Steel Partners Holdings LP — Investor Presentation (March 2018)
51 slides from Steel Partners Holdings LP's investor presentation, Mar 15, 2018
Slide 1: Steel Partners Holdings L.P.
STEEL PARTNERS HOLDINGS LP.
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: Agenda
Agenda Business Overview - Waren Lichtenstein, Executive Chairman, Stee! Partners The Steel Way - Bill Fejes, President, Stee! Services Ltd. Business SegmentReviews Diversified Industrial— Bill Fejes Energy- Stewart Peterson, CEO, Steel Energy Financial Services- Kelly Bamett, President, WebBank Cor
Slide 4: Steel Partners Holdings Business Overview
Steel Partners Holdings Business Overview Warren Lichtenstein Executive Chairman STEEL PARTNERS
Slide 5: Steel at a Glance
Steel at a Glance Global diversified holding company that engages in multiple businesses through consolidated subsidiaries, associated companies, and other interests Common Units—SPLP: NYSE + Common Unit price: $20.00 (as o * Total Common Units outstandin: Preferred Units —SPLPPRA: NYSE + Preferred
Slide 6: Direct investments
STEEL PARTNERS Revenue: $1.16B Directinvestments Company ‘Ownership %! Aerojet Rocketdyne 56% Aviat Networks 12.7% i Babcock & Wilcox 18.4% School Specialty 9.8% / Steel Connect 46.0% 4.As of 3972018 STEEL PARTNERS
Slide 7: Business Simplification
Sa Business Simplificatio oa ; business | plan ing Strategic simplifi streamlin cor a structure ~~ FSC CC— a 2015 — 2017 Purchased non-Steel owned shares a», Further enhanced efficiencies Lowered costs Facilitated communications and transparency Reduced management layers and number of boards API Gro
Slide 8: Competitive Advantages; Unique Characteristics
Competitive Advantages; Unique Characteristics e Corporate structure provides distinct competitive advantages not easy to replicate e Operates as one company from cultural and policy perspectives e Diversification e Tax efficiencies e Permanent capital e Economies of scale through shared services e
Slide 9: Strategy & Philosophy
Strategy & Philosophy Investing on the Basis of Value, Not Popularity e Investin good companies with simple business models at prices that have built-in margins of safety e Avoid complex businesses or investments that cannot be easily explained or understood e Create continuous improvement culture a
Slide 10: Deep Discount to Sum-of-the-Parts (SOTP)
Deep Discount to Sum-of-the-Parts (SOTP) As of December 31, 2017 (inmilions, except value per unit) Pre-Tax, Pre-Parent Company Expense Sum of the Parts Notes Value Diversified In ‘Segment (1) $964.9 WebBank (2) 242.6 Steel Energy @ 1923 Cash (4) 1149 Investments. «) 294.4 Total Debt (414. n| Prefer
Slide 11: Senior Management Team
Senior Management Team Warren Lichtenstein Executive Chairman Len McGill Senior Vice President and General Counsel Jack Howard Paul Burgon President ‘Senior Vice President — Corporate Development William Fejes Pete Marciniak President, Stee! Services Ltd. Vice President Human Resources Doug Woodwort
Slide 12: The Steel Way
The Steel Way Bill Fejes President, Steel Services Ltd STEEL PARTNERS
Slide 13: The Steel Way
The Steel Way Sales fans = | [Aner —al Pasa [7505] | = | | Roewasnay —a| 2 s H 4 Profitable FFF, 5 STEEL PARTNERS
Slide 14: Motor Assembly
Motor Assembly Tools e Standard Work e One Piece Flow Results 4 Productivity improved 50% Product floor space reduced 27% Reduced production from 3 shifts to 2 shifts Tools e Value Stream Mapping (VSM) e Cell Design e One Piece flow Results e Quality — 32% yield improvement (12 months) e Productivit
Slide 15: Steel Business System
a as Steel Business System | Purity Tools Nail head Lead e Strategy Creation (New Opportunity) e VOC e Rapid Product Innovation Results for the Customer (voc) e Cost -— eliminate separate preform component Current Business e Productivity — eliminate assembly step and increase throughput Results for
Slide 16: Diversified Industrial Segment
Diversified Industrial Segment Bill Fejes President, Steel Services Ltd STEEL PARTNERS
Slide 17: Nine independent operating companies
e Nine independent operating companies e 3,900+ employees; 30 mfg. locations; 7 countries e Key Product Categories United — Building Materials Technologies — Laminates and Foils — Joining Materials — Electro-mechanical Products e Key Market Segments — Commercial and Residential Construction — Consum
Slide 18: Build Management
Build Management Team and Ability to Promote from Within Drive to Zero Safety Incidents 8 e Apply Strategic Creation Process to promote innovation and create new products, processes, and business models e Apply Steel Business System enterprise wide to sustain solid, continuously improving operationa
Slide 19: Diversified Industrial Segment: Largest Operating Companies
Diversified Industrial Segment Largest Operating Companies G@omc North America’s leading supplier of commercial roof fastening products + Leading global producer of metal joining products Providing innovative decking and wood framing EUSISENIESS fastener solutions to PRO contractors * Serves HVAC, e
Slide 20: Diversified Industrial
Diversified Industrial nue, ‘ 1 Flow fron \djusted Free Cas! 18% Revenue CAGR $1,600 N1.5% 11.6% $1200 $800 ($16) $400 = Cash Fiow trom Operating Activities ey =—rcr 2013 2014 2015, 2016 2017 ——Capex (As % of Segment Revenue) mmaRevenue —S1. Margin —Adj. EBITDA Margin Pa "STEEL PARTNERS
Slide 21: Energy Segment
Energy Segment Stewart Peterson CEO, Steel Energy STEEL PARTNERS
Slide 22: Energy services company
Energy services company p to established customers in s and production services states e 4 independent operating companies e 750+ employees; 7 locations e Well servicing and production services e Key Industries - Oil — Gas e Key Locations — Bakken Basin (ND, MT) — Texas — New Mexico Customers QEP...
