Ryerson Holding Corporation · NYSE:RYZ
Ryerson — Deutsche Bank 29th Annual Leveraged Finance Conference 2021
34 slides from Ryerson's conference presentation, Oct 4, 2021
Slide 1: Ryerson
Ryerson Deutsche Bank Leverage Finance Conference October 4, 2021 Jim Claussen Molly Kannan Executive Vice President Corporate Controller & & Chief Financial Officer Chief Accounting Officer
Slide 2: Safe Harbor
Safe Harbor 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”) or its subsidiaries and no investment decision should be made based upon the infor
Slide 3: Agenda
Agenda 01 Who We Are 02 Market Trends 03 Financial Transformation 04 Operational Excellence 05 Investment Case
Slide 4: Ryerson Investment Case
Ryerson Investment Case RYI (NYSE) • Leading Metal Service Center • Positive secular market dynamics • Financial & operating model transformation • Successful record of M&A and organic growth initiatives • Returning cash to shareholders • Growing book value and strong free cash flow yield 4
Slide 5: The time to invest in the renewal and modernization of our infrastructure is now
The time to invest in the renewal and modernization of our infrastructure is now That goes beyond the clichés of potholes and traffic jams, extending out to the mobility, energy, communications, and wellness infrastructures that we all rely on for every interaction with the world today. Metal provid
Slide 6: Intelligent Network of Service Centers
Intelligent Network of Service Centers Great customer experiences at Speed, Scale and Consistency • Say “Yes” Culture • 100 company operated locations • Hundreds of “virtual” locations • Dedicated logistics network • Availability, speed, ease, consistency • Advanced value-add • Diversified Values ar
Slide 7: Ryerson Holding Corporation
Ryerson Holding Corporation Diversified customers, geography and products • 179 years of continuous operations, based in Chicago • Leading Metals Processor and Distributor • 100 locations across North American and China • 40k+ customers • 75k+ products • 24/7 e-commerce platform Values represented a
Slide 8: Diverse Mix
Diverse Mix Carbon 50%/ Bright Metals 50% 2% Other Stainless Steel 17 Aluminum % Product Plate Carbon & Alloy Mix Nickel Alloys 57% 24% Sheet Long Brass & Copper End market percentages are based on 2020 sales as disclosed in Ryerson’s Annual Report on Form 10-K for the year ended December 31, 2020.
Slide 9: Durable Recovery
Durable Recovery Secular economic and global trends support a durable recovery • Above trend infrastructure • Growth and employment investment oriented monetary policy • Trade policy rebalancing • Reshoring/Onshoring • ESG impacts on industry cost • Domestic supplier consolidation and price curve •
Slide 10: Q2 2021 Key Financial Metrics
Q2 2021 Key Financial Metrics Record setting results A reconciliation of non-GAAP financial measurements to the comparable GAAP measure is included in the Appendix. See Ryerson’s 8-K filed on August 4, 2021. 10
Slide 11: Financial Transformation
Financial Transformation Lower net debt, liabilities and fixed cash commitments since IPO Net Debt* Pension Benefit Liability Annual Fixed Cash $M $M Commitments $572 $M $147 $112 $1,135 $277 $181 $563 $130 $69 Q3 2014 Q2 2021 2014 Q2 2021 2014 2022F *Net debt is calculated as total debt less cash &
Slide 12: Improved Operating Model
Improved Operating Model Improved EBITDA generation, cash conversion cycle and margins Adj. EBITDA excl. LIFO Cash Conversion Cycle Gross Margin excl. LIFO $M Days $M 34 days 4.5% $167 $386 89 22% $219 55 18% Q3 2014 TTM Q2 2021 TTM Q3 2014 Q2 2021 Q3 2014 TTM Q2 2021 TTM 12
