Ryerson Holding Corporation · NYSE:RYZ
Ryerson — JPMorgan Global High Yield and Leveraged Finance Conference 2016
31 slides from Ryerson's conference presentation, Feb 29, 2016
Slide 1: JPMorgan Global High Yield and Leveraged Finance Conference
JPMORGAN GLOBAL HIGH YIELD AND LEVERAGED FINANCE CONFERENCE February 29, 2016 1 J P M O R G A N G L O B A L H I G H Y I E L D C O N F E R E N C E 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 and no investment decision should be made based upon the information provided herein. Ryerson strongly urges you to review
Slide 3: Business Overview
Business Overview EDDIE LEHNER PRESIDENT AND CHIEF EXECUTIVE OFFICER Note: Presentation is available at ir.ryerson.com 3 J P M O R G A N G L O B A L H I G H Y I E L D C O N F E R E N C E 3
Slide 4: 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 • Have long lead times • Same/next day deli
Slide 5: Ryerson
Ryerson • One of North America’s largest metals processors and distributors, with TTM sales of $3.4 billion • More than 100 locations in U.S., Canada, Mexico, China and Brazil • Founded in 1842; relisted on NYSE with IPO in August 2014 • Distribute more than 70,000 products to 35,000 active customer
Slide 6: Executive Summary
Executive Summary 1 Transformation creating a stronger company 2 Industry-leading expense and working capital management 3 Successful shift to higher value mix and value-added processing 4 Building sustainable competitive advantages to fuel growth 5 Generating counter cyclical cash flow and delevera
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 Expense control leadership Optimize customer mix fragmented market Working capital leadership Value-driven pricing and
Slide 8: Weak Service Center Shipments
Weak Service Center Shipments* Monthly shipments ton in thousands Current industry shipments below pre- and post-recession averages *Source: MSCI 8 J P M O R G A N G L O B A L H I G H Y I E L D C O N F E R E N C E 8
Slide 9: Demand Uncertainty
Demand Uncertainty* PMI index contracted in December *Source: Institute for Supply Management 9 J P M O R G A N G L O B A L H I G H Y I E L D C O N F E R E N C E 9
Slide 10: Persistent Deflation in 2015
Persistent Deflation in 2015 1.250 CRU HRC LME Nickel Midwest Aluminum 1.150 Price index to Jun. 2014 1.050 0.950 0.850 0.750 0.650 0.550 0.450 Deflationary trends have persisted for industrial metals in 2015, with average prices down 40% from 4Q, ‘14 to 4Q, ‘15 10 J P M O R G A N G L O B A L H I G
Slide 11: Transformation Driving Industry-Leading Performance: Operational Efficiency
Transformation Driving Industry-Leading Performance OPERATIONAL EFFICIENCY MARGIN EXPANSION PROFITABLE GROWTH Structural cost reduction Shift product mix Leveraging scale in highly Optimize customer mix fragmented market Expense control leadership Value-driven pricing and value- Multi-channel sales
Slide 12: Proven Operational Efficiency
Proven Operational Efficiency Expenses as a percent of sales(1) Working capital management Inventory days of supply (DOS) 17.7% 110 109 16.3% 16.4% 17.6% 95 107 11.9% 84 82 12.5% 82 74 10.5% 11.5% 2011 2012 2013 2014 2011 2012 2013 2014 Competitor averages are based on Ryerson’s analysis of financia
Slide 13: Transformation Driving Industry-Leading Performance: Margin Expansion
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 distribution Working capital
Slide 14: Higher Value Mix to Improve Margins
Higher Value Mix to Improve Margins PRODUCT MIX (percentage of sales) HIGHER MARGIN MIX 100% 4% 2% ~ 90% 16% 23% 80% 31% 42% • Optimize shape mix for 70% 15% margin, working capital 19% Service 60% 12 Multi- investment and cost to serve Center 50% Markets ~ • Increase higher margin 40% value-added p
Slide 15: Transformation Driving Industry-Leading Performance: Profitable Growth
Transformation Driving Industry-Leading Performance OPERATIONAL EFFICIENCY MARGIN EXPANSION PROFITABLE GROWTH Structural cost reduction Shift product mix Leveraging scale in highly Expense control leadership Optimize customer mix fragmented market Working capital leadership Value-driven pricing and
Slide 16: Leveraging Scale and Integrated Network
Leveraging Scale and Integrated Network BENEFITS • Better asset utilization: • Shared and optimized inventory • Shared processing equipment • Shared human resources 12 Multi- Ryerson Integrated • More responsive customer service Service Markets Network of 100+ and prospecting: Center Locations • Loc
Slide 17: Impact of Transformation: Performance Versus Peers
Impact of Transformation: Performance Versus Peers Gross margin, excluding LIFO Adjusted EBITDA margin, excluding LIFO 25.0% 22.4% 22.1% 21.6% 21.3% 7.0% 21.4% 5.8% 20.0% 6.0% 6.0% 5.0% 4.7% 4.8% 15.0% 17.6% 16.1% 16.9% 4.0% 5.0% 4.9% 3.9% 15.2% 4.7% 3.7% 15.0% 10.0% 3.0% 3.6% 2.0% 5.0% 1.0% 0.0% 0.
