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DATE
Thursday, October 16, 2025 at 11:00 a.m. ET
CALL PARTICIPANTS
President and Chief Executive Officer — Peter Matt
Senior Vice President and Chief Financial Officer — Paul Lawrence
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TAKEAWAYS
Net Earnings -- $151.8 million, or $1.35 per diluted share, compared to $103.9 million, or $0.90 per diluted share, in the prior year period for the fiscal fourth quarter ended Aug. 31, 2025.
Adjusted Net Earnings -- $155 million, or $1.37 per diluted share, up from $97.4 million, or $0.84 per diluted share, after adjusting for estimated net after-tax charges totaling $3.2 million for the fiscal fourth quarter ended Aug. 31, 2025.
Core EBITDA -- $291.4 million for the fiscal year ended Aug. 31, 2025, a 33% increase from $219 million in the prior year period.
Core EBITDA Margin -- 13.8%, compared to 11% in the prior year period.
North American Steel Group Adjusted EBITDA -- $239.4 million of adjusted EBITDA, or $207 per ton of finished steel shipped, reflecting an 18% year-over-year increase.
North American Steel Group Adjusted EBITDA Margin -- 14.8%, compared to 13% in 2024.
Finished Steel Shipments (North American Steel Group) -- Increased by 3% year-over-year; rebar shipments rose at a similar rate.
Steel Product Margins -- Sequential quarterly expansion delivered the highest North American steel product margin level in two years; Exited the quarter with metal margins $31 per ton higher than the period average.
Emerging Business Group (EBG) Net Sales -- $221.8 million, up 13.4% year-over-year.
EBG Adjusted EBITDA -- $50.6 million adjusted EBITDA, an increase of 19.1% year-over-year.
Europe Steel Group Adjusted EBITDA -- $39.1 million adjusted EBITDA for the fiscal year ended Aug. 31, 2025, reversing a prior year loss of $3.6 million.
Europe Steel Group Adjusted EBITDA Margin -- 14.8%, up from negative 1.6% in the prior year, with $31 million of CO2 credits received in the quarter.
Adjusted EBITDA Methodology -- Now excludes unrealized gains and losses from undesignated commodity derivatives in adjusted results, with historical numbers recast dating back to fiscal year 2019.
Precast Platform EBITDA -- Expected to generate approximately $250 million of adjusted EBITDA (non-GAAP) in calendar 2025, with margins in excess of 34% before synergies.
Foley Acquisition Terms -- Valuation is 10.3x expected calendar 2025 EBITDA, or 9.2x after cash tax savings from asset step-up; immediate accretion to earnings and cash flow per share is expected.
Synergy Targets -- Run-rate synergies from Foley are anticipated at $25 million to $30 million of EBITDA (non-GAAP) by year three, in addition to previous CPMP synergy goals of $5 million to $10 million.
Net Leverage Outlook -- Post-acquisition net debt is expected at 2.7x trailing twelve-month adjusted combined EBITDA (non-GAAP), with a target to reduce it below 2x within eighteen months.
TAG Operational Excellence Program -- Delivered $50 million in EBITDA benefit in the fiscal year ended Aug. 31, 2025, exceeding the original $40 million goal; Run-rate annualized EBITDA benefit is expected to exceed $150 million by fiscal year 2026, with minimal capital required.
Capital Spending Guidance -- Anticipated at $600 million for fiscal year 2026, of which $350 million is for completing the West Virginia micro mill and select growth projects in the EDG segment.
48C Tax Credit -- Approximately $80 million in net tax credits related to Steel West Virginia will be realized in fiscal year 2026.
Tax Rate Guidance -- Effective tax rate was 21.5% and is projected at 48% for fiscal year 2026; No significant U.S. federal cash taxes are expected in fiscal year 2026 or most of fiscal year 2027.
Rebar Trade Case Update -- The International Trade Commission found merit in the antidumping petition against exporters from Algeria, Bulgaria, Egypt, and Vietnam; preliminary ruling expected late 2025 or early 2026.
SUMMARY
Commercial Metals Company (CMC -7.43%) announced the acquisition of Foley Products Company, which, together with the CPMP acquisition, establishes a platform expected to deliver around $250 million in precast segment adjusted EBITDA (non-GAAP) for calendar 2025 at margins above 34%. Company leadership plans to prioritize integration of recent acquisitions and deleveraging, pausing further major M&A activity until net leverage returns to target levels. Reported consolidated core EBITDA rose 33%, while adjusted EBITDA margin increased to 13.8%. Segment profitability improved across North American steel, EBG, and European steel, with the latter segment benefiting from a $31 million CO2 credit as part of governmental energy cost reimbursement. Management highlighted immediate accretive effects from the acquisitions, a disciplined capital allocation strategy, and sustained margin improvements supported by its TAG program, with a run-rate annualized EBITDA benefit expected to surpass $150 million by fiscal year 2026.
President Matt asserted, "Both businesses together will position us to drive significant value for our customers and shareholders alike."
Chief Financial Officer Lawrence stated, "The platform would have improved normalized free cash flow conversion by over four percentage points in the fiscal year ended Aug. 31, 2025."
Acquisition funding for Foley and CPMP will combine cash on hand and committed bank financing, with later corporate bond issuance planned for permanent debt structure.
INDUSTRY GLOSSARY
EBG (Emerging Businesses Group): CMC’s segment encompassing high-value specialty products and early-stage construction solutions, including Performance Reinforcing Steel and Tensar site-prep products.
TAG (Operational Excellence Program): Company-wide initiative focused on cost reduction, process efficiency, and profitable sales to enhance EBITDA and overall operational performance.
CPMP: CPMP refers to Concrete Pipe & Manufacturing Products, an acquired precast platform strengthening CMC’s presence in early-stage construction materials.
48C Program: U.S. IRS tax credit under Section 48C, incentivizing clean energy manufacturing investments through project-specific tax credits.
DMI (Dodge Momentum Index): A leading indicator tracking non-residential construction project planning activity, providing visibility into likely future construction spending.
Full Conference Call Transcript
Operator: Hello and welcome everyone to the Fiscal 2025 Fourth Quarter and Year End Earnings Call for Commercial Metals Company. Joining me on today's call are Peter Matt, Commercial Metals Company's President and Chief Executive Officer, and Paul Lawrence, Senior Vice President and Chief Financial Officer. Today's materials, including the press releases and supplemental slides that accompany this call, can be found on Commercial Metals Company's Investor Relations website. Today's call is being recorded. After the company's remarks, we will have a question and answer session and we'll have a few instructions at that time. I would like to remind all participants that today's discussion contains forward-looking statements, including with respect to economic conditions, effects of legislations and trade actions, U.S.
