Ryerson Holding Corporation · NYSE:RYZ
Ryerson — Deutsche Bank Leveraged Finance Conference 2014
25 slides from Ryerson's conference presentation, Oct 1, 2014
Slide 1: Deutsche Bank Leveraged Finance Conference
Deutsche Bank Leveraged Finance Conference October 1, 2014 Confidential 1
Slide 2: Corporate Overview
Corporate Overview Michael C. Arnold 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 Who we are / The key role of the metal service center Transformation of the company and our performance Industry-leading expense and working capital management Progress expanding gross margins with more to come Favorable end market dynamics driving operating leverage Strong counter
Slide 5: One of North America's largest metals processors/distributors
One of North America’s With more than largest metals 100 locations on processors/distributors, three continents with 2013 sales of $3.5 billion Founded in 1842; Relisted on NYSE with IPO in August 2014 5
Slide 6: Metal Service Center Supply Chain
Metal Service Center Supply Chain SUPPLIERS SERVICE CENTERS CUSTOMERS • Manufacture metals • Purchase in scale • Have 40,000+ diverse • Produce in large volume customers • Is a single-source supplier • Have long lead times with 70,000+ products • Purchase smaller • Process more than 1/2 of quantitie
Slide 7: Transformation Driving Industry-Leading Performance
Transformation Driving Industry-Leading Performance Operational Efficiency Margin Expansion Profitable Growth Structural cost reduction Shift product mix Leveraging significant Expense control Optimize customer mix scale in highly leadership fragmented market Value-driven pricing and Working capital
Slide 8: Proven Expense and Working Capital Management
Proven Expense and Working Capital Management Expenses as % of Sales (1) Days of Supply (DOS) 19% 17.7% 120 17.7% 16.3% 16.4% 110 110 17% 110 103 15% 100 95 12.5% 13% 11.5% 11.9% 90 84 10.5% 82 11% 80 80 9% 74 7% 70 5% 60 2011 2012 2013 1H2014 2011 2012 2013 1H2014 Ryerson Competitor Average Ryerson
Slide 9: Changing Mix to Improve Margins
Changing Mix to Improve Margins Ryerson Product Mix (% of Sales) Processing Capabilities 100% 4% 3% 3% 90% ~ 80% 16% 31% 22% 40% 30% 57% Plate Processing 15% 70% 18% 60% 50% 27% Long Products ~ 40% processing 65% 30% 57% 20% ~ 40% Coil and Sheet 10% processing 0% 2010A 2013A Long Term Goal Flat Plat
Slide 10: Performance vs. Peers
Performance vs. Peers Gross Margin excl. LIFO % (2010 vs. Q2 2014) Adj. EBITDA excl. LIFO % (2010 vs. Q2 2014) 25.0% 22.4% 22.1% 21.4% 21.5% 21.6% 7.0% 6.4% 5.9% 20.0% 18.0% 6.0% 16.1% 16.9% 5.0% 5.1% 4.9% 15.2% 15.0% 5.0% 4.7% 4.7% 15.0% 3.8% 3.9% 4.0% 3.4% 10.0% 3.0% 2.0% 5.0% 1.0% 0.0% 0.0% 2010
Slide 11: Differentiation Through Integrated Network
Single franchise and brand Multi-channel sales: Sharing inventory, • Local sales & service technical knowledge, • Centralized call center (2013) Differentiation Through processing and logistics • RyersonDirect e-Commerce across geographic platform (2014) Integrated Network locations Bring Ryerson’s
Slide 12: Financial Overview
Financial Overview Eddie Lehner Executive Vice President and Chief Financial Officer 12
Slide 13: Benefits of the transformation apparent in our results
Benefits of the transformation apparent in our results 13
Slide 14: Successful Gross Margin Improvement…
