Ryerson Holding Corporation · NYSE:RYZ
Ryerson — Loop Capital Metals & Mining Conference 2017
38 slides from Ryerson's conference presentation, March 2017
Slide 1: Loop Capital Metals & Mining Conference
Loop Capital Metals & Mining Conference March 2017 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”) and no investment decision should be made based upon the information provided herein. Ryerson strongly urges yo
Slide 3: Business Overview
BUS INES S OV ERV IEW EDDIE LEHNER │ PRESIDENT AND CHIEF EXECUTIVE OFFICER 3
Slide 4: Ryerson Highlights
Ryerson Highlights Iconic industry leader offering a broad range of metal products, services, & solutions to a diversified customer base Built for all market cycles as evidenced by market share growth, strong margins, & cash generation in challenging 2016 Differentiated by an interconnected service
Slide 5: A Market Leading North American Service Center with Scale & Broad Strategic Footprint
A Market Leading North American Service Center with Scale & Broad Strategic Footprint: The Basis for a Branded, Connected, Industrial Metals Network Other 2% % of 2016 Revenue • Founded in 1842; relisted on NYSE Stainless 24% in 2014 Carbon Aluminum 50% 24% • Approximately 100 interconnected locatio
Slide 6: Exposure to Diverse, Growing, and Recovering End-Markets
Exposure to Diverse, Growing, and Recovering End-Markets All Other, 7% Oil & Gas, 5% Commercial Ground Transportation, 16% Food Processing & Ag., 9% Metal Fabrication & Construction Machine Shops, 18% Equipment, 9% HVAC, 7% Consumer Durable, Industrial Machinery & 11% Equipment, 18% Percentages are
Slide 7: Macro Outlook: Improving but Volatile Industrial Metal Prices
Macro Outlook: Improving but Volatile Industrial Metal Prices, with Potential Positive Demand Inflection COMMODITY PRICES U.S. INDUSTRIAL PRODUCTION P O T E N T I A L I N F L E C T I O N I N E A R LY 2 0 1 7 CRU HRC 2.0 2016-2017 0.7 LME Nickel performance LME Aluminum + Midwest Premium 0.2 0.3 1.8
Slide 8: Expected Significant Market Upside: Under-Investment Since 2009
Expected Significant Market Upside: Under-Investment Since 2009 Leaves Potential for Secular Industrial Recovery U . S . C A R B O N a n d S T A I N L E S S M O N T H LY S H I P M E N T S 6,000 Peak Tons = 5,400 5,500 5,000 Average Tons Jan. '93 - Oct. '08 = 4,200 Tons in Thousands 4,500 Average Ton
Slide 9: Ryerson's DNA – The "How" Really Matters
Ryerson’s DNA – The “How” Really Matters ANALYTICS SPEED CULTURE VALUE-ADD SCALE 9
Slide 10: Ryerson's "Periodic Table": How We Deliver Value to Customers
Ryerson’s “Periodic Table”: How We Deliver Value to Customers Understanding the “Elements” is Vital to Profitable Growth FABRICATION BURN/CUT AS IS FABRICATION CARBON BURN/CUT STAINLESS AS IS ALUMINUM FLAT LONG PLATE METAL SHAPE PROCESSING 10
Slide 11: Our Strategic Priorities Step-by-Step
Our Strategic Priorities Step-by-Step: A Differentiated Approach 1 2 3 4 Renewed Grow stainless products Develop and diversify Scale prospecting and emphasis market share through vertical markets call centers on coil / sheet supply chain leverage 5 6 7 8 Build out long products Ryerson virtual Ryers
Slide 12: Leveraging Scale and Integrated Network
Leveraging Scale and Integrated Network An Integrated and Decentralized Network of Intelligent Service Centers BENEFITS Better asset utilization: • Shared and optimized inventory • Shared processing equipment Ryerson Integrated Network of • Shared human resources Service Center 12 Multi-Markets Appr
Slide 13: An Industry-Leading Performance
AN INDUSTRY-LEADING PERFORMANCE OPERATIONAL EFFICIENCY MARGIN EXPANSION PROFITABLE GROWTH Expense and working Optimize product and Growing share by leveraging capital leadership customer mix scale in highly fragmented market Significant operating leverage Value-added processing Multi-cha
