Ryerson Holding Corporation · NYSE:RYZ
Ryerson — Ryerson Tull — Goldman Sachs Global Steel CEO Forum (November 2005)
17 slides from Ryerson's conference presentation, Nov 1, 2005
Slide 1: Goldman Sachs Global Steel CEO Forum
G O L D M A N S A C H S G L O B A L S T E E L C E O F O R U M N O V E M B E R 2, We are proud of what we have accomplished And even more excited about what comes next Exhibit 99.1
Slide 2: The turnaround
EBITDA* 9 mos04 108.8 The turnaround 28.0 (48.7) 19.9 26.6 118.5 246.4 (100) (50) 9 mos. '05 $ in millions 9 mos04 108.8 * Earnings before discontinued operations, taxes, interest expense, depreciation and amortization. (Full reconciliation is attached.)
Slide 3: Three Fundamentals
Three Fundamentals Intense focus on operating efficiency Organic growth Acquisitions and joint ventures to structurally enhance competitive position
Slide 4: Three Fundamentals
Three Fundamentals Intense focus on operating efficiency Organic growth Acquisitions and joint ventures to structurally enhance competitive position • Streamlined organization • Optimized facility configuration • Centralized noncustomer- facing activities
Slide 5: Inventory turnover
$85mm 2000 2004 $85mm $85mm Intense focus on operating efficiency Inventory turnover* Square footage Employees (year end) Tons shipped per employee Number of suppliers Fixed-cost savings versus 2002 3.9x 8.1mm 3,574 3.4x 11.5mm 4,500 150+ — *Full reconciliation of inventory turnover is attached.
Slide 6: Three Fundamentals
Three Fundamentals Intense focus on operating efficiency Organic growth • Aggressive marketing Acquisitions and joint ventures to structurally enhance competitive position
Slide 7: Organic growth
Organic growth Comprehensive research in 2002 showed: Ryerson had a great reputation But awareness was lacking • 50% of potential customers unaware of Ryerson Customers want the same things everywhere • Available inventory, on-time delivery, competitive prices, quality product, rapid response Improv
Slide 8: Aggressive marketing
Aggressive marketing • Advertising • Direct mail • Special promotions • Coordinated sales follow-up • Direct sales reps Leads to trial Good experience leads to retention Results 2003–2005 10,000 $200 mil. Number of new accounts Annualized revenues
Slide 9: Three Fundamentals
Three Fundamentals Intense focus on operating efficiency Organic growth Acquisitions and joint ventures to structurally enhance competitive position
Slide 10: Acquisition strategy
Product/supply chain “Add strength to strength” Highest overall potential Cross-selling opportunities “Buying a cash flow” Very risky New markets Acquisition strategy Product/supply chain Different Different Same Same Service center industry is fragmented and ripe for consolidation
Slide 11: Broadest geographic footprint in the industry
Broadest geographic footprint in the industry— opportunities to streamline supply chain RT Integris Estimated savings in excess of $50 million
Slide 12: Rich product mix and diverse customer base
Pro forma 2004 revenues by product 1 Pro forma 2004 sales by end market 1 Rich product mix and diverse customer base Other 4% Carbon flat rolled 27% Stainless and aluminum 51% Bars, tubing, structurals 10% Fabrication and carbon plate 8% 2004 pro forma revenue = $5.4 billion Pro forma figures assume
Slide 13: Leading metals service center company
Trailing 12-month revenues (through 3Q05) Stainless & aluminum sales $3,000 Leading metals service center company Source: Company filings and press releases Pro forma 4 th quarter 2004 includes Integris Metals and J&F Steel as if acquired on January 1, 2004. Converted to US$ using exchange rate as o
Slide 14: Current environment—metals prices indicate strong market fundamentals
Stainless and Aluminum 1,000 1,200 1,400 1,600 1,800 2,000 2,200 2,400 2,600 2,800 0.7 0.8 0.9 1.1 1.2 1.3 1.4 1.5 1.6 Stainless Aluminum Source: Purchasing Magazine (Stainless) BB&T Capital Markets (Aluminum) Hot Rolled, Cold Rolled and Plate Prices Hot Rolled Cold Rolled Carbon Plate *Figures incl
Slide 15: What's next?
Three Fundamentals Reduce leverage What’s next? Complete In process • Restructure organization • Integris integration - $50 million cost savings • SAP implementation • Six sigma • Increase inventory turnover; reduce inventory $200 million • Aggressive marketing • Expand into new target markets • Int
Slide 16: Improving inventory turns generates cash
Improving inventory turns generates cash* Cumulative Cash Flow Impact on Change in Inventory Turns 3.8 4.25 4.5 4.75 5.25 Inventory Turns * Assumes constant metal prices.
Slide 17: EBITDA Reconciliation
2000 2001 2002 2003 2004 9 mos. 2005 EBITDA Reconciliation Net Income Cumulative effect of change in accounting principle Discontinued operations (gain)/loss Income tax/(benefit) Interest on debt Depreciation and amortization EBITDA $(29.9) – 4.8 (8.4) 29.7 31.8 $28.0 $(60.2) – – (39.6) 19.3 31.8 $(
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