Ryerson Holding Corporation · NYSE:RYZ
Ryerson — Global High Yield & Leveraged Finance Conference 2017
39 slides from Ryerson's conference presentation, February 2017
Slide 1: Global High Yield & Leveraged Finance Conference
Global High Yield & Leveraged Finance Conference February 2017 1
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 (“Ryerson”) and no investment decision should be made based upon the information provided herein. Ryerson strongly urges yo
Slide 3: Business Overview
BUS INES S OV ERV IEW EDDIE LEHNER │ PRESIDENT AND CHIEF EXECUTIVE OFFICER 3
Slide 4: Ryerson Highlights
Ryerson Highlights An industry leader offering a broad range of metal products, services and solutions to a diversified group of manufacturing customers Built for all market cycles as evidenced by continued market share growth, strong margins, and cash generation Differentiated by a branded intercon
Slide 5: A Market Leading North American Service Center with Scale and Broad Strategic Footprint
A Market Leading North American Service Center with Scale and Broad Strategic Footprint: The Basis for a Branded, Connected, Industrial Metals Network • Founded in 1842; relisted on NYSE Other 2% % of 2015 Revenue in 2014 Stainless 23% Carbon • Approximately 100 interconnected Aluminum 51% 24% locat
Slide 6: Exposure to Diverse, Growing, and Recovering End-Markets
Exposure to Diverse, Growing, and Recovering End-Markets All Other, 7% Oil & Gas, 7% Commercial ground Food transportation, Processing 18% & Ag., 7% Construction Metal Fabrication Equipment, 8% & Machine Shops, 18% HVAC, 8% Consumer Industrial Durable, 10% Machinery & Equipment, 17% Percentages are
Slide 7: Macro Outlook: Improving but Volatile Industrial Metal Prices
Macro Outlook: Improving but Volatile Industrial Metal Prices, with Potential Positive Demand Inflection COMMODITY PRICES U.S. INDUSTRIAL PRODUCTION P O T E N T I A L I N F L E C T I O N I N E A R LY 2 0 1 7 CRU HRC 2.0 2016-2017 LME Nickel 0.7 0.0 performance LME Aluminum + Midwest Premium Price in
Slide 8: Expected Significant Market Upside: The Opportunity
Expected Significant Market Upside: The Opportunity Under-Investment Since 2009 Leaves Potential for Secular Industrial Recovery U . S . C A R B O N a n d S T A I N L E S S M O N T H LY S H I P M E N T S 6,000 Peak Tons = 5,400 5,500 5,000 Average Tons Jan. '93 - Oct. '08 = 4,200 Tons in Thousands 4
Slide 9: Ryerson's DNA – The "How" Really Matters
Ryerson’s DNA – The “How” Really Matters ANALYTICS SPEED CULTURE VALUE-ADD SCALE 9
Slide 10: Ryerson's "Periodic Table": How We Deliver Value to Customers
Ryerson’s “Periodic Table”: How We Deliver Value to Customers Understanding the “Elements” is Vital to Profitable Growth FABRICATION BURN/CUT AS IS FABRICATION CARBON BURN/CUT STAINLESS AS IS ALUMINUM FLAT LONG PLATE METAL SHAPE PROCESSING 10
Slide 11: Our Strategic Priorities Step-by-Step
Our Strategic Priorities Step-by-Step: A Differentiated Approach 1 2 3 4 Renewed Grow stainless products Develop and diversify Scale prospecting and emphasis market share through vertical markets call centers on coil / sheet supply chain leverage 5 6 7 8 Build out long products Ryerson virtual Ryers
Slide 12: Leveraging Scale and Integrated Network
Leveraging Scale and Integrated Network An Integrated and Decentralized Network of Intelligent Service Centers BENEFITS Better asset utilization: • Shared and optimized inventory Ryerson Integrated • Shared processing equipment Network of • Shared human resources Service Center 12 Multi-Markets Appr
Slide 13: An Industry-Leading Performance
AN INDUSTRY-LEADING PERFORMANCE OPERATIONAL EFFICIENCY MARGIN EXPANSION PROFITABLE GROWTH Expense and working Optimize product and customer Growing share by leveraging capital leadership mix scale in highly fragmented market Significant operating leverage Value-added processing Multi-cha
