Russel Metals Inc. · TSX:RUS
Russel Metals — Q1 2025 Earnings Presentation
21 slides from Russel Metals's earnings presentation, May 7, 2025
Slide 1: Information Package for Investor Conference Call May 7, 2025
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Slide 2: Index
INDEX 1. Cautionary Statement on Forward-Looking Information 3 2. Notes (Non-GAAP Measures) 4 3. Q1 2025 in Review 5-18 4. Financial Highlights 19 5. Other Financial Information 20-21 Russel Metals 2
Slide 3: Cautionary Statement on Forward-Looking Information
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION Certain statements contained in this presentation constitute forward-looking statements or information within the meaning of applicable securities laws, including statements as to our future capital expenditures, our outlook, the availability of fu
Slide 4: Notes (Non-GAAP Measures)
NOTES (NON-GAAP MEASURES) In this Information Package we use certain financial measures that do not comply with IFRS Accounting Standards (IFRS or GAAP) or have standardized meanings, and thus, may not be comparable to similar measures presented by other issuers, for example EBIT and EBITDA and Othe
Slide 5: Q1 2025 in Review
Q1 2025 IN REVIEW GENERATED STRONG RESULTS Record quarterly shipments EBITDA of $86 mm Cash from Operating Activities before non-cash working capital of $82 mm INCREASED CAPITAL GREW U.S., SPECIALTY & INVESTMENTS VALUE-ADD % of TOTAL Record quarterly capex of $29 mm -- GREW CAPITAL DEPLOYED GENERATE
Slide 6: Market Conditions
MARKET CONDITIONS Carbon Pricing Carbon Steel: Inventory (Canada) $2,500 Source: Metals Service Center Institute (MSG) #1 Heavy Melt (Chicago) HR Sheet HR Plate - INDUSTRY INVENT ORY $2,000 1,400,000 6.00 - INV Months on Hand 1,200,000 5.00 $1,500 US $ / ton 1, 000,000 4.00 800,000 $1,000 3.00 600,0
Slide 7: Trend of Recent Results
TREND OF RECENT RESULTS • Revenues were up 13% vs. Q4; full quarter from Tampa Bay, positive steel prices and strong volumes • Gross margin increased by 113 bps; EBITDA margin increased by 140 bps • Recovery from Q4 trough for all key metrics • Capital structure remains strong Revenue (millions) Adj
Slide 8: Summary: Financial Results
SUMMARY: FINANCIAL RESULTS $ mm, unless otherwise stated Q1 2024 Q4 2024 Q1 2025 Q1 2025 Observations: Income Statement: Revenues $1,061 $1,039 $1,174 • Revenues were up 13% vs. Q4’24 and up 11% vs. Q1’24 due to the seasonal recovery in volumes, improved steel prices part way Gross Margin ($ mm/%) $
Slide 9: Variance Analysis: EBITDA Q4 2024 vs. Q1 2025
VARIANCE ANALYSIS: EBITDA Q4 2024 VS. Q1 2025 $120 $20 $100 $6 $25 $86 ($20) ($3) $80 ($3) C$ million $61 $60 Service Center Segment +$25 $40 • Mark-to-market on stock-based comp $3 recovery in Q1 vs. $3 mm expense in Q4 • Thunder Bay down due to seasonality $20 $0 Q4 2024 Volumes Gross Margin Op Co
Slide 10: Segment Breakdown: Operating Results
SEGMENT BREAKDOWN: OPERATING RESULTS Revenue (C$ millions) Gross Margins % Earnings from Operations (C$ millions) $1,000 $800 $600 ___________ ............_ ~ 30% 25% $80 $70 $60 $50 20% $40 $400 $30 $200 15% $20 $10 __......_____________ ...........__"""' ~ $0 10% $0 MSC Energy Distributors MSC Ene
Slide 11: Service Center Results
SERVICE CENTER RESULTS • Q1 2024 tons were a quarterly record - up 14% vs. Q4; up Tons Shipped (000’s) 11% on a same store basis. 450 • Price realizations per ton up and CGS per ton down = 400 increase in gross margin per ton to $430 (up $62/ton vs. 350 Q4). 300 250 Revenue and CGS/Ton 200 Q4 Q1 Q2
