Russel Metals Inc. · TSX:RUS
Russel Metals — Investor Presentation (October 2025)
44 slides from Russel Metals's investor presentation, October 2025
Slide 1: Company Update - October 2025
COMPANY UPDATE - OCTOBER 2025
Slide 2: Cautionary Statement on Forward-Looking Information
CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION Certain statements contained in this presentation constitute forward-looking statements or information within the meaning of applicable securities laws, including statements as to our future capital expenditures, our outlook, the availability of fu
Slide 3: Non-GAAP Measures
NON-GAAP MEASURES In this Information Package we use certain financial measures that do not comply with International Financial Reporting Standards (IFRS or GAAP) or have standardized meanings, and thus, may not be comparable to similar measures presented by other issuers, for example EBIT and EBITD
Slide 4: Table of Contents
TABLE OF CONTENTS I. Overview II. Market Trends III. Capital Allocation Priorities IV. Financial Overview V. Recent Acquisitions 4
Slide 5: I. Overview
Il. OVERVIEW
Slide 6: Q2 2025 in Review
Q2 2025 IN REVIEW STRONG Q2 RESULTS Near record shipments; revenues up 3% vs. Q1 EBITDA of $108 mm – up 26% vs Q1 EPS of $1.07 – up 43% vs Q1 Cash from Operating Activities before non-cash working capital of $105 mm – up 29% vs Q1 DISCRETIONARY CAPEX GREW U.S., SPECIALTY & INVESTMENTS CAPITAL DEPLOY
Slide 7: Business Highlights
BUSINESS HIGHLIGHTS Compelling Market Position with Strong Supplier Relationships and Market Insight • One of the largest metals distribution and processing companies in North America • Well-established relationships with North American steel producers and one of the largest independent steel import
Slide 8: Russel Metals At-A-Glance
RUSSEL METALS AT-A-GLANCE Overview Key Segments • Distribution of various industrial products across North America • Coast-to-coast in Canada • Three segments: Metal Service Centers, Energy Field Stores and • Strong US presence in mid-west Metals Service Steel Distributors and south Centers • Founde
Slide 9: Market Position
MARKET POSITION • Russel is one of the largest service center companies in North America • Leading market position in Canada • Strong market position in the US South and US Mid-West 2023 Revenues (US$ billion) $16 $14 $12 $10 $8 $6 $4 $2 $0 (1) Russel results are pro forma for the acquisitions of th
Slide 10: Diversified Business
DIVERSIFIED BUSINESS Locations – 140 Branches Suppliers Product Mix Total of 6-10, 12% Plate, 19% Canada, 71% Flanges, Valves, Fittings, Others, 57% 16% Flat Rolled, 11% Bars, 5% Stainless. Aluminum & Other Non- Ferrous, 9% U.S., 29% Total of 1-5, 31% Structurals , 36% Other, 4% Transactional Busine
Slide 11: Incentive Compensation Tied to Return on Capital
INCENTIVE COMPENSATION TIED TO RETURN ON CAPITAL Variable Compensation vs. Operating Profit • A large number of our employees participate in a profit-sharing program, $700 $130 with bonus pools tied to their local $120 returns on net assets. $600 $110 • This approach is a significant element of $100
Slide 12: Business Transformation
BUSINESS TRANSFORMATION Illustration of Historical Results Illustration of Expected Impact from New Approach Financial Metric Financial Metric Time Time Actions Impacts • Divested underperforming business units and repatriated $400 mm of • Raise the cycle floor and ceiling underperforming capital •
Slide 13: Impact of Portfolio Changes
IMPACT OF PORTFOLIO CHANGES • The portfolio changes over the past few years significantly reduced our EBITDA variance between the peak and trough on both an absolute basis and relative to our peers. Quarterly EBITDA Peak-to-Trough Variance, 2017-2019 Quarterly EBITDA Peak-to-Trough Variance, 2022-20
Slide 14: Working Capital Management/Counter Cyclicality of FCF
WORKING CAPITAL MANAGEMENT/COUNTER CYCLICALITY OF FCF • Working capital management is a long-term strategy and results in countercyclical cash flows. $200,000 Quarterly EBITDA ($000’s) $150,000 $100,000 $50,000 $- Q2 2007 Q2 2008 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013 Q2 2014 Q2 2015 Q2 2016 Q2 201
Slide 15: ESG Focus
ESG FOCUS Summary From Sustainability Report Updated April, 2025 Environmental • Divested OCTG/Line Pipe business • Low carbon emissions from operations • Over the past five years, our revenues grew by 63% vs. a 2% increase in GHG emissions. Social • Structured H&S Program “Mission Zero” • Dash cam
