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Employees say:&nbsp;"Working at Nucor, you hear on day one, 'we are a family.' Often that seems like lip service at other facilities or entities, but at Nucor, I was able to experience this firsthand. I lost a cherished loved one and my plant manager didn't care about days missed, work not being completed, or productivity; he cared about my kids and how they would be impacted. He wanted to know if we had food at the house or a cleaning service while we were grieving. He wanted to ensure for the holidays we were together and that they enjoyed their holiday break. He cared about ME. That spoke volumes to the level of care this company—this family displayed for my family at home."

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Nucor is the largest steel manufacturer and recycler in North America. The company, founded in 1905, produces a variety of steel sheet products, bar products, and more through its steel mills segment, which serves steel service centers, fabricators, and manufacturers across North America. Nucor also operates through its steel products and raw materials segments. In addition to production, the company is involved in the steel trading, rebar distribution, and piling distribution businesses.

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Q4 2024

Nucor (NUE): Company Profile, Stock Price, News, Rankings

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Nucor

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Good morning, and welcome to Nucor's 4th Quarter 2024 Earnings Call. All lines have been placed on mute to prevent any background noise. And today's call is being recorded. After the speakers' prepared remarks, I will provide instructions for callers to ask questions. I would now like to introduce Jack Sullivan, Vice President of Investor Relations.

Thank you, and good morning, everyone. Welcome to Nucor's Q4 year end 2024 earnings review and business update. Leading our call today is Leon Tapalian, Chair, President and CEO along with Steve Laxton, Executive Vice President and CFO. Other members of Nucor's executive team are also here with us today and may participate during the Q and A portion of the call. Yesterday, we posted our Q4 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 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 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. We often begin these calls by highlighting our safety performance. We do this because safety is our most important value, and we cannot truly be successful as a company if we are not taking great care of one another. That's why I'm pleased to report that 2024 was the safest year in Nucor's history.

We have the fewest number of recordable and reportable injuries on record and our injury and illness rate declined for the 7th consecutive year. To my 32,000 team members, I'm extremely proud of your safety performance, especially since it has occurred through all phases of the economic cycle and during a period of rapid expansion for our company, but safety never rests and we must all remain vigilant to achieve our ultimate goal of becoming the world's safest steel company. Let's continue to work together and make 2025 our new safest year ever. Turning to our financial performance, we earned $1.22 per share in the 4th quarter and $8.46 for the full year. We generated EBITDA of $751,000,000 for the quarter on our way to nearly $4,400,000,000 for the year and our balance sheet remains quite strong with $4,100,000,000 of cash at year's end.

2024 was a very active year on the capital allocation front with approximately $3,200,000,000 in total CapEx and $760,000,000 in acquisitions. In keeping with our commitment to investors, Nucor has returned over $2,700,000,000 to shareholders through share repurchases and dividends for the year. When I became CEO of Nucor 5 years ago, we developed a 3 part mission statement to grow the core, expand beyond and live our culture. It launched the company on a long term growth trajectory that will take nearly a decade to complete and will require more of our team than we've ever asked. I'm proud of the work we've accomplished so far and the plans we have over the next few years to reach our stated goals.

But as I've said in the past, this is not about getting bigger. This is all about getting better for our shareholders, our customers and our team members. We are about 2 thirds of the way into this journey in terms of the capital deployment, but we've yet to realize the earnings potential of the investments we've made. This is one of the primary reasons I'm so optimistic about Nucor's future. I'd like to take a moment to revisit our long term growth plans and how the investments we're making today are going to create value for our customers and shareholders for years to come.

In raw materials, we are investing in new technologies to enhance our scrap, segregation and recovery rates while reducing our carbon footprint. In our Steel Mill segment, each investment is aligned with our broader strategy to increase Nucor's product mix towards higher margin, value added products that address specific customer needs in key markets. For steel products, we're investing in automation to drive efficiencies and create a safer work environment, and we're developing new products and solutions that our customers value. And finally, we're investing in new downstream platforms where we identify steel adjacent businesses with growth prospects underpinned by strong secular demand drivers. Let's take a minute to provide an update on our largest growth initiatives, which collectively represent approximately 65 percent of our 2025 CapEx budget.