Steel import levels, construction activity, demand for finished steel products, expected capabilities, benefits, costs, and timeline for construction of new facilities, the benefits and impact of the pending acquisitions of Foley Products Company and Concrete the company's operations, the company's strategic growth plan, its anticipated benefits, legal proceedings, company's future results of operations, financial measures, and capital spending. These statements reflect the company's beliefs based on current conditions, but are subject to risks and uncertainties. The company's earnings release, most recent annual report on Form 10-Ks, and other filings with the U.S. Securities and Exchange Commission contain additional information concerning factors that could cause actual results to differ materially from those projected in forward-looking statements.
Except as required by law, Commercial Metals Company does not assume any obligation to update, amend, or clarify these statements. Some numbers presented will be non-GAAP financial measures, and reconciliations for such numbers can be found in the company's earnings release, supplemental slide presentation, or on the company's website. In addition, today's presentation includes financial information that gives effect to the consummation of pending acquisitions. Pro forma financial information is presented for illustrative purposes only and is based on available information and certain assumptions and estimates that the company believes are reasonable.
The pro forma financial information may not necessarily reflect what the company's results of operations and financial position would have been had the transactions occurred during the periods discussed or what the company's results of operations and financial position will be in the future. Unless stated otherwise, all references made to year or quarter end are references to the company's fiscal year or fiscal quarter. And now for opening remarks and introductions, I will turn the call over to Peter.
Peter Matt: Good morning, everyone, and thank you for joining our conference call. You've likely already seen, we have a lot of ground to cover today. First, we are excited to share more about Commercial Metals Company's agreement to acquire Foley Products Company, after which we will cover our fourth quarter performance, fiscal 2025 strategic progress, and our outlook. Before opening the call to questions. To supplement today's commentary, we have posted two presentations to our IR website, one for the Foley acquisition and one detailing our fourth quarter and fiscal 2025 results. Starting with Foley, we are thrilled to add a best-in-class business with industry-leading margins to Commercial Metals Company's portfolio.
In combination with our recently announced acquisition of CPMP, the addition of Foley will create a high-quality large-scale platform in the strategically attractive precast industry, greatly enhancing Commercial Metals Company's financial profile and growth over the long term. I am confident that the acquisition of Foley will increase our value proposition for customers and shareholders alike, extending our growth runway and marking another major milestone as we execute our strategy. Slide four of the acquisition presentation provides a brief overview of Foley. Since its founding by Frank Foley over forty years ago, the company has grown into the largest regional precast producer in The United States, with 580 employees in 18 plants across nine states.
Foley has a strong track record of growth and best-in-class margin performance, which is a testament to their talented management team and the industry-leading practices they have developed. We are very excited to welcome them to the Commercial Metals Company family and look forward to collaborating on Foley's continued success. As you can see on Slide seven, the addition of Foley in combination with our recently announced acquisition of CPMP creates immediate scale for Commercial Metals Company's Precast platform. Upon closing both transactions, Commercial Metals Company will be the third-largest Precast player in The U.S. and a leader across the Mid-Atlantic and Southeast, supported by 35 facilities across 14 states.
Our strategic entry into Precast will broaden our commercial portfolio to support our customers, enhance our exposure to powerful structural trends in construction, offer new capabilities to address construction industry challenges, and establish a new platform with a significant future runway. Slide eight helps illustrate Foley's best-in-class operations, which will support our ability to build a broader Precast platform and unlock further synergies with CPMP. The left side of the page outlines Foley's industry-leading margin and cash flow profile, which has been consistent over time and is enabled by a highly efficient low-cost operating model. The company has achieved sustained cost advantages through a combination of centralized production planning, automation, best-in-class manufacturing practices, low-cost support functions, and optimized logistics.
Foley has also developed a winning commercial formula with leading design and engineering capabilities, lead times, and product quality. With the most comprehensive product portfolio of any precast supplier within its core regions, Foley is a true one-stop shop for many construction applications. These capabilities have given the company enduring competitive advantages, which Commercial Metals Company will seek to preserve and strengthen. As highlighted on Slide nine, Foley and CPMP have highly complementary footprints, and we see many meaningful synergy opportunities between the two companies.
We expect the acquisition of Foley to generate annual run-rate synergies of approximately 25% to $30 million of EBITDA by year three, in addition to the $5 million to $10 million of EBITDA we originally identified for CPMP and 35% to 40% of CPMP's forecasted 2025 EBITDA, consistent with our previous commentary that synergies would become more significant as our Precast platform gains scale. It is worth pointing out that meaningful commercial synergies are likely to emerge but have not been included in our initial synergy estimate.
On Slide 10, we illustrate Foley's highly complementary proximity to both Commercial Metals Company and CPMP networks, which we believe will facilitate optimal coordination to achieve operational synergies and over the longer term substantial commercial opportunities. As you can see, every Precast site within the Eastern and Western U.S. is located near a Commercial Metals Company rebar mill or fabrication plant, allowing us to maximize value over time through close coordination across commercial, operational, and support functions. In particular, we are excited by the increased value we can bring to customers in these regions by providing Commercial Metals Company's full suite of early-stage construction solutions from site preparation to structural erection.
Our offering will be unique in the marketplace and will grow more compelling over time as we integrate our portfolio and offer attractive turnkey solutions. While a vast majority of the acquired Precast facilities are located within one of Commercial Metals Company's densest geographic regions, we will also operate one satellite location in Louisiana and three satellite locations in the Western U.S., which will provide beachheads in those regions and offer the opportunity for profitable bolt-on growth in the future.
To conclude my comments on Foley, when we began our study of the precast space nearly two years ago, we immediately identified Foley as a best-in-class operator based on its reputation, its standing among customers, and its top-tier financial profile in the construction material sector. Our due diligence confirmed Foley's attractiveness as a strong business and drove us to execute on this unique opportunity. I am incredibly excited about both of these announcements, and I am confident that the additions of Foley and CPMP unlock further upside as the cornerstones of our newly created Precast platform. Both businesses together will position us to drive significant value for our customers and shareholders alike.
That summary of the deal rationale, I'll turn the call over to Paul to discuss the financial details. Paul?
Paul Lawrence: Thank you, Peter, and good morning to everyone on the call. I will start by saying I share the excitement and optimism both about this transaction and the strategic momentum we have achieved at Commercial Metals Company over the last year. The acquisition of Foley in combination with CPMP is transformative to Commercial Metals Company's financial profile. As shown on Slide 11, the creation of the new Precast platform meaningfully shifts the composition of Commercial Metals Company's earnings, increases margin levels and free cash flow capabilities, and importantly should reduce earnings and cash flow volatility in our business.