Slide 16: II. Market Trends
II. MARKET TRENDS
Slide 17: Revenue Volatility vs. Indexes
REVENUE VOLATILITY VS. INDEXES • Russel Metals’ revenue is less volatile than underlying steel prices. Relative Volatility Absolute Volatility Revenue Volatility - Russel vs Benchmarks Coefficient of Variation (%) Russel Metals Service Centres - Avg Price 29% Realization (C$)/Ton 300% Russel Metals
Slide 18: Business Conditions: Metal Pricing Trends
BUSINESS CONDITIONS: METAL PRICING TRENDS Carbon Pricing $2,500 #1 Heavy Melt (Chicago) HR Sheet HR Plate $2,000 $1,500 US $ / ton $1,000 $500 $0 Specialty Metals Pricing $300 Stainless Steel Sheet Aluminium Midwest $250 $200 US$ / cwt $150 $100 $50 $- Source: Fastmarkets as of July 2025 18
Slide 19: Business Conditions: Supply Chain Dynamics
BUSINESS CONDITIONS: SUPPLY CHAIN DYNAMICS Steel Mills/Imports: • Capacity utilization has increased to ~80%. • Imports are not a major factor and are down year- over-year. Service Centers: • Supply chain tonnage remains reasonable. 19
Slide 20: III. Capital Allocation Priorities
III. CAPITAL ALLOCATION PRIORITIES
Slide 21: Capital Allocation Priorities
CAPITAL ALLOCATION PRIORITIES Increase capital deployment with a target of >15% Flexible approach to returning capital to return over a cycle shareholders LTM NCIB Activity = $107 Share Buy mm Backs Facility • Q2: 534k acquired for $22 mm • Since NCIB established in Modernizations Aug/22: 7.7 mm acq
Slide 22: Capital Reallocation Evolution
CAPITAL REALLOCATION EVOLUTION • In the five-year period of 2020-2024, we generated >$2 billion of cash and substantially changed our business and capital structure profile. Cash Generation 1/1/20 to 12/31/24 ($ mm) Capital Deployment 1/1/20 to 12/31/24 ($ mm) Asset Sales; $403 Reduce NCIB; $244 Deb
Slide 23: Dividend and Share Buy Back Summary
DIVIDEND AND SHARE BUY BACK SUMMARY Historical (and Projected Q3'25) Quarterly Dividends Return of Capital to Shareholders (millions) $0.43 $80 $0.42 $69 $71 $0.40 $49 $45 $56 $47 $0.38 $40 $44 $41 $46 $39 $38 $35 $20 $25 $22 $16 $17 $15 $14 $24 $12 $24 $0.35 $24 $24 $24 $24 $25 $24 $24 $24 $25 $24
Slide 24: Capex Program
CAPEX PROGRAM • The opportunities for value-added projects and facility modernizations are ongoing. Russel Historical Capex By Quarter - $ mm New 30k Lasers $35 $30 $29 $28 $25 $24 $24 $21 21 $20 $16 $15 $15$15 $15 $14 $14 $12 $11 $11 $11 $10 $10 $10 $10 $10 $9 $9 $9 $9 $9 $8 $8 $8 $8 $8 $7 $7 $6 $6
Slide 25: Acquisitions
ACQUISITIONS • We have completed several acquisitions over the past few years and continue to focus on tuck-in opportunities for our existing business units or standalone/complementary businesses. Acquisition History (C$ mm) $268 $167 $162 $157 $139 $113 $106 $70 $36 $39 $37 $22 $17 $27 $28 $27 $26
Slide 26: IV. Financial Overview
IV. FINANCIAL OVERVIEW
Slide 27: Trend of Recent Results
TREND OF RECENT RESULTS • Revenues were up 3% vs. Q1; positive steel prices and strong volumes • Gross margin increased by 180 bps; EBITDA margin increased by 160 bps • Continued recovery from Q4 trough • Capital structure remains strong Revenue (millions) Adj. EBITDA (millions) Adj. EBITDA Margin $
Slide 28: Summary: Financial Results
SUMMARY: FINANCIAL RESULTS $ mm, unless otherwise stated Q2 2024 Q1 2025 Q2 2025 Q2 2025 Observations: Income Statement: Revenues $1,072 $1,174 $1,207 • Revenues were up 3% vs. Q1 and up 13% vs. Q2’24 due to solid volumes, higher steel prices and last year’s acquisitions. Gross Margin ($ mm/%) $225
Slide 29: Variance Analysis: EBITDA Q1 2025 vs. Q2 2025
VARIANCE ANALYSIS: EBITDA Q1 2025 VS. Q2 2025 $140 $120 $4 $108 $23 $0 ($1) ($0) $100 $86 $80 ($4) C$ million Service Center Segment +$19 $60 • Mark-to-market on stock-based comp $5 $40 expense in Q2 vs. $3 mm recovery in Q1 • Thunder Bay Terminals seasonal recovery $20 $0 Q1 2025 Volumes Gross Marg
Slide 30: Segment Breakdown: Operating Results
SEGMENT BREAKDOWN: OPERATING RESULTS Revenue (C$ millions) Gross Margins % Earnings from Operations (C$ millions) $1,000 30% $80 $70 $800 25% $60 $600 $50 20% $40 $400 $30 15% $20 $200 $10 $0 10% $0 MSC Energy Distributors MSC Energy Distributors MSC Energy Distributors MSC: • Q2 had the benefit of