Slide 14: Driving Profitable Growth: Growing Market Share and Margins
Driving Profitable Growth: Growing Market Share and Margins TONNAGE MARKET SHARE & GROSS MARGIN Ryerson's U.S. MSCI Volume Market Share - All Metals Gross Margin Gross Margin Excl. LIFO 4.17% 4.17% 4.16% 4.10% 3.79% 3.81% 22.0% 3.75% 21.1% 3.68% 21.0% 20.0% 19.7% 19.8% 19.0% 18.8% 18.9% 17.3% 16.8%
Slide 15: Proven Operational Efficiency and Industry Leadership
Proven Operational Efficiency and Industry Leadership: Consistent Execution of Fundamentals D AY S O F S U P P LY E X P E N S E P E R C E N TA G E E XC L U D I N G D&A AND ONE-TIME ITEMS 97 95 18.9% 92 90 17.0% 16.2% 84 15.6% 82 80 13.8% 12.5% 12.9% 76 11.9% 2013 2014 2015 2016 2013 2014 2015 2016 R
Slide 16: Optimizing Mix to Drive Margin Expansion
Optimizing Mix to Drive Margin Expansion: Value-Add, Speed, and Attributes Emphasis 2010 SALES MIX 2016 SALES MIX Cut Long & Plate Cut Long & Plate • Expand value- 3.0% 4.8% added processing: More than 75% of Fabrication 6.7% Fabrication metals are 9.2% processed to As-Is Long customer & Plate speci
Slide 17: Significant Growth Potential Around Smart Use of Analytics
Example: Significant Growth Potential Around Smart Use of Analytics Commercial Bandwidth is the Key Ryerson’s existing customer base External …potentially We have a Using data analytics and increasing both large database of customer advanced sales techniques, margin & market ~930k accounts… we are t
Slide 18: Financial Overview
FINANCIAL OVERVIEW RUSS JEWETT │ SENIOR FINANCE DIRECTOR 18
Slide 19: Ryerson Financial Priorities
Ryerson Financial Priorities Deleveraging Propel growth, invest in high return capital projects, and bolt-on acquisitions Maximize free cash flow for investment while maintaining a strong balance sheet Expense management leadership Continue industry-leading working capital management 19
Slide 20: Quarterly Financial Highlights: Strong Performance Despite Challenging Conditions
Quarterly Financial Highlights: Strong Performance Despite Challenging Industry Conditions ADJ. EBITDA , EXCL. LIFO ($M) N E T I N C O M E ( L O S S ) AT T R I B U TA B L E TO RYERSON HOLDING ($M) $56.0 $48.8 $13.5 $8.2 $37.2 $36.0 $5.6 $14.2 ($8.6) ($20.5) Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q4 '15
Slide 21: Quarterly Financial Highlights: Strong Performance Despite Challenging Conditions
Quarterly Financial Highlights: Strong Performance Despite Challenging Industry Conditions TONS SHIPPED (000’S) AV E R AG E SE LLIN G PR IC E PE R TO N 505 $1,531 $1,550 $1,517 478 480 $1,470 $1,465 441 440 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 GROSS MARGIN % GROSS MA
Slide 22: Material Deleveraging Increases Value for All Investors
Material Deleveraging Increases Value for All Investors T O TA L D E B T ( $ M ) • Issued $650M of Senior Secured Notes due 2022 in May 2016 1,242.1 • Issued common stock in July 2016 Total debt reduced with net proceeds of $71.5M used by $279M to reduce our debt balance 1,023.5 • Amended our credit
Slide 23: Ample Liquidity to Fund Operations and Investments
Ample Liquidity to Fund Operations and Investments LIQUIDITY ($M) North American Availability Foreign Availability Cash & Equivalents $301 $273 50 65 26 23 $162.9 225 185 Dec. 31, 2015 Dec. 31, 2016 23
Slide 24: Investing in the Business – Smart Decisions Well Executed
Investing in the Business – Smart Decisions Well Executed • More than $100 million in growth capital invested since 2010, expanding value-added capabilities • Enhanced intelligent systems for connecting people, supply chains, inventory, fixed assets, and logistics • Eight bolt-on acquisitions since
Slide 25: Conclusion
CONCLUSION EDDIE LEHNER │ PRESIDENT AND CHIEF EXECUTIVE OFFICER 25
Slide 26: Ryerson's Differentiated Approach Creates Value for Investors
Ryerson’s Differentiated Approach: Connectivity, Speed, Scale, Value-Add, Culture, and Analytics Well Executed Creates Value for Investors “ONE RYERSON” • Single franchise / one brand • Great customer experiences • Decentralized AND connected GEOGRAPHIC SCALE CONNECTIVITY • United States, Canada, Me
Slide 27: Our Commitment, Our Culture
Our Commitment, Our Culture SAY YES, FIGURE IT OUT 27
Slide 28: Appendix
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Slide 29: Metal Service Center Supply Chain
Metal Service Center Supply Chain SUPPLIERS RYERSON SERVICE CENTERS CUSTOMERS • Manufacture metals • Purchase in scale; ship • Purchase smaller quantities smaller quantities • Produce & ship large volumes • Require a variety of products • Distribute 65,000+ aluminum, and services • Have long lead ti
Slide 30: Experienced Management Team
Experienced Management Team Years at Years at Years in Executive Title Position Ryerson Industry Eddie Lehner* President & Chief Executive Officer 2 5 28 Erich Schnaufer** Chief Financial Officer 2 12 12 Executive Vice President, General Mark Silver 4 4 4 Counsel & Secretary Kevin Richardson Preside
Slide 31: Strong U.S. Dollar Contributes to Highest Trade Deficit Since 2012
Strong U.S. Dollar Contributes to Highest Trade Deficit Since 2012 106.0 104.0 Appreciation of U.S. Dollar US Balance of Trade 101.5 102.0 100.0 98.0 -384 -462 96.0 -495 -490 -500 -502 -549 -537 94.0 92.0 90.0 90.3 88.0 Jul-15 Jul-16 Jun-16 Jan-17 Jan-15 Jun-15 Aug-15 Sep-15 Nov-15 Dec-15 Jan-16 Aug
Slide 32: The U.S. Trails Other OECD Member Countries in Investment
The U.S. Trails Other OECD Member Countries in Investment 34 Gross capital formation (% of GDP) 32 30 31.2 28 29.1 26 24.0 24 23.6 22 23.6 20.9 20 19.5 20.3 18 16 17.5 2000 2005 2010 2015 United States OECD members BRIC Source: World Bank 32
Slide 33: Industry Math: 2016 MSCI Shipped Tonnage Mix
Industry Math: 2016 MSCI Shipped Tonnage Mix Industry Tons Mix Total Shapes 100% Flat 69% Carbon Flat Rolled 64% Stainless Sheet & Coil 3% Aluminum Sheet & Coil 2% Long 21% Key Long 11% All Other Long 10% Plate 11% Carbon Plate 9% Stainless Plate 1% Aluminum Plate 1% Key Long: aluminum and stainless
Slide 34: 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 foreign currency transacti
Slide 35: Non-GAAP Reconciliation: Quarterly
Non-GAAP Reconciliation: Quarterly ($M) Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 Net Sales 868.0 840.4 790.0 668.8 702.6 739.8 735.1 682.2 Gross Profit 150.0 165.8 150.3 101.6 147.6 163.0 145.4 114.6 Gross Margin 17.3% 19.7% 19.0% 15.2% 21.0% 22.0% 19.8% 16.8% LIFO Expense (Income) (1
Slide 36: Non-GAAP Reconciliation: Net Income and EPS Excluding Impairment and Debt Retirement
Non-GAAP Reconciliation: Reconciliation of Net Income (Loss) and Earnings (Loss) per Share Excluding Impairment and (Gain) Loss on Retirement of Debt Year Ended Fourth Quarter December 31, Dollars and Shares in Millions, Except per Share Data 2016 2015 2016 2015 Net Income (loss) attributable to Rye
Slide 37: Non-GAAP Reconciliation: Annual
Non-GAAP Reconciliation: Annual ($M) 2013 2014 2015 2016 Net Sales 3,460.3 3,622.2 3,167.2 2,859.7 Gross Profit 616.6 593.8 567.7 570.6 Gross Margin 17.8% 16.4% 17.9% 20.0% LIFO Expense (Income), net (33.0) 42.3 (59.5) (6.6) Gross Profit, excluding LIFO 583.6 636.1 508.2 564.0 Gross Margin, excludin
Slide 38: Ryerson
RYERSON
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