The sum of CPMP and Foley representing our Precast platform is expected to generate approximately $250 million of adjusted EBITDA in calendar 2025, before growth and synergies with EBITDA margins in excess of 34%. This compares to Commercial Metals Company's core EBITDA margin of 10.7% and the North American Steel Group adjusted EBITDA margin of 12.2% in fiscal 2025. The addition of these levels of earnings by the precast operations will significantly shift the composition of Commercial Metals Company's earnings, increasing the combined contribution from our EBG segment and Precast platform to over 32% of total operating segment adjusted EBITDA.
Upon completion of the acquisitions, we expect nearly a third of our profitability will be generated by high-value-added solutions with attractive market penetration potential, strong margins, and cash flow conversion. The lower capital intensity of these businesses also means they require less reinvestment to maintain operations and less capital commitment to grow organically, enhancing free cash flows. Margin levels and normalized free cash flow conversion are both expected to increase meaningfully. Based on Foley and CPMP's forecasted results for 2025, the addition of Foley and CPMP would have increased Commercial Metals Company's core EBITDA margin by more than two percentage points, and given the stability of these businesses, we anticipate this improvement to be sustained over time.
In fiscal 2025 alone, the platform would have improved normalized free cash flow conversion by over four percentage points. Now I will cover the major terms related to the transaction. Total consideration will be paid at closing and is subject to customary working capital adjustments. This valuation represents a 10.3 times multiple on Foley's expected calendar 2025 EBITDA. Importantly, the effective multiple is reduced to approximately 9.2 times when cash tax savings are considered, as Commercial Metals Company will benefit from a tax step-up on assets. We believe this is a fair valuation for a fantastic asset, and the multiple reflects Foley's best-in-class margin profile and business characteristics previously discussed by Peter.
It's worth noting Foley's EBITDA margins are five to ten percentage points higher than those of many blue-chip building product and construction material companies that routinely trade at 10 to 16 times forward EBITDA. Importantly, we anticipate the transaction to be immediately accretive to earnings and cash flow per share. The combined total consideration of approximately $2.5 billion related to the purchases of Foley and CPMP will be funded through a combination of cash on hand and committed bank financing. As soon as feasible, we will seek to raise permanent debt in the form of corporate bond offerings.
Immediately following the completion of both transactions, which is expected by the end of 2025, Commercial Metals Company's net debt is expected to increase to approximately 2.7 times trailing twelve-month adjusted combined EBITDA. As we have stated in the past, we are comfortable with temporarily increasing net leverage above our long-term target of two times for the right strategic opportunity. As we did with the highly successful acquisition of Gerdau's U.S. Rebar business in 2019, we will prioritize delevering in the quarters ahead with a goal of returning below two times net leverage within eighteen months.
This effort will be aided by strong free cash flow generation from the Precast platform itself, the wind-down of capital expenditures for the construction of Steel West Virginia, and significant cash tax savings related to the 48C program and the One Big Beautiful Bill. Based on these supportive factors and the positive outlook for our business, we are confident in our ability to delever quickly. That concludes my remarks, and I'll turn it back to Peter to cover the fourth quarter and fiscal year.
Peter Matt: Thank you, Paul. I will now turn to our earnings presentation. The goal of our strategy is to drive meaningful and sustainable improvements to Commercial Metals Company's margins, earnings, cash flow, and returns on capital, while reducing volatility in our business. As you can see on Slide five, we are executing against this objective along three paths. First, by investing in our people and pursuing excellence in all we do. Second, by investing in value-accretive organic growth, and third, by driving capability-enhancing inorganic growth as we just discussed in detail. Each of these objectives represents a significant opportunity for Commercial Metals Company and taken together will be game-changing for our returns, scale, and ultimately the value we create for investors.
We made tremendous progress across each of these strategic paths over the last year. And Slide six outlines some of our most notable accomplishments. I'll start with investing in our people and pursuing excellence. As I've said before, the most important investment we can make in our people is to keep them safe on the job. And I am proud to report that fiscal 2025 was the safest year in our company's history and marked the third consecutive year of record safety performance. The job of improving safety is never done, but we are in an excellent position to maintain our momentum and cement our position as truly world-class.
During the year, we also invested in the leadership talent and resources that will support strategic execution across our organization. Within our emerging businesses group, we now have in place a group of veteran leaders who are poised to drive EBG segment performance to new heights. We are already seeing early dividends in our Commercial Metals Company Construction Services and Performance Reinforcing Steel divisions as new sales and margin initiatives take hold. Late in fiscal 2025, we also streamlined reporting structures in our North America Steel Group to facilitate decision-making and provide optimal coordination in supporting key initiatives, including our TAG program efforts.
On the topic of TAG, we began execution of our operational and commercial excellence program in fiscal 2025. I could not be prouder of the progress the Commercial Metals Company team achieved during the year. Not only did we generate $50 million in EBITDA benefits, well in excess of the $40 million we expected, but we also successfully identified additional opportunities to reduce costs, increase efficiencies, cut waste, and drive profitable sales in the future. Looking ahead, I am more confident than ever in this program's ability to drive meaningful and sustained improvement to Commercial Metals Company's financial profile.
By the end of fiscal 2026, we now expect to generate a run-rate annualized EBITDA benefit of more than $150 million with virtually no related capital investment. The next strategic path is value-accretive organic growth, which we anticipate will represent a meaningful source of new earnings and cash flow over the next several years. Particularly as our Arizona II and Steel West Virginia mill investments reach full operations. I am pleased to report that we made significant progress on both projects during fiscal 2025. Notably, we achieved a full quarter of positive EBITDA at Arizona II, for which I would like to congratulate our team out west.
I would also like to highlight Commercial Metals Company's attainment of an approximately $80 million net tax credit related to Steel West Virginia under the 48C program, which we will realize in fiscal 2026 and effectively reduces our capital investment in this project. Finally, turning to capability-enhancing inorganic growth, as I've already discussed at length, we have created a large-scale Precast platform with the announced acquisitions of Foley and CPMP. We believe this platform will greatly enhance Commercial Metals Company's financial profile, increase our value to customers, and provide an avenue for meaningful long-term growth. Paul will cover the financials, but before this, I would like to briefly reflect on our markets.
First, in North America, a combination of resilient construction activity and a balanced supply landscape resulted in favorable conditions for both volumes and margins during the quarter. Shipments of finished steel increased year over year and were unchanged from the prior quarter's strong level. Downstream bid volumes, our best gauge of the construction pipeline, remained healthy and were consistent with recent quarters as we continue to see strength across a number of key market segments, including public works, highway and bridge, institutional buildings, and data centers. As we have indicated previously, we see substantial pent-up demand, particularly within non-residential markets.