In the Sheet Group, we're making good progress on our West Virginia Sheet Mill, Nucor's single largest capital investment. We're nearly 40% of the way through the construction phase and remain on track to commission the mill by the end of next year. As this mill ramps up throughout 2027, it will begin shipping some of the cleanest and most advanced sheet steels in North America, targeting the automotive, construction and industrial markets. Also within the Shey Group, we're adding new finishing capabilities, including a new galvanizing line and coating complex at Crawfordsville that will begin operation by late 2025, a second galvaline at our Berkeley County mill by mid-twenty 26 and a construction grade galvanizing line at our CSI joint venture by the end of 2027. Within the Bar Mill Group, we're on track to complete construction of 2 key projects in 2025, including our new rebar micro mill in Lexington, North Carolina and our new melt shop bar mill in Kingman, Arizona.

These new operations will allow Nucor to better serve infrastructure and construction markets in some of the fastest growing regions in the nation. And Steel Products will complete construction on 2 highly automated tower manufacturing plants this year and will break ground on a 3rd site in Utah, which will be completed in 2027. These will serve the high end growth power transmission and telecommunication markets. Each of these investments address critical customer needs and advances us towards our objective of doubling Nucor's through cycle earnings. Our mission also includes living our culture.

Nucor's culture is one of our greatest competitive advantage, and while it will continue to evolve, its core values like trust, open communication, teamwork remain constant. This is what enables the company to harness the collective strength of the 32,000 men and women who make up the Nucor family. Our mission and the way in which we executed has created significant shareholder value. Over the last 5 years, Nucor has returned over $12,000,000,000 of capital to shareholders and we've reinvested approximately $16,000,000,000 through CapEx and strategic acquisitions. During the same period, we've maintained our industry leading credit profile and have advanced our sustainability journey.

I'm proud of all we've accomplished during the first half of this decade, but make no mistake, Nucor's greatest days are still in front of us as we continue to ramp up recently completed projects and finalize several more over the next few years. With the inauguration last week, we look forward to working with President Trump and members of his administration as they advance the President's fair trade and pro growth economic agenda. Unfairly traded imports continue to be Unfairly traded imports continue to be a challenge for the domestic steel industry with earnings negatively affected by rising global steel overcapacity and surges of unfairly traded imports, including corrosion resistant steel. More needs to be done to ensure that these illegally dumped and subsidized imports do not continue to distort the American market and erode profitability. Section 232 measures have been critical in providing support for our domestic steel industry, but they've been weakened over time.

Country exemptions and quota arrangements, including with Mexico and Canada and the EU should be replaced with tariffs and the Section 232 measures should be extended to downstream steel products such as fabricated structural steel. We also need the new Congress to pass the Leveling the Playing Field Act 2.0 quickly. It's been roughly a decade since the last overhaul of our trade laws and this bill would help to ensure that domestic industries injured by unfairly traded imports can obtain critical relief. Over the last few years, we've seen significant investment in American based manufacturing. We expect this trend to continue given the new administration's desire to strengthen America's industrial base and supply chains for national security and energy independence.

America is home to the cleanest and most advanced steel industry anywhere on the globe, and we look forward to working with the administration to ensure that we strengthen our steel industry. As we look ahead into 2025, we believe steel demand is poised for modest growth in the first half of the year and will gain more momentum as we get further into the second half. Consumer confidence has been resilient, inflation has moderated and unemployment remains low. With respect to our primary markets, infrastructure construction activity continues to be strong as does institutional construction. We expect a resumption of growth in residential and commercial construction this year as well, especially if we see looser lending conditions and a more supportive regulatory permitting environment under the new administration.

Manufacturing construction starts have slowed, but we will continue to see demand for steel products from these complex projects for several years to come. Overall, we're encouraged by the pro growth and fair trade philosophy of the new administration. These policies are well aligned with the rebuilding, repowering and reassuring of the U. S. Economy, which should continue to drive demand for steel.

And as America's largest and most diversified steel producer, Nucor is well positioned to supply those needs. With that, I'll turn it over to Steve Laxton, who will provide more detail about our Q4 and full year performance and our outlook for Q1.

Thank you, Leon, and thank you all for joining us on the call this morning. During the Q4, Nucor generated net earnings of 287,000,000 or $1.22 a share. For the full year, Nucor's net earnings were approximately $2,000,000,000 or $8.46 a share.

the Q4 exceeded the midpoint of our 4th quarter guidance range by about $0.62 There were several factors contributing to our beat, but they fit into 2 primary categories. 1st, stronger than expected operating performance accounted for about 2 thirds of the guidance beat. And second, favorable impacts from corporate, administrative and discrete tax items accounted for the rest. With respect to operations, higher than expected shipments were the primary driver of our performance. Shipment volumes for our steel and steel product segments were both higher than we anticipated in December.

Solid demand fundamentals coupled with less impact than anticipated during the holidays drove these results. Additionally, operating margins were stronger for several of our products. Various items drove the favorable impacts from corporate, administrative and tax and are more discrete in nature. These include lower compensation costs as well as unrealized gains on investments due to changes in market valuations and one time tax items primarily related to state taxes. Turning to segment level results for the quarter.

The steel mill segments generated pre tax earnings of $169,000,000 a decrease of roughly 45% from the prior quarter. While shipment volumes were roughly in line with that of the 3rd quarter, both realized pricing and metal margins declined in the 4th quarter. Approximately half of the segment declines in the quarter are attributable to our sheet business. The Steel Products segment delivered pre tax earnings of $329,000,000 for the 4th quarter, a decrease of about 5% compared to the 3rd quarter, excluding the 3rd quarter's non cash impairment charge. Volumes for the segment were 4% lower than the prior quarter and realized pricing declined about 1%.

Our joist and deck backlogs are stable and extend well into the Q2. The nature of this business is longer duration backlogs, meaning we expect to continue to see lower realized pricing in our financial results in the coming months from prior period price declines. Importantly, the margins in this backlog remain well above their pre pandemic levels. We are cautiously optimistic that more favorable demand trends are emerging in some non residential construction markets, which may have positive impacts on our overall downstream businesses. Improving construction activity should also benefit our ExpandBeyond platforms and we expect double digit top line growth for each of our overhead doors, racking and insulated metal panels in 2025.

These three platforms generated a run rate EBITDA of approximately $400,000,000 in 2024 when annualizing for the partial year ownership of 2 of our acquisitions, Ridetech and Southwest Data Products. For 2025, we expect these platforms to generate over $450,000,000 in EBITDA with further opportunity for additional growth in the years ahead. Just to highlight a few of the catalysts fueling our growth, With the acquisition of Rytec and further capability development, our door technologies platform should realize added growth by going to market with a more comprehensive offering of overhead doors and to a larger customer base. Our racking business is executing on numerous opportunities to provide custom fabricated solutions for data centers and for warehouse customers looking for vendors who can help them realize the benefits of automatic storage and retrieval systems. Insulated metal panels should continue to benefit from growing demand for climate controlled environments, manufacturing and storage facilities and going to market alongside our growing racking business and market leading pre engineered metal buildings business.

And we continue to build out our capabilities in our towers and structures business. We anticipate starting up our facilities in Alabama and Indiana in 2025 and our recently announced Utah facility in 2027. These advanced manufacturing facilities are well positioned to serve our nation's growing needs in energy infrastructure for years to come. Turning to our raw materials segment. We realized pretax earnings of approximately $57,000,000 for the quarter, an increase of approximately $40,000,000 from the 3rd quarter, excluding the 3rd quarter's non cash impairment charge.

While pricing was relatively stable during the quarter, DRI production increased by about 20% from the 3rd quarter, and we benefited from lower operating costs in our scrap processing facilities. As Leon mentioned, capital expenditures for 2024 totaled approximately $3,200,000,000 For 2025, we're estimating capital spending to be approximately $3,000,000,000 as we continue to execute on our long term growth strategy. Growth oriented investments constitute about 2 thirds of our expected spend this coming year with our West Virginia sheet mill being the largest single use of capital. We're more than 1 third of the way into construction phase at West Virginia with considerable headway made in 2024. We remain on track to complete construction and begin the start up of West Virginia by the end of 2026.

As we construct and ramp up new mills, it's important to remind you that we'll continue to incur elevated levels of pre operating and start up costs, which were $594,000,000 for 2024. As we progress through this period of growth investments, we remain dedicated to our balanced capital allocation framework. We're committed to a strong investment grade balance sheet with a debt to capital ratio of about 25 percent and debt to EBITDA of 1.6 times and ample liquidity with cash of more than $4,000,000,000 at the end of the year. Our balance sheet is a reliable enabler of our ability to grow while providing meaningful direct returns to shareholders. Nucor returned over $2,700,000,000 back to shareholders in the form of dividends and share repurchases in 2024 alone and has returned approximately $12,500,000,000 over the last 5 years.

We plan to continue to return at least 40% of our annual net earnings through quarterly dividends and share repurchases. This past December, our Board of Directors authorized an increase in our quarterly dividend to $0.55 a share. We've not only paid, but also increased our regular quarterly dividend for 52 consecutive years. That's a commitment to our shareholders that very few other companies can attest to. Turning to our Q1 of 2025 outlook, we expect Nucor's operating results at the Steel Mills and Steel Products segment to be generally in line with prior quarter.

The demand environment may be showing some early indications of strengthening and backlog tons increased 5% from the Q3 to the end of the year. But given the length of backlogs and the lagged nature of some of our businesses, realized pricing and margins for these segments may not exceed prior quarter's results. In our raw material segment, we expect to ship higher volumes to meet the demand growth of our mills. Ferrous scrap pricing has moved up slightly in the opening weeks of 2025, but the realized transfer price for our DRI is trending lower. The net effect of this is likely to result in a lower contribution for the raw material segment compared to the Q4.

While the fundamentals of our operating segments appear to be stable with the possibility of upside as we work further into the quarter, we must bear in mind that the discrete benefits we saw from our corporate, administrative and tax areas in the 4th quarter are not expected to reoccur. As a result, this may cause our net earnings in Q1 to be slightly lower than the Q4. As we look further into 2025, several positive trends seem to be emerging. And as the largest, most diverse and most capable solutions provider in our industry, Nucor is well positioned for the year ahead. And with that, we'd like to hear from you and answer any questions you may have.

Operator, please open the line for questions.

Thank you. And ladies and gentlemen, we will now begin the question and answer session. And your first question comes from the line of Tina Tanners with Wolfe Research. Please go ahead.

Hey, good morning. Wanted a little more granularity please on your payout ratio that you said you want to keep above 40%, but we calculated shareholder returns as a percentage of net income in 2024 at 135%. So given that you still have a pretty high CapEx number and the slow start to the year relatively, do you think it's possible to keep the same pace of buybacks year over year? And any comment on kind of a pause actually after your mid quarter guidance? Thanks a lot.

Hey, Timna, I'll kick it off. It's Leon. I wouldn't categorize the year as off to a slow start. In fact, I would tell you, I think we're off to an amazing start. I'll outline why in a moment, but I'd be remiss if I didn't take an opportunity to thank every team member listening in right now for the safest year in our history in 2024, safest by in terms of recordable injuries, reportable injuries, illness and injury rates and it continues to trend in the right direction.

