Ryerson Holding Corporation · NYSE:RYZ
Ryerson — Global Industrials & Materials Summit 2017
33 slides from Ryerson's conference presentation, June 2017
Slide 1: Global Industrials & Materials Summit
Global Industrials & Materials Summit June 2017 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 (“Ryerson”) and no investment decision should be made based upon the information provided herein. Ryerson strongly urges yo
Slide 3: Business Overview
Business Overview Mike Burbach │ President North / West Region 3
Slide 4: Ryerson's Value Proposition
Ryerson’s Value Proposition Leading North American metals processor and distributor serving a diversified customer portfolio with a broad range of tailored solutions, services, and products Fully interconnected network with local presence differentiates our customer service with superior speed, scal
Slide 5: Value-Added Metals Processor & Distributor with Scale & Broad Strategic Footprint
Value-Added Metals Processor & Distributor with Scale & Broad Strategic Footprint • Iconic industrial metals company founded in 1842 • Approximately 100 interconnected facilities in North America & China • 2016 sales of $2.9 billion & shipments of 1.9 million tons • Distributes 65,000 products to 40
Slide 6: Ryerson: Differentiated Through Interconnectivity
Ryerson: Differentiated Through Interconnectivity One Ryerson Enhanced intelligent systems for connecting people, supply chains, inventory, fixed assets, and logistics Texas Multi-Market Example Benefits Better asset utilization • Shared and optimized inventory • Shared processing equipment More res
Slide 7: Diverse End-Market Exposure
Diverse End-Market Exposure All Other, 7% Oil & Gas, 5% Commercial Ground Transportation, 16% Food Processing & Ag., 9% Metal Fabrication & Construction Machine Shops, 18% Equipment, 9% HVAC, 7% Consumer Durable, Industrial Machinery & 11% Equipment, 18% Percentages are based on 2016 sales as disclo
Slide 8: Our Culture: Contributing to our customers' success
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-channe
Slide 9: Ryerson's Important Growth Drivers
Ryerson’s Important Growth Drivers 1 2 3 4 Renewed Grow stainless products Scale prospecting & Expand end market emphasis market share call centers expertise on coil / sheet 5 6 7 8 Grow long products Ryerson virtual Ryerson online store Increase fabrication market share warehouse 9
Slide 10: Macro Outlook
Macro Outlook Volatile but Improved Commodity Potential Inflection in U.S. Prices Since Dec. 31, 2015 Industrial Production in 2017 CRU HRC 2.2 2016-2017 2.2 LME Nickel Prices Indexed to Dec. 31, 2015 performance 2.0 LME Aluminum + Midwest Premium 1.5 0.8 1.8 0.4 +76% 0.0 1.6 -0.4 1.4 -0.8 -0.8 +27%
Slide 11: Under-Investment Since 2009 Leaves Potential for Industrial Recovery
Under-Investment Since 2009 Leaves Potential for Industrial Recovery 5.0 U.S. Carbon and Stainless Average Monthly Shipments 4.5 Average Monthly Tons in Millions Tons Per Month Jan. '93 - Oct. '08 = 4.2M/mo. 4.0 Nov. '08 - Present = 3.2M/mo. 3.5 3.0 2.5 2.0 Source: Average annual shipments calculate
Slide 12: Driving Profitable Growth: Growing Market Share and Margins
Driving Profitable Growth: Growing Market Share and Margins Tonnage Market Share & Gross Margin 4.2% Highly fragmented 3.8% 3.8% industry with ~7,000 20.0% 17.9% 19.7% service centers, 17.6% ~1 million customers*, 16.4% 16.0% and ~30 million 2014 2015 2016 transactions* every year in the U.S. Gross
Slide 13: Delivering Value to Customers: Understanding the Elements
Delivering Value to Customers: Understanding the “Elements” Is Vital to Profitable Growth Metal Shape Processing As Is Burn/Cut Fabrication Carbon 50% Stainless 24% Aluminum 24% Flat Long Plate Percent of 2016 Sales 13
Slide 14: Ryerson's DNA – The How Really Matters
Ryerson’s DNA – The “How” Really Matters ANALYTICS SPEED CULTURE VALUE-ADD SCALE 14
Slide 15: Optimizing Mix to Drive Margin Expansion: Expand Value-Added Processing
Optimizing Mix to Drive Margin Expansion: Expand Value-Added Processing 2010 SALES MIX 2016 SALES MIX Cut Long & Cut Long & Plate 3.0% Plate 4.8% Fabrication 6.7% Fabrication 9.2% As-Is Long $M, Tons 000's 2010 2016 Change & Plate As-Is Long 19.5% Cut to Tons Sold 2,252 1,903 (349) & Plate Cut to Le
Slide 16: Financial Overview
Financial Overview Erich Schnaufer │ Chief Financial Officer 16
Slide 17: First Quarter 2017 Financial Highlights
First Quarter 2017 Financial Highlights • Increased Adjusted EBITDA, $56.0 excluding LIFO by 46% to $54.3 $54.3 $48.8 million compared to Q1 2016 $37.2 • Increased gross margin, excluding $36.0 LIFO by 70 basis points to 19.6% compared to Q1 2016 • Improved inventory days of supply $13.5 $5.6 $14.8
Slide 18: Ryerson Financial Priorities
Ryerson Financial Priorities Deleveraging Propel growth with disciplined investment in high return capex & bolt-on acquisitions Maximize free cash flow Maintain industry-leading working capital and expense management 18
Slide 19: Deleveraging Increases Value for All Investors
Deleveraging Increases Value for All Investors Total Debt ($M) Annual Fixed Cash $1,242 Commitments ($M) Total debt Cash Interest $ 80M reduced by Pension and OPEB 30M $278M Maintenance Capital $1,024 15M Expenditures $964 Foreign and State Tax 5M Other 5M Annual Fixed Cash $ 135M Dec. 31, 2014 Dec.