This view is supported by historic strength in the Dodge Momentum Index or DMI, as well as recent conversations with many of our largest customers. The DMI leads construction activity by twelve to eighteen months and reached a record high in September, driven by growth that was broad-based across several market segments. Additionally, our customers are increasingly bullish as they experience a large inflow of projects into the pipeline related to energy generation, reshoring, advanced manufacturing, and LNG infrastructure. When we look beyond the current environment, we remain confident that the emerging structural drivers will support construction activity over a multi-year period.
These trends include investment in our nation's infrastructure, reshoring industrial capacity, growth in energy generation and transmission, the build-out of AI infrastructure, as well as addressing a U.S. housing shortage of 2 to 4 million units. As noted on Slide 10 of the earnings presentation, over $2 trillion of corporate investments across AI, manufacturing, shipping, and logistics, and energy have been announced in calendar 2025. Commencement of even a handful of related mega projects could provide a meaningful demand catalyst for Commercial Metals Company's products in the quarters ahead. Moving on to profitability in this segment, we experienced a strong sequential expansion in North American steel product margins during the quarter, achieving the highest level in two years.
The improvement only partially reflects the impact of the June and July price announcements. Realized pricing increased steadily throughout the quarter, and we exited at a much higher level than the period average, positioning us to further expand margins in the first quarter. Within our downstream business, we have seen price levels on new bids rise in tandem with the mill rebar price. This should support average backlog pricing in the future as these higher-priced bids are converted into new contract awards. On the topic of backlog, I would note that average pricing stabilized in the fourth quarter following more than two years of sequential quarterly declines from the post-COVID peak.
Before I move on to our other segments, I would like to briefly update you on the status of the rebar trade case filed with the International Trade Commission or ITC back in June. The petition alleges exporters located in Algeria, Bulgaria, Egypt, and Vietnam are guilty of dumping material into The U.S. Market and should be subject to corrective duties ranging up to 160%. In mid-July, the ITC ruled that the case has merit and has passed it to the Department of Commerce for further investigation. Based on the current case schedule, we expect a preliminary ruling on the antidumping claim sometime in late calendar 2025 or early 2026.
It is worth noting that since filing the case, price levels have increased markedly on several rebar sizes often sourced from the subject countries. Turning to our emerging businesses group on Slide 11, current conditions are supportive, and we see encouraging signals regarding future activity, specifically solid quoting levels, busy engineering firms, and improved velocity of quote conversion into backlog. One attractive element of the EBG segment is the fact that our current solutions are underpenetrated in the market, which provides significant opportunities for growth as we drive product adoption in addition to market expansion. In our key proprietary products, we are winning share through the strong value proposition while maintaining solid margins.
This dynamic helped us achieve record segment profitability during the quarter as shipments of core solutions such as Interox GeoGrid, Galvabar, and Chromax all increased from the prior year. We have outlined the unique capabilities of these products on prior calls, and we continue to expect that they, along with EBG's other high-value-added offerings, position the segment to achieve a consistent organic growth rate in the mid to high single digits and EBITDA margins in the high teens. Finally, for our Europe Steel Group, conditions improved modestly from the third quarter.
Demand continued to normalize as a result of solid Polish economic growth, while on the supply side, import flows ticked up slightly from recent quarters but remain below the disruptive levels of a year ago. During the fourth quarter, we saw metal margins recover to their highest mark in over two years, aided by an improved price environment for merchant bar and wire rod. The green shoots that we have noted on recent earnings calls continue to mature. We are encouraged by recent developments that the EU is looking to bolster its trade legislation with the implementation of a long-term mechanism that will reduce existing quotas for foreign steel by nearly half.
Imports beyond those quotas would be subject to new higher tariffs, which are currently proposed at 50%. Before turning the call over to Paul, I would like to recognize the efforts of our world-class employees. We have asked a lot of the team as we execute on our ambitious vision for the future, and I am truly inspired by all that they have accomplished so far. Their efforts have been instrumental in laying the groundwork for years of success ahead, and I look forward to maintaining that momentum in the new fiscal year. With that, I'll turn the call over to Paul to provide more color on the quarter. Paul?
Paul Lawrence: Thank you, Peter. We reported fiscal fourth quarter 2025 net earnings of $151.8 million or $1.35 per diluted share compared to net earnings of $103.9 million and net earnings per diluted share of $0.90 in the prior year period. Excluding estimated net after-tax charges of approximately $3.2 million, adjusted earnings for the quarter totaled $155 million or $1.37 per diluted share compared to $97.4 million and $0.84 per diluted share respectively in the prior year period. These adjustments consisted of a $3.8 million pretax expense for interest on the judgment amount associated with the previously disclosed litigation, an impairment charge of $3.4 million, and a $2.9 million unrealized gain on undesignated commodity hedges.
During 2025, we modified our method of calculating adjusted EBITDA to exclude the impact of unrealized gains and losses from undesignated commodity derivatives. This change was primarily driven by heightened volatility in copper forward markets, which introduced significant non-cash fluctuations unrelated to our core operations. The relevant financial figures, including historical numbers, have been adjusted to reflect this change, impacting consolidated adjusted earnings, adjusted earnings per diluted share, adjusted EBITDA, core EBITDA, and core EBITDA margin, as well as North American Steel Group adjusted segment EBITDA. Given the prominence of these metrics, we have published recast quarterly figures dating back to fiscal 2019 in a Form 8-Ks filing accompanying our earnings release this morning.
We believe this change in reporting will provide a more representative view of our operating performance and cash-generating capability. Consolidated core EBITDA was $291.4 million for 2025, representing a 33% increase from the $219 million generated during the prior year period. Slide 14 of the supplemental presentation illustrates the year-to-year changes in Commercial Metals Company's quarterly financial performance. Segment level adjusted EBITDA increased by $87.4 million in total, with our North American Steel Group contributing $36.6 million of improvement, EBG providing $8.1 million, and the Europe Steel Group delivering $42.7 million. The consolidated core EBITDA margin of 13.8% compared to 11% in the prior year period.
Commercial Metals Company's North American Steel Group generated adjusted EBITDA of $239.4 million for the quarter, equal to $207 per ton of finished steel shipped. Segment adjusted EBITDA increased 18% compared to the prior year period, driven primarily by higher margin over scrap cost on steel products and contributions from our TAG operational excellence efforts. In particular, scrap optimization, alloy consumption reduction, process yield improvements, and logistics optimization. North American Steel Group adjusted EBITDA margin of 14.8% compares to 13% in 2024. Segment results also improved sequentially as steel product margins continued the expansion that began early in the third quarter.
