2 0 1 6 I N V E S T O R P R E S E N TAT I O N J U N E 1 5 , 2 0 1 6 R Y E R S O N I N V E S T O R P R E S E N T A T I O N
IMPORTANT INFORMATION ABOUT RYERSON HOLDING CORPORATION These materials do not constitute an offer or solicitation to purchase or sell securities of Ryerson Holding Corporation (the “Company”) and no investment decision should be made based upon the information provided herein. Ryerson strongly urges you to review its filings with the Securities and Exchange Commission, which can be found at ir.ryerson.com/financial-info/sec-filings/. This site also provides additional information about Ryerson. SAFE HARBOR PROVISION Certain statements made in this presentation and other written or oral statements made by or on behalf of the Company constitute “forward - looking statements” within the meaning of the federal securities laws, including statements regarding our future performance, as well as manageme nt’ s expectations, beliefs, intentions, plans, estimates or projections relating to the future. Such statements can be identified by the use of forward-looking terminol ogy such as “believes,” “expects,” “may,” “estimates,” “will,” “should,” “plans” or “anticipates” or the negative thereof or other variations thereon or comparable ter minology, or by discussions of strategy. The Company cautions that any such forward-looking statements are not guarantees of future performance and may involve significant risks and uncertainties, and that actual results may vary materially from those in the forward-looking statements as a result of various factors. Among the factors that significantly impact the metals distribution industry and our business are: the cyclicality of our business; the highly competitive and fragmented market in which we operate; fluctuating metal prices; our substantial indebtedness and the covenants in instruments governing such indebtedness; the integration of acquired operations; regulatory and other operational risks associated with our operations located inside and outside of the United States; work stoppages; obligations regarding certain employee retirement benefit plans; the ownership of a majority of our equity securities by a single investor group; currency fluctuations; and consolidation in the metals producer industry. Forward-looking statements should, therefore, be considered in light of various factors, including those set forth above and tho se set forth under “Risk Factors” in our annual report on Form 10-K for the year ended December 31, 2015 and in our other filings with the Securities and Exchange Commission. Moreover, we caution against placing undue reliance on these statements, which speak only as of the date they were made. The Company does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events or circumstances, new information or otherwise. NON-GAAP MEASURES Certain measures contained in these slides or the related presentation are not measures calculated in accordance with generally accepted accounting principles (GAAP). They should not be considered a replacement for GAAP results. Non-GAAP financial measures appearing in these slides are identified in the footnotes. A reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures is included in the Appendix. 2 R Y E R S O N I N V E S T O R P R E S E N T A T I O N
B U S I N E S S O V E R V I E W M I K E B U R B A C H │ P R E S I D E N T , N O R T H - W E S T R E G I O N R Y E R S O N I N V E S T O R P R E S E N T A T I O N
Ryerson: Scale and Network • One of North America’s largest metals processors and distributors, with 2015 sales of $3.2 billion • Approximately 100 interconnected locations in North America and China • Founded in 1842; listed on NYSE since 2014 • Distribute 65,000 products to 40,000 active customers 4 R Y E R S O N I N V E S T O R P R E S E N T A T I O N
Metal Service Center Supply Chain S U P P L I E R S C U S T O M E R S R Y E R S O N S E R V I C E C E N T E R S • Manufacture metals • Purchase in scale; ship smaller quantities • Purchase smaller quantities • Distribute more than 65,000 carbon, • Produce & ship large • Require a variety of stainless, and aluminum products volumes products and services • Process 75% of products sold • Have long lead times with • Can leverage Ryerson to high variance delivery times reduce processing and • Deliver same/next day inventory investment needs • Provide product and end-market expertise R Y E R S O N I N V E S T O R P R E S E N T A T I O N 5
