Operationalization of significant capex projects continued to progress as we gained market share, continued to grow our transactional business, and achieved Adjusted EBITDA, excl. LIFO at the top of our guidance range.CHICAGO, July 29, 2025 /PRNewswire/ -- Ryerson Holding Corporation (NYSE: RYI), a leading value-added processor and distributor of industrial metals, today reported results for the second quarter ended June 30, 2025.Highlights:  Generated second quarter revenue of $1.17 billion, in-line with g ...

Summary of the Conference Call on Steel Industry - July 2025 Industry Overview - The steel industry is currently experiencing a lackluster demand environment in Europe, despite some supportive trade measures and potential increases in defense and infrastructure spending [9][10] - The demand for carbon steel is expected to remain weak, with no clear signs of recovery anticipated in 2025 [9][10] - Stainless steel demand is also expected to lag behind carbon steel due to its later-cycle nature, with no inflection predicted for 2025 [9][10] Key Insights - **Demand Conditions**: Demand conditions in Europe are weak, leading to a continued erosion of EU Hot-Rolled Coil (HRC) spreads, which have fallen below historical averages [9][10] - **Equity Ratings**: Steel equities have seen a sharp re-rating, with shares outpacing fundamentals, particularly for companies like thyssenkrupp and Salzