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    NUE
    Earnings call· Mar 2025(Q1 FY25)

    NUCOR Q1 FY25 earnings call NUE

    Apr 29, 2025 Source

    Executive summary

    Nucor Q1 FY25 — Strong Backlog Growth and Strategic Project Advancement

    Nucor delivered Q1 FY25 adjusted EPS of $0.77 amidst significant growth investments and macroeconomic uncertainty. The company saw robust backlog growth across steel mills and products, driven by strong end-market demand in construction, infrastructure, and advanced manufacturing. Strategic capital projects are progressing, with several facilities expected to commence operations within the next 12 months, positioning Nucor for future earnings diversification and value creation.

    Highlights

    5

    • Steel mill segment backlog grew over 30% quarter-over-quarter and nearly 25% year-over-year.

    • Steel products segment backlog grew nearly 25% quarter-over-quarter.

    • Returned $429 million to shareholders via dividends and share repurchases in Q1.

    • Brandenburg plate mill shipments and production trended higher for 5 consecutive quarters, with 25% of Q1 shipments being new products.

    • Lexington rebar micro mill rolled its first billet in April, on track for commercial shipments in Q3.

    Concerns

    5

    • Adjusted EPS of $0.77, lower than prior quarters.

    • Incurred $170 million ($0.56 per share) in pre-operating and start-up costs in Q1.

    • Raw materials segment pretax earnings decreased $28 million quarter-over-quarter due to lower DRI pricing and higher scrap processing expenses.

    • Steel products segment expects slightly lower realized pricing in coming months due to lag effect.

    • West Virginia sheet mill budget increased due to inflationary impacts.

    Guidance & targets

    7
    CategoryTargetConfidence
    Q2 FY25 Earnings
    meaningfully higher than in the first quarter of this year
    high materiality
    High
    Q2 FY25 Steel Mills Segment Earnings
    drive the largest portion of the sequential earnings growth due to stable volumes and higher realized pricing
    medium materiality
    High
    Q2 FY25 Steel Products Segment Outlook
    higher volumes and improved cost to more than offset slightly lower realized pricing
    medium materiality
    High
    Q2 FY25 Raw Materials Segment Outlook
    volumes to remain flat along with moderating scrap pricing and stable realized DRI pricing
    medium materiality
    High
    FY25 Domestic Steel Demand
    growth
    high materiality
    High
    FY25 Overhead Doors, Racking, and Insulated Metal Panels Platforms EBITDA
    $450 million
    medium materiality
    High
    Brandenburg Plate Mill EBITDA Run Rate
    EBITDA positive run rates
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Steel Mill Segment
    Driven by volume beats in bar and sheet. Brandenburg plate mill shipments and production trended higher for 5 consecutive quarters.
    Volume increased 14% QoQBar mill group shipments rose 21% QoQBar mill group shipments rose 20% YoYPlate shipments improvedBacklog grew over 30% QoQBacklog up nearly 25% YoY
    		———$241 million adjusted pretax earnings
    Steel Products Segment
    Expects lower realized pricing in coming months due to lag effect, but margins expected to remain well above pre-pandemic levels. Strong performance from joist and deck, strengthening from tubular and metal buildings groups.
    Backlog grew nearly 25% QoQJoist and deck backlogs extend into Q4
    		———$307 million adjusted pretax earnings
    Raw Materials Segment
    Decrease of $28 million QoQ due to lower realized pricing for DRI and higher operating expenses in scrap processing.
    		———$29 million pretax earnings

    Operational metrics

    17
    Adjusted EPS
    $0.77
    Q1 FY25

    Excludes pretax charges of $29 million ($0.10 per share after-tax) related to facility closures/repurposing.

    Adjusted Net Earnings
    $179 million
    Q1 FY25

    Excludes pretax charges of $29 million ($0.10 per share after-tax) related to facility closures/repurposing.

    Pre-operating and Start-up Costs
    $170 million$0.56 per share
    Q1 FY25

    Incurred for growth investments.

    Capital Returned to Shareholders
    $429 million
    Q1 FY25

    In the form of dividends and share repurchases.

    Weighted Average Coupon (New Senior Notes)
    4.88%
    Q1 FY25

    For $1 billion in new senior notes, split evenly across 5- and 10-year tenors.

    Total Debt to Capital
    27%
    Q1 FY25

    Ended Q1.

    Total Debt to Capital (Adjusted)
    just under 25%
    Q1 FY25

    Adjusted for $1 billion debt retirement.

    Cash Balance
    $4 billion
    Q1 FY25

    Ended Q1.

    Cash Balance (Adjusted)
    $3 billion
    Q1 FY25

    Adjusted for $1 billion debt retirement.

    Steel Mill Segment Conversion Costs
    up about 2% to 3%YoY
    Q1 FY25

    Driven by higher energy costs and some consumables.

    Scrap Cost
    up about 3%QoQ
    Q1 FY25

    Contributed to margin squeeze.

    Overhead Doors, Racking, Insulated Metal Panels EBITDA
    $400 million
    FY24

    Annualized for midyear acquisitions.

    Overhead Doors, Racking, Insulated Metal Panels EBITDA (Expected)
    $450 million
    FY25

    Expected for these three platforms.

    Imports Subject to Section 232 Tariffs
    fewer than 18%
    FY24

    Prior to recent policy changes, indicating significant weakening of tariffs.

    Steel Mills Capacity Utilization
    74%-75%
    Q4 FY24

    Utilization rate in the prior quarter.

    Steel Mills Capacity Utilization
    80%
    Q1 FY25

    Utilization rate in the current quarter.

    Flat-rolled Steel Price Increase
    $200QoQ
    Q1 FY25

    Analyst's estimate confirmed by management as 'pretty good math' for price increase quarter-over-quarter.

    Industry KPIs

    3
    MetricValueDetails
    Safetyimpressive progress our team has made in reducing injuries over the last several years
    Unit cash costup about 3%%
    Production sales volume by metal and by mineVolume increased 14%%

    Orderbook & backlog

    6
    Steel Mill Segments Backlogover 30%Q1 FY25

    QoQ

    Steel Mill Segments Backlognearly 25%Q1 FY25

    YoY

    Steel Products Backlognearly 25%Q1 FY25

    QoQ

    Steel Products Backlog19%Q1 FY25

    YoY

    Joist and Deck Backlogsextend into the fourth quarterQ1 FY25
    Structural Backlog (Nucor-Yamato and Nucor Berkeley beams)highest levels in our historyQ1 FY25

    Represents hundreds of thousands of tons from fabricators, not distribution.

    Capital programs

    8
    Lexington Rebar Micro Millunderway

    Benefit: rolled its first billet in April; produce its first heat in June

    On track for commercial shipments in the third quarter.

    Kingman Melt Shopunderway

    Benefit: produce its first heat in June

    Expected to be operational in the third quarter.

    Crawfordsville Coating Complexunderway

    Benefit: add galvanizing and prepainting capabilities

    Scheduled to be completed by year's end.

    Berkeley County Galv Lineunderway

    On track to completion by mid-2026.

    Alabama Towers and Structures Facilityunderway

    Slated to begin operations in the third quarter of this year. Customers have started to tour the location and initial qualification processes are underway.

    Indiana Towers and Structures Facilityunderway

    On track to begin operations in the first quarter of 2026.

    West Virginia Sheet Millunderwayincreased due to inflation
    Period spend: roughly half of our overall capital spend for the year
    Spent to date: 40% to 50% completion

    Benefit: most state-of-the-art, cleanest, advanced offering in automotive exposed deals

    Construction continues through 2026, near midpoint of construction timeline, equipment installation well underway. Budget increase due to inflationary impacts on contractor rates, fuels, materials, and labor, not added scope. The project is expected to realize $1.7 billion in value for shareholders.

    Overall Capital Planunderway$3 billion
    Period spend: FY25

    Benefit: roughly 2/3 growth oriented

    Total capital plan for the current year.

    Risks & headwinds

    5
    Growth Investments HeadwindNear-term

    $170 million ($0.56 per share) in pre-operating and start-up costs in Q1

    Mitigation: These investments are designed to create long-term shareholder value and diversify earnings profile.

    Lower Realized Pricing in Steel Products SegmentComing months

    Slightly lower realized pricing expected

    Mitigation: Higher volumes and improved costs are expected to more than offset; margins are anticipated to remain well above pre-pandemic levels.

