Ryerson Holding Corporation · NYSE:RYZ
Ryerson — Deutsche Bank Leveraged Finance Conference 2018
38 slides from Ryerson's conference presentation, October 2018
Slide 1: Deutsche Bank Leveraged Finance Conference
Deutsche Bank Leveraged Finance Conference October 2018 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” or “the Company”) and no investment decision should be made based upon the information provided herein. Ryerson
Slide 3: Business Overview
Business Overview MIKE BURBACH│ NORTH-WEST REGION PRESIDENT 3
Slide 4: Iconic Industrial Metals Company Founded in 1842
Iconic Industrial Metals Company Founded in 1842 Processes and distributes carbon, aluminum, and stainless products Distributes 65,000+ products to 40,000 manufacturing customers 100 interconnected facilities located in North America and China Sales of $3.4 billion and shipments of 2 million tons in
Slide 5: 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 6: Local Presence, National Scale
Local Presence, National Scale Leading North American metals processor and distributor optimizing customer supply chains with tailored solutions, services, and products 24/7 customer access through local sales, customer development centers, and e-commerce Intelligently networked locations sharing kn
Slide 7: Ryerson's Processing Capabilities = Value Add
Ryerson’s Processing Capabilities = Value Add Perforating Bending Precision Blanking Beveling Polishing Blanchard Grinding Machining and Profile Cutting Blasting Forming Plate Punching Burning Rolling Centerless Grinding Sawing Cutting-to-Length Beveling Scribing Drilling Shearing Embossing Slitting
Slide 8: Diverse End-Market Exposure
Diverse End-Market Exposure Metal Fabrication & Industrial Machinery Machine Shops & Equipment 20% 18% All Other 4% Commercial Oil & Ground Gas, 5% Transportation 16% HVAC 7% Consumer Construction Durable Equipment Food 11% 9% Processing & Ag. 10% Percentages are based on 2017 sales as disclosed in
Slide 9: Contributing to our customers' success
INDUSTRY-LEADING PERFORMANCE OPERATIONAL EFFICIENCY MARGIN EXPANSION PROFITABLE GROWTH Expense and working Optimize product and customer mix Growing share by leveraging scale capital leadership in highly fragmented market Value-added processing Significant operating leverage Multi-channe
Slide 10: Ryerson's Commitment to Safety
Ryerson’s Commitment to Safety Improving Our Industry, Impacting Our Communities Ryerson is committed to providing a *Injury rate calculated as OSHA incidents per 100 full-time employees safe environment for employees, families, and shareholders through achieving better than industry safety records,
Slide 11: Ryerson's Strategic Drivers – Optimizing the Customer Experience
Ryerson’s Strategic Drivers – Optimizing the Customer Experience Through Intelligently Networked Service Centers 1 2 3 4 Develop & Diversify Coil & Sheet Franchise Stainless Products Scale Prospecting & Vertical Markets Renewal Leadership Call Centers Portfolio 5 6 7 8 Ryerson Virtual Ryerson Advanc
Slide 12: Macro Outlook: Volatile but Improved Commodity Inflection in U.S.
Macro Outlook Volatile but Improved Commodity Inflection in U.S. Prices Since Dec. 2015 Industrial Production Dec.‘15-Aug.‘18 CRU HRC performance LME Nickel 4.9 Prices Indexed to Dec. 2015 2.8 LME Aluminum + Midwest Premium 4.0 +158% 3.73.63.8 3.4 3.5 2.92.8 2.9 2.7 2.3 2.1 1.9 1.8 1.4 1.4 1.11.2 0.
Slide 13: Growing Market Share In a Highly Fragmented Industry
Growing Market Share In a Highly Fragmented Industry Ryerson U.S. Market Share 4.2% • 7,000 service centers • 1 million customers 3.8% • 30 million transactions per year Sources: Metals Service Center Institute and IBISWorld 2014 2017 Estimated market data based on Ryerson’s analysis of Metals Servi
Slide 14: Optimizing Mix to Drive Margin Expansion
Optimizing Mix to Drive Margin Expansion Gross Profit per Ton Fabrication % of Sales 17.9% 15.2% $240 $263 $291 $301 6.7% 9.8% 2010 2017 2010 2017 Gross Profit Per Ton ($M) Gross Profit Per Ton, excl. LIFO ($M) Gross Margin, excl. LIFO $M, Tons 000's 2010 2017 % Change Ryerson processes over 75% of
Slide 15: Ryerson Acquires Central Steel & Wire Company
Ryerson Acquires Central Steel & Wire Company • Rich 109 year history with loyal customer base and strong brand name • Complimentary long and plate product offerings • Strategic application of Ryerson’s industry leading working capital management, expense leverage strength, and procurement synergies
Slide 16: Financial Overview
Financial Overview ERICH SCHNAUFER │ CHIEF FINANCIAL OFFICER 16
Slide 17: Ryerson Financial Priorities
Ryerson Financial Priorities 70-75 Days of 20% Gross Margins, 3x Debt / Supply excl. LIFO EBITDA Gaining Financial Strength Through Continuously Improving Operating and Financial Performance 17
Slide 18: Quarterly Financial Highlights
Quarterly Financial Highlights $106.6 • Ryerson anticipates revenues in the range of $1,230 million to $84-87 $1,240 million for the third quarter $77-80 of 2018, or $1,045 million to $1,055 $62.2 million on a same-store basis $51.5 • Ryerson continues to see strong $37.7 $40.6 end market demand whe
Slide 19: Proven Inventory & Operational Efficiency
Proven Inventory & Operational Efficiency Industry Leadership Days of Supply Expense Percentage of Sales Excluding D&A and One-Time Items Ryerson Competitor Averages Competitor averages are based on Ryerson’s analysis of financial information disclosed in peer groups’ annual reports. Ryerson’s peer
Slide 20: Gross Profit per Ton Expansion with Improving Industry Conditions
Gross Profit per Ton Expansion with Improving Industry Conditions Ryerson has executed well in an environment of improved pricing and demand conditions, contributing to higher $271 $298 $282 $278 $290 $308 $313 $338 $341 $422 gross profit for every ton Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 sold Gross P
Slide 21: Deleveraging Increases Value for All Investors
Deleveraging Increases Value for All Investors Total Debt ($M) Annual Fixed Cash $1,242 Commitments ($M) Reduced total Cash Interest $ 93M debt ~$190M Pension and OPEB 34M since IPO $1,053 Maintenance Capital 15M Expenditures Taxes and Other 8M Annual Fixed Cash $ 150M Commitments Dec. 31, 2014 Jun.
Slide 22: Improving Credit Profile
Improving Credit Profile Ryerson has improved our Net Debt to EBITDA ratio, working toward our goal of 3X $M 2017 TTM 1H '18 Adj. EBITDA, excl. LIFO 184 247 Ending Net Debt 968 1,025 Net Debt to Adj. EBITDA, excl. LIFO 5.3X 4.1X TTM - Trailing 12 month number 22
Slide 23: Deferred Retiree Benefit Liability Declines Since 2015
Deferred Retiree Benefit Liability Declines Since 2015 Pension and OPEB liability has declined 27% over the past 2 years driven by strong pension asset returns and strategic participant reductions Sources: Federal Reserve treasury rates; Yahoo Finance daily adjusted stock price 23
Slide 24: Liquidity to Fund Operations and Investments
