Ryerson Holding Corporation · NYSE:RYZ
Ryerson — Investor Presentation (June 2016)
39 slides from Ryerson's investor presentation, Jun 15, 2016
Slide 1: 2016 Investor Presentation
2 0 1 6 I N V E S T O R P R E S E N TAT I O N JUNE 15, 2016 RYERSON INVESTOR PRESENTATION
Slide 2: 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 (the “Company”) and no investment decision should be made based upon the information provided herein. Ryerson strongly urge
Slide 3: Business Overview
BUSINESS OVERVIEW MIKE BURBACH │ PRESIDENT, NORTH-W EST REGION RYERSON INVESTOR PRESENTATION
Slide 4: Ryerson: Scale and Network
Ryerson: Scale and Network • One of North America’s largest metals processors and distributors, with 2015 sales of $3.2 billion • Approximately 100 interconnected locations in North America and China • Founded in 1842; listed on NYSE since 2014 • Distribute 65,000 products to 40,000 active customers
Slide 5: Metal Service Center Supply Chain
Metal Service Center Supply Chain SUPPLIERS RYERSON SERVICE CENTERS CUSTOMERS • Manufacture metals • Purchase in scale; ship smaller quantities • Purchase smaller quantities • Produce & ship large • Distribute more than 65,000 carbon, • Require a variety of volumes stainless, and aluminum products p
Slide 6: Ryerson's Differentiated Model: What Customers Value
Ryerson’s Differentiated Model: What Customers Value “ONE RYERSON” • Single franchise / one brand • Great customer experiences CONNECTIVITY GEOGRAPHIC SCALE RYERSON • Technical knowledge • Service largest metals markets Leveraging Scale and • Processing & fabrication to meet our customers’ needs • L
Slide 7: Highlights: Excellent Execution Amidst Bottoming Secular Trends
Highlights: Excellent Execution Amidst Bottoming Secular Trends • Stabilizing and improving industrial metal commodity prices Macro Environment • Pressure for secular demand improvement building as under- investment is prevalent • Proven expense and working capital management • Ryerson business mode
Slide 8: 2016 Commodity Prices: Global Capacity Surplus Rebalancing
2016 Commodity Prices: Global Capacity Surplus Rebalancing Carbon Recovery With Range-Bound Nickel and Aluminum 1.300 Chg. Jun '14 vs. Chg. Dec '15 vs. CRU HRC LME Nickel Midwest Aluminum 2016 Prices Dec '15 May '16 1.200 CRU HRC (USD/st) -47% 66% LME Nickel Cash Average (USD/lb) -53% 0% 1.100 Midwe
Slide 9: PMI Trends: Slowly Improving From A Bottoming
PMI Trends: Slowly Improving From A Bottoming Over The Past Three Quarters U.S. MANU FAC TU RING PMI 53.1 53.1 51.9 51.8 51.3 51.0 50.8 50.0 49.4 49.5 48.4 48.2 48.0 MAY-15 JUN-15 JUL-15 AUG-15 SEP-15 OCT-15 NOV-15 DEC-15 JAN-16 FEB-16 MAR-16 APR-16 MAY-16 Source: Bloomberg 9 RYERSON INVESTOR PRESEN
Slide 10: Macro Trends: Promising Over The Longer-Term With Underinvestment
Macro Trends: Promising Over The Longer-Term With Underinvestment Notable Since 2009 6,000 U . S . C A R B O N a n d S TA I N L E S S S T E E L S H I P M E N T S 5,500 5,000 Average Tons Jan. '93 - Oct. '08 = 4,200 Tons in Thousands 4,500 Average Tons Nov. '08 - Present = 3,200 4,000 3,500 3,000 2,5
Slide 11: End Market Mix, Recovery and Growth
End Market Mix, Recovery and Growth 2015 SALES MIX Shading based on All Other Q1 2016 vs. Q1 2015 7% tonnage change: Oil & Gas GROWING 7% Commercial Ground Transportation STABLE 18% Food DECLINING Processing & Ag. 7% Construction Equipment Metal Fabrication and 8% Machine Shops 18% HVAC 8% Consumer
Slide 12: A Ryerson for All Seasons with Competitive Advantages
A Ryerson for All Seasons with Competitive Advantages Built Around Speed, Scale, Value-Add, Culture and Analytics NATHAN NORMAN Industry-leading expense and working capital management SERVICE CENTER OPERATOR ELDRIDGE, IOWA Enhancing margins with greater value-add Building sustainable competitive adv