Slide 20: Investing to Drive Profitable Growth
Investing to Drive Profitable Growth • More than $100 million in growth capital invested since 2010 to expand value-added capabilities • Enhanced intelligent systems to connect people, supply chains, inventory, fixed assets, and logistics • Eight bolt-on acquisitions since 2010 20
Slide 21: Liquidity to Fund Operations and Investments
Liquidity to Fund Operations and Investments Liquidity ($M) $301 $302 Total liquidity was $302 50 31 million compared to $301 21 26 million in the fourth quarter of 2016, higher sequentially $162.9 250 even with the recent 225 acquisitions of Guy Metals and Laserflex Dec. 31, 2016 March 31, 2017 Nor
Slide 22: Proven Operational Efficiency and Industry Leadership
Proven Operational Efficiency and Industry Leadership: Consistent Execution of Fundamentals Days of Supply Expense Percentage of Sales Excluding D&A and One-Time Items 18.9% 97 95 92 17.0% 90 16.2% 15.6% 84 13.8% 82 80 12.9% 12.5% 76 11.9% 2013 2014 2015 2016 2013 2014 2015 2016 Ryerson Competitor A
Slide 23: Conclusion
Conclusion Mike Burbach │ President North / West Region 23
Slide 24: Our Commitment, Our Culture
Our Commitment, Our Culture Say Yes, Figure it Out 24
Slide 25: Appendix
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Slide 26: Metal Service Center Supply Chain
Metal Service Center Supply Chain SUPPLIERS RYERSON CUSTOMERS • Manufacture metals • 65,000+ aluminum, carbon, and • Purchase smaller quantities stainless products • Produce & ship large volumes • Require a variety of products • Processes 75% of products sold and services • Have long lead times with
Slide 27: 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 28 Erich Schnaufer** Chief Financial Officer 2 12 12 Executive Vice President, General Mark Silver 4 4 4 Counsel & Secretary Kevin Richardson Preside
Slide 28: Quarterly Financial Highlights
Quarterly Financial Highlights Tons Shipped (000’s) Average Selling Price Per Ton 505 $1,639 497 478 480 $1,531 $1,550 $1,470 $1,465 440 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Gross Margin Gross Margin, Excluding LIFO 22.0% 21.0% 21.1% 19.8% 19.7% 20.0% 18.9% 18.8% 19.
Slide 29: Industry Math: 2016 MSCI Shipped Tonnage Mix
Industry Math: 2016 MSCI Shipped Tonnage Mix Industry Tons Mix Total Shapes 100% Flat 69% Carbon Flat Rolled 64% Stainless Sheet & Coil 3% Aluminum Sheet & Coil 2% Long 20% Key Long 10% All Other Long 10% Plate 11% Carbon Plate 9% Stainless Plate 1% Aluminum Plate 1% Key Long: aluminum and stainless
Slide 30: Non-GAAP Reconciliation
Non-GAAP Reconciliation EBITDA represents net income before interest and other expense on debt, provision for income taxes, depreciation, and amortization. Adjusted EBITDA gives further effect to, among other things, impairment charges on assets, reorganization expenses, and foreign currency transac
Slide 31: Non-GAAP Reconciliation: Quarterly
Non-GAAP Reconciliation: Quarterly ($M) Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q1 '17 Net Sales 702.6 739.8 735.1 682.2 814.5 Gross Profit 147.6 163.0 145.4 114.6 160.6 Gross Margin 21.0% 22.0% 19.8% 16.8% 19.7% LIFO Expense (Income) (14.8) (7.0) 1.4 13.8 (0.7) Gross Profit, excluding LIFO 132.8 156.0 146.8 12
Slide 32: Non-GAAP Reconciliation: Annual
Non-GAAP Reconciliation: Annual ($M) 2013 2014 2015 2016 Net Sales 3,460.3 3,622.2 3,167.2 2,859.7 Gross Profit 616.6 593.8 567.7 570.6 Gross Margin 17.8% 16.4% 17.9% 20.0% LIFO Expense (Income), net (33.0) 42.3 (59.5) (6.6) Gross Profit, excluding LIFO 583.6 636.1 508.2 564.0 Gross Margin, excludin
Slide 33: Ryerson
RYERSON
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