Ryerson Holding Corporation · NYSE:RYZ
Ryerson — Bank of America Merrill Lynch 2015 Leveraged Finance Conference
29 slides from Ryerson's conference presentation, Dec 3, 2015
Slide 1: Bank of America Merrill Lynch 2015 Leveraged Finance Conference
B A N K O F A M E R I C A M E R R I L L LY N C H 2015 LEVERAGED FINANCE CONFERENCE December 3, 2015
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 B A N K O F A M E R I C A M E R R I L L LY N C H 2 0 1 5 L E V E R A G E D F I N A N C E 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 products and service
Slide 5: One of North America's largest metals processors and distributors
• One of North America’s largest metals processors and distributors, with 2014 sales of $3.6 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 customers • Pri
Slide 6: Executive Summary
EXECUTIVE SUMMARY 1 Transformation yielding higher performance and potential 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 flo
Slide 7: Macro Trends: Lackluster Demand
MACRO TRENDS: Lackluster Demand % 2% U.S. Purchasing 3% Managers’ Index (PMI) ~ Source: Institute of Supply Management B A N K O F A M E R I C A M E R R I L L LY N C H 2 0 1 5 L E V E R A G E D F I N A N C E C O N F E R E N C E 7
Slide 8: Macro Trends: Highly Deflationary Base Metal Prices
MACRO TRENDS: Highly Deflationary Base Metal Prices Source: LME and CRU B A N K O F A M E R I C A M E R R I L L LY N C H 2 0 1 5 L E V E R A G E D F I N A N C E C O N F E R E N C E 8
Slide 9: Macro Trends: Well Below Pre-recession Levels
MACRO TRENDS: Well Below Pre-recession Levels U.S. CARBON and STAINLESS STEEL SHIPMENTS (M tons) 40% below prior peak Source: Metals Service Center Institute B A N K O F A M E R I C A M E R R I L L LY N C H 2 0 1 5 L E V E R A G E D F I N A N C E C O N F E R E N C E 9
Slide 10: 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 Optimize customer mix fragmented market Expense control leadership Value-driven pricing and Multi-channel sales and Wor
Slide 11: Proven Operational Efficiency
PROVEN OPERATIONAL EFFICIENCY Expenses as a percent of sales(1) Working capital management Inventory days of supply (DOS) 17.7% 16.3% 16.4% 17.6% 110 109 95 107 11.9% 12.5% 10.5% 11.5% 84 82 82 74 2011 2012 2013 2014 2011 2012 2013 2014 Competitor averages are based on Ryerson’s analysis of financia
Slide 12: 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% 31% 23% 42% • Shift to higher margin plate 80% 70% 15% and long products 19% 60% 50% • Increase value-added 9.9% 9.5% 10.3% 10.6% 40% ~ processing ~ 8.3% 65% 6.7% 65% 30% 20% 56% • Expand tra
Slide 13: Investing in the Businesses
INVESTING IN THE BUSINESSES • More than $100 million growth capex since 2010, expanding value- added capabilities • Six bolt-on acquisitions since 2010 • Additive to earnings and margins • Focus on value-added processing • Broaden transactional customer portfolio B A N K O F A M E R I C A M E R R I
Slide 14: Performance Versus Peers
PERFORMANCE VERSUS PEERS Gross margin, excluding LIFO Adjusted EBITDA margin, excluding LIFO 25.0% 22.4% 22.1% 21.4% 21.5% 21.0% 7.0% 5.8% 20.0% 6.0% 6.0% 5.0% 4.6% 4.9% 15.0% 16.9% 17.6% 5.0% 16.1% 4.0% 4.7% 4.9% 3.7% 15.2% 15.0% 3.0% 3.3% 10.0% 3.4% 2.0% 5.0% 1.0% 0.0% 0.0% 2010 2011 2012 2013 201
Slide 15: Differentiated Model
DIFFERENTIATED MODEL “ONE RYERSON” • Single franchise • One brand • Speed • Great customer experiences CONNECTIVITY GLOBAL SCALE RYERSON • Technical knowledge • Global capabilities in Leveraging Scale and • Processing and fabrication local markets • Logistics Integrated Network • Inventory services
Slide 16: Financial Review
