doug Jellison, corporate strategy, Greg Murphy, business services, sustainability, and general counsel, Dan Needham, Commercial, Rex Query, Sheet, and Talent Resources, and Chad Udemark, New Markets and Innovation. We've posted our third quarter earnings release and investor presentation to Nucor's IR 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 and involve risks 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 today's call by highlighting the tremendous performance of our 32,000 Nucor team members through the first nine months of the year. The investments we're making to grow our core and expand into new markets are generating strong returns for our shareholders, and our team continues to operate efficiently and safely. In fact, we're on pace to deliver our fifth consecutive year of record safety performance, further proof of the world-class performance by our Nucor team members who live our culture each and every day. Looking at our financial performance in the second quarter, Nucor generated approximately $1.8 billion of EBITDA and $1.1 billion net earnings, or $4.57 per diluted share. This brings our year-to-date net earnings to $3.7 billion, or $14.83 per diluted share. Even though we still have one more quarter to go, our year-to-date earnings through September already represents our third best full year in New Course history. In keeping with our investor-focused capital allocation strategy, we've returned $627 million to shareholders in Q3, representing 55% of our net earnings for the quarter. On the operations front, total shipments to outside customers was approximately $6.2 million. down 5% compared to the prior quarter and down 3% compared to Q3 of 2022. Total steel mill shipments for the quarter were nearly 5.8 million tons and downstream steel product shipments to outside customers was roughly 1.1 million tons. Earlier this month, we launched a national sustainability campaign branded Made for Good, which highlights our commitment to producing the world's most sustainable steel and our efforts to lead others in our industry to adopt practices that reduce emissions. Our circular, recycling-based process gives us a competitive advantage as more customers look to reduce emissions in their supply chain. But we are taking steps to differentiate ourselves even further. We are not just talking about sustainability. We are making investments and forming partnerships to accelerate a cleaner future for Nucor, the broader steel industry, in all industrial manufacturers. And in almost every month of the past year, we've done something to move the needle in that regard. We've entered into another renewable energy, PPA, invested in technologies to develop advanced forms of nuclear power generation and zero carbon iron making, formed a partnership to capture, transport, and sequester CO2 emissions from our Louisiana DRI facility, Introduced LCN, our new sustainable heavy gauge steel plate for the offshore wind energy industry. And helped lead the Global Steel Climate Council, a coalition of global steel companies and industry partners to develop a clear and unbiased global standard to measure and report carbon emissions. Consistent reinvestment in our businesses has played a critical role in our company's growth. We make investments after we identify strategies that have compelling risk adjusted return opportunities for new core shareholders. I'd like to highlight three important milestones we've hit recently across sheet, plate and bar with a reminder of the strategic rationale behind each investment. Starting with sheet, last week we were joined by hundreds of leaders in West Virginia and Mason County for a groundbreaking event to celebrate the start of a construction of our newest sheet mill. This investment in West Virginia, along with additional galvanizing, paint, and tube lines we are adding at other sheet mills, will enable Nucor to produce higher margin, value-added products for a broader set of customers, especially those who value high-quality steel with a lower carbon footprint. By 2026, we will have more than doubled our capacity to produce higher valued sheet products compared to our capabilities in 2020. Turning to plate, earlier this month, we celebrated the official grand opening of our state-of-the-art mill in Brandenburg, Kentucky. This investment positions Nucor as the most capable plate supplier in the largest plate consuming region of North America, able to produce specialty plate products that support our nation's economy and security in critical areas such as wind, long-span bridges, military applications, power transmission, amongst many others. And in August, we held a groundbreaking ceremony for a rebar micro mill in Lexington, North Carolina. This mill will help us to capitalize on growing demand for rebar in the growing mid-Atlantic and southeast regions over the coming decades. The modernized equipment and processes at this new mill will enable us to achieve both improved margins and lower emissions intensity from our rebar operations. The team in Lexington is making great progress on the construction and we look forward to starting the mill up in early 2025. As we have said many times, the goal of our growth strategy is to expand our capabilities to better serve our customers and grow our earnings for our shareholders. The new capabilities we're adding in our steel mill and steel product segments are diversifying our customer base and creating more opportunities to cross-sell various products. A lot has already been said about the magnitude of the three steel intensive megatrends, each fueled by supportive federal legislation. We like to think of these three as the rebuilding, repowering, and reshoring of the U.S. economy. And with Nucor's unrivaled scale and diversity, we are favorably positioned to capitalize on these growth drivers. Investors have been asking where we are in the cycle of these mega trends and what steel products Nucor is best positioned to supply. I'd like to share a few thoughts on that. And since it's baseball playoff season, I'll use a few baseball metaphors to help make my point. Based on current production in order books, it feels like we're still in the early innings across all three. To be clear, innings played is not intended to reflect tons shipped and some innings may last longer than others. It's meant to indicate where we believe we are along the continuum from federal and state level appropriations, project engineering and development, the permitting and bidding process, and ultimately taking orders and manufacturing steel products. While all three are still early in the process with still plenty of upside to come, we feel like the IIJA has progressed the least with respect to steel-related orders. The Chipsax has probably had the biggest impact on our order book this far, and the IRA falls somewhere in between. As it relates to the rebuilding effort, with funding through IIJA, we have shipped tons related to the first wave of bridge projects involving Nucor plate, beam, and piling products. but we believe a lot more has yet to make it out of state-level permitting and the bidding processes, especially with respect to highway construction and power transmission, which will require a great deal of rebar, plate, and heavy sheet. Back to my baseball analogy, the game has started and we've probably neared the bottom of the first, but some fans are still tailgating while others are just entering the stadium. On the repowering front, the financial stimulus under the IRA occurs through tax credits as opposed to the longer allocation process under the IIJA. This probably gives the IRA a slight edge on timing, but renewable and energy storage projects still take a while to secure financing and all the necessary permits. So, while we are starting to see more orders relating to ground mounted solar and onshore wind, There's still a lot of upside remaining in the years yet to come. And finally, the reshoring effort supported by the CHIPS and Science Act has promulgated announcements for at least 37 projects worth an estimated $370 billion. Nucor is already delivering steel products to a few of these, but these projects can take several years to complete and will shift from one steel product to another as construction progresses. When it comes to an advanced manufacturing facility, including semiconductor, battery, and EV plants, Nucor can produce an estimated 90% of the required steel. Some of the higher steel intensity products represent home runs for Nucor, but there are plenty of companion tons representing base hits. And in many cases, the profit margins of base hits orders can be quite compelling. Needless to say, we're excited for what these megatrends can mean for the U.S. economy and Nucor plans to be the leading supplier of the steel with which it's built. With that, I'd like to turn it over now to Steve Laxton, who will provide additional details about our Q3 performance and outlook for Q4.