Slide 14: Driving Profitable Growth: Growing Market Share and Margins
Driving Profitable Growth: Growing Market Share and Margins TONNAGE MARKET SHARE & GROSS MARGIN Ryerson's U.S. MSCI Volume Market Share - All Metals Gross Margin Gross Margin Excl. LIFO 4.17% 4.17% 4.10% 3.79% 3.81% 22.0% 3.75% 3.68% 21.0% 20.0% 19.0% 21.1% 19.7% 19.8% 17.3% 16.8% 18.9% 15.9% 16.3%
Slide 15: Proven Operational Efficiency and Industry Leadership
Proven Operational Efficiency and Industry Leadership: Consistent Execution of Fundamentals D AY S O F S U P P LY E X P E N S E P E R C E N TA G E E XC L U D I N G 110 109 109 112 D&A AND ONE-TIME ITEMS 106 20.7% 19.1% 17.5% 17.6% 16.5% 84 13.8% 82 82 80 12.9% 78 12.5% 11.5% 11.9% 2012 2013 2014 201
Slide 16: Optimizing Mix to Drive Margin Expansion
Optimizing Mix to Drive Margin Expansion: Value-Add, Speed, and Attributes Emphasis 2010 SALES MIX 2015 SALES MIX Cut Long & Plate Cut Long & Plate • Expand value- 3.0% 4.3% added processing: More than 75% of Fabrication 6.9% Fabrication metals are 10.6% processed to As-Is Long customer & Plate spec
Slide 17: Significant Growth Potential Around Smart Use of Analytics
Example: Significant Growth Potential Around Smart Use of Analytics Commercial Bandwidth is the Key Ryerson’s existing customer base External …potentially We have a increasing both large database of customer Using data analytics and advanced margin & market ~930k accounts… sales techniques, we are t
Slide 18: Financial Overview
FINANCIAL OVERVIEW ERICH SCHNAUFER │ CHIEF FINANCIAL OFFICER 18
Slide 19: Ryerson Financial Priorities
Ryerson Financial Priorities Deleveraging Propel growth, invest in high return capital projects, and bolt-on acquisitions Maximize free cash flow for investment while maintaining a strong balance sheet Expense management leadership Continue best in class working capital management 19
Slide 20: Quarterly Financial Highlights: Adjusted EBITDA and Net Income
Quarterly Financial Highlights: Managed Well through a Downturn and Positioned for Growth ADJ. EBITDA, EXCL. LIFO ($M) N E T I N C O M E ( L O S S ) AT T R I B U TA B L E $56.0 TO RYERSON HOLDING ($M) $48.8 $15.8 $13.5 $6.7 $8.2 $37.2 $33 - $36 $5.6 $29.2 $29.7 $14.2 ($14 - $11) ($20.5) Q2' 15 Q3' 1
Slide 21: Quarterly Financial Highlights: Tons, Pricing and Margin
Quarterly Financial Highlights: Managed Well through a Downturn and Positioned for Growth TONS SHIPPED (000’S) AV E R AG E SE LLIN G PR IC E PE R TO N 505 $1,722 488 492 478 480 $1,606 $1,517 $1,531 $1,470 $1,465 441 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q2' 15 Q3' 15 Q4 '15 Q1 '16 Q2 '16 Q3 '16
Slide 22: Material Deleveraging Increases Value for All Investors
Material Deleveraging Increases Value for All Investors T O TA L D E B T ( $ M ) • Issued $650M of 11% Senior $1,259 Secured Notes due 2022 in May 2016 Total debt reduced by $281M • Issued common stock in July 2016 with net proceeds of $71.5M used $1,024 to reduce our debt balance $978 • Amended our
Slide 23: Ample Liquidity to Fund Operations and Investments
Ample Liquidity to Fund Operations and Investments LIQUIDITY ($M) North American Availability Foreign Availability Cash & Equivalents $364 43 $273 26 65 23 $162.9 295 185 Dec. 31, 2015 Sep. 30, 2016 23
Slide 24: Investing in the Business – Smart Decisions Well Executed
Investing in the Business – Smart Decisions Well Executed • More than $100 million in growth capital invested since 2010, expanding value-added capabilities • Enhanced intelligent systems for connecting: people, supply chains, inventory, fixed assets, and logistics • Six bolt-on acquisitions since 2
Slide 25: Conclusion
CONCLUSION EDDIE LEHNER │ PRESIDENT AND CHIEF EXECUTIVE OFFICER RYERSON INVESTOR PRESENTATION
Slide 26: Ryerson's Differentiated Model Creates Value for Investors