FINANCIAL REVIEW ERICH SCHNAUFER Interim Chief Financial Officer B A N K O F A M E R I C A M E R R I L L LY N C H 2 0 1 5 L E V E R A G E D F I N A N C E C O N F E R E N C E 16
Slide 17: Ryerson Financial Priorities
RYERSON FINANCIAL PRIORITIES 1. Support corporate transformation and weather current industry conditions 2. Reduce balance sheet leverage 3. Invest in high return growth capital projects and attractive “bolt-on” companies B A N K O F A M E R I C A M E R R I L L LY N C H 2 0 1 5 L E V E R A G E D F I
Slide 18: Strong Execution in a Recessionary Environment
STRONG EXECUTION IN A “RECESSIONARY” ENVIRONMENT • Control what we can control – expenses and inventory • Continued expense management • Implementing plan to achieve $20 million in additional expense savings by mid-2016 • Continued strong working capital management / rapid inventory turnover • Gener
Slide 19: Nine Months of 2015: Impacted by Deflationary Pressure
NINE MONTHS OF 2015: Impacted by Deflationary Pressure Net income attributable to Ryerson Holding Corp. ($M) Adjusted EBITDA, excluding LIFO ($M) 30 250 20 200 10 5 $20.02 150 $1.6 0 100 9 mos. 2014 9 mos. 2015 $177.4 -5 50 -10 ($30.5)1 $94.8 -20 0 9 mos. 2014 9 mos. 2015 -30 1 Includes IPO-related
Slide 20: Counter-Cyclical Cash Flow and Debt Reduction
COUNTER-CYCLICAL CASH FLOW AND DEBT REDUCTION Cash Flow From Operations ($M) First Nine Months of 2015 200 • Repurchased 150 $60 million 100 $192.6 principal amount of long-term notes $162.9 $53.2 50 • Reduced total debt 0 9 mos. 2014 ($34.7) 9 mos. 2015 $165 million or 13% -50 B A N K O F A M E R I
Slide 21: Conclusion
CONCLUSION EDDIE LEHNER President and Chief Executive Officer B A N K O F A M E R I C A M E R R I L L LY N C H 2 0 1 5 L E V E R A G E D F I N A N C E C O N F E R E N C E 21
Slide 22: Conclusion
CONCLUSION 1 Transformation yielding higher performance and potential 2 Industry-leading expense and working capital management 3 Successful shift to higher value mix and value-added processing 4 Building sustainable competitive advantages to fuel growth 5 Generating counter cyclical cash flow and d
Slide 23: Leveraged Finance Conference
B A N K O F A M E R I C A M E R R I L L LY N C H 2 0 1 5 LEVERAGED FINANCE CONFERENCE December 3, 2015 B A N K O F A M E R I C A M E R R I L L LY N C H 2 0 1 5 L E V E R A G E D F I N A N C E C O N F E R E N C E 23
Slide 24: Appendix
APPENDIX B A N K O F A M E R I C A M E R R I L L LY N C H 2 0 1 5 L E V E R A G E D F I N A N C E C O N F E R E N C E 24
Slide 25: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION EBITDA represents net income before interest and other expense on debt, provision for income taxes, depreciation and amortization. Adjusted EBITDA gives further effect to, among other things, impairment charges on assets, reorganization expenses and the payment of management
Slide 26: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION Figures may not add due to rounding. ($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 $636 Gross Margin, excluding LIFO 15.2%
Slide 27: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION ($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 $144.5 Reorganization 3.1 5.0 Advisory Service F
Slide 28: Net Debt to Adjusted EBITDA, excl. LIFO Reconciliation
NET DEBT to ADJUSTED EBITDA, excl. LIFO RECONCILIATION Trailing 12-mos. ($M) 2010 2011 2012 2013 2014 (as of 9/30/15) 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 $1,128 $1,244 $1,214 $1,200 $1,188 $1
Slide 29: Capitalization
CAPITALIZATION Figures may not add due to rounding. Current 9/30/15 Trailing 12-mos. Adj. EBITDA, Rate Book Value excl. LIFO Multiple ($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 Revolv
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