Ryerson Holding Corporation · NYSE:RYZ
Ryerson — Investor Presentation (September 2006)
18 slides from Ryerson's investor presentation, Sep 12, 2006
Slide 1: Investor Presentation 2006
Investor Presentation 2006 Exhibit 99.1
Slide 2: EBITDA: The turnaround
EBITDA* The turnaround… (50.1) 20.8 27.4 121.1 275.8 140.3 (100) (50) 1H06 $ in millions * Earnings before discontinued operations, taxes, interest expense, depreciation and amortization. (Full reconciliation is attached.)
Slide 3: Three Fundamental Principles
… Reflects our strategy Three Fundamental Principles 1. Focus on operating efficiency 2. Capture organic growth 3. Do acquisitions and joint ventures to: Structurally enhance competitive position Provide additional earnings growth Part way through a multi-year process A lot completed More to be done
Slide 4: Integris integration cost-saving and inventory turnover goals
Reach cost-saving goal of $50 million from Integris integration by end of Consolidate additional 15 facilities; reduce headcount; complete consolidation of overhead Reach inventory turnover goal of 5x by end of 2007 Can significantly enhance return on assets and cash flow Do at a pace to retain cust
Slide 5: Lean Six Sigma problem solving and continuous improvement
Lean Six Sigma problem solving and continuous improvement Clear opportunities for improvement and plan to get there Targets improvements throughout the company/across all strategic initiatives Specific financial goals Quantitative measurement of progress Lean Six Sigma Sell the Change Transfer Knowl
Slide 6: National marketing program results
Results 10,000 new accounts Annualized revenue of $200 mil. Aggressive marketing and brand creation • Advertising • Targeted corporate campaigns • Local campaigns • Coordinated sales follow-up • Direct sales reps Leads to trial • Good experience leads to retention Measure internally and externally M
Slide 7: Acquisition and joint venture strategy
Product/supply chain Cross-selling opportunities “Add strength to strength” Highest overall potential “Buying a cash flow” Very risky New markets Acquisition and joint venture strategy Product/supply chain Different Different Same Same Service center industry is fragmented and consolidating
Slide 8: Leading metals service center company
Stainless & Aluminum Sales $2,976 Trailing 12-month revenues (through 2Q06) $5,632 $1,673 $908 $5,677 $2,502 Ryerson Reliance Steel & Earle M. Jorgensen Russel Metals (1) Metals USA Olympic Steel Leading metals service center company Source: Company filings and press releases Converted to US$ using
Slide 9: Broad geographic footprint
Broad geographic footprint
Slide 10: Rich product mix and diverse customer base
2005 revenues by product 2005 sales by end market Rich product mix and diverse customer base Other 5% Carbon flat rolled 26% Stainless and aluminum 50% Bars, tubing, structurals 10% Fabrication & carbon plate 9% Machinery 31% Fabricated metals 27% Electrical machinery 13% Transportation 10% Construc
Slide 11: Joint ventures: Mexico, India, China
JVs Mexico India China definitive agreement— Collado Ryerson Mexico 50/50 fabrication venture 2005 revenues: $63 million Commercial relationship with Grupo Collado carbon flat roll processing operation in Monterrey Tata Ryerson India 50/50 venture Fiscal 2006 (March ‘06) revenues: $160 million (1 mi
Slide 12: Debt paydown
Debt paydown 1,000 1,050 1,100 1,150 1,200 1,250 1,300 1,350 1,400 1/4/05 3/31/05 6/30/05 9/30/05 12/31/05 3/31/06 6/30/2006 55% 57% 59% 61% 63% 65% 67% 69% 71% 73% 75% Debt Debt-to-Capital
Slide 13: Metal prices reflect strong 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 0.9 1.1 1.3 1.5 1.7 1.9 Stainless Aluminum Source: Purchasing Magazine *Spot prices include raw materials' surcharges starting in 1st Quarter 2001 Hot Rolled, Cold Rolled and Plate Prices Hot Rolled Cold Rolled Ca
Slide 14: Hypothetical LIFO vs. FIFO
Hypothetical LIFO vs. FIFO- Where is the value during a rising price environment? LIFO Methodology 1,000 1,200 - 1,000 1,200 1,400 $300 $500 LIFO Reserve FIFO Methodology 1,000 1,200 - 1,000 1,200 1,400 Answer: Same LIFO- Lower income, higher reserve FIFO- Higher income, no reserve Period 1 Period 2
Slide 15: Gross profit per ton increases with material cost per ton
Gross profit per ton increases with material cost per ton Material Cost Per Ton to Gross Profit Per Ton Material Cost Per Ton Gross Profit Per Ton Note: Integris results included as of 1Q 2005
Slide 16: But LIFO reserve increases significantly
But LIFO reserve increases significantly Material Cost Per Ton to LIFO Reserve Material Cost Per Ton LIFO Reserve Note: Integris results included as of 1Q 2005
Slide 17: Profit drivers and impact
Profit drivers and impact Business model Profit drivers Impacted by Volume (tonnage) Manufacturing economy 2 types of customers 50%-60% OEMs—agreements 40%-50% transactional—spot pricing Gross margins (gross profit/ton) Market conditions Buy and sell negotiations Selling prices Material costs Operat
Slide 18: EBITDA Reconciliation
2001 2002 2003 2004 2005 1H06 EBITDA Reconciliation Net income ($61.1) ($95.7) $(13.6) $56.0 $98.1 $54.6 Cumulative effect of change in accounting principle ---- 82.2 ---- ---- ---- ---- Discountinued operations (gain)/loss ---- 1.7 ---- (7.0) ---- ---- Income tax/(benefit) (40.1) (7.0) (1.7) 27.0 6