Ryerson’s Differentiated Model: Connectivity, Speed, Scale, Value-Add, Culture, and Analytics Well Executed Creates Value for Investors “ONE RYERSON” • Single franchise / one brand • Great customer experiences • Decentralized AND connected GEOGRAPHIC SCALE CONNECTIVITY • United States, Canada, Mexic
Slide 27: Our Commitment, Our Culture: Say Yes, Figure It Out
Our Commitment Our Culture SAY YES, FIGURE IT OUT 27
Slide 28: Appendix
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Slide 29: Metal Service Center Supply Chain
Metal Service Center Supply Chain SUPPLIERS RYERSON SERVICE CENTERS CUSTOMERS • Manufacture metals • Purchase in scale; ship • Purchase smaller quantities smaller quantities • Produce & ship large volumes • Require a variety of products • Distribute 65,000+ aluminum, and services • Have long lead ti
Slide 30: Experienced Management Team
Experienced Management Team Years at Years at Years in Executive Title Position Ryerson Industry Eddie Lehner* President & Chief Executive Officer 2 5 27 Erich Schnaufer** Chief Financial Officer 2 11 11 Executive Vice President, General Mark Silver 4 4 4 Counsel & Secretary Kevin Richardson Preside
Slide 31: Strong U.S. Dollar Contributes to Highest Trade Deficit Since 2012
Strong U.S. Dollar Contributes to Highest Trade Deficit Since 2012 106.0 104.0 Appreciation of U.S. Dollar US Balance of Trade 102.0 100.0 98.0 100.4 -384 96.0 -462 -495 -490 -500 -502 94.0 -549 -537 92.0 90.0 90.3 88.0 May-15 May-16 Jan-15 Jun-15 Jan-16 Jun-16 Jan-17 Feb-15 Mar-15 Feb-16 Mar-16 Feb
Slide 32: The U.S. Trails Other OECD Member Countries in Investment
The U.S. Trails Other OECD Member Countries in Investment 34 Gross capital formation (% of GDP) 32 30 31.2 28 29.1 26 24.0 24 23.6 22 23.6 20.9 20 19.5 20.3 18 16 17.5 2000 2005 2010 2015 United States OECD members BRIC Source: World Bank 32
Slide 33: Industry Math: 2016 MSCI Shipped Tonnage Mix
Industry Math: 2016 MSCI Shipped Tonnage Mix Industry Tons Mix Total Shapes 100% Flat 69% Carbon Flat Rolled 64% Stainless Sheet & Coil 3% Aluminum Sheet & Coil 2% Long 21% Key Long 11% All Other Long 10% Plate 11% Carbon Plate 9% Stainless Plate 1% Aluminum Plate 1% Key Long: aluminum and stainless
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 foreign currency transacti
Slide 35: Non-GAAP Reconciliation of Recent Developments: Q4 2016
Non-GAAP Reconciliation of Recent Developments: Q4 2016 Anticipated Net Loss to Adjusted EBITDA, Excluding LIFO Expense Range of Estimates (unaudited) (in millions) Q4 2016 Low High Net loss attributable to Ryerson Holding Corporation $ (14) $ (11) Interest and other expense on debt 22 22 Benefit fr
Slide 36: Non-GAAP Reconciliation: Quarterly
Non-GAAP Reconciliation: Quarterly ($M) Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Net Sales 840.4 790.0 668.8 702.6 739.8 735.1 Gross Profit 165.8 150.3 101.6 147.6 163.0 145.4 Gross Margin 19.7% 19.0% 15.2% 21.0% 22.0% 19.8% LIFO Expense (Income) (37.0) (21.3) 10.8 (14.8) (7.0) 1.4 Gross Profit, ex
Slide 37: Non-GAAP Reconciliation: Net Income and Earnings per Share
Non-GAAP Reconciliation: Reconciliation of Net Income and Earnings per Share Excluding Impairment and (Gain) Loss on Retirement of Debt Nine Months Third Quarter Ended Sep 30 Dollars and Shares in Millions, Except per Share Data Q3 '16 Q3 '15 2016 2015 Net Income attributable to Ryerson Holding Corp
Slide 38: Non-GAAP Reconciliation: Annual
Non-GAAP Reconciliation: Annual ($M) 2012 2013 2014 2015 Q3 '16 YTD Net Sales 4,024.7 3,460.3 3,622.2 3,167.2 2,177.5 Gross Profit 709.6 616.6 593.8 567.7 456.0 Gross Margin 17.6% 17.8% 16.4% 17.9% 20.9% LIFO Expense (Income), net (63.1) (33.0) 42.3 (59.5) (20.4) Gross Profit, excluding LIFO 646.5 5
Slide 39: Ryerson
RYERSON
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