Ryerson’s Differentiated Model: What Customers Value “ONE RYERSON” • Single franchise / one brand • Great customer experiences CONNECTIVITY RYERSON • Technical knowledge GEOGRAPHIC SCALE • Processing & fabrication • Service largest metals markets Leveraging Scale and to meet our customers’ needs • Logistics Integrated Network • Inventory MULTI-CHANNEL SALES • Local sales and service • Customer service prospecting centers • Ryerson.com / e-commerce 6 R Y E R S O N I N V E S T O R P R E S E N T A T I O N
Highlights: Excellent Execution Amidst Bottoming Secular Trends • Stabilizing and improving industrial metal commodity prices Macro Environment • Pressure for secular demand improvement building as under- investment is prevalent • Proven expense and working capital management • Ryerson business model and execution building momentum Ryerson’s Execution • Market share gains • Cash generation and reducing leverage 7 R Y E R S O N I N V E S T O R P R E S E N T A T I O N
2016 Commodity Prices: Global Capacity Surplus Rebalancing Carbon Recovery With Range-Bound Nickel and Aluminum 1.300 Chg. Jun '14 vs. Chg. Dec '15 vs. CRU HRC LME Nickel Midwest Aluminum 2016 Prices Dec '15 May '16 1.200 CRU HRC (USD/st) -47% 66% LME Nickel Cash Average (USD/lb) -53% 0% 1.100 Midwest Aluminum (USD/lb) -25% 2% Price index to Jun. 2014 1.000 0.900 0.800 0.700 0.600 0.500 0.400 Source: Bloomberg 8 R Y E R S O N I N V E S T O R P R E S E N T A T I O N
PMI Trends: Slowly Improving From A Bottoming Over The Past Three Quarters U . S . M A N U F A C T U R I N G P M I 53.1 53.1 51.9 51.8 51.3 51.0 50.8 50.0 49.5 49.4 48.4 48.2 48.0 MAY-15 JUN-15 JUL-15 AUG-15 SEP-15 OCT-15 NOV-15 DEC-15 JAN-16 FEB-16 MAR-16APR-16 MAY-16 Source: Bloomberg 9 R Y E R S O N I N V E S T O R P R E S E N T A T I O N
Macro Trends: Promising Over The Longer-Term With Underinvestment Notable Since 2009 U . S . C A R B O N a n d S T A I N L E S S S T E E L S H I P M E N T S 6,000 5,500 5,000 Average Tons Jan. '93 - Oct. '08 = 4,200 Tons in Thousands 4,500 Average Tons Nov. '08 - Present = 3,200 4,000 3,500 3,000 2,500 2,000 Source: Metals Service Center Institute 10 R Y E R S O N I N V E S T O R P R E S E N T A T I O N
End Market Mix, Recovery and Growth 2 0 1 5 S A L E S M I X Shading based on Q1 2016 vs. Q1 2015 All Other tonnage change: 7% GROWING Oil & Gas 7% Commercial Ground STABLE Transportation 18% DECLINING Food Processing & Ag. 7% Construction Equipment Metal Fabrication and 8% Machine Shops 18% HVAC 8% Consumer Durable Industrial Machinery 10% and Equipment 17% 11 R Y E R S O N I N V E S T O R P R E S E N T A T I O N
A Ryerson for All Seasons with Competitive Advantages Built Around Speed, Scale, Value-Add, Culture and Analytics NATHAN NORMAN Industry-leading expense and working capital management SERVICE CENTER OPERATOR ELDRIDGE, IOWA Enhancing margins with greater value-add Building sustainable competitive advantages to fuel growth Excellent execution and market share gains Generating strong cash flows and reducing debt balances 12 R Y E R S O N I N V E S T O R P R E S E N T A T I O N
INDUSTRY-LEADING PERFORMANCE OPERATIONAL EFFICIENCY MARGIN EXPANSION PROFITABLE GROWTH Expense and working Optimize product and Leveraging scale in highly capital leadership customer mix fragmented market Significant operating Value-added processing Multi-channel sales and leverage distribution platform Value-driven pricing Best practice talent Investment in capabilities Supply chain innovation, management architecture and leadership Bolt-on acquisitions Speed Unleashing analytics Our culture: contributing meaningfully to our customers’ success R Y E R S O N I N V E S T O R P R E S E N T A T I O N 13
Impressive U.S. Carbon and Stainless Market Share Gains 3.75% T O N N A G E M A R K E T S H A R E 3.53% 3.51% 3.46% 3.41% Q1 '15 Q2 '15 Q3 '15 Q4 '15 Q1 '16 Source: Metals Service Center Institute 14 R Y E R S O N I N V E S T O R P R E S E N T A T I O N
Optimizing Mix to Improve Gross Margin Dollars 2 0 1 0 S A L E S M I X 2 0 1 5 S A L E S M I X Cut Long & Plate Cut Long & 4.2% Plate Fabrication Fabrication 2.9% 6.7% 10.4% As-Is Long & Plate As-Is Long & 18.7% Plate Cut to Length 20.3% Cut to Length Sheet Sheet 63.1% 67.8% • Expand value-added processing: More than 75% of metal gets processed to customer specifications with growth in high margin fabrication • Understand margins, cost to serve, asset efficiency and industry math 15 R Y E R S O N I N V E S T O R P R E S E N T A T I O N
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