And when you have a company who values the safety, health and well-being of every team, every result and every KPI that you want to discuss and we'll discuss with every other analyst is the reason for the results that we achieve. It is the 32,000 men and women choosing every moment of every day to work safely to go home to their families, their loved ones, children, grandchildren and creating a better future for themselves. So again, with that, I'll shift gears a little bit. And again, as I think about the start of the year, I remain incredibly optimistic, not just in terms of how Nucor remains unlevered in thinking about our future cash flows and certainly in a very high period of CapEx for us. But we're also coming off 3 of the best years in the history of the company.

In 2021, 2020, 2020 combined, we made more money in those 3 years than the previous 2020. So we invested heavily for growth. And while our free cash flow is going to be down, the future earnings potential that will be unlocked in the coming years. And so there's a lot of things to worry about and noise in the industry. The last thing I would tell you, you ever have to worry about is the returns by Nucor to our shareholders.

Our last 5 years as CEO, it's been over 60%. So we take great care of our shareholders returning that. And so we will not get levered to the point where that will ever, ever come into question.

Yes. Hey, Tim, this is Steve. I'll kind of pick up there. And as Leon said, we have an absolute firm commitment to meaningful returns direct to shareholders. We've demonstrated that for years.

And so that target that you cited is sort of a minimum threshold of at least 40% of earnings. We clearly go above that when we've got excess liquidity. And so that's what you saw last year was we ended the prior year with more than $7,000,000,000 in cash. And so we demonstrated an additional principle that we run the company by and have for years and years. And that is, if we can't find a use for the capital, we return it back to the shareholder.

And so that's really what drove that percentage that you accurately cited at 135% for last year. With regards to the pace as we head into this coming year, I think I would say if you look toward last year as guide, we each quarter, quarter over quarter took the share buyback pace down and that was a reflection of the liquidity and the alternative uses of that cash. And so you'll see us match the balance of needs for the cash along with the liquidity position we have to frame up whether we go above that 40% or not. But we're certainly committed to that over time. And I think you had a question in there as well about a pause in the Q4.

I'd had to look back, but I believe 7 of the last 8 quarters, we ended our share buyback programs before we gave guidance. So there was nothing exceptional or different about the Q4 than most of the times that we do our share buybacks.

Okay. Thanks. And didn't mean to imply that you're off to a slow start as the new core, I just meant like relative pricing year over year is slower. So I was just like pointing to the liquidity, I think, that was just discussed. If I could sneak in one more.

Just wanted to hear your thoughts on tariffs as it would apply to Nucor's operations. Obviously, broadly speaking, we assume tariffs are positive, but you do have some imports of slabs at California Steel and you have some operations in Mexico. So just wondering how they might affect those operations? And thanks again.

Yes, Tim, look, again, I think the macro there's a lot happening. I mean, in the last 7 days, there's been more EOs signed by the President than most can keep up with. But as it relates to trade, I think the macro environment of America First trade agenda policies and measures, you're going to see continue to move. And so if we think back to 2018, when the 232 was applied, I mean that created some positive momentum and again creating a more level playing field for the United States to compete. We've seen both north and south of our borders, those tariffs move to TRQs that have been grossly abused.

And again, that needs to get right sided. 40% of the imports roughly 40% of the imports coming in to America today are from Canada and Mexico. That has got to come way down. And so again, I think in the coming hours and days, you're going to see broad sweeping tariffs that are going to come back in to create a much more level playing field. You're going to see those bad actors that are manipulating currency, that are distorting how they price goods are going to be penalized.

And again, I think that's going to be broad sweeping to include even those countries and nations that we have TRQs already in place with. So the overall and again the macro to the balance you asked, I mean only about 5% or 6% of our product leaves the U. S, but most of that product that's leaving is high value added products, most of what's coming in from north and south of the border are commodity grades. And again, that's got to stop.