As Peter noted, we exited the fourth quarter with steel prices on an upward trajectory and steel product metal margins $31 per tonne above the period average, setting the stage for us to generate strong margins in 2026. As indicated earlier, demand for long steel products was resilient during the quarter. Finished steel shipments increased by 3% compared to a year ago, while rebar shipments from Commercial Metals Company's mills and downstream operations grew at a similar rate. Emerging business group fourth quarter net sales of $221.8 million increased by 13.4% on a year-over-year basis, while adjusted EBITDA of $50.6 million increased by 19.1%.
The improvement was largely driven by three factors: strong demand for Geo grids and proprietary products within Commercial Metals Company's Performance Reinforcing Steel division, improved tensor cost performance, and the impact of commercial initiatives within our Commercial Metals Company Construction Services division. Turning to Slide 17 of the earnings presentation, our Europe Steel Group reported adjusted EBITDA of $39.1 million for 2025 compared to a loss of $3.6 million in the prior year period. Segment adjusted EBITDA margin of 14.8% increased from negative 1.6% a year ago.
The biggest driver of improved profitability was the receipt of a $31 million CO2 credit, which was the first of two payments that will be received this calendar year as part of the government energy cost reimbursement program in place through 2030. Excluding this, operational results improved by $11.7 million, driven by higher margins, a 17% increase in shipment volumes, and ongoing cost management efforts. Similar to recent quarters, the team in Poland continued to drive efficiency gains with success in nearly every major cost category, including labor, consumable usage, alloys, and overhead. Most of these improvements are permanent in nature and set us up well to capitalize on market recovery.
As Peter mentioned, during the quarter, we saw continued demand growth and a somewhat moderated level of long steel imports into Poland. The combination of these factors provided Commercial Metals Company the opportunity to achieve improved shipping volumes. Commercial Metals Company's effective tax rate was 21.5% in the fourth quarter and 21.3% for the full year. Looking ahead, we anticipate a full-year effective tax rate between 48% for fiscal 2026. As a result of several factors, we do not anticipate paying any significant U.S. Federal cash taxes in fiscal 2026, and for much of fiscal 2027.
During fiscal 2026, we will benefit from our 48C tax credit, bonus depreciation on our West Virginia mill investment, as well as accelerated depreciation from the assets acquired in Commercial Metals Company's acquisition of Foley and CPMP, which will significantly increase our free cash flow generation. Turning to Commercial Metals Company's fiscal 2026 capital spending outlook, we expect to invest approximately $600 million in total. Of this amount, approximately $350 million is associated with completing the construction of our West Virginia micro mill, as well as a handful of high-return growth investments within our EDG segment. This concludes my remarks, and I'll now turn it back to Peter for additional comments on Commercial Metals Company's financial outlook.
Peter Matt: Thank you, Paul. We expect consolidated financial results in 2026 to be generally consistent with those of the fourth quarter. Finished steel shipments within the North America Steel Group are anticipated to follow normal seasonal trends, while our adjusted EBITDA margin is expected to increase sequentially on higher steel product margins over scrap. While we expect financial results in the Emerging Businesses Group to decline on a sequential basis due to normal seasonality, we believe they will improve year over year. Our Europe Steel Group will receive the second tranche of the annual CO2 credit in an amount of approximately $15 million during the first quarter.
Excluding this credit, adjusted EBITDA for our Europe Steel Group is likely to be around breakeven as seasonal factors and scheduled maintenance outages weigh on profitability. I am confident in Commercial Metals Company's long-term outlook and continue to believe in our ability to generate significant value for our shareholders. We are executing on several strategic initiatives, which we believe will deliver meaningful and sustained enhancements to our margins, earnings, cash flow, and return on capital. We will achieve this by leveraging our TAG operational and commercial excellence program to get more out of our existing enterprise, completing value-accretive organic projects, and adding complementary early-stage construction solutions that provide attractive new growth lanes.
Taken together, we believe these efforts will position our company to take full advantage of the powerful structural trends in the domestic construction market for years to come. I would like to conclude by thanking our customers for their trust and confidence in Commercial Metals Company and all of our employees for delivering yet another quarter of very solid safety and operational performance. Thank you.
Operator: And at this time, we will now open the call to questions. And your first question today will come from Mike Harris with Goldman Sachs. Please go ahead.
Cecilia Tang: Hi, good morning. This is Cecilia Tang on for Mike Harris. You mentioned strong growth in the construction industry. I was wondering how much of that demand is coming from infrastructure, residential, industrial, and energy?
Peter Matt: Yes. Thank you very much for the questions, Cecilia. Infrastructure has been very strong. It has been for the past several years really on the back of the IIJA. And we expect it's going to continue to be strong. And I would say that we expect there to be a follow-on bill so that this should be a multiyear trend. On non-residential construction, it's been a bit mixed. There have been certain areas that are very strong. Areas like energy, as you cite, that's been very strong. Data centers, obviously very strong. Institutional spending on hospitals, that type of thing has been also very strong.
But then there have been other areas that are kind of weaker, and I'm thinking about kind of commercial buildings, retail has been weaker. The thing that's exciting about the nonresidential space is that there is a huge backlog of potential projects coming down the pike. And I'm thinking about, and we've said this before, there are something like $2 trillion of potential projects that are out there that have been announced. And then there's still a huge pipeline of potential projects that come behind that in some of these trade deals, if and when they get negotiated.
So we're very bullish about a turn in non-residential spending, and we'll see that move from kind of what's been flattish to something that's growing again. And then lastly, residential markets, residential markets have been lackluster, I would say, and a lot of that is tied to interest rates. Those markets tend to be more sensitive to interest rates. But as we see interest rates start to come down, we have confidence that we're going to see a turn in that market. And remember that we have a deficit of 2 to 4 million homes in this country. So there's absolutely a demand backdrop that warrants the residential spending.
And we just have to get to a place where the economics support that. But we think we're going to see that as rates continue to drift down. So in total, we remain very bullish about the level of spending over the next several years. Each of these sectors, it's a multiyear trend.
Cecilia Tang: Thank you. That's very helpful. And also, given the bullish outlook, why is it that the first quarter outlook is not more positive, especially given the positive performance in the current quarter?
Paul Lawrence: Yes, Cecilia, there's a few moving pieces to our outlook for the first quarter. You're correct. As far as North America Steel Group is concerned, we're going to have a very strong quarter in the first quarter. We often measure the North American Steel Group as EBITDA per ton, and it was great to see in the fourth quarter that the EBITDA per ton of that segment was over $200 a ton. And as we said in our stated remarks, we exited the quarter with a metal margin over $30 a tonne higher than the average for the quarter. So North America Steel Group will have a great quarter.
However, if we look at our Europe Steel Group, two aspects to that. We talked about the reduction in the CO2 credits. We will get another credit in the first quarter, but it will be roughly half of what we received in the fourth quarter. So that'll be a $15 million impact. And then we have our typical seasonal planned maintenance outage that will reduce the operating performance, excluding the CO2 credits, to near breakeven. And the other piece is within the EBG group, because Tensar means a significant portion to that business, and it's really involved in site prep. The seasonality of that business is quite a bit more significant than our other businesses.
So as we guided towards improvement over last year, but a similar type of transition from fourth quarter to first quarter, those are the major factors, which drive us towards a fairly consistent overall quarter over quarter, but many different moving pieces within the portfolio.
Cecilia Tang: That makes sense. Thank you.
Operator: And your next question today will come from Satish Kathanasan with Bank of America. Please go ahead.
Satish Kathanasan: Yes. Hi, good morning, Peter and Paul. Congrats on a strong quarter and the announced acquisition. Thank you, Amit. With Foley and CPMP, Nava, like, I think you now have strong scale in the precast concrete market. With this kind of size, do you think the focus over the next couple of years will be to just integrate the assets and reduce debt, or given the fragmented market, would you continue to look for additional inorganic growth opportunities?
Peter Matt: Yes. So that's a great question. So thank you very much. As we kind of look forward with these two transactions, I'd say it's fair to say we are done for now. We have quite a bit of integration to do with these transactions. And we're very happy with the platform that we've built. As we look a little bit further forward, once we bring our leverage down to into our acceptable range, then we would start to look at other transactions. We think this is a big market. Again, precast overall, as we said on the last call when we introduced CPMP, this is a $30 billion market.
And it's fragmented, and we think there are going to likely be opportunities for us over time. Bolt-ons will be super attractive because they typically are cheaper, they come with synergies, and they strengthen our core, which is kind of part of the message that we are consistently trying to reinforce. And bigger transactions will likely be more episodic. But our goal for this platform is ultimately to create one of national scale that looks a little bit like our rebar business again, and that's to do that we're going to build a platform several $100 million of EBITDA, but we're going to do it on a measured basis.
And remember, we've always said from the beginning, we're going to be super disciplined about M&A and making sure that we deliver the returns on the M&A that we do. And integrating these assets successfully is absolutely critical to ensuring the success of that going forward. So very excited about the opportunity, and these two businesses could not fit together better. So anyway, super excited about what we have so far.
Paul Lawrence: Satish, I would just add, as we've been talking with the investment community probably for two years, we've been looking at the early-stage construction and really honing in on this precast market. And the one thing that came up repeatedly was that these are the two leaders in the space. And so obviously, don't dictate the timing of when the assets become available, but when they became available, it was imperative that we took a look and tried to build the portfolio that made sense.
Satish Kathanasan: Yeah. That's great to hear. Just on Foley, it is clear that the margin profile is one of the best today, but can you maybe share the historical growth rate portfolio like over the past two, three years? And looking ahead, do you see potential for this business to continue to grow or gain market share and grow above the 5% to 7% market growth?
Peter Matt: Yeah. I think if you look at the growth of the business over the last couple of years, I think we should assume there's a base level of growth that's kind of GDP related. And then on top of that, there's growth related to kind of share expansions that the business has a number of expansions that it's in progress on. In its territory today or in its territories today, that will provide opportunities for future growth. So we would expect to grow at a level in excess of GDP over the next couple of years from a volume standpoint.
Paul Lawrence: And I would just add, Satish, the margin level that we described in the material, the business has generated that consistently over the last handful of years. So very consistent performer.
Satish Kathanasan: Okay. Thank you. I'll jump back in queue. Thank you.
Operator: And your next question today will come from Alex Hacking with Citi. Please go ahead.
Alex Hacking: Yes. Thanks. Good morning and congrats on the deal. I guess just following up on the margin question, Foley's margins look like they're almost double CPMP. You maybe give a little more color on kind of what's driving that? And is there a potential opportunity to increase margins at CPMP from learning from Foley? Thanks.
Peter Matt: Yes. Thanks, Alex. Appreciate the question. So a couple of things that I would point to. And again, I think as we look at these businesses, one of the things we really like about this is we've, and as Paul said, we spent a lot of time looking at these businesses, is that they both bring strength to the table. There are certain things that Foley does really well, there are certain things that CPMP does really well, and I think the combination of those two companies is going to build a really formidable company in our portfolio.
If we look at Foley specifically relative to CPMP and try to articulate the margin differentials, one of the things Foley has a different operating model than CPMP, and so that's a factor. And the other thing that I would say on the CPMP side is that CPMP has made a number of acquisitions recently where they are kind of works in process, and so as a consequence, the margins in some of those businesses are lower, and they bring down the overall margin. So if you look at precast in general, it is the case that Foley's margins stand out.
But CPMP does, if you look at the plants that are kind of the more mature plants, they have very attractive margins there as well.
Alex Hacking: Okay. Thanks for the color. And then just following up, I guess, on the cash conversion side, of the $600 million CapEx next year, estimate? How much of that would be for precast? And within that, how much would be kind of sustaining versus growth? Thank you.
Peter Matt: Yes. Well, for Precast, the maintenance CapEx on these businesses is much lower. We talked about in the case of CPMP, you may remember we talked about $8 million to $10 million of maintenance CapEx. In the case of Foley, it's like a kind of $10 million to $15 million type of number. In the case of CPMP, for the reason that I just explained to you, they've got these businesses that they've acquired where there's some investment that we think we can support, their spending is probably going to be a little bit higher over the first couple of years of our ownership as we kind of bring together the investments that they've made.
And again, all of that CapEx beyond maintenance is spending that has very attractive returns tied to it.
Paul Lawrence: The only thing, Alex, I'd add is Peter's talking about annual numbers, and as we talked about, really, we expect the transaction to close by the end of the calendar year. So the numbers in our fiscal will be a lot lower than those. Thanks for the clarification.
Operator: Thank you. And your next question today will come from Carlos De Alba with Morgan Stanley. Please go ahead.
Carlos De Alba: Yes. Thank you very much. Good morning. And maybe a follow-up on the prior question. How quickly do you think that the margins in CPMP and particularly in those recent acquisitions could bring to the levels that Foley and maybe the core CPMP business is already experiencing? Is it a year or two-year?
