Carlos de Alba's questions to COMMERCIAL METALS (CMC) leadership • Q4 2025
Question
Carlos de Alba followed up on the margin discussion, asking how quickly CPMP's margins, particularly from recent acquisitions, could align with Foley's and core CPMP levels. He also sought clarification on the $5-10 million incremental EBITDA for CPMP and the company's outlook for dividends and buybacks given strong free cash flow generation and reduced cash taxes.
Answer
President and CEO Peter Matt advised caution on specific timeframes for CPMP margin improvement until transactions close, but suggested a three to five-year horizon for synergy realization. He clarified that the $5-10 million synergy was for the initial CPMP acquisition, with an additional $25-30 million expected from the Foley transaction over three to five years. Regarding capital allocation, Peter Matt stated no plans to change the dividend and that the long-term capital allocation strategy remains unchanged. He indicated a temporary slowdown in share repurchases to offset employee share grants while delevering, with plans to ramp up repurchases once net leverage is below two times. SVP and CFO Paul Lawrence expressed confidence in delevering quickly due to strong cash flow, lack of U.S. cash taxes, reduced CapEx, and strong expected EBITDA.