Ryerson Holding Corporation · NYSE:RYZ
Ryerson — Jefferies Chicago Steel and Metals Summit 2015
27 slides from Ryerson's conference presentation, Apr 7, 2015
Slide 1: Jefferies Chicago Steel and Metals Summit
JEFFERIES CHICAGO STEEL A N D M E TA L S S U M M I T APRIL 7, 2015
Slide 2: Business Overview
BUSINESS OVERVIEW EDDIE LEHNER Executive Vice President and Chief Financial 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 Expanding gross margins and operating leverage 4 Sustainable competitive advantages to fuel growth 5 Leveraged to later-cycle end markets JEFFERIES CHICAGO STEEL AND MET
Slide 5: Ryerson at a glance
• 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 CHICAGO STEEL AND METALS SUMMIT 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 • Same/next
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 scale in highly fragmented market Expense control leadership Optimize customer mix Multi-channel sales and Working capita
Slide 8: Proven Operational Efficiency
PROVEN OPERATIONAL EFFICIENCY Expenses as a percent of sales(1) Working capital management days of supply (DOS) 17.7% 16.3% 16.4% 17.6% 110 109 95 107 11.9% 12.5% 82 84 10.5% 11.5% 82 74 2011 2012 2013 2014 2011 2012 2013 2014 Competitor averages are based on Ryerson’s analysis of financial informat
Slide 9: 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 10: Differentiated Model
DIFFERENTIATED MODEL “ONE RYERSON” • Single franchise • One brand 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 services M U LT I - C H A N N E L S A L E
Slide 11: Financial Review
FINANCIAL REVIEW JEFFERIES CHICAGO STEEL AND METALS SUMMIT 11
Slide 12: 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 $3,622 15.0% 17.8% 16.5% 2,000 10.0% 1,000 5.0% 0 2013 2014 0 2013 2014 Gross margin excluding LIFO Expenses excluding depreciation and 20.0% amortization and IPO-related expenses ($M) 15.0% 16.9% 17.6% 6
Slide 13: 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 measures. A recon
Slide 14: Performance Versus Peers
PERFORMANCE VERSUS PEERS Gross margin excluding LIFO Adjusted EBITDA excluding LIFO margin 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 15: 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 60 58 56 PMI index 54 52 50 48 46 PMI Growth threshold Sources: 1. Institute of Supply Management, 2. LME and CRU JEFFERIES CHICAGO STEEL AND METALS SUMMIT 15
Slide 16: Macro Trends: Steel Shipments
MACRO TRENDS: Steel Shipments U.S. CARBON and STAINLESS STEEL SHIPMENTS 6,000 (mm tons) 5,500 5,000 4,500 38% below prior peak 4,000 3,500 3,000 2,500 2,000 Source: Metals Service Center Institute, February 2015. JEFFERIES CHICAGO STEEL AND METALS SUMMIT 16
Slide 17: Key Financial Drivers
KEY FINANCIAL 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 CHICAGO STEEL AND METALS SUMMIT 17
Slide 18: Ryerson Financial Objectives
RYERSON FINANCIAL OBJECTIVES • Reduce balance sheet leverage • High return growth capital projects • Accretive bolt-on acquisitions, exemplified by Fay Industries in December 2014: • Well managed, $30 million annual revenues, focused on long products • Adds significant number of new transactional ac
Slide 19: Long-Term Financial and Operating Goals
LONG-TERM FINANCIAL and OPERATING GOALS METRIC TARGET Gross Margin 20% (excl. LIFO) EBITDA Margin 10% (Adjusted EBITDA, excl. LIFO) Working Capital 75 DOS Debt/EBITDA 2.0 x JEFFERIES CHICAGO STEEL AND METALS SUMMIT 19
Slide 20: Ryerson Highlights
RYERSON HIGHLIGHTS 1 Industry-leading expense and working capital management 2 Gross margin expansion through improved product and customer mix 3 Differentiated service model/competitive advantages 4 Significant operating leverage tied to late-cycle end markets JEFFERIES CHICAGO STEEL AND METALS SUM
Slide 21: Jefferies Chicago Steel and Metals Summit
JEFFERIES CHICAGO STEEL A N D M E TA L S S U M M I T APRIL 7, 2015 JEFFERIES CHICAGO STEEL AND METALS SUMMIT 21
Slide 22: Appendix
APPENDIX JEFFERIES CHICAGO STEEL AND METALS SUMMIT 22
Slide 23: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION EBITDA represents net income before interest and other expense on debt, provision for income taxes, depreciation and amortization. Adjusted EBITDA gives further effect to, among other things, impairment charges on fixed assets and goodwill, reorganization expenses and the pay
Slide 24: Non-GAAP Reconciliation
Figures may not add due to rounding. NON-GAAP RECONCILIATION ($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 $592 707 647 584 636 Gross Margin Excluding LIFO 15.2% 15.0%
Slide 25: Capitalization
Figures may not add due to rounding. CAPITALIZATION Current Call Data 2014 2014 Adj. EBITDA Rate Call Date Call Price Book Value excl. LIFO Multiple ($M) Cash and Cash Equivalents $60 Marketable Securities 11 Availability under Revolver 257 and Foreign Debt Facilities Total Liquidity $328 ABL Revolv
Slide 26: Net Debt to Adjusted EBITDA excl. LIFO Reconciliation
NET DEBT to ADJUSTED EBITDA excl. LIFO RECONCILIATION ($M) 2010 2011 2012 2013 2014 Cash and Cash Equivalents $63 $62 $71 $74 $60 Marketable Securities 20 10 21 21 11 Total Debt 1,211 1,316 1,305 1,295 1,259 Net Debt 1,128 1,244 1,214 1,200 1,188 Adjusted EBITDA $133 $223 $202 $170 $218 excluding LI
Slide 27: Ryerson President and CEO Michael C. Arnold to Retire in 2015
RYERSON PRESIDENT AND CEO MICHAEL C. ARNOLD TOMichael Ryerson President and CEO RETIRE INin 2015 C. Arnold to Retire 2015 CHICAGO, IL – December 19, 2014 – Ryerson Holding Corporation (NYSE: RYI), a leading distributor and processor of metals, announced today that President and Chief Executive Offic
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