Slide 13: Strong Liquidity to Fund Growth
Strong Liquidity to Fund Growth Ryerson’s availability increased significantly again in second quarter 890 38 22 • Ryerson’s global liquidity rose QoQ from $583M to 583 $890M driven by rising Adj. 43 31 EBITDA excl LIFO, proceeds 398 373 350 61 830 from the sale-leaseback 11 122 100 39 35 509 transa
Slide 14: Significant FCF Through the Cycle
Significant FCF Through the Cycle Improved operating profile generates higher through-the-cycle earnings, lower cash flow volatility to fuel value shift to equity shareholders and future growth investment $5,310 $4,730 $4,408 $4,502 $3,896 $4,025 $3,460 $3,622 $3,467 Generated $3,365 $3,066 $3,167 $
Slide 15: Deleveraging Drives Shareholder Value
Deleveraging Drives Shareholder Value Net Debt ($M) Interest Expense ($M) 2012 2016 2020 Current Refinance Refinance Refinance Principal Amount $900 $650 $500 $300 Coupon 9.75% 11.00% 8.50% 8.50% $1,130 $923 $679 $563 Annual Interest $88 $72 $43 $26 2018 2019 2020 Q2 2021 • Reduced net debt by
Slide 16: Digitalization
Digitalization $112m capex on value-add processing and intelligent systems • Digital evolution through e-commerce, pricing analytics and quoting tools • Leveraging industry and functional expertise across the company • Supply chains – visualization/virtualization • Inventory – offering more selectio
Slide 17: Capital Allocation Plan
Capital Allocation Plan Enterprise Value shift from debt to equity underway $0.08 and $50M per Share Option to repurchase outstanding Quarterly capital return to investors shares from excess liquidity Enabled by: +$100M $890M Reduction in annual fixed cash Strong liquidity position as of Q2 2021 com
Slide 18: Next Phase Targets
Next Phase Targets Creating industry’s best customer experience with speed, scale and consistency 6% 1.5x $600M|$50M 15% 20% N.A. Market Net Debt / CS&W Net Sales Value-Add Gross Share Adj. EBITDA & Adj. EBITDA Sales Mix Margin excl. LIFO excl. LIFO excl. LIFO Note: Targets are based on 3-year windo
Slide 19: Ryerson Investment Case
Ryerson Investment Case RYI (NYSE) • Leading Metal Service Center • Positive secular market dynamics • Financial & operating model transformation • Successful record of M&A and organic growth initiatives • Returning cash to shareholders • Growing book value and strong free cash flow yield 19
Slide 20: Appendices
Appendices
Slide 21: Experienced Management Team
Experienced Management Team Eddie Lehner Jim Claussen President and Chief Executive Officer | 6 years Executive Vice President and Chief Financial Officer | <1 year • 9 years at Ryerson • 20 years at Ryerson • 32 years of industry experience • 27 years of industry experience Mike Burbach John Orth C
Slide 22: At Nexus of Fragmented $250 Billion Industry
At Nexus of Fragmented $250 Billion Industry SUPPLIERS CUSTOMERS • Manufacture metals • Inventory of 75k owned metal • Require a variety of products plus more than 50k products/services • Produce and ship large "virtually" mapped items volumes • Purchase in smaller quantities • Interconnected North
Slide 23: Foundational Pillars
Foundational Pillars Industry-Leading Performance Operational Efficiency Margin Expansion Profitable Growth ⚫ Expense and working capital ⚫ Product and customer mix ⚫ Market share growth through leadership optimization redefining the customer experience ⚫ Significant operating leverage ⚫ Value-added
Slide 24: Diverse End-Market Expertise
