Ryerson Holding Corporation · NYSE:RYZ
Ryerson — Bank of America Merrill Lynch Leveraged Finance Conference 2014
29 slides from Ryerson's conference presentation, Dec 2, 2014
Slide 1: Bank of America Merrill Lynch Leveraged Finance Conference
Bank of America Merrill Lynch Leveraged Finance Conference December 2, 2014
Slide 2: Business Overview
Business Overview Mike 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 Company with transformed performance and potential Industry-leading expense and working capital management Expanding gross margins and operating leverage Sustainable competitive advantages to fuel targeted growth Favorable end market dynamics 4
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; ship • Purchase smaller • Produce in large smaller quantities quantities volume • Process more than 1/2 of • Require a variety of • Have long lead times products sold products and services
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 scale in highly fragmented Expense control Optimize customer mix market leadership Value-driven pricing and Multi-channel s
Slide 8: Proven Expense and Working Capital Management
Proven Expense and Working Capital Management Expenses as % of sales(1)(2) Days of Supply (DOS) 17.8% 16.3% 16.4% 17.4% 110 110 95 105 11.8% 12.5% 80 84 10.5% 11.5% 82 74 2011 2012 2013 2014 YTD 2011 2012 2013 2014 YTD Q3 Q3 Competitor averages are based on Ryerson’s analysis of financial informatio
Slide 9: Changing Mix to Improve Margins
Changing Mix to Improve Margins Ryerson Product Mix (% of Sales) Processing Capabilities 100% 4% 3% 3% ~ 90% 16% 31% 22% 40% 30% 57% Plate 80% 15% 70% 18% 60% 27% 50% ~ 40% Long 65% 30% 57% Products 20% 40% ~ 10% 0% 2010A Flat Plate 2013A Long Other Long Term Goal Coil and Source: SEC filings and co
Slide 10: Differentiated Model
Differentiated Model “ONE RYERSON” • Single franchise • One brand GLOBAL SCALE CONNECTIVITY • Technical knowledge • Global capabilities • Processing & fabrication in local markets Leveraging Scale and • Logistics Integrated Network • Inventory services MULTI CHANNEL SALES MULTI-CHANNEL • Local sales
Slide 11: Financial Overview
Financial Overview Eddie Lehner, Executive Vice President and Chief Financial Officer
Slide 12: Ryerson Financial Objectives
Ryerson Financial Objectives Cash Usage Priorities Financial Management Attributes Reduce balance sheet leverage Strong working capital management High return growth capital projects Rigorous and effective expense Accretive bolt-on acquisitions management vs. peer comps Demonstrated counter-cyclical
Slide 13: Key Financial Drivers
Key Financial Drivers Ryerson’s Metal Prices End Markets Transformation
Slide 14: Macro Trends: Industrial Activity and Base Metal Prices
Macro Trends: Industrial Activity and Base Metal Prices 2 US Purchasing Managers' Index (PMI)1 60 58 56 54 52 PMI 50 Growth threshold 48 46 Sources: 1. Institute of Supply Management, 2. LME and CRU 14
Slide 15: Highlights
Broad Geographic Reach, Extensive Products and Services, and Diverse 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 Recoveries Custom
Slide 16: Significant EBITDA Leverage to Recovering Volumes
Significant EBITDA Leverage to Recovering Volumes Quarterly year-over- year growth 53.1% 47.7% 17.6% 16.9% 3.4% 10.2% 2.7% -1.9% -10.6% -5.6% Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Operating Leverage Will Drive Considerable EBITDA Growth Relative to Sales Growth Adjusted EBITDA EX. LIFO Growth Sale
Slide 17: Macro Trends: Shipments
