Ryerson Holding Corporation · NYSE:RYZ
Ryerson — Global Steel CEO Forum 2006
18 slides from Ryerson's conference presentation, Dec 4, 2006
Slide 1: Global Steel CEO Forum 2006
Global Steel CEO Forum 2006 Goldman Sachs December 6-7, 2006 New York Exhibit 99.1
Slide 2: EBITDA: The turnaround in 3 phases
EBITDA* The turnaround in 3 phases (50.1) 20.8 27.4 121.1 275.8 203.1 (100) (50) 3Q 2006 YTD $ in millions * Earnings before discontinued operations, taxes, interest expense, depreciation and amortization. (Full reconciliation is attached.) Recession / Restructuring Integris Acquisition Future Oppor
Slide 3: Our strategy is a constant: Three Fundamental Principles
Our strategy is a constant Three Fundamental Principles 1. Focus on operating efficiency 2. Capture organic growth 3. Seek acquisitions and joint ventures to: Structurally enhance competitive position Provide additional earnings growth Part way through a multi-year process A lot completed More to be
Slide 4: Reach cost-saving goal of $50 million from Integris integration by end of 2007
Reach cost-saving goal of $50 million from Integris integration by end of 2007 Consolidate additional 15 facilities; reduce headcount; complete consolidation of overhead Reach inventory turnover goal of 5x by end of 2007 Can significantly enhance return on assets and cash flow Do at a pace to retain
Slide 5: Lean Six Sigma problem solving and continuous improvement
Lean Six Sigma problem solving and continuous improvement process to increase operating efficiencies Target improvements throughout the company/ across all strategic initiatives Specific financial goals Quantitative measurement of progress Lean Six Sigma Sell the Change Transfer Knowledge
Slide 6: Organic growth: Marketing
Results • Met or exceeded expectations for 80% of customers 10,000 new accounts Annualized revenue of $200 mil. Aggressive marketing and brand creation • Promotions • Targeted vertical markets • Direct outbound telesales Leads to trial • Good experience leads to retention National marketing program
Slide 7: Acquisition and joint venture strategy
Product/supply chain “Add strength to strength” Highest overall potential Cross-selling opportunities “Buying a cash flow” Very risky New markets Acquisition and joint venture strategy Product/supply chain Different Different Same Same Service center industry is fragmented and consolidating • Ample
Slide 8: Integris acquisition created a leading metals service center company
Trailing 12-month revenues (through 3Q06) Stainless & Aluminum Sales $3,103 Integris acquisition created… A leading metals service center company Source: Company filings and press releases Converted to US$ using exchange rate as of 9/30/2006 $5,798 $1,754 $960 $6,214 $2,464 Reliance Steel & Earle M.
Slide 9: Broad geographic footprint
…Broad geographic footprint
Slide 10: A rich product mix and diverse customer base
2005 revenues by product 2005 sales by end market …And a rich product mix and diverse customer base Other 5% Carbon flat rolled 26% Stainless and aluminum 50% Bars, tubing, structurals 10% Fabrication & carbon plate 9% Machinery 31% Fabricated metals 27% Electrical machinery 13% Transportation 10% C
Slide 11: JVs: $400 million annual revenue to date
JVs: $400 million annual revenue to date Mexico India China Closed 10/2006 Collado Ryerson Mexico 50/50 fabrication venture 2005 revenues: $63 million Tata Ryerson India 50/50 venture Fiscal 2006 (March ‘06) revenues: $160 million (1 million+ tons processed annually- including tolling) Metals distri
Slide 12: Recent jumps in metal prices
Stainless and Aluminum 1,000 1,500 2,000 2,500 3,000 3,500 0.7 0.9 1.1 1.3 1.5 1.7 1.9 2.1 Stainless Aluminum Source: Purchasing Magazine *Spot prices include raw materials' surcharges starting in 1st Quarter 2001 Hot Rolled, Cold Rolled and Plate Prices Hot Rolled Cold Rolled Carbon Plate Source: P
Slide 13: Hypothetical LIFO vs. FIFO: Where is the value during a rising price environment?
FIFO Methodology 1,000 1,200 - 1,000 1,200 1,400 LIFO Methodology 1,000 1,200 - 1,000 1,200 1,400 $300 $500 LIFO Reserve Hypothetical LIFO vs. FIFO- Where is the value during a rising price environment? ANSWER: SAME FUNDAMENTALLY LIFO- Lower income, higher reserve FIFO- Higher income, no reserve Per
Slide 14: LIFO reserve increased significantly
LIFO reserve increased significantly Material Cost Per Ton to LIFO Reserve Material Cost Per Ton LIFO Reserve Note: Integris results included as of 1Q 2005 $300MM
Slide 15: Gross profit per ton increases with material cost per ton
Gross profit per ton increases with material cost per ton Material Cost Per Ton to Gross Profit Per Ton Material Cost Per Ton Gross Profit Per Ton Note: Integris results included as of 1Q 2005
Slide 16: Debt management
Debt management *Current value of inventory as of 1/31/05 1,000 1,050 1,100 1,150 1,200 1,250 1,300 1,350 1,400 1,450 1,500 1,550 1,600 1/4/05* 3/31/05 6/30/05 9/30/05 12/31/05 3/31/06 6/30/06 9/30/06 40% 45% 50% 55% 60% 65% 70% 75% 80% Debt Current Value of Inv. Debt-to-Capital
Slide 17: Profit drivers and impact
Profit drivers and impact Business model Profit drivers Impacted by Volume (tonnage) Manufacturing economy 2 types of customers 50%-60% OEMs—agreements 40%-50% transactional—spot pricing Gross margins (gross profit/ton) Market conditions Buy and sell negotiations Selling prices Material costs Operat
Slide 18: EBITDA Reconciliation
2001 2002 2003 2004 2005 3Q 2006 YTD EBITDA Reconciliation Net income ($61.1) ($95.7) $(13.6) $56.0 $98.1 $76.2 Cumulative effect of change in accounting principle ---- 82.2 ---- ---- ---- ---- Discountinued operations (gain)/loss ---- 1.7 ---- (7.0) ---- ---- Income tax/(benefit) (40.1) (7.0) (1.7)