Slide 31: Service Center Results
SERVICE CENTER RESULTS • Q2 2025 tons were a near quarterly record. Tons Shipped (000’s) • Price realizations per ton and CGS per ton were both up -- 430 increase in gross margin per ton to $487 (up $57/ton vs. 410 390 Q1) and EBITDA per ton to $200 (up $52/ton vs. Q1). 370 350 330 310 290 270 Reven
Slide 32: Inventory Turns
INVENTORY TURNS • Total inventory turns in Q2 were comparable with Q1. Inventory Turns 5.0 4.7 4.5 3.8 4.0 4.0 4.0 3.9 3.7 4.0 3.9 3.9 3.8 3.9 3.8 3.7 3.5 3.4 3.8 3.7 3.6 3.5 3.0 3.0 2.9 2.5 2.2 2.5 2.0 1.5 1.0 0.5 0.0 March June Sept. Dec. March June Sept. Dec. March June Sept. Dec. March June Sept
Slide 33: Working Capital Management: Inventory
WORKING CAPITAL MANAGEMENT: INVENTORY • Total inventory was up slightly vs. Q1 reflecting lower tonnage offset by higher prices/ton. Inventory Trends $1,200 $1,050 $1,025 $986 $994 $1,012 $1,000 $957 $941 $948 $907 $924 $920 $894 $190 $211 $883 $122 $133 $862 $843 $861 $228 $166 $123 $125 $840 $104
Slide 34: Liquidity and Capital Structure Summary
LIQUIDITY AND CAPITAL STRUCTURE SUMMARY • Significant balance sheet flexibility. • Completed bank debt extension and removed springing lien provision in April. • All debt is unsecured with no financial covenants on long term debt. • Grew book value per share. 12/31/24 3/31/25 6/30/25 6/30/25 (C$ mm)
Slide 35: Return on Capital
RETURN ON CAPITAL Invested Capital at End of Period ($ millions) Return on Invested Capital – Trailing 3 Years Average $2,000 40% 36% $1,800 $1,710 +19% 31% $1,626 $1,600 30% $1,492 $1,436 $1,410 24% $1,400 $1,308 23% $1,200 $1,132 20% 17% 14% $1,000 $800 10% $600 $400 0% 2019 2020 2021 2022 2023 20
Slide 36: Industry Leading Return on Capital
INDUSTRY LEADING RETURN ON CAPITAL Return on Invested Capital - YTD 2025 (Annualized) Return on Invested Capital (Average Annual) - Last Two Years Ended 12/31/24 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% – – Russel Competitor #1 Competitor #2 Competitor #3 Russel Competitor #1 Competitor #2 Competitor #
Slide 37: V. Recent Acquisitions
V. RECENT ACQUISITIONS
Slide 38: Samuel Acquisition: Fit in W. Canada
SAMUEL ACQUISITION: FIT IN W. CANADA • The combined footprint in Western Canada created opportunities to reconfigure the equipment/locations, enhance operating efficiencies and reduce the combined capital. Russel Location Samuel Location # of Locations BC Alberta Sask. Manitoba Total Russel 5 9 4 3
Slide 39: Samuel Acquisition: Extension into US Northeast
SAMUEL ACQUISITION: EXTENSION INTO US NORTHEAST • Samuel’s US NE operations extended Russel’s geography and increased economies of scale in plate processing. Russel - Buffalo, NY Wisconsin Pittsburgh, PA Russel Location Samuel Location 39
Slide 40: Samuel Acquisition: Invested Capital Update
SAMUEL ACQUISITION: INVESTED CAPITAL UPDATE • At the time of the Samuel acquisition announcement, the purchase price approximated the book value. Since that time, we reduced the invested capital by ~$100 mm(1) and substantially reduced the implied purchase price multiple. Invested Capital – C$ Milli
Slide 41: Tampa Bay Steel Acquisition: Summary
TAMPA BAY STEEL ACQUISITION: SUMMARY • Final purchase price of US$75 mm. • Average sales and adjusted EBITDA of US$115 mm and US$13 mm, respectively, over the past five years • Invested US$20 mm in capex over past three years – significant value-added processing with capacity to grow. • Product mix
Slide 42: Kloeckner Asset Acquisition: Summary
KLOECKNER ASSET ACQUISITION: SUMMARY • The Kloeckner Assets to be Acquired: • Seven locations in the US (2 in Florida; 2 in Texas; 1 in Georgia; 1 in North Carolina; and 1 in Iowa) • Assets include the net working capital, buildings, real estate and equipment for those locations – all properties wil
Slide 43: Kloeckner Asset Acquisition: Expansion of US Footprint
KLOECKNER ASSET ACQUISITION: EXPANSION OF US FOOTPRINT • Our geographic coverage will be enhanced across key industrial hubs in the US. • The combined footprint should create opportunities to reinvest in the Kloeckner branches and improve operating performance. Mid-West Region Dubuque, IA Northeast
Slide 44: Contact Information
6600 Financial Drive, Mississauga, Ontario L5N 7J6 Email: info@russelmetals.com Visit us at: www.russelmetals.com Investor Relations Line: 905.816.5178