Ryerson Holding Corporation · NYSE:RYZ
Ryerson — Jefferies Global Industrials Conference 2015
30 slides from Ryerson's conference presentation, Aug 11, 2015
Slide 1: Jefferies Global Industrials Conference
JEFFERIES GLOBAL INDUSTRIALS CONFERENCE August 11, 2015
Slide 2: Business Overview
BUSINESS OVERVIEW EDDIE LEHNER President and Chief Executive Officer
Slide 3: Important Information About Ryerson Holding Corporation
IMPORTANT INFORMATION ABOUT RYERSON HOLDING CORPORATION These materials do not constitute an offer or solicitation to purchase or sell securities of Ryerson Holding Corporation and no investment decision should be made based upon the information provided herein. Ryerson strongly urges you to review
Slide 4: Executive Summary
EXECUTIVE SUMMARY 1 Company with transformed performance and potential 2 Industry-leading expense and working capital management 3 Shifting mix and value-added focus to enhance gross margins 4 Sustainable competitive advantages to fuel growth 5 Leveraged to later-cycle end markets JEFFERIES GLOBAL I
Slide 5: One of North America's largest metals processors and distributors
• One of North America’s largest metals processors and distributors, with 2014 sales of $3.6 billion • With more than 100 locations spanning three continents • Founded in 1842; relisted on NYSE with IPO in August 2014 JEFFERIES GLOBAL INDUSTRIALS CONFERENCE 5
Slide 6: Metal Service Center Supply Chain
METAL SERVICE CENTER SUPPLY CHAIN SUPPLIERS SERVICE CENTERS CUSTOMERS • Manufacture metals • Purchase in scale; ship smaller quantities • Purchase smaller quantities • Produce in large volume • Process more than half of products sold • Require a variety of products • Have long lead times and service
Slide 7: Macro Trends: Industrial Activity and Base Metal Prices
MACRO TRENDS: Industrial Activity and Base Metal Prices U.S. Purchasing Managers’ Index (PMI)1 Indexed Price2 PMI index PMI Growth threshold Sources: 1. Institute of Supply Management, 2. LME and CRU JEFFERIES GLOBAL INDUSTRIALS CONFERENCE 7
Slide 8: Key Macro Business Drivers
KEY MACRO BUSINESS DRIVERS M E TA L P R I C E S RYERSON’S END MARKETS T R A N S F O R M AT I O N Operational Margin Profitable Efficiency Expansion Growth JEFFERIES GLOBAL INDUSTRIALS CONFERENCE 8
Slide 9: Macro Trends: 1H 2015 US Census Industry Trends
MACRO TRENDS: 1H 2015 US Census Industry Trends US Census shipments ($M in sales) weighted to Ryerson US industries • Within each industry we re-weight Census sub-industries Industrial% Equipment 2% 3% ~ by Ryerson’s industry mix Transportation Equipment • For example, Census Transportation growth i
Slide 10: Transformation Driving Industry-Leading Performance
Transformation Driving Industry-Leading Performance OPERATIONAL EFFICIENCY MARGIN EXPANSION PROFITABLE GROWTH Structural cost reduction Shift product mix Leveraging scale in highly fragmented market Expense control leadership Optimize customer mix Multi-channel sales and Working capita
Slide 11: Proven Operational Efficiency
PROVEN OPERATIONAL EFFICIENCY Expenses as a percent of sales(1) Working capital management Inventory days of supply (DOS) 17.7% 16.3% 16.4% 17.6% 110 109 95 107 11.9% 12.5% 10.5% 11.5% 84 82 82 74 2011 2012 2013 2014 2011 2012 2013 2014 Competitor averages are based on Ryerson’s analysis of financia
Slide 12: Changing Mix to Improve Margins
CHANGING MIX to IMPROVE MARGINS PRODUCT MIX (PERCENTAGE OF SALES) ADVANTAGE OF CHANGING MIX 100% 4% 2% 3% 90% 16% ~ • Shift to higher-margin plate and 23% 80% 31% 42% 30% 57% long products 15% 70% 19% • Increase value-added processing 60% 27% • Expand transactional business 50% ~ 40% 65% 30% 56% 20%
Slide 13: Differentiated Model
DIFFERENTIATED MODEL “ONE RYERSON” • Single franchise • One brand • Speed • Great customer experiences CONNECTIVITY GLOBAL SCALE RY E R S O N • Technical knowledge • Global capabilities in Leveraging Scale and • Processing and fabrication local markets • Logistics Integrated Network • Inventory serv
Slide 14: Financial Review
FINANCIAL REVIEW ERICH SCHNAUFER Interim Chief Financial Officer JEFFERIES GLOBAL INDUSTRIALS CONFERENCE 14
Slide 15: Annual Results: Improvement in Key Metrics
ANNUAL RESULTS: Improvement in Key Metrics Net sales ($M) Gross margin 4,000 20.0% 3,000 $3,460 $3,622 15.0% 17.8% 16.4% 2,000 10.0% 1,000 5.0% 0 2013 2014 0 2013 2014 Gross margin excluding LIFO Expenses excluding depreciation and 20.0% amortization and IPO-related expenses ($M) 15.0% 16.9% 17.6% 6
Slide 16: Annual Results: Improvement in Key Metrics
ANNUAL RESULTS: Improvement in Key Metrics Net income attributable to Ryerson Holding Corp. ($M) Adjusted EBITDA excluding LIFO ($M) 140 250 120 +28% $127.31 200 $218 100 80 150 $170 60 100 40 50 20 0 0 2013 2014 -20 $(25.7)2 Adjusted EBITDA, excluding LIFO, is a non-GAAP financial measure. A reconc
Slide 17: Performance Versus Peers
PERFORMANCE VERSUS PEERS Gross margin excluding LIFO Adjusted EBITDA margin excluding LIFO 25.0% 22.4% 22.1% 21.4% 21.5% 21.0% 7.0% 5.8% 20.0% 6.0% 6.0% 5.0% 4.6% 4.9% 15.0% 16.9% 17.6% 5.0% 16.1% 4.0% 4.7% 4.9% 3.7% 15.2% 15.0% 3.0% 3.3% 10.0% 3.4% 2.0% 5.0% 1.0% 0.0% 0.0% 2010 2011 2012 2013 2014
Slide 18: Quarterly Results: Impacted by Deflationary Pressure
QUARTERLY RESULTS: Impacted by Deflationary Pressure Net income attributable to Ryerson Holding Corp. ($M) Adjusted EBITDA excluding LIFO ($M) 140 250 120 200 100 $1.6 150 80 60 100 $53.2 $35.9 40 50 20 $(2.5)1 0 0 Q1 2014 Q1 2015 -20 Adjusted EBITDA, excluding LIFO, is a non-GAAP financial measure.