And your next question comes from the line of Carlos de Alba with Morgan Stanley. Please go ahead.

Yes. Thank you very much. Good morning. So just to continue with the discussions on tariffs, is it fair to say that the direct impact on Nucor will be negative if there is import tariffs on Mexican material because of these labs that you import. And also like when we look into the number, the reality is that the U.

S. Is a net exporter of flat steel products to Mexico. So I just wanted to understand what the direct impact would be on Nucor and obviously indirectly prices went up here that will be positive impact. If you can provide a little more details on the specific impact on Nucor that will be great.

Carlos, I want to make sure I understand the heart of your question. And so we have a joint venture in Mexico and JSM and a galvanizing on there that we should substrate to. But again, in terms of the overall mix for Nucor, that volume is very, very low. And so while that may have an impact if the tariffs are applied, we'll find and look for ways to continue to supply that and feed that unit. But again, against the backdrop of Nucor's overall mix, it's a very small amount that's being shipped from the U.

S. Into from Nucor into Mexico. Noah, any comments you'd add to that?

Maybe two points and kind of goes back to Timna's comments as well about CSI and our joint venture with JFE and JSM in Mexico. The first is on the slab side for CSI. We enjoy wide flexibility on how we supply that mill. And it's similar to our raw material strategy. I mean, we've taken up over the past year our supply of our own substrate from our mills to that mill.

So, we feel very confident that regardless of any trade impact on slabs, we can continue to operate CSI at more than competitive cost profile. On the NJSM side, I think Leon's point about the fact that we supply high value added products in the Mexico versus the commodity that's imported into the U. S. From Mexico is really important because our supply from NJSM is going directly into products that are bolted to a car, that are part of a car that's then moved by major automotive producers into the U. S.

And we feel like the options that the potential of that being impacted directly by tariff is just at a lower profile. So we certainly have developed contingencies for how we manage that. But I'd say in both cases, we feel very comfortable with our position.

Question would be, given the robust pipeline of projects that the company has, I mean, you guys still generate a lot of cash, right? But is there any room? What is the appetite to potentially participate in M and A where you buy existing assets that would arguably strengthen in the short term the company's position in the U. S. On the EIF side?

Yes. Look, Carlos, we the short answer is yes, of course. We are the largest steel company in North America. Of course, we're looking. We're going to continue to look.

And so today, we're about 2 thirds of the way through a $16,000,000,000 capital campaign between organic growth, greenfield growth and M and A. And so we have invested and committed a lot of our valuable shareholder capital to continue to grow this company. And what you've seen in the last few months of 2024 and early 2025 is again a very disciplined approach to capital allocation that we're not going to get over levered. We're going to make sure we execute on the capital that we have put out and are putting out in West Virginia and Lexington, North Carolina and Kingman, Arizona and Crawfordsville, Indiana and CSI and Nucor Steel, Berkeley. So we have an awful lot of not only capital being spent, but value that's going to be created for the long term shareholders of Nucor.

So again, we're we'll stay and again, we have plenty of liquidity if we wanted to do whatever we wanted to do in terms of M and A. Our leverage, as Steve mentioned a few minutes ago, is 1.6 debt to EBITDA ratio. So again, those metrics remain low. We're still the highest investment grade credit rating in the industry. So yes, stay tuned.

Nucor will stay on the forefront of thinking about growth, but we will not overpay for assets and we will be very disciplined in how we execute our capital.

Your next question comes from the line of Bill Peterson with JPMorgan. Please go ahead.

Yes. Thanks for taking my question and nice job on the quarterly execution. On your downstream business, has pricing for the new joist and deck orders, I guess, that's entered the backlog? Has pricing bottomed? And if not, when do you expect it so?

And then as we think about the trends in pricing for your other downstream products? And I guess more importantly, I guess, are you seeing green shoots in the activities such as warehouse or otherwise that would support pricing to move higher later in the year?