Peter Matt: Great question, Carlos. So the one thing I'd say is we want to be a little careful. We don't own these businesses yet. So we need to kind of close on the transactions and better understand what we have. And with that understanding will come more clarity on the timeframe. But I think the appropriate way to frame it for you at this juncture is that we talk about the synergies as being achievable over a three to five-year horizon, and I think that's the right horizon to think about for any kind of improvement in the CPMP margins. Obviously, there are some things that will come quick, and then there's other things that will take longer.
I just mentioned before in response to Alex's question that we're going to put some extra capital into CPMP to the tune of kind of $5 million per year, and that will be to accelerate some of that, and again, that's all really high-return capital that we'll be deploying.
Carlos De Alba: All right. So the $5 million to $10 million incremental EBITDA in CPMP that you mentioned, that includes this recent acquisition by the company stepping up their EBITDA generation, right?
Peter Matt: No. Just to be clear, so when we announced CPMP, we said that there was $5 million to $10 million in that transaction. We maintain that, right? And then in this transaction, we're bringing another $25 to $30 million over a three to five-year period. So it's that's why, and you'll remember in the last conversation that we had when we acquired or when we announced the acquisition of CPMP, we said that, as we have a platform, we would have more synergies with successive moves. And this is a great example of this.
And honestly, you might ask the question about the timing of these two transactions, obviously, we couldn't call the timing, but I think when you see that magnitude of synergies, it makes it clear why this was a transaction we had to look at seriously. So it's yes, it's an extra $25 million to $30 million in this transaction.
Carlos De Alba: All right. Fair enough. And my second question is regarding the outlook for dividends and buybacks vis-a-vis the cash flow generation of the company. You did mention that the acquisitions, both of them are going to be accretive to free cash flow. You're not going to really pay a lot of cash taxes in the next two years. How do you see dividends and buybacks in the coming quarters?
Peter Matt: Yes. So let me just say to answer your question directly, on dividends, we have no plan to change our dividend. Zero plan to change our dividend. And I say also our long-term capital allocation strategy is not changing at all. Not at all. What I would say is that we are done with acquisitions for now. And we're going to focus on the big acquisitions for now, and we're going to focus on integration and making sure that we make these transactions highly successful and great return investments for our business. We will continue the organic growth projects that we've started across the company.
As we move past Steel West Virginia, these will be much more capital-light investments, but we will continue those. And we will slow down our share repurchase program and bring it to a level where we're offsetting employee share grants in the short term as we get our leverage back down below the two times target. And as we once we get to the two times target or below, we'll then ramp up share repurchases. Share repurchases are a critical part of our capital allocation strategy. And we intend to resume those as our balance sheet comes into line.
Paul Lawrence: And Carlos, we're very confident in both the numerator and the denominator in terms of being able to bring that leverage down in terms of the you mentioned the cash flow and the lack of U.S. cash taxes, the reduction in CapEx going forward. And the optimism in the current environment in our business is that cash flow generation is expected to be very strong. And then that also is helping the EBITDA that we expect the business to generate over the coming periods also expected to be strong, and therefore both aspects should help us achieve that two times net leverage over the coming quarters.
Carlos De Alba: Perfect. Thank you.
Peter Matt: Thank you, Carlos.
Operator: And your next question today will come from Bill Peterson with JPMorgan. Please go ahead.
Bill Peterson: Yes. Hi, good morning. Thanks for taking the questions and congrats on the second transaction here in a few months. Along those lines, I have a longer-term question, maybe more suited for a Capital Markets Day, but given these transactions, how would you envision the company looking like in sort of a five-plus-year timeframe in terms of product mix, rebar versus long products, ground stabilization, precast, or other materials? Given the margin structure in these newer businesses and acquired companies, would you consider selling core assets in order to accelerate the transition? Just trying to get a sense of how we should envision this company over the long term.
Peter Matt: Yes, it's a great question. If you think about the strategy that we've outlined, it's one of becoming an early-stage construction supplier. And if you think about our rebar business, our fabrication business, these fit perfectly, and these are early-stage construction suppliers. You think about our tensor business, it's early-stage construction. Think about our recently acquired Precast platforms, early-stage construction, PRS performance reinforcing steel, early-stage construction, and construction services, same thing. So if you look at the portfolio that we have today, we've got a number of interesting assets that we can build on, and that's one of the things we find so compelling about the portfolio to become a leader in early-stage construction.
So when we talk about our precast business, again, as I said in response to an earlier question, our goal is to build that into something where we have a national footprint, and that's going to mean kind of several $100 million of EBITDA. With these two transactions, we're well on the way to doing that. And with the footprint that Foley brings, I think we have a beachhead to examine some of those markets that, by the way, we know well because we're already in those markets with our rebar fabrication, our mills business, right? So there's a very natural path that we're following. As we look at our other EBG businesses, we would love to grow Tensar.
We think that has great potential, and it's still a very underpenetrated market. It could be it will be an important piece of our portfolio. Performance reinforcing steel, the plant that we have today is sold out. So we're building another one. And we believe that the demand for kind of corrosion-resistant steel in this country, given some of the changes in weather and so forth, is only going to increase. And construction services is a tremendous asset. We talked to customers, and the customers tell us the construction services business where we are, and it's really a small segment of our footprint, which is really Texas, Louisiana, and Oklahoma, is it's a great asset to the customers we have.
So that's something that we're looking at as a potential way to complement the early-stage construction portfolio that we're building. So as we look at the portfolio, again, we want businesses that can be of scale and that can be of significance to our customers. We want businesses that bring value to our customers. So it's difficult to define the portfolio precisely, but the direction that we're going is we want value-added products that have high margins and kind of good returns on invested capital. And I want to just come back sorry, this is a long answer, but I think this is important. I want to come back to our steel business and TAG.
And what the whole mission of TAG is to improve the great platform that we already have in steel. And it is so critical when we talk to the customers, and I'm talking about big contractors, they tell us you guys are your franchise in the steel market is tremendously valuable to us because you do what you say you're going to do, and you do it when you say you're going to do it. And TAG is helping us make that business even better. And our goal with that business is to raise the margins through the cycle so that they start to look like the margins in some of our kind of ultimately some of our EBG business.
So again, this is a it's a multiyear journey, but we think we have a lot of opportunity, and the team that's executing the TAG program within our company is doing a phenomenal job. So anyway, Bill, I know that's a long answer to your question, but hopefully, it gives you some color.
Bill Peterson: No, certainly. Thanks for all that. Details there. My next question is more, I guess, term-focused. You talked about typical seasonality across several of these sectors. But I guess on North America, if you look back, this would imply something like a down 3% to 7% quarter on quarter. We've seen a lot of variability over the last five years or so. And I would assume you're really talking more driven by the downstream versus products. But can you unpack what typical seasonality has really meant here? And what that may look like for the various subsectors? Subsegments of your business?