Slide 19: Quarterly Results: Strong Counter-Cyclical Cash Flow
QUARTERLY RESULTS: Strong Counter-Cyclical Cash Flow Cash Flow From Operations ($M) 100 75 50 $101.6 $53.2 25 $25.1 0 Q1 2014 Q1 2015 JEFFERIES GLOBAL INDUSTRIALS CONFERENCE 19
Slide 20: Macro Trends: Steel Shipments
MACRO TRENDS: Steel Shipments U.S. CARBON and STAINLESS STEEL SHIPMENTS (mm tons) 6,000 5,500 5,000 4,500 34% below prior peak 4,000 3,500 3,000 2,500 2,000 Jan-93 Mar-95 May-97 Aug-99 Oct-01 Dec-03 Mar-06 May-08 Aug-10 Oct-12 Dec-14 Mar-17 Source: Metals Service Center Institute, March 2015. JEFFER
Slide 21: Ryerson Financial Objectives
RYERSON FINANCIAL OBJECTIVES • Reduce balance sheet leverage • High return growth capital projects • Accretive bolt-on acquisitions consistent with strategic focus: • Fay Industries – $30 million annual revenues, focused on long products. Adds significant number of new transactional accounts. • Sout
Slide 22: Long-Term Financial and Operating Goals
LONG-TERM FINANCIAL and OPERATING GOALS METRIC TARGET Gross Margin 20% (excl. LIFO) EBITDA Margin 10% (Adjusted EBITDA, excl. LIFO) Working Capital 75 DOS Debt/EBITDA 2.0 x JEFFERIES GLOBAL INDUSTRIALS CONFERENCE 22
Slide 23: Ryerson Highlights
RYERSON HIGHLIGHTS 1 Industry-leading expense and working capital management 2 Improving product and customer mix and value-added focus 3 Differentiated service model/competitive advantages 4 Significant operating leverage tied to late-cycle end markets JEFFERIES GLOBAL INDUSTRIALS CONFERENCE 23
Slide 24: Jefferies Global Industrials Conference
JEFFERIES GLOBAL INDUSTRIALS CONFERENCE August 11, 2015 JEFFERIES GLOBAL INDUSTRIALS CONFERENCE 24
Slide 25: Appendix
APPENDIX JEFFERIES GLOBAL INDUSTRIALS CONFERENCE 25
Slide 26: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION EBITDA represents net income before interest and other expense on debt, provision for income taxes, depreciation and amortization. Adjusted EBITDA gives further effect to, among other things, impairment charges on fixed assets and goodwill, reorganization expenses and the pay
Slide 27: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Figures may not add due to rounding. ($M) 2010 2011 2012 2013 2014 Net Sales $3,896 $4,730 $4,025 $3,460 $3,622 Gross Profit $540 659 710 617 594 LIFO Expense (Income) 52 48 (63) (33) 42 Gross Profit Excluding LIFO $592 707 647 584 636 Gross Margin Excluding LIFO 15.2% 15.0%
Slide 28: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION ($M) 1Q2014 1Q2015 Net Income (loss) attributable to Ryerson Holding $1.6 $(2.5) Interest and other expense on debt 27.4 25.3 Provision (benefit) for income taxes 3.1 (0.2) Depreciation and amortization expense 10.8 11.1 EBITDA $42.9 $33.7 Reorganization 1.0 1.5 Advisory Serv
Slide 29: Capitalization
CAPITALIZATION Figures may not add due to rounding. Current Call Data 3/31/15 Trailing 12-mos. Adj. EBITDA Rate Call Date Call Price Book Value excl. LIFO Multiple ($M) (as of 3/31/15) Cash and Cash Equivalents $71 Marketable Securities 5 Availability under Revolver 256 and Foreign Debt Facilities T
Slide 30: Net Debt to Adjusted EBITDA excl. LIFO Reconciliation
NET DEBT to ADJUSTED EBITDA excl. LIFO RECONCILIATION Trailing 12-mos. ($M) 2010 2011 2012 2013 2014 (as of 3/31/15) Cash and Cash Equivalents $63 $62 $71 $74 $60 $71 Marketable Securities 20 10 21 21 11 5 Total Debt 1,211 1,316 1,305 1,295 1,259 1,202 Net Debt 1,128 1,244 1,214 1,200 1,188 1,126 Ad
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