Steel Partners Holdings LP — Investor Presentation (May 2017)
33 slides from Steel Partners Holdings LP's investor presentation, May 25, 2017
Slide 1: Company Overview
Slide 2: Forward Looking Statements
Forward Looking Statements Use of Non-GAAP Financial Measures This document may contain certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that reflect Steel Partners Ho
Slide 3: A Diversified Global Holding Company
A Diversified Global Holding Company e Three broad segments: Diversified Industrial, Energy, Financial Services e Structured as partnership with 100%-owned businesses, controlled subsidiaries and active investments; effective use of limited partnership to maximize tax efficiencies e Steel Services L
Slide 4: Investment Thesis
Investment Thesis Proven Management Team Driving Value through Accretive Acquisiti Low Market Multiple with Deep Discount to Sum-of-the-Parts High ROIC, Rigid Capital Allocations with Modest Use of Leverage Strong Free Cash Flow and Balance Sheet Diversified Revenue Mix, Market-Leading Brands “Steel
Slide 5: Reporting Segments & Principal Operating Entities
Reporting Segments & Principal Operating Entities Revenue: $1.28 Steel Partners Netincans (Attributable to Common Unitholders}: $7M (1%) Holdings L.P. Adjusted EBITDA‘: $149M (13%) Cash & Investments”: $624M ae. Total Debt: $304M Accrued Pension Liabilities: $285M Corporate Expense: $24M (-2%) Finan
Slide 6: Steel at a Glance
Steel at a Glance Steel Partners founded in 1990 Current entity created in 2009; Listed on NYSE in April 2012 4,857 employees at 72 locations in 8 countries (December 2016) Inside ownership: 52% (March 2017) Market cap: $475 million (as of May 19%) Unit price: $418.25 (as of May 19%) Revenue: $1.2 b
Slide 7: Competitive Advantages, Unique Characteristics
Competitive Advantages, Unique Characteristios e Corporate structure provides distinct competitive advantages not easy to replicate e Diversification e Tax efficiencies e Permanent capital e Economies of scale through shared services, including access to expert corporate management resources e Manag
Slide 8: Deep Discount to Sum-of-the-Parts (SOTP)
Deep Discount to Sum-of-the-Parts (SOTP) WebBank (1) $ 2868 = ©$ 14.01 (MV) Quoted market price (1) Current market value determined using the trailing Handy & Harman wv 233.3 8.95 ‘twelve months net income for the period ended Energy Segment 2) 166.0 637 March 31, 2017 as reported in WebBank’s FFIEC
Slide 9: Business Simplification Plan
Business Simplification Plan Working Toward ONE Steel Implementing Board-approved, strategic business simplification plan aimed at streamlining corporate structure — Further enhance efficiencies — Lower costs — Facilitate communications and transparency — Reduce management layers and number of board
Slide 10: Strategic Growth Model
Strategic Growth Model Incentivize, Focus and Empower Top Talent Increase Value by Utilizing the Steel Business System e Acquire and operate entire businesses e Purchase with built-in margins of safety Strong brands and solutions in attractive end markets e Control costs and use leverage prudently,
Slide 11: The Steel Way
The Steel Way Using the Stee/ Business System, a set of industry leading best practices, on a continual basis, we: Stee! Focus on customer experience by eee increasing efficiencies and eliminating ——— waste through lean deployment N _ie i say fuanio0 Aaowuonsy voip Install time-tested blocking and t
Slide 12: Good Businesses
Good Businesses Handy&Harman... @pi, Diversified global industrial company Leading manufacturer and distributor Strong organic growth and strong of foils and laminates brands (OMG) » Strong global brand in fragmented Aglobal leader in brazing products; market strong brand (Lucas-Milhaupt) API produc
Slide 13: Good Businesses
Good Businesses Financial Services Segment Energy Segment W] WebBank STEELS ENERGY Customized consumer and commercial Focused on well servicing and production financing solutions nationwide services for oil and gas industries e One of the highest ROE financial e We believe one of few cash-flow posit
Slide 14: Good Management and Systems
Good Management and Systems Handy&Harman... e CEO and CFO former Danaher senior executives with strong history of results; former CEO and current Steel Vice Chairman is former Danaher, Black & Decker and GE senior executive e Steel Business System, similar to Toyota Production System, Danaher Busine
Slide 15: Good Management and Systems
Good Management and Systems Financial Services Segment Energy Segment W| WebBank e Implementing the Steel Business System for a service environment has led to significant operational improvements e Kaizen events with partners have led to improved customer experience e The Bank has been able to lever
Slide 16: Good Prospects
Good Prospects Handy&Harman... e Growing quickly through product innovation in wood joining and framing where current sales are modest but growth opportunity is significant (OMG) Experiencing diversified growth and tailwinds in oil & gas, LED and motion markets (Electrical Products) e Implementing g
Slide 17: Good Prospects
