Ryerson Holding Corporation · NYSE:RYZ
Ryerson — Bank of America Merrill Lynch 2016 Leveraged Finance Conference
39 slides from Ryerson's conference presentation, Nov 29, 2016
Slide 1: Bank of America Merrill Lynch Leveraged Finance Conference
Bank of America Merrill Lynch Leveraged Finance Conference November 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 (“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 RYERSON INVESTOR PRESENTATION
Slide 4: Ryerson Highlights
Ryerson Highlights A market-leading metals service center offering a broad range of products to a diversified group of industrial manufacturing customers Built for all market cycles as evidenced by continued market share growth, strong margins, cash generation, and improving quality of earnings Diff
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 % of 2015 Revenue • Founded in 1842; relisted on NYSE Other 2% in 2014 Stainless 23% Carbon • Approximately 100 interconnected Aluminum 51% 24% locations in North America and China • One of North America’s larges
Slide 6: The US Trade Deficit: Does This Seem Normal to You?
The US Trade Deficit: Does This Seem Normal to You? 6
Slide 7: Productivity has been in Steady Decline: Junk Food Growth Diet
Productivity has been in Steady Decline: Junk Food Growth Diet Productivty pe rce nt change (20-qtr ra te) 5 4 3 2 1 0 -1 1950 '55 '60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15 Source: Federal Reserve Bank of Chicago 7
Slide 8: Why is the U.S. at the Bottom in Investment?
Why is the U.S. at the Bottom in Investment? Better for the Entire World if the U.S. is at Least at or Above OECD Levels Source: Taxfoundation.org 8
Slide 9: Macro Outlook: Demand Weakness Persists in the Industrial Sector
Macro Outlook: Demand Weakness Persists in the Industrial Sector with Industrial Metals Prices Moving Higher From Decades Low Levels in 2015 U.S. INDUSTRIAL PRODUCTION COMMODITY PRICES 14 straight months of contraction CRU HRC 2.0 LME Nickel YTD LME Aluminum + Midwest Premium performance Price index
Slide 10: 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 11: 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 12: Driving Profitable Growth: Growing Market Share and Margins
Driving Profitable Growth: Growing Market Share and Margins TONNAGE MARKET SHARE & GROSS MARGIN Ryerson's MSCI Volume Market Share - All Metals Gross Margin Gross Margin Excl. LIFO 4.11% 4.12% 4.05% 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% 15.3%
Slide 13: 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 14: 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 14 RYERSON INVESTOR PRESENTATION
Slide 15: 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 16: Our Strategic Priorities Step-by-Step: A Differentiated Approach
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 Ryerson e-commerce Build out long products Ry
Slide 17: Significant Growth Potential Around Smart Use of Analytics
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 targeting
Slide 18: 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 19: Ryerson's DNA – The "How" Really Matters
Ryerson’s DNA – The “How” Really Matters ANALYTICS SPEED CULTURE VALUE-ADD SCALE 19 RYERSON INVESTOR PRESENTATION
Slide 20: 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 21: Financial Overview
FINANCIAL OVERVIEW ERICH SCHNAUFER │ CHIEF FINANCIAL OFFICER RYERSON INVESTOR PRESENTATION
Slide 22: 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 22 RYERSON INVESTO
Slide 23: 2016 Q3 Performance Highlights
2016 Q3 Performance Highlights Earnings • Net income attributable to Ryerson Holding Corp. of $8.2M • Diluted earnings per share of $0.23 • Diluted earnings per share on an adjusted basis of $0.28 vs. $0.20 in Q3 ‘15 • Gross margin increased 80 bps to 19.8% vs. Q3 ‘15 • Gross margin, excluding LIFO
Slide 24: Quarterly Financial Highlights
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 25: Material Deleveraging Increases Value for All Investors
Material Deleveraging Increases Value for All Investors T O TA L D E B T ( $ M ) $1,259 • Issued $650 million of 11% Senior Total debt reduced Secured Notes due 2022 in May by $281M 2016 • Amended our credit facility in $1,024 November 2016, thereby $978 extending the maturity date to November 16, 2
Slide 26: Investing in the Business
Investing in the Business • More than $100 million in growth capital invested since 2010, expanding value-added capabilities • Enhanced intelligent systems for connecting: people, supply chains, inventory, fixed assets, and logistics • Six bolt-on acquisitions since 2010 • Accretive to gross margin
Slide 27: Conclusion
CONCLUSION EDDIE LEHNER │ PRESIDENT AND CHIEF EXECUTIVE OFFICER RYERSON INVESTOR PRESENTATION
Slide 28: Ryerson's Differentiated Model
Ryerson’s Differentiated Model: Connectivity, Speed, Scale, Value-Add, Culture, and Analytics Well Executed Creates Value for Investors “ONE RYERSON” • Single franchise / one brand • Great customer experiences • Decentralized AND connected GEOGRAPHIC SCALE CONNECTIVITY • United States, Canada, Mexic
Slide 29: Our Commitment, Our Culture: Say Yes, Figure It Out
Our Commitment Our Culture SAY YES, FIGURE IT OUT 29 RYERSON INVESTOR PRESENTATION
Slide 30: Appendix
APPENDIX 30 RYERSON INVESTOR PRESENTATION
Slide 31: Metal Service Center Supply Chain
Metal Service Center Supply Chain SUPPLIERS RYERSON SERVICE CENTERS CUSTOMERS • Manufacture metals • Purchase in scale; ship smaller quantities • Purchase smaller quantities • Produce & ship large • Distribute more than 65,000 carbon, • Require a variety of volumes stainless, and aluminum products p
Slide 32: Experienced Management Team
Experienced Management Team Years at Years at Years in Executive Title Position Ryerson Industry Eddie Lehner* President & Chief Executive Officer 2 5 26 Erich Schnaufer** Chief Financial Officer 1 11 11 Executive Vice President, General Mark Silver 4 4 4 Counsel & Secretary Kevin Richardson Preside
Slide 33: Ample Liquidity to Fund Operations and Investments
Ample Liquidity to Fund Operations and Investments LIQUIDITY ($M) North American Availability Foreign Availability Cash & Equivalents $364 43 $273 26 65 23 $162.9 295 185 Dec. 31, 2015 Sep. 30, 2016 33 RYERSON INVESTOR PRESENTATION
Slide 34: Industry Math: 2015 MSCI Shipped Tonnage Mix
Industry Math: 2015 MSCI Shipped Tonnage Mix Industry Tons Mix Total Shapes 100% Flat 67% Carbon Flat Rolled 62% Stainless Sheet & Coil 3% Aluminum Sheet & Coil 2% Long 20% Key Long 10% All Other Long 10% Plate 13% Carbon Plate 11% Stainless Plate 1% Aluminum Plate 1% Key Long: aluminum and stainles
Slide 35: Non-GAAP Reconciliation
Non-GAAP Reconciliation EBITDA represents net income before interest and other expense on debt, provision for income taxes, depreciation and amortization. Adjusted EBITDA gives further effect to, among other things, impairment charges on assets, reorganization expenses and foreign currency transacti
Slide 36: Non-GAAP Reconciliation: Quarterly
Non-GAAP Reconciliation: Quarterly ($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 2016 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) (63.1) (33.0) 42.3 (59.5) (20.4) Gross Profit, excluding LIFO 646.5 583.6 63
Slide 39: Ryerson Investor Presentation
RYERSON INVESTOR PRESENTATION
Ryerson Holding — Bank of America Merrill Lynch 2016 Leveraged Finance Conference on 6ix