Slide 23: Steel Energy Strategy
= Steel Energy St e Leverage best in class safety record to capture market share by reducing well down-time >. Improve supply costs through centralized oversight of supply chain and maintenance programs for all subsidiaries Strategic Continue to opportunistically acquire businesses that Peat provide
Slide 24: Steel Energy Services Operating Companies
Steel Energy Services Operating Companies WILLISTON, ND e Provider of premium well services to oil e Operates work over and completion and gas exploration and production rigs, reverse units, & air/foam packages compare Operating in the Permian Basin, New Operating in the Williston Basin and Mexico,
Slide 25: Steel Energy Services
Steel Energy Services 2013 2014-2015 2016-2017 ‘= Cash Flow from Operating Actvites* mm FCF m= Revenue —S|. Margin —Adj. EBITDA Margin —Caplx (Asa % of Revenue) 2013-2014 «2015-2016 2017 STEEL PARTNERS
Slide 26: Financial Services Segment
Financial Services Segment Kelly Barnett President, WebBank STEEL PARTNERS
Slide 27: Financial Services Segment: WebBank
Financial Services” seqnen= aj FDIC-insured, st consumer and comme! ar e Core operations dedicated to extending credit products through Strategic Partnerships Customers with marketplace lenders, retailers, OEMs, and fintech companies AVANT e Extends credit principally via online and digital channels
Slide 28: Financial Services Strategy
———= : Financial Services seqnen= Revenue Diversification Support Product Innovation 28 © Assist partners with funding on and offbalance sheet (grow HTM and asset management) Apply Steel Business System to drive value-added services and support additional products to help spread partners’ cost of ac
Slide 29: Financial Services Segment
a Financial Services segment 2017 Revenue Mix Total Assets* HTM >_> Strategic Partners (HFS) 29 $172 $227 $628 $465 $328 2014 2015 2016-2017 STEEL PARTNERS
Slide 30: Financial Services Adjusted Earnings
justed E Net Income & Return on Assets* $120 30% CAGR 80.0% 66.5% 67.0% si09 | 63.7% 627% 06.2% 68.7% AES $80 ~ $60 | 40.0% $40 } 20.0% $20 $0 + 0.0% 2013 2014 | 2015 «20162017 mmm Revenue —S.. Margin —Adj. EBITDA Margin 30 $60 9% 120% 10.0% $40 8.0% $30 6.0% STEEL PARTNERS
Slide 31: Capital and leverage ratio
$200 $150 ‘$100 $60 2015 25% 20% 15% 10% 5% 0% + 22% 19% 2013 «2014S 2015 = 2016.) 2017 — Capital Leverage Ratio STEEL PARTNERS
Slide 32: Corporate Development
Corporate Development Paul Burgon Senior Vice President, Corporate Development STEEL PARTNERS
Slide 33: Actively manage acquisition funnel
3 Actively manage acquisition funnel Opco senior staff and corporate M&A work together to cultivate deals Continue to see good opportunities Tracking more than 170 potential targets Multiple potential transactions Two recent acquisitions - Dunmore and Basin Well both non-auction transactions Acquisi
Slide 34: Dunmore Corporation
Dunmore Corporation (February 2018) * 2017 annual revenue of $70 million ng * Collaborative client partnerships (Collaborative * Global footprint * Advanced technology toolbox * Flexible, efficient production * Rapid speed to market Footprint * Trusted quality & safety Acquired certain U.S. assets a
Slide 35: Leadership Development
Leadership Development Pete Marciniak Vice President, Human Resources STEEL PARTNERS
Slide 36: Human Capital - Recruit, Retain, Reward
Human Capital = Recruit, Retain, Reward Talent Director to : focus Increas sharing best SteelGrow ‘college practices efforts participa 5X previous Solution to develop, empower, drive accountability, reward performance w wall tandard STEELGROW Steel on- boarding experience Intelligence i a recruitmen
Slide 37: Wellness - Partners in Health
Wellness — Partners in Health: e Community Involvement/Giving Back — Opioid Awareness Day 2018 — Eventsiraces for cures; blood drives ~ Stee! Partners Foundation ¢ At Work and at Home — 1:1 nutritionist — Healthy options at work — Healthy meal delivery Classes and Products — Patches, gum, e-cigs - i
Slide 38: Consolidated Financial Performance
Consolidated Financial Performance Doug Woodworth CFO STEEL PARTNERS
Slide 39: Consolidated revenue and margins
39 $1,500 $1,200 $900 | $600 $300 $0 17% Revenue CAGR 13.7% 13.8% 14.1% $1,164 mmm Revenue 4 0.9% NL. Margin -3.0% —Adj. EBITDA Margin STEEL PARTNERS
Slide 40: Consolidated Financial Performance
Consolidated Financial Performance Balance Sheet (Select Items) (o mii Partners’ Capital per Unit) Veanended [27] ane | _2016 Total Assets $2,164.0 $1,967.1 $1,684.8 Cash and Investments $713.2 $623.8 $433.9 U.S. Federal NOLs $482.7 $512.0 $580.5 Net Debt $299.8 $231.0 $140.0 Pension Liabilities $26
Slide 41: Financial Performance
Financial Performance (S16} ($39) (S71) 1.0% 2013 2014 2015-2016 2017 so + + 0.0K ‘= Cash Flow from Operating Activities 2013 2014 «2015 «2016-2017 = mmm Net Debt. —Net Debtto-Adj. EBITDA Leverage CapEx (As % of Total SPLP Revenue) STEEL PARTNERS
Slide 42: Highlights and Priorities
Sa Highlights and Priorities — )18 revenue of $1.5 billion-$1.6 billion; TDA of $184 million-$225 million + Approval to repurchase up to 2 million units + In 2017, purchased 309,680 units for $6 million + Completed October 2017 + Own 100% of Handy & Harman + 7.9 million preferred units issued in Ste
Slide 43: 2018 Strategic Focus
2018 Strategic Focus Jack Howard President STEEL PARTNERS
Slide 44: Steel Partners 2018 strategic focus
Sa - Steel Partners (e) ie Drive strategy creation process to support organic growth Identify accretive “bolt-on” acquisitions Acquire new, under-valued businesses or platforms for long- term growth Evaluate expansion of unit buy-back program Deploy industry leading best practices Deepening Culture
Slide 45: Steel Partners Holdings
Steel Partner Holdings | High ROIC, rigid capital allocations with modest use of leverage Proven management team driving value Strong free cash flow and balance sheet ‘CONFDENTIAL Diversified revenue mix, creates market- leading brands Steel Way culture that drives performance STEEL PARTNERS
Slide 46: STEEL PARTNERS
STEEL PARTNERS
Slide 47: Appendix
Appendix STEEL PARTNERS
Slide 48: Valuation: Sum-of-the-Parts (SOTP) Detail
Valuation: Sum-of-the-Parts (SOTP) Detail As of December 31, 2017 (tamitionsexceptvalveper uni) Pre-Tax, Pre-Parent Company Expense Sum of the Parts | Notes Diversified Industrial Segment (ty WebBank @ 242.6 Steel Energy ® 19323 Cash @ 1149 Investments ©) 294.4 | Total Debt Preferred Unit Liabilty (
Slide 49: Adjusted EBITDA Reconciliation 2013-2017
Financial Performance Adjusted EBITDA Reconciliation 2013-2017 a ee 2017 2016201520420 ‘Segment income (GAAP) Diersifed dust ssojos S187 seaze1sessta—1.900 Eneray = Energy Buses G0) 6) 5703) TN) 1088 Enery Sports & Corporate (79s) @767) G40) 18S) 2HB Faancal Services “ie 25I8 abd hast 78 Corporate a
Slide 50: Energy Services Reconciliation 2013-2017
Financial Performance Energy Services Reconciliation 2013-2017 Reveme: Energy Energy Business Enaray- Sports & Corporate Total Rer ene -Energy Segment ‘Segment Income (GAAP): Energy Enerzy Busnes Energy- Spats & Corporate ‘Total Segment Income - Energy Segment YEARENDED DECEMBER 31, 2017 2016 2015,
Slide 51: Free Cash Flow Reconciliation 2013-2017
Financial Performance Free Cash Flow Reconciliation 2013-2017 Fre Gain Roca SEER Ft Gah arcmin = a a z SeetFaten es LE a ie ans ae am) | SS Scop ses gee sess ae Eo ee Opening Pow Fee Cabin aS se sarerreny Seb BMS ek mes ue Deena pain eal ee ne | | Cprarecanto $ MOS Res Bm snes ais ey ten Be au wma)
Steel Partners Holdings — Investor Presentation (March 2018) on 6ix