Good morning, Bill. This is John Hollitz. I'll take that one. Let me start by saying, we're extremely proud of what our teams in our downstream businesses have done to really redefine the earnings profile of these products. Keep in mind, these are not commodity products.

These are custom engineered solutions and our teams have really done a great job in creating value for our customers and for our end users and we expect that to continue into the future. As far as pricing specific to Choice and Deck, look, we've been doing this for a really long time and we're wise enough to not call a peak or a trough in any given market. Biggest market supported that joist and deck market participates in is the warehouse market, which has moderated off of the historic highs we've seen over the last 3 years. That's heavily impacted by interest rates. That said, it's still a very healthy market.

This is a very healthy business. We expect the warehouse market to be flat over the course of the rest of the year. And while margins have moderated from record highs, we are still performing well above pre pandemic levels in our joist and deck business and many of our other downstream business. Our buildings business has been very resilient over the last year. We actually saw improvement quarter over quarter in our rebar fab business and in our doors business.

So we feel really good about where we're starting the year. And as mentioned in the opening comments, our backlogs are in a position to carry us well into the Q2.

Thanks for that. And then maybe shifting to mills and I guess specifically plate, we saw the $60 per ton plate price hike yesterday. We also understand inventories are running pretty lean. I guess, are you seeing anything in the market to support this price hike versus at least what appears to be still slow infrastructure spending or potential risk to wind under Trump 2.0? And I guess, how does this inform your view on how to operate Brandenburg and how we should think about the ramp and then eventually run rate profitability when that could be achieved?

Yes, this is Brad Ford. I'll tackle that one. It sounds like there's a number of questions in there, but I'll start with the price increase. We're constantly monitoring market conditions. Like you mentioned, we see relatively lean order, seeing inventories throughout the supply chain.

Our bookings and backlogs are very strong. And now it's like the timing was right given the mentioned variables, couple of lead times just announced the increase. Overall, I'm optimistic about plate demand in 2025. Some of what Leon mentioned in the opening and in his comments around Trump policy, but we see expect to see increases in military spending, continued infrastructure spending, which impacts plate for bridges where we're a very large player, especially with the new capabilities of Brandenburg. And then on imports, in addition to the 1,600,000 tons of plate and heavy foil imported, nearly 2,200,000 tons of fabricated structural products, which are pretty plate

are also imported in 2024, which impacts our market. So any reduction in import stands to be a very positive for the domestic market. So overall optimistic on plate demand and it shows in our backlogs which are multiyear highs.

and we are extremely optimistic and confident about the future of Brandenburg and very, very proud of what that team has accomplished in Q4. Really that excitement stems from the step change in performance of the Brandenburg team from Q3 to Q4. Production was up over 100%, while conversion cost per ton was down 30%. And we produced nearly 150,000 tons in Q4 and walk into January with a record backlog at Brandenburg. And as we've said in the past, Brandenburg is a story of capability and not capacity.

Our product development pipeline remains full, but the team made a lot of progress in Q4 developing products for military, oil and gas and shipbuilding industries. Pursuing the certifications and product development, certifications and approvals takes time, but it's going to open up new markets and customers that were unavailable to NewCo prior to the Brandenburg investment. The size ranges of Brandenburg in conjunction with other 2 plate mills in Alabama and Carolina position us with the largest product breadth offered by any plate producer in North America. And I'll let's say given the recent pace of the ramp at Brandenburg along with the progress in product development gives us great confidence we'll achieve consistent EBITDA positive results by the middle of 2025.

Thanks for sharing all the insights and good luck on the execution ahead.

Thank you. And your next question comes from the line of Katya Jancyk with BMO Capital Markets. Please go ahead.

Hi. Thank you for taking my questions. You mentioned that shipments in 4Q or in December were stronger than expected. Was that driven by real demand? Or is some of that potentially due to pre buying activity ahead of tariffs?