Slide 18: Financial Overview
Financial Overview ERICH SCHNAUFER CHIEF FINANCIAL OFFICER 18 J P M O R G A N G L O B A L H I G H Y I E L D C O N F E R E N C E 18
Slide 19: Ryerson Financial Priorities
Ryerson Financial Priorities Support corporate transformation and weather current 1 industry conditions 2 Reduce balance sheet leverage Invest in high return growth capital projects and attractive 3 “bolt-on” companies 19 J P M O R G A N G L O B A L H I G H Y I E L D C O N F E R E N C E 19
Slide 20: Strong Execution in a "Recessionary" Environment
Strong Execution in a “Recessionary” Environment • Generate strong countercyclical cash flow • Reduce debt • Maintain positive EBITDA • Announced additional action in November 2015, with plans to achieve annualized expense savings of $20 million by mid-2016 and realize more than $10 million from sal
Slide 21: Nine Months of 2015: Impacted by Deflationary Pressure
Nine Months of 2015: Impacted by Deflationary Pressure Net income attributable to Ryerson Holding Corp. ($M) Adjusted EBITDA, excluding LIFO 30 20 250 10 200 5 $20.02 0 150 $1.6 -5 100 -10 $177.4 -20 50 ($30.5)1 -30 0 $94.8 9 mos. 2014 9 mos. 2015 9 mos. 2014 9 mos. 2015 1 Includes IPO-related and d
Slide 22: Counter-Cyclical Cash Flow and Debt Reduction
Counter-Cyclical Cash Flow and Debt Reduction Cash Flow From Operations ($M) First Nine Months of 2015 200 • Repurchased 150 $60 million 100 principal amount of long-term notes $192.6 $162.9 50 • Reduced total debt 0 $165 million or 13% 9 mos. 2014 9 mos. 2015 -50 ($34.7) 22 J P M O R G A N G L O B
Slide 23: Conclusion
Conclusion EDDIE LEHNER PRESIDENT AND CHIEF EXECUTIVE OFFICER 23 J P M O R G A N G L O B A L H I G H Y I E L D C O N F E R E N C E 23
Slide 24: Conclusion
Conclusion 1 Transformation creating a stronger company 2 Industry-leading expense and working capital management 3 Successful shift to higher value mix and value-added processing 4 Building sustainable competitive advantages to fuel growth 5 Generating counter cyclical cash flow and deleveraging ba
Slide 25: Appendix
Appendix 25 J P M O R G A N G L O B A L H I G H Y I E L D C O N F E R E N C E 25
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation EBITDA represents net income before interest and other expense on debt, provision for income taxes, depreciation and amortization. Adjusted EBITDA gives further effect to, among other things, impairment charges on assets, reorganization expenses and the payment of management
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation Figures may not add due to rounding. ($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 $636 Gross Margin, excluding LIFO 15.2%
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($M) 9 mos. 2014 9 mos. 2015 Net Income attributable to Ryerson Holding $(30.5) $20.0 Interest and other expense on debt 82.8 74.5 Provision for income taxes 0.7 16.1 Depreciation and amortization expense 34.0 33.9 EBITDA $87.0 $144.5 Reorganization 3.1 5.0 Advisory Service F
Slide 29: Net Debt to Adjusted EBITDA, excl. LIFO Reconciliation
Net Debt to Adjusted EBITDA, excl. LIFO Reconciliation Figures may not add due to rounding. Trailing 12-mos. 2010 2011 2012 2013 2014 (as of 9/30/15) ($M) Cash and Cash Equivalents $63 $62 $71 $74 $60 $48 Marketable Securities 20 10 21 21 11 3 Total Debt 1,211 1,316 1,305 1,295 1,259 1,094 Net Debt
Slide 30: Capitalization
Capitalization Figures may not add due to rounding. 9/30/15 Trailing 12-mos. Adj. EBITDA, Book Value excl. LIFO Multiple ($M) (as of 9/30/15) Cash and Cash Equivalents $48 Marketable Securities 3 Availability under Revolver 218 and Foreign Debt Facilities Total Liquidity $269 ABL Revolver due 2017 $
Slide 31: N C E
31 J P M O R G A N G L O B A L H I G H Y I E L D C O N F E R E N C E 31
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