Worthington Steel, Inc. · NYSE:WS
Worthington Steel — Investor Presentation (August 2024)
31 slides from Worthington Steel's investor presentation, Aug 15, 2024
Slide 1: Worthington Steel Investor Presentation | August 2024
Exhibit 99.1 Worthington Steel Investor Presentation | August 2024
Slide 2: Safe Harbor Statement
Safe Harbor Statement Selected statements contained in this release constitute“forward-lookingstatements,” as that term is used in the Private Securities Litigation Reform Act of 1995 (the“Act”). The Company wishes to take advantage of the safe harbor provisions included in the Act. Forward-looking
Slide 3: Investment Highlights
Investment Highlights Well-positioned to capitalize on opportunities resulting 1. from the energy transition with our electrical steel products Long-standing customer relationships focused on 2. value creation and best-in-class service delivery Strong balance sheet and ample liquidity to pursue 3. a
Slide 4: Building A Differentiated Steel Processing Company
Building A Differentiated Steel Processing Company Established market leading joint ventures 1971 Worthington Steel to bring additional value to our customers changed its name to Worthington Steel Worthington Industries to Introduction of founded in 1955 with a reflect new areas of business Worthing
Slide 5: Spin-off Unlocks Shareholder Value
Spin-off Unlocks Shareholder Value 1 2 3 Enhanced Agility Tailored Capital Shareholder and Sharpened Structures and Capital Value Strategic Focus Allocation Strategies Creation • Pursue strategy and growth • Modest leverage and ample • Company value proposition initiatives with a focus on our liquid
Slide 6: Value-added Metals Processing Company
2,3 Net Sales by End-Market Value-added Metals Processing Company 8% 3% 2 TTM Financial Metrics 3% 1955 3% Volume Delivered (tons) 4.0M Founded 5% Direct / Toll (tons) 2.3M / 1.7M Columbus, OH Headquarters Net Sales $3.4B 5% 52% 32 Adjusted EBITDA / Margin $289.7M / 8.4% 1 Locations 8% Free Cash Flo
Slide 7: We Occupy a Unique Position in the Steel Supply Chain
We Occupy a Unique Position in the Steel Supply Chain WHERE WE OPERATE Mills Service Centers Hot Roll Specialty Dimensional Melt Warehouse Processing Conversion Processing & Distribute Hot Roll Coil (HRC) Specialty cold rolling, Pickling / scale removal Slitting to Width temper pass, annealing, Hot
Slide 8: Building on Market Leadership Position
Building on Market Leadership Position #1 #1 #1 #1 #2 #3 Independent Producer Producer of Tailor Trader of Steel Futures Network of Independent Independent Flat Global Manufacturer of of Hot Dipped Welded Blanks in by Volume Among Picklers in Rolled Service Electrical Steel Galvanized Steel in North
Slide 9: Network and Services to Deliver Added Value to Customers
Network and Services to Deliver Added Value to Customers 32 Manufacturing Facilities Primarily Located 1 in North America Key Operations Strategically Located Proximate to Suppliers and Customers Expertise in Optimizing Supply Chains and Minimizing Total Landed Cost 90% of Sales in North America; 10
Slide 10: Joint Ventures Expand Our Processing Capabilities and Reach
Joint Ventures Expand Our Processing Capabilities and Reach 1 Spartan Steel Coating TWB WSCP Serviacero Worthington (52%) (55%) (63%) (50%) • Partner: Cleveland-Cliffs • Partner: BAOSteel • Partner: Samuel, Son & Co. • Partner: Serviacero • A cold-rolled, hot-dipped coating • Tailor welded products
Slide 11: Our Steel is Used in a Variety of End Markets and Applications
Our Steel is Used in a Variety of End Markets and Applications Automotive Construction Agriculture Truck / Trailer Energy • Traction motors for BEVs • Metal buildings • Combines • Wheel rims • Transformer cores for /hybrids including trucks power distribution • Garage doors & rail • Grain bins • Fra
Slide 12: Critical Supplier to Blue-Chip Companies Across End Markets
Critical Supplier to Blue-Chip Companies Across End Markets Diversified Customer Base, Many With Decades-Long Relationships 8% 3% 3% 3% 5% 5% 52% 8% 13% Automotive Construction Machinery & Equipment Agriculture Heavy Truck Sustainable Energy Containers Service Centers Other Note: Sales based on fisc
Slide 13: Strategy Focused on Growth
Strategy Focused on Growth Focused Investments in the rapidly growing electrical steel market Strategically expanding our capacity for highly technical electrical steel products to meet demand for improved electrical infrastructure and electric vehicles (including battery electric and hybrid) Margin
Slide 14: Worthington Business System is the Foundation for Driving Improved Profitability
Worthington Business System is the Foundation for Driving Improved Profitability TRANSFORMATION Leveraging Lean Practices and Technology • Systematic approach to business improvement • Optimizing working capital • Predictive analytics and automation enhance efficiency, reduce downtime and improve sa
Slide 15: Our Differentiated Business Model Drives Worthington Steel Forward
Our Differentiated Business Model Drives Worthington Steel Forward Beginning with Material Worthington Steel Offers a Wide Range of Value-Added Serving Customers Across from our Mill Partners Processing Capabilities and Services Attractive End Markets Customized Strategic End-to-End Operating Supply
Slide 16: Case Study: Transformation Resulted in ~$2.3M in Annualized Savings