Slide 12: Inventory Turns
INVENTORY TURNS • Total inventory turns in Q1 improved vs. Q4 and followed typical seasonal patterns. Inventory Turns 5.0 4.7 4.5 4.0 3.8 4.0 4.0 3.9 3.9 4.0 3.9 3.9 3.5 3.4 3.8 3.7 3.8 3.8 3.7 3.6 3.5 3.0 3.0 2.9 2.5 2.2 2.5 2.0 1.5 1.0 0.5 0.0 I March June Sept. Dec. March June Sept. Dec. March Ju
Slide 13: Working Capital Management: Inventory
WORKING CAPITAL MANAGEMENT: INVENTORY • Total inventory was up vs. Q4 reflecting higher volumes due to the pickup in market activity. Inventory Trends $1,200 $1,050 $1,025 $986 $994 $1,000 $957 $941 $948 $907 $924 $920 $894 $190 $211 $883 $122 $862 $843 $861 $228 $166 $123 $125 $840 $104 $96 $100 $7
Slide 14: Return on Capital
RETURN ON CAPITAL Invested Capital at End of Year ($ millions) Return on Invested Capital – Trailing 3 Years $2,000 50% $1,800 $1,717 $1,626 40% $1,600 36% $1,492 $1,436 $1,410 31% $1,400 $1,308 30% $1,200 $1,132 24% 23% $1,000 20% 18% 14% $800 10% $600 $400 2019 2020 2021 2022 2023 2024 March 0% 31
Slide 15: Liquidity and Capital Structure Summary
LIQUIDITY AND CAPITAL STRUCTURE SUMMARY • Significant balance sheet flexibility. • Completed inaugural investment grade term debt financing and extended/amended credit facility. • Grew book value per share. 12/31/24 3/31/25 (C$ mm) (C$ mm) Cash $43 $230 Bank Lines ($450 mm) - Maturity April 2029 (1)
Slide 16: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Increase capital deployment with a target of >15% Flexible approach to returning capital to return over a cycle shareholders LTM NCIB Activity = $141 Share Buy mm Backs Facility • Q1: 623k acquired for $25 mm • Since NCIB established in Modernizations Aug/22: 7.1 mm acq
Slide 17: Capex Program: Summary
CAPEX PROGRAM: SUMMARY • The opportunities for value-added projects and facility modernizations are ongoing. New 30k Lasers Being Installed Russel Historical Capex By Quarter - $ mm $35 $30 $29 $28 $24 $25 $24 $21 21 $20 $15 $15$15 $15 $14 $14 $12 $11 $10$11 $11 $10 $10 $10 $10 $8 $9 $9 $9 $9 $9 $8
Slide 18: Dividend and Share Buy Back Summary
DIVIDEND AND SHARE BUY BACK SUMMARY Historical (and Projected Q2'25) Quarterly Dividends Return of Capital to Shareholders (millions) $0.43 $80 $0.42 $69 $71 $0.40 $49 $45 $56 $0.38 $40 $44 $41 $46 $39 $38 $35 $20 $25 $16 $17 $15 $14 $24 $12 $24 $0.35 $24 $24 $24 $24 $25 $24 $24 $24 $25 $24 $24 $24
Slide 19: Financial Highlights
FINANCIAL HIGHLIGHTS Three Months Ended Years Ended December 31 March 31 2025 2024 2024 2023 2022 2021 OPERATING RESULTS (millions) Revenues $1,173.6 $1,061.1 $4,261.2 $4,505.1 $5,070.6 $4,208.5 EBITDA (1) 85.7 84.0 298.5 425.6 578.9 664.0 Adjusted EBITDA (1) 85.7 84.0 298.5 425.6 578.9 666.6 Adjust
Slide 20: Consolidated Statements of Earnings on an Adjusted Basis
CONSOLIDATED STATEMENTS OF EARNINGS ON AN ADJUSTED BASIS Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 ($ millions) 2025 2024 2024 2024 2024 2023 2023 2023 2023 2022 2022 2022 2022 2021 2021 2021 2021 METALS SERVICE CENTERS Tons Shipped ('000's) 409.0 359.0 340.0 328.4 322.4 306.7 310.1 332.0 3
Slide 21: Consolidated Statements of Earnings on an Adjusted Basis
CONSOLIDATED STATEMENTS OF EARNINGS ON AN ADJUSTED BASIS Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 Q1 ($ millions) 2025 2024 2024 2024 2024 2023 2023 2023 2023 2022 2022 2022 2022 2021 2021 2021 2021 Quarter ended: Revenue 1,173.6 1,039.2 1,089.4 1,071.5 1,061.1 1,019.3 1,109.5 1,189.5 1,186.7