Hey, Kashy, this is Steve, and thank you for the question. I think the shipments what you're referencing is the shipments are stronger than our guidance expected. And there are really two factors that play there. 1 is demand was fairly stout and stable. That certainly was the enabler, but also simply because of the timing of the holiday, the mid week timing of the holiday, we expected to ship less than we actually did.

So some of that was just you can call that seasonality or where the holiday happened to fall, where we expected to actually get less out the door than we really did.

And then maybe just in general about the inventory levels in the supply chain, what's your view on that? Are they right sized? Is there opportunity for restocking over the next few months? Or how are you looking at it?

Yes. Look, I think as we go throughout the year and what I said in my opening comments, we're optimistic. We think we're going to continue to see policies that deregulation, tax relief, tariffs, reshoring and they can other pro economic drivers to reach or energy independence data centers. The green data center surgeons is going to continue. Nucor sits at the epicenter of all of that.

So I would tell you as we move through the year, we remain very optimistic about the economic situation that will create and continue to pull through demand, and ultimately deliver higher performances that we had seen over the last 6 to 12 months.

Thank you. And your next question comes from the line of Tristan Gerzer with BNP Paribas. Please go ahead.

Yes. Hi. Thank you for taking my questions. The first one is just on M and A. I mean, there have been reports of a potential partner bid for UST asset.

And I think last year, you look at those assets, notably the EAF, and decided, correct me if I'm wrong, that valuation was an issue there. So now if those are correct and you're looking again at those assets, has anything changed since last year? When you look at those and also regarding to that, can you comment a little bit on your sheet strategy if it involves organic growth, but also M and A? Yes, that's my first question.

And look, again, as the largest steel producer in North America, we're going to look at our core assets, our strengths. We run a massive amount of EAFs and the largest EAF producer in the continent. So again, when things come available that fit us culturally, that fit us technologically, and we believe we can return value to our shareholders, man, we're going to execute. And at that time, and as I mentioned and you just shared, valuation is ultimately going to dictate whether or not we're going to move forward.

And so to speculate on what may unwind and this thing's tied up in the courts and will it get pulled out and killed earlier or again come to its death in June. Well, I don't know. And I don't know if those assets come back. What I would tell you is the guiding principle of a very disciplined capital allocation philosophy and strategy is going to remain. So again, the other piece of that is if you step back and thinking about there's a lot of talk and there's a lot of noise right now going on in that side of the business and a lot of nostalgia regarding U.

S. Steel over years years. But the reality is it's got nothing to do with the workers at U. S. Steel.

The men and women who are making their products every day are working hard and doing the right things. It's the leadership that didn't invest to stay competitive. And so what you see today versus 30, 40, 50 years ago is a shell of itself. And again, there are some assets that Nucor may be interested in. Again, if they come to fruition, But if you want to talk about iconic companies over the last 60 years, it's Nucor period, full stop.

And we're going to continue to focus to grow our company. We're going to continue to focus on maximizing shareholder value and again making our shareholders as much money as possible. The other question I think you asked was around our sheet strategy. And again, it's framed up in very simply this, how do we create EVA by providing a differentiated product mix and a higher value added mix in geographic markets that maybe we don't have as much leverage. So the fastest growing and the largest sheet consuming region in the U.

S. Is the Midwest and Northeast and that is where our lowest market share of consumption is. And so the West Virginia mill sits incredibly well suited. But the capability set of what's being built in West Virginia is going to enable us to make products and drive into some end markets that, we've not done before. And so we're really excited about those opportunities.

We think we're going to have a cost profile that's going to be incredibly competitive in that region. And so again, we're incredibly optimistic about the future of West Virginia and what that's going to mean for our shareholder base.

All right. That's very clear. Thank you. And my second question is just going back to the imports. So there is the ongoing review of Section 232 and I would assume that you're in touch with the new administration on that.

Nucor (NUE) Q4 2024 Earnings Call Transcript

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