Slide 13: Our culture: contributing meaningfully to our customers' success
INDUSTRY-LEADING PERFORMANCE OPERATIONAL EFFICIENCY MARGIN EXPANSION PROFITABLE GROWTH Expense and working Optimize product and Leveraging scale in highly capital leadership customer mix fragmented market Significant operating Value-added processing Multi-channel sales and leverage distr
Slide 14: Impressive U.S. Carbon and Stainless Market Share Gains
Impressive U.S. Carbon and Stainless Market Share Gains TONNAGE MARKET SHARE 3.75% 3.53% 3.51% 3.46% 3.41% Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Source: Metals Service Center Institute 14 RYERSON INVESTOR PRESENTATION
Slide 15: Optimizing Mix to Improve Gross Margin Dollars
Optimizing Mix to Improve Gross Margin Dollars 2010 SALES MIX 2015 SALES MIX Cut Long & Cut Long & Plate Plate 4.2% Fabrication Fabrication 2.9% 6.7% 10.4% As-Is Long & Plate 18.7% As-Is Long & Cut to Length Plate Cut to Length Sheet 20.3% Sheet 63.1% 67.8% • Expand value-added processing: More than
Slide 16: Proven Operational Efficiency and Industry Leadership
Proven Operational Efficiency and Industry Leadership DAYS OF SUPPLY EXPENSE PERCENTAGE EXCLUDING D&A AND ONE-TIME ITEMS 20.5% 110 109 109 19.1% 106 101 17.5% 17.6% 16.5% 14.0% 84 82 82 12.9% 80 12.5% 11.9% 11.5% 75 2012 2013 2014 2015 Q1 2016 2012 2013 2014 2015 Q1 2016 Expense % excluding D&A and
Slide 17: Financial Overview
FINANCIAL OVERVIEW JIM CLAUSSEN │ REGION CFO RYERSON INVESTOR PRESENTATION
Slide 18: Ryerson Financial Priorities
Ryerson Financial Priorities Maintain operational efficiency Manage working capital Maximize liquidity position Propel growth, invest in high return capital projects and bolt-on acquisitions 18 RYERSON INVESTOR PRESENTATION
Slide 19: 2016 Q1 Performance Highlights
2016 Q1 Performance Highlights Earnings • Net income of $13.5M • Earnings per share of $0.42, or $0.26 on an adjusted basis • Gross margin increased 370 bps to 21.0% vs. Q1 ‘15 • Gross margin, excluding LIFO increased 300 bps to 18.9% vs. Q1 ‘15 • Adjusted EBITDA, excluding LIFO of $37M Market Share
Slide 20: Quarterly Financial Highlights: Managing Well Through a Downturn
Quarterly Financial Highlights: Managing Well Through a Downturn TONS SHIPPED (000'S) AVERAGE SELLING PRICE PER TON 1,824 1,722 488 492 1,606 476 478 1,517 1,470 441 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 GROSS MARGIN GROSS MARGIN EXCL. LIFO 21.0% 19.7% 19.0% 18.9% 17.
Slide 21: Quarterly Financial Highlights: Managing Well Through a Downturn
Quarterly Financial Highlights: Managing Well Through a Downturn NET INCOME ($M) ADJ. EBITDA EXCL. LIFO ($M) $16 $14 $7 ($3) ($21) $36 $37 $29 $30 $14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 21 RYERSON INVESTOR PRESENTATION
Slide 22: Ongoing Debt Reduction Through an Industry Downturn
Ongoing Debt Reduction Through an Industry Downturn NET DEBT ($M) Reduced Debt $286M $1,188 $1,127 $1,070 $1,043 $958 $902 Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 22 RYERSON INVESTOR PRESENTATION
Slide 23: Investing in the Business
Investing in the Business • More than $100 million in growth capex since 2010, expanding value-added capabilities • Developed and enhanced intelligent systems for connecting people, supply chains, inventory, fixed assets and logistics for exceptional customer experiences • Six bolt-on acquisitions s
Slide 24: Conclusion
CONCLUSION MIKE BURBACH │ PRESIDENT, NORTH-W EST REGION RYERSON INVESTOR PRESENTATION
Slide 25: Conclusion
Conclusion Industry-leading expense and working capital management Enhancing margins with greater value-add Building sustainable competitive advantages to fuel growth Excellent execution and market share gains Generating strong cash flows and reducing debt balances SHAWN ZUK SLITTER OPERATOR Rising
Slide 26: Appendix