Macro Trends: Shipments 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 Mar-95 May-97 Jul-99 Sep-01 Nov-03 Jan-06 Mar-08 May-10 Jul-12 Sep-14 Source: Metals Service Center Institute, September 2014. 17
Slide 18: Performance vs. Peers
Performance vs. Peers Gross Margin excl. LIFO Adj. EBITDA Margin excl. LIFO 25.0% 22.4% 22.1% 7.0% 6.4% 21.4% 21.5% 21.5% 5.9% 6.0% 20.0% 17.9% 4.7% 4.7% 5.0% 5.1% 4.9% 16.1% 16.9% 5.0% 15.2% 15.0% 4.1% 3.8% 15.0% 4.0% 3.4% 3.0% 10.0% 2.0% 5.0% 1.0% 0.0% 0.0% 2010 2011 2012 2013 2014 YTD 2010 2011 2
Slide 19: Improving Balance Sheet
Improving Balance Sheet Debt and Pension Liabilities, $M Net Debt to Adj. EBITDA (excl. LIFO)* 8.5 1,830 1,825 1,704 7.1 1,632 1,501 6.0 514 520 5.6 493 338 5.2 273 Long Term Deferred Employee Benefits Debt 1,211 1,316 1,305 1,295 1,228 2010 2011 2012 2013 TTM, Q3 2014 *Net Debt to Adjusted EBITDA (
Slide 20: Solid Liquidity
Solid Liquidity Liquidity ($M) 400 385 385 346 Cash and Marketable Securities 83 329 92 93 72 North American Revolver Availability 317 95 293 293 274 234 Financial Maintenance Covenant ($125M) 2010 2011 2012 2013 Q3 2014 20
Slide 21: Long-term Financial and Operating Goals
Long-term Financial and Operating Goals METRIC TARGET •Gross margin •20% •EBITDA margin •10% •Working Capital •75 DOS •Debt / EBITDA •3.0x 21
Slide 22: Bank of America Merrill Lynch Leveraged Finance Conference
Bank of America Merrill Lynch Leveraged Finance Conference December 2, 2014
Slide 23: Appendix
RYERSON ‘ . 9 Gi = a,
Slide 24: Non-GAAP Reconciliation
($ in millions) Non-GAAP Reconciliation Nine Months 2010 2011 2012 2013 Ended 9/30/14 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Net Sales $3,896 $4,730 $4,025 $3,460 $2,754 $860 $803 $874 $932 $948 Gross Profit $540 659 710 617 452 155 147 148 154 150 LIFO Expense (Income) 52 48 (63) (33) 42 (10) (6)
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation EBITDA represents net income before interest and other expense on debt, provision for income taxes, depreciation and amortization. Adjusted EBITDA gives further effect to, among other things, impairment charges on fixed assets and goodwill, reorganization expenses and the pay
Slide 26: Capitalization
Capitalization Current Call Data 9/30/2014 TTM Adj. EBITDA (excl. LIFO) ($ in millions) Rate Call Date Call Price Book Value Multiple (9/30/2014) Cash and Cash Equivalents $81 Marketable Securities 12 Availability under Revolver 301 and Foreign Debt Facilities Total Liquidity $394 ABL Revolver due 2
Slide 27: Net Debt to Adjusted EBITDA (excl. LIFO) Reconciliation
Net Debt to Adjusted EBITDA (excl. LIFO) Reconciliation ($ in millions) 2010 2011 2012 2013 3Q 2014 Cash and Cash Equivalents $63 $62 $71 $74 $81 Marketable Securities 20 10 21 21 12 Total Debt 1,305 1,228 1,211 1,316 1,295 Net Debt 1,128 1,244 1,214 1,200 1,135 TTM Adj. EBITDA excl. LIFO $133 223 2
Slide 28: Non-GAAP Reconciliation of Net Income
Non-GAAP Reconciliation of Net Income ($ in millions) YTD 2014 Q3 2014 (through Q3) Net income attributable to Ryerson Holding Corporation $(34.7) $(30.5) IPO-related and debt redemption expenses, net of 37.3 37.3 income taxes* Net income attributable to Ryerson Holding Corporation $2.6 $6.8 excludi
Slide 29: Financial Results
Financial Results Gross Profit (dollars in millions) Gross Profit (dollars in millions) Gross Margin (%) Gross Margin (%) $451.6 $658.8 $709.6 $616.6 $539.8 $456.1 $149.5 17.8% $147.2 $147.7 $154.4 15.8% 16.4% 17.6% 14.9% 13.9% 13.9% 18.4% 16.9% 16.6% 2009 2010 2011 2012 2013 Q4 2013 Q1 2014 Q2 2014
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