Successful Gross Margin Improvement… Gross Profit Ex. LIFO Quarterly year-over-year gross margin +126 bps +136 bps +95 bps +200 bps improvement $200 $168 20.0% Gross profit $146 $157 Gross margin excluding $160 $141 19.0% excluding LIFO LIFO $120 18.0% 17.5% 17.9% 17.9% 18.0% 18.0% $80 17.5% 17.0% 1
Slide 15: …Drives EBITDA Improvement
…Drives EBITDA Improvement Adjusted EBITDA Ex. LIFO Quarterly year- over-year EBITDA 3% 18% 17% 53% growth Adjusted EBITDA, $80 10.0% Adjusted EBITDA margin, excluding excluding LIFO $62 LIFO $60 $53 8.0% $42 $42 6.0% $40 6.7% 6.1% 4.0% 4.9% 5.2% $20 2.0% $0 0.0% Q3 2013 Q4 2013 Q1 2014 Q2 2014 Note
Slide 16: Current Market 32% Below Prior Peak
Current Market 32% Below Prior Peak Steel Shipments (mm tons) 6,000 5,500 5,000 32% below 4,500 prior peak 4,000 3,500 3,000 2,500 2,000 Jan -93 Feb - 95 Apr - 97 Jun - 99 Jul - 01 Sep - 03 Nov - 05 Dec - 07 Feb - 10 Apr - 12 Jun -14 Source: Metals Service Centre Institute, June 2014. 16
Slide 17: Significant EBITDA Leverage to Recovering Volumes
Significant EBITDA Leverage to Recovering Volumes Quarterly year-over- year growth 60% 53.1% 50% 40% 30% 17.6% 16.9% 20% 10% 3.4% 0% -10% (16.8%) 2.7% (5.6%) (1.9%) -20% (10.6%) -30% -40% (31.5%) Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Sales growth Adjusted EBITDA excluding LIFO growth Operating Lev
Slide 18: Focus on Reducing Debt Leverage and Cost of Debt Capital
Focus on Reducing Debt Leverage and Cost of Debt Capital Target leverage range of 3x - 4x EBITDA vs. current 5.5x Maintenance capex of $15 - $20 million High return growth capital projects Accretive bolt-on acquisitions 18
Slide 19: Possible Catalysts Affecting Free Cash Flow Generation
Possible Catalysts Affecting Free Cash Flow Generation Late cycle end market recoveries Built-in operating leverage within Ryerson footprint High yield bond call dates in 2015 Impacts of recent Highway Bill Legislation providing for adjusted pension contribution methodology under review 19
Slide 20: Highlights
Broad Geographic Reach, Extensive Products and Services, and Diverse Customer Base Industry Leading Differentiated Expense Control and Service Model / Competitive Working Capital Advantages Management HIGHLIGHTS Gross Margin Levered to Late Expansion Through Cycle End Market Improved Product and Rec
Slide 21: Q&A
RYERSON Q&A 21
Slide 22: Appendix
RYERSON Appendix 22
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation 2014 YTD 2010 2011 2012 2013 Q1 & Q2 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Net Sales $3,896 $4,730 $4,025 $3,460 $1,806 $860 $803 $874 $932 Gross Profit 540 659 710 617 302 155 147 148 154 LIFO Expense (Income) 52 49 (63) (33) 23 (10) (6) 9 14 Gross Profit Excluding LIFO 592 707 64
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation EBITDA represents net income before interest and other expense on debt, provision for income taxes, depreciation and amortization. Adjusted EBITDA gives further effect to, among other things, impairment charges on fixed assets and goodwill, reorganization expenses and the pay
Slide 25: Capitalization
Capitalization Current Call Data 6/30/2014 PF LTM Adj. EBITDA (1) ($ in millions) Rate Call Date Call Price Book Value Adj Pro Forma Multiple (6/30/2014) Cash and Cash Equivalents $83 $83 Marketable Securities 15 15 Availability under Revolver 353 (30) 324 and Foreign Debt Facilities Total Liquidity
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