Diverse End-Market Expertise Infrastructure and secular growth trends Metal Industrial • Electric Vehicles Fabrication & Machine Machinery & Equipment Shops 18% • Cloud Infrastructure 25% • Automation Commercial Ground Transportatio • Renewable Energy n 14% • E-Commerce Logistics Consumer Constructi
Slide 25: Ryerson "Periodic Table"
Ryerson “Periodic Table” How Ryerson Delivers Value to its Customers BURN/CUT FAB AS IS FAB Carbon BURN/CUT Stainless AS IS Aluminum FLAT LONG PLATE Metal Shape Processing Attractive Price Margin Combinations • Carbon, Flat, Contractual or Transactional • Aluminum, Flat, Contractual • Plate, Complex
Slide 26: Reduction in Fixed Cash Commitments
Reduction in Fixed Cash Commitments Since 2014, fixed cash commitments are down +$100M per year $181 15 $153 $148 $142 15 $134 $132 66 21 15 22 17 51 34 $99 30 30 32 $88 20 15 $69 11 29 25 100 93 87 89 85 88 12 62 50 32 2014 2015 2016 2017 2018 2019 2020 2021F 2022F Cash Interest Pension & Retiree M
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation Note: EBITDA represents net income before interest and other expense on debt, provision for income taxes, depreciation, and amortization. Adjusted EBITDA gives further effect to, among other things, reorganization expenses, gain or loss on retirement of debt, loss on pension
Slide 28: Non-GAAP Reconciliation: Adjusted EBITDA, excl. LIFO
Non-GAAP Reconciliation: Adjusted EBITDA, excl. LIFO ($M) *Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Tons Sold (000's) 479 506 529 518 489 492 543 559 Net Sales 802.5 874.4 931.5 947.9 831.5 853.0 1,147.3 1,419.0 Gross Profit 147.2 147.7 154.4 149.5 155.9 153.9 197.9 257.0 Gross Profit
Slide 29: Non-GAAP Reconciliation: Annual Adj. EBITDA excl. LIFO
Non-GAAP Reconciliation: Annual Adj. EBITDA excl. LIFO ($M) 2008 2009 2010 2011 2012 2013 2014 Tons Sold (000's) 2,505 1,881 2,252 2,433 2,149 2,038 2,024 Net Sales 5,309.8 3,066.1 3,895.5 4,729.8 4,024.7 3,460.3 3,622.2 Gross Profit 712.9 456.1 539.8 658.8 709.6 616.6 593.8 Gross Profit per Ton 285
Slide 30: Non-GAAP Reconciliation: Annual Adj EBITDA, excl. LIFO continued
Non-GAAP Reconciliation: Annual Adj EBITDA, excl. LIFO continued ($M) 2015 2016 2017 2018 2019 2020 Tons Sold (000's) 1,897 1,903 2,000 2,268 2,381 2,009 Net Sales 3,167.2 2,859.7 3,364.7 4,408.4 4,501.6 3,466.6 Gross Profit 567.7 570.6 582.5 758.1 827.9 621.1 Gross Profit per Ton 299 300 291 334 34
Slide 31: Adjusted Net Income Reconciliation
Adjusted Net Income Reconciliation (Dollars and shares in millions, except per share data) Q2 '20 Q1 '21 Q2 '21 Net income (loss) attributable to Ryerson Holding Corporation ($25.6) $25.3 $112.9 Gain on sale of assets - (20.3) (87.4) Restructuring and other charges 2.0 - - (Gain) loss on retirement
Slide 32: Non-GAAP Reconciliations: Net Debt
Non-GAAP Reconciliations: Net Debt Quarterly ($M) Q3 2014 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Total Debt $ 1,227.8 $ 903.8 $ 814.0 $ 740.0 $ 741.4 $ 600.9 Less: Cash and Cash Equivalents $ (80.5) $ (99.9) $ (121.8) $ (61.4) $ (43.3) $ (38.1) Less: Fair Value of AM Castle Shares $ (11.9) $ - $ -
Slide 33: Non-GAAP Reconciliations: Free Cash Flow
Non-GAAP Reconciliations: Free Cash Flow Annual $M 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total Cash Flow from Operating Activities $281 $285 ($199) $55 $187 $48 ($73) $259 $25 ($3) $57 $193 $278 $1,393 Less: Capital Expenditures 30 23 27 47 41 20 22 22 23 25 38 46 26 $390
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