Good Prospects Financial Services Segment Energy Segment W} WebBank e Strong capital and earnings to support growth e Well-positioned in the digital lending segment of the massive consumer credit market e Significant opportunity to increase earning assets through increased balance sheet participatio
Slide 18: 2016 Consolidated Financial Performance
2016 Consolidated Financial Performance $1,500 13.7% 13.8% 15.0% $1,200 12.0% $900 9.0% $600 6.0% $300 3.0% $0 0.0% 2012 2013 2014 2015 2016 mmm Revenue “NI. Margin —Adj. EBITDA Margin
Slide 19: Consolidated Financial Performance
Consolidated Financial Performance Total Assets $ 1,974.4 §$ 1,967.1 $ 1,684.8 $ 1,490.5 Cash and Investments * $ 585.7 $ 623.8 $ 433.9 $ 639.4 U.S. Federal NOLs 2 $ 512.0 $ 512.0 $ 580.5 §$ 224.2 Net Debt * $ 265.1 $ 231.0 $ 140.0 $ 231.0 Pension Liabilities $ 281.7 $ 2849 $ 2765 $ 208.4 Partners’
Slide 20: 2016 Financial Performance
2016 Financial Performance $300 $200 $100 2012 2013-2014. 2015-2016 2.0K 1.5K 1.0K 05x 0.0K mmm Net Debt Net Debt-to-Adj. EBITDA Leverage $200 $150 $100 $50 $0 (816) ($39) 2012 20138 «2014-2015 2016 mmm Cash Flow from Operating Activities mms FCF ——CapEx (As % of Total SPLP Revenue) 5.0% 4.0% 3.0% 2
Slide 21: Q1 2017 & 2016 Financial Performance
Q1 2017 & 2016 Financial Performance Suen Ge r Diversified industrial $ 280,214 $ 206,600 Energy 27,316 19,999 Financial services 15,789 20,194 Total $323,319 $ 246,793 Diversified industrial $ 7,946 $ 12,409 Energy (7,777) (3,024) Financial services 7,623 12,868 Corporate and other ‘4,044 16,174 To
Slide 22: Cash Flows
Cash Flows Annual Results Quarterly Results $ in millions $ in millions 200.0 4 . 3 ee [23 | 2 100.0 3 Oo fas uw iL (30.0) R i n S| eer g§ °° “mom o (23.3) @ (70.0) g 2 63 | = (COON ; ue Q12017 12016 2016 2015 ‘Cash Flow from Operating Activities* = CapEx Cash Flow from Operating Activities” = CapEx
Slide 23: 2017 Key Priorities
2017 Key Priorities e Continue to apply strategic business model — M&A: Identify accretive “bolt-on” acquisitions and acquire new businesses and platforms for long-term growth — SteelGrow: Focus and empower top talent — Steel Business System: A set of industry leading best practices to guide opportu
Slide 24: Appendix
Slide 25: Senior Management Team
Senior Management Team Warren Lichtenstein, Executive Chairman Jack Howard, President + CEO and a founder of Steel Partners LLC + President of the General Partner of Steel + Director of GenCorp Inc. since March Partners Holdings L.P. since 2009; Secretary 2008); Chairman of Handy & Harman Ltd since
Slide 26: Senior Management Team
Senior Management Team Bill Fejes, CEO- Handy & Harman John McNamara, Executive Chairman—WebBank + President and CEO of Handy & Harman + Executive chairman since 2012 Group, Ltd. since June 2016 + Chairman of the board since 2009; board + Previously president and CEO of SLI member at Handy & Harman
Slide 27: Senior Management Team
Senior Management Team Len McGill, SVP and General Counsel Pete Marciniak, VP—Human Resources * Senior vice president, general counsel and + Vice President, Human Resources at Steel secretary of Steel Partners Holdings G.P. Inc. since Partners since July 2000 January 2012 + Served as director of Han
Slide 28: Accounting Summary
Accounting Summary - Marketablesecurities: $54M reported at fair value, with non-cash changes in value reflectedin equity section of balance sheet**; gains/losses on sales in “Other income, net” in P&L o Excluded from Adjusted EBITDA o Classified in Energy segment — Long-term investments: $117M repo
Slide 29: Accounting Summary
Accounting Summary * General Partner Management Fee and Incentive Unit Expense — Management fee equal to 1.5% of Partners’ Capital = Reduction of Adjusted EBITDA (cash expense) = — Includedin the “Corporate and Other” segment - Incentive Unit Expense = Based on attainment of certain performance goal
Slide 30: Sum-of-the-Parts Value per Unit
(in millions, except value per unit) (SPLP units outstanding 4/30/2017: 26.4 million) ‘WebBank Handy & Harman Energy Segment API Aerojet Rocketdyne ModusLink Global Solutions Other Investments Preferred Unit Liability Corporate Cash 4/30/17 Corporate Debt 4/30/17 Net Debt Total Value SPLP Unit Closi
Slide 31: Financial Performance
Financial Performance ‘SegmentIncome (GAAP) Diversified Industrial $19,175 $42,281 $65,543 $51,900 $27,437 Energy (11,459) (5,112) (28.254) 12.641 25,034 Financial Services 42518 46.314 24,281 17.668 12918 Corporate and Other (@artt) (1.881) (6,824) 7.388) (6.580) Net income (loss) from continuing o
Slide 32: Financial Performance
Financial Performance ‘SegmentIncome (GAAP) Diversified Industrial $7,946 $12,408 Eneray Gr) (024), Financial Services 7623 12.868 Corporate and Other (044) (16,174) Incomebeforeincome taxes $3,748 $6,079 ‘SegmentAdjusted EBITDA: Diversified Industrial 927,198 922,137 Energy (1,826) (2648) Financial
Slide 33: Financial Performance
Financial Performance Free Cash Flow Reconciliation 2012-2017 ESSE Eo ‘Operating Cash Flow Diasiied Insta S (18510) $ 230 § 852 § S758 $ Den s 218 § 3.9 Eregy (4387) (47) (1218) 254 2918 2681 220 Francial Services (2509) (70e24) 11792 (966) (1403) 5190 (10.850) (Corporate and Other (5723) 673) (6975
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