Liquidity to Fund Operations and Investments Liquidity ($M) $414 28 $338 23 Ryerson’s ability to maintain 49 25 ample liquidity allows us to $162.9 make strategic investments 363 264 and fund our operations Dec. 31, 2017 Jun. 30, 2018 North American Availability Foreign Availability Cash & Equivalen
Slide 25: Investing Drives Increased Free Cash Flow
Investing Drives Increased Free Cash Flow • $70 million in capital investment from 2016 through Q2 ’18 to expand value-added capabilities • Enhanced intelligent systems to connect people, supply chains, inventory, fixed assets, and logistics • Eleven strategic acquisitions since 2010 25
Slide 26: Our Commitment, Our Culture
Our Commitment, Our Culture Say Yes, Figure It Out 26
Slide 27: Appendix
Appendix 27
Slide 28: The DNA of Our Success
The DNA of Our Success ANALYTICS SPEED CULTURE VALUE-ADD SCALE 28
Slide 29: 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 26% Aluminum 22% Flat Long Plate Percent of 2017 Sales 29
Slide 30: Experienced Management Team
Experienced Management Team Years in Years at Years in Executive Title Position Ryerson Industry Eddie Lehner* President & Chief Executive Officer 3 6 29 Erich Schnaufer** Chief Financial Officer 3 13 13 Executive Vice President, General Mark Silver 6 6 6 Counsel & Secretary Kevin Richardson Preside
Slide 31: Annual Financial Highlights
Annual Financial Highlights Tons Sold (000’s) Average Selling Price Per Ton 1,903 2,000 $1,869 $1,682 1,069 $1,503 2016 2017 1H 2018 2016 2017 1H 2018 Gross Margin & Gross Margin, excl. LIFO Expense Percentage of Sales excl. D&A 20.0% 19.7% 20.4% 13.8% 17.3% 17.9% 17.5% 12.6% 12.3% 2016 2017 1H 2018
Slide 32: Quarterly Financial Highlights
Quarterly Financial Highlights Tons Sold (000’s) Average Selling Price Per Ton 518 515 526 543 $1,947 470 $1,790 $1,690 $1,725 $1,678 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Gross Margin & Gross Margin, excl. LIFO Expense Percentage of Sales excl. D&A Gross Margin % Gro
Slide 33: Industry Math: 2017 MSCI Shipped Tonnage Mix
Industry Math: 2017 MSCI Shipped Tonnage Mix 2017 Industry Tons Mix Total Shapes 100% Flat 68% Carbon Flat Rolled 63% Stainless Sheet & Coil 3% Aluminum Sheet & Coil 2% Long 20% Plate 12% Carbon Plate 10% Stainless Plate 1% Aluminum Plate 1% 33
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation EBITDA represents net income before interest and other expense on debt, benefit from income taxes, depreciation, and amortization. Adjusted EBITDA gives further effect to, among other things, impairment charges on assets, reorganization expenses, gain on bargain purchase, and
Slide 35: Non-GAAP Reconciliation of Recent Developments
Non-GAAP Reconciliation of Recent Developments: Q3 ‘18 Anticipated Net Income to Adjusted EBITDA, Excluding LIFO Expense (Income) Range of Estimates (unaudited) (in millions) Low High Net income attributable to Ryerson Holding Corporation $ 77 $ 80 Interest and other expense on debt 26 26 Benefit fr
Slide 36: Non-GAAP Reconciliation: Annual
Non-GAAP Reconciliation: Annual ($M) 2014 2015 2016 2017 1H 2018 Tons Sold (000's) 2,024 1,897 1,903 2,000 1,069 Net Sales 3,622.2 3,167.2 2,859.7 3,364.7 1,998.4 Gross Profit 593.8 567.7 570.6 582.5 350.2 Gross Profit per Ton 293 299 300 291 328 Gross Margin 16.4% 17.9% 20.0% 17.3% 17.5% LIFO Expen
Slide 37: Non-GAAP Reconciliation: Quarterly
Non-GAAP Reconciliation: Quarterly ($M) Q1 '17 Q2 '17 Q3 '17 Q4 '17 Q1 '18 Q2 '18 Tons Sold (000's) 497 518 515 470 526 543 Net Sales 814.5 875.4 864.2 810.6 941.3 1,057.1 Gross Profit 160.6 140.4 145.0 136.5 164.9 185.3 Gross Profit per Ton 323 271 282 290 313 341 Gross Margin 19.7% 16.0% 16.8% 16.
Slide 38: Ryerson
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