Case Study: Using the Transformation Resulted in ~$2.3M in Annualized Savings GOAL: Margin Expansion Through Operational Excellence FOCUS: Columbus Tandem Mill OBJECTIVES • Improve gauge-reduction performance to reduce scrap and processing time • Leverage insights from various holistic data set and
Slide 17: Case Study: Product Improvements for Lightweighting
Case Study: Product Improvements That Meet Changing Customer Needs for Lightweighting Results “Voice of Customer” Approach to New Product Development Driving Market Share Gains and Improved Customer Intimacy Continued Enhancements to Core Offerings At the Forefront of EV Battery Box Design Hot Stamp
Slide 18: Well Positioned to Capitalize on Key End Market Trends
Well Positioned to Capitalize on Key End Market Trends Decarbonization of Energy Infrastructure Transportation Transition Electrical Steel Tailored Galvanized Electrical Steel Electrical Steel Galvanized Laminations Blanks Steel Laminations Laminations Steel Worthington Steel Product Offering EV Tra
Slide 19: Focused Strategic Investments in Electrical Steel
Focused Strategic Investments in Electrical Steel Mexico: Increase Motor Lamination Capacity to Meet Growing xEV Demand • Expanding production capacity • Total expected capex = $85M (~$23M spent through 5/31/24) ‒ Building expansion nearing completion ‒ 5 new presses expected to be installed during
Slide 20: Resilient Financial Performance Despite Commodity Volatility
Resilient Financial Performance Despite Commodity Volatility Net Sales ($M) & Volumes (M Tons) Adjusted EBITDA ($M) & Margin (%) $4,069 $290 $290 $3,608 $266 $3,431 $206 Strategic Acquisitions: 12.5% $2,127 8.4% 7.1% 4.3 4.2 5.7% 4.0 4.0 FY2021 FY2022 FY2023 FY2024 FY2021 FY2022 FY2023 FY2024 Estima
Slide 21: How Worthington Steel Mitigates Volatility in Steel Pricing
How Worthington Steel Mitigates Volatility in Steel Pricing We Minimize Steel Holding Gains and Losses Worthington Business System Helps Drive Down Inventory Transformation Advanced Baseline Lean Flow Launch Analytics • Worthington Business System to manage inventory 73 70 66 ‒ Deployed to drive inv
Slide 22: Pathway to Margin Expansion
Pathway to Margin Expansion Strategy to Achieve 10%+ Adj. EBITDA Margin Target 10%+ 10%+ 8% FY21-24 Average Worthington Product New Acquisitions Long-Term Target Business System Mix Products Drive LEVERS TO Introduce higher Focus on Acquire out waste margin new high IMPROVE margin and reduce product
Slide 23: Strong Cash Flow Supports Growth Initiatives
Strong Cash Flow Supports Growth Initiatives 1 Operating Cash Flow ($M) Operating Working Capital ($M) 30 . 0% $646 $315 25 . 0% $498 $481 $396 $200 20 . 0% $153 18.6% 1.50% $39 15.9% 14.5% 13.3% 10 . 0% FY2021 FY2022 FY2023 FY2024 FY2021 FY2022 FY2023 FY2024 Capex Steel Price $29 $36 $45 $103 $850
Slide 24: Capital Investments to Strengthen and Grow Market Position
Capital Investments to Strengthen and Grow Market Position Strategic Capital Investments Increasing Lightweighting Capabilities/Capacity • Hot Galvanizing Line: produce Type 1 aluminized Capital Expenditures ($M) steels for the automotive industry • Laser Welding: support lightweighting targets for
Slide 25: Capital Structure Supports Growth Initiatives
Capital Structure Supports Growth Initiatives • Accomplished initial goal for a strong balance Balance Sheet Summary ($M) sheet at Spin Date Total Debt $148 • Expect to maintain a flexible capital structure with modest leverage and ample (-) Cash $40 liquidity Net Debt $108 • Current credit facility
Slide 26: M&A Is a Key Part of Our Strategy
M&A Is a Key Part of Our Strategy Select Acquisitions Investment Criteria ▪ Immediately accretive to earnings per share and increases overall EBITDA margin Strip Steel Assets ▪ Well-run, successful companies with strong management teams ▪ Culture aligns with Our Philosophy Cleveland Facility BlankLi
Slide 27: Disciplined Framework Designed to Drive Shareholder Value
Disciplined Framework Designed to Drive Shareholder Value Organic Growth Strategic M&A Shareholder Return • Maintain operations in • Target acquisition • Focus on maximizing market ready condition opportunities that are shareholder return expected to be • Grow capacity to meet • Expect to pay a mode
Slide 28: Experienced Management Team to Drive Strategy
Experienced Management Team to Drive Strategy More than 200 Combined Years of Experience Managing Through Steel Price Cycles and Shifting Macroeconomic Climates with Proven Ability to Execute M&A JOE HEUER MELISSA DYKSTRA GEOFF GILMORE JEFF KLINGLER TIM ADAMS VP & General Counsel VP of Corporate Com
Slide 29: Investment Highlights
Investment Highlights Well-positioned to capitalize on opportunities resulting 1. from the energy transition with our electrical steel products Long-standing customer relationships focused on 2. value creation and best-in-class service delivery Strong balance sheet and ample liquidity to pursue 3. a
Slide 30: Appendix
Appendix
Slide 31: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures These materials present certain financial measures that are not calculated in accordance with U.S. generally accepted accounting principles, or GAAP. Management believes these Fiscal Year Ended May 31, non-GAAP measures provide useful supplemental inform
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