1 Investment Highlights Worthington Steel Investor Presentation | December 2025 Safe Harbor Statement Selected statements contained in this release constitute "forward-looking statements," as that term is used in the Private Securities Litigation Reform Act of 1995 (the "Act"). The Company wishes to take advantage of the safe harbor provisions included in the Act. Forward-looking statements reflect the Company's current expectations, estimates or projections concerning future results or events. These statem ...

Core Insights - Meros Investment Management has fully exited its position in Worthington Steel, resulting in a liquidation valued at nearly $5.3 million, which reflects a significant portfolio adjustment [2][10]. Company Overview - Worthington Steel, based in Columbus, Ohio, operates as a steel processor with a diversified product portfolio, serving various industrial sectors including automotive, heavy truck, agriculture, construction, and energy [6][9]. - As of the latest market close, Worthington Steel shares were priced at $35.92, with a market capitalization of $1.8 billion, revenue of $3.1 billion, and net income of $118.6 million for the trailing twelve months (TTM) [4][6]. Recent Performance - The company reported a 5% revenue growth to $872.9 million in the most recent quarter, alongside an increase in operating income to $48.3 million and net earnings of $36.8 million, all showing meaningful improvement from the previous year [7]. - Adjusted earnings per share rose to $0.77 from $0.56, indicating positive traction in core spreads despite some volume softness in certain categories [7]. Market Context - Worthington Steel's stock has underperformed, down 18% over the past year, while the S&P 500 has increased by 13% during the same period [3]. - The exit by Meros Investment Management raises questions about investor sentiment, especially as the company appears to be stabilizing after its spin-off [7][10]. Strategic Positioning - Worthington Steel's vertically integrated model, strong balance sheet, and recent acquisition of the Sitem Group contribute to its ongoing transformation efforts [10]. - The company continues to focus on dividend continuity and steady margin improvement, which are key factors for fundamentals-driven investors to monitor [10].

Core Viewpoint - Worthington Steel, Inc. is currently in negotiations with Klöckner & Co SE regarding a potential voluntary public takeover offer, but no investment decision has been made and discussions may not lead to a transaction [1] Company Summary - Worthington Steel, Inc. is a metals processor that collaborates with customers to deliver solutions [1]

Company Overview - Worthington Steel, Inc. is a relatively new independent company in the metals industry, having been spun off from Worthington Industries to focus more directly on steel processing [1] Investment Focus - The analysis primarily targets small- to mid-cap companies, which are often overlooked by many investors, while also occasionally reviewing large-cap names to provide a broader perspective on equity markets [1]

Financial Performance - Worthington Steel's net sales for the trailing twelve months (TTM) were $3.132 billion[70, 104] - The adjusted EBITDA for the TTM period was $235 million, with a margin of 7.5%[11, 71, 104] - Free cash flow for the TTM period was $32.4 million[11, 104] - Capital expenditures for the TTM period were $138.3 million, representing 4.4% of sales[11] Market Position and Strategy - The company delivered 3.7 million tons of steel in the TTM period, with 2.2 million tons direct and 1.5 million tons toll[11] - Automotive accounts for 53% of net sales, followed by Construction at 11%[13, 34] - The company is targeting a 10%+ adjusted EBITDA margin through various strategies[76, 77] - The company has a strong balance sheet with net leverage at 0.66x and total liquidity of $355 million[88] Growth Initiatives - The company is investing $85 million in Mexico to increase motor lamination capacity for xEV demand, targeting production start in early CY 2026[55, 59] - The company is investing $85 million in Canada to increase transformer core making capacity, targeting production start in early CY 2026[56, 59] - The company acquired a 52% ownership in Sitem Group to strengthen its electrical steel business globally[62, 66]