Paul Lawrence: Yeah, Bill. You know, the season, September through November, really it is a good construction season similar to our fourth quarter with the exception of the week that we lose for Thanksgiving. So really, we see it's usually that 3% reduction in volumes that we see in the first quarter on the North American steel group. As I said in an earlier answer, we do see impacts to the other segments a little bit stronger given the more cyclical nature of site preparation, which drives a lot of the EBG business. So that one is a little bit more seasonal, as you saw last year. And then Europe with the outage, it's less seasonal, but the outage season.
Bill Peterson: Thanks for that, Paul. Thanks for all the details. Appreciate it.
Peter Matt: Thank you, Bill.
Operator: And your next question today will come from Andrew Jones with UBS. Please go ahead.
Andrew Jones: Hi, gents. I just want to better understand the barriers to entry in this business. I mean, to me, it looks like it's a pretty fragmented business. You obviously call out a few things on the slides, including relatively high capital costs. I mean, could you give us some idea in terms of how to sort of quantify those? And when you talk about the steep learning curve, can you kind of give us some sort of sense as to how complex this is? Because I just high level, our fragmented business usually means a much lower margin than we're seeing in these numbers. Thanks.
Peter Matt: Yes. So again, if we look at what drives this business, it starts with the customer, right? And if you look across the portfolio of CPMP or Foley, they've got great relationships in the region that connect them and obviously a reputation and the capability to service these the jobs that they're getting. And I think obviously reputation, just like in our rebar fabrication, it's critical that you deliver the products on time and that you deliver good quality products and that you help the contractor accelerate their jobs. So those are really important. And the third leg of this is capability. And when you look at the capabilities of both CPMP and Foley, they bring a broad-based precast capability.
So you can be in the Precast business pretty easily if you kind of have a concrete mixer and a mold. But the point is that most of these comp job sites, they need a lot of different forms to serve the precast need. And so as a consequence, the capability that both of these companies have across the concrete pipe and precast fronts gives them a differentiating capability to perform in the market on these complicated jobs.
And the last thing I would say is, and this goes to the speed point, is that having some scale helps a lot on these larger jobs because, again, what the contractors will tell you is when they start a project, they want to go fast. And so they don't want to wait for material, and the party that can have the material available has a real advantage in supplying the product.
Andrew Jones: In terms of the percentage of Well, thanks very much.
Peter Matt: So can you, Andrew, can you start over because we lost follow on.
Andrew Jones: Oh, no, no. Just that no, that was clear. Thank you.
Operator: And your next question today will come from Katja Jankic with BMO Capital Markets. Please go ahead.
Katja Jankic: Hi, thank you for taking my question. Maybe just quickly, Peter, did you say earlier on in the call that you would like to grow the Precast business to $700 million in EBITDA? Did I hear that correctly?
Peter Matt: No, no, several $100 million. Several $100 million. And sorry, go ahead.
Katja Jankic: No, no, you go. Sorry.
Peter Matt: No, I was just going to say several $100 million. And again, between these two acquisitions, we're already at $250 million. So we've got a good start.
Katja Jankic: And I think with the announcement of the first acquisition, the commentary was that most of this the growth there is more likely through M&A. Is that correct?
Peter Matt: It is. It is. I mean, there are organic projects, and I noted two of them earlier in this call on the Foley platform, and there's a number of organic growth projects in the CPMP platform. But again, to build scale and the scale that we're talking about doing, as I said in the last call, it's likely going to involve M&A. The good news is that now, as I said, we have a real that we can build around. So bolt-on acquisitions that come with lots of synergies will be very appealing.
And then when they come around, some of these larger acquisitions, which are not going to be every single day, but when they come around, we'll be in a position to look at those as well.
Paul Lawrence: Just to supplement that, Katja, I would say the step change comes from inorganic growth. I think as we look at the trends in these businesses, we see above-average growth for the adoption and penetration of Precast product. They really solve a labor shortage issue. They solve stormwater management issues, and, you know, that has been what really has driven some good-sized growth. If we look at the regions in which these businesses operate, the growth expectation of construction activity in their geographies is expected to be very attractive over the coming years.
Katja Jankic: Perfect. Thank you so much.
Peter Matt: Thank you, Katja.
Operator: And your next question today will come from Phil Gibbs with KeyBanc Capital Markets. Please go ahead.
Phil Gibbs: Hey, good morning.
Peter Matt: Hey, Phil.
Phil Gibbs: Question about the CapEx guidance for this year around $600 million. Does that include CapEx related to the businesses that you're poised to close on? And if not, what's the typical maintenance level of CapEx associated with those businesses?
Peter Matt: Yes, it does not. That's a Commercial Metals Company CapEx number. But Phil, you may have heard us say in response to an earlier question, the maintenance CapEx for these businesses, it's probably $8 million to $10 million for CPMP and probably $10 million to $15 million for Foley. So they're not big CapEx numbers. That's a percentage of their revenues. No. That's million dollars.
Phil Gibbs: Oh, okay. Yeah. So it's generally 3% to 4% revenue in this precast space is the maintenance CapEx, a very generic number, but that's it's very capital-light.
Phil Gibbs: Okay. And as you've really pivoted and accelerated the strategy to acquire some of these more upstream-oriented construction-facing businesses in The United States, particularly in the Southeast and Mid-Atlantic. Do you think that you think that means that there should be a more natural buyer perhaps for your European assets?
Peter Matt: Well, so again, when we look at our European assets, I think I've said this in the past. We really, really appreciate those assets for what they bring to the Commercial Metals Company family. And I'd just point to the TAG kind of initiative that I mentioned earlier on the call. The team in Europe has done just a phenomenal job on being low cost, and there's a lot that we can extrapolate from what they've done to help us in North America. One of the things that our team in North America is absolutely dead set on is that we will be a low-cost producer in our steel business in North America.
So the Polish business brings a lot to the table, and it's absolutely a core part of our portfolio.
Phil Gibbs: Thank you.
Peter Matt: Thank you, Phil.
Operator: At this time, there appears to be no further questions. Mr. Matt, I'll turn the call back over to you.
Peter Matt: Thank you very much. At Commercial Metals Company, we remain confident that our best days are ahead. The combination of the structural demand trends we have noted, operational and commercial excellence initiatives to strengthen our through-the-cycle performance, and value-accretive growth opportunities, including our recently announced precast acquisitions, create an exciting future for our company. Thank you for joining us on today's conference call. We look forward to speaking with many of you during our investor calls in the coming days and weeks. Thank you very much, everybody.
Operator: This concludes today's Commercial Metals Company conference call. You may now disconnect.