    Inflationary Impacts on Capital ProjectsOngoing

    West Virginia sheet mill budget increased

    Mitigation: Increase attributed to inflationary impacts on contractor rates, fuels, materials, and labor, not added scope.

    Macroeconomic Uncertainty and VolatilityOngoing

    Discussed as a general concern

    Mitigation: Nucor is 'built for this' with strong capabilities, team, and financial strength; focus on growing the core, expanding beyond, and living its culture.

    Lag Effect on Steel Products PricingComing months

    Lower realized pricing in some businesses

    Mitigation: Longer-duration backlogs mean a lag between market pricing changes and realized financial results; margins in backlog expected to remain well above pre-pandemic levels.

    What to watch in Q2 FY25

    5

    Brandenburg Plate Mill EBITDA positive run rate

    By summer
    CurrentRamping up, record shipments in March
    TargetEBITDA positive run rates

    Why it matters

    Indicates successful ramp-up and profitability of a major growth investment.

    As we mentioned on the last earnings call, we're very confident in getting to EBITDA positive run rates by this summer, and we remain confident we're on track for that.

    Q&A highlights

    6

    Can Nucor provide guidance on the magnitude of start-up costs for the remainder of 2025, similar to prior years?

    Start-up costs for the balance of the year are expected to be similar to previous quarters, around $160-$170 million per quarter, due to heavy capital spending and new project ramp-ups.

    “what you will see for the balance of the year is probably very similar to what we had last year. So for your purposes of modeling out the next couple of quarters, I would pencil in something close to what we've done in the last few quarters. And just for a reminder, we had $160 million and $164 million in the last couple of quarters and $170 million this past quarter.”

    asked by Lawson Winder · answered by Stephen Laxton

    2 min read5 chapters

    Detailed Narrative

    01

    Strategic Growth Projects Update

    Nucor is reinvesting heavily in growth projects, with nearly two-thirds of the $860 million reinvested in Q1 going to projects commencing operations within two years. Key projects include the Lexington rebar micro mill (first billet April, first heat June, commercial shipments Q3), Kingman melt shop (first heat June, operational Q3), Crawfordsville coating complex (completion year-end), Berkeley County galv line (completion mid-2026), and new towers and structures facilities in Alabama (operations Q3) and Indiana (operations Q1 2026). The West Virginia sheet mill is near midpoint of construction, on schedule for commissioning by end of 2026.

    02

    Trade Policy and Market Dynamics

    Nucor applauds the reinstatement and broadening of Section 232 steel tariffs, which previously applied to less than 18% of imports. The Department of Commerce also announced preliminary antidumping duties on coated flat-rolled steel from 10 countries. These measures are seen as crucial for strengthening the U.S. steel industry and leveling the playing field against unfairly traded imports. Management notes a positive impact on import levels, dropping below 20% for the first time in many years.

    03

    Demand Outlook and Backlogs

    Despite macroeconomic uncertainty🌐, Nucor sees steady to improving demand driven by reshoring, rebuilding, and repowering of American industry. Backlogs rose over 30% in steel mill segments and nearly 25% in steel products during Q1. The structural backlog, including Nucor-Yamato and Nucor Berkeley beams, is at historical highs, representing locked-in business from fabricators for projects like data centers, infrastructure, and advanced manufacturing facilities.

    04

    Capital Allocation and Balance Sheet Strength

    Nucor maintains a strong investment-grade credit quality, ending Q1 with total debt to capital of approximately 27% and over $4 billion in cash. The company increased its revolving credit facility by $500 million and raised $1 billion in senior notes to prefund upcoming debt maturities. After retiring debt, net debt to capital would be just under 25% with over $3 billion in cash. Nucor returned $429 million to shareholders in Q1 through dividends and share repurchases.

    05

    Sustainability and Safety Initiatives

    Nucor recently posted its 2024 Corporate Sustainability Report, highlighting its low greenhouse gas emission intensity and impressive progress in reducing injuries over the last several years. The company is actively advancing cleaner energy sources such as nuclear energy, as well as carbon-free iron sources and other low-carbon raw materials, aligning with growing demand for cleaner steels.

    AI-generated summary of the company’s earnings call. Not investment advice.