APPENDIX RYERSON INVESTOR PRESENTATION
Slide 27: Ryerson's DNA
Ryerson’s DNA ANALYTICS SPEED CULTURE VALUE-ADD SCALE 27 RYERSON INVESTOR PRESENTATION
Slide 28: Ryerson's Periodic Table: How We Deliver Value to Customers
Ryerson’s “Periodic Table”: How We Deliver Value to Customers FAB BURN/CUT AS IS FAB CARBON BURN/CUT STAINLESS AS IS ALUMINUM FLAT LONG PLATE METAL SHAPE PROCESSING 28 RYERSON INVESTOR PRESENTATION
Slide 29: Leveraging Scale and Integrated Network
Leveraging Scale and Integrated Network BENEFITS Better asset utilization: • Shared and optimized inventory Ryerson Integrated • Shared processing equipment Service Center 12 Multi-Markets Network of • Shared human resources Approximately 100 Locations More responsive customer service and prospectin
Slide 30: Tailwinds Forming in our End Markets
Tailwinds Forming in our End Markets End Market Customer Recent End Market Commentary Industry Growth Outlook Strong performance in 2015; 7.1% HVAC Continued improvement expected throughout 2016 (2015-2020 Americas HVAC Market Revenue CAGR) Construction Equipment Transportation bill expected to driv
Slide 31: Ryerson Expects to Benefit from Commodity Price Increases Beginning in 2Q 2016
Ryerson Expects to Benefit from Commodity Price Increases Beginning in 2Q 2016 Trade Cases • Carbon sheet case rulings • Recently filed actions on stainless by US producers against China • Newly filed case on coiled carbon plate against 12 countries • ENFORCE Act & TPA – better trade case accountabi
Slide 32: Counter-Cyclical Cash Flow: $281M Generated Over 13 Quarters
Counter-Cyclical Cash Flow: $281M Generated Over 13 Quarters Cash Flow from Operations ($M) $259 $162.9 $48 $47 ($73) 2013 2014 2015 Q1 '16 32 RYERSON INVESTOR PRESENTATION
Slide 33: Adequate Availability and Liquidity to Finance Business Plan
Adequate Availability and Liquidity to Finance RYI’s Business Plan $313 $273 48 25 65 23 240 185 Q4-15 Q1-16 North American Availability Foreign Availability Cash & Equivalents 33 RYERSON INVESTOR PRESENTATION
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation EBITDA represents net income before interest and other expense on debt, provision for income taxes, depreciation and amortization. Adjusted EBITDA gives further effect to, among other things, impairment charges on assets, reorganization expenses and the payment of management
Slide 35: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($M) 2010 2011 2012 2013 2014 2015 Net Sales 3,895.5 4,729.8 4,024.7 3,460.3 3,622.2 3,167.2 Gross Profit 539.8 658.8 709.6 616.6 593.8 567.7 LIFO Expense (Income) 52.4 48.6 (63.1) (33.0) 42.3 (59.5) Gross Profit, excluding LIFO 592.2 707.4 646.5 583.6 636.1 508.2 Gross Margi
Slide 36: Non-GAAP Reconciliation
Non-GAAP Reconciliation RYERSON HOLDING CORPORATION AND SUBSIDIARY COMPANIES Reconciliation of Net Income (Loss) and Earnings (Loss) per Share Excluding Impairment Charges on Assets and Gain on Debt Retirement (Dollars and Shares in Millions, Except Per Share Data) First Quarter Dollars and Shares i
Slide 37: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($M) Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Net income (loss) attributable to Ryerson Holding Corporation (2.5) 15.8 6.7 (20.5) 13.5 Interest and other expense on debt 25.3 23.8 25.4 21.8 22.0 Provision (benefit) for income taxes (0.2) 10.2 6.1 (12.4) 8.1 Depreciation and amortiz
Slide 38: Net Debt Calculation
Net Debt Calculation ($M) Q4 '14 Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Total Debt 1,259.1 1,202.4 1,145.0 1,094.2 1,023.5 976.6 Less: Cash and cash 60.0 70.8 66.0 48.3 63.2 70.5 equivalents Less: Marketable securities 11.2 5.1 8.6 3.1 2.2 3.8 Net Debt 1,187.9 1,126.5 1,070.4 1,042.8 958.1 902.3 38 RYER
Slide 39: RYERSON INVESTOR PRESENTATION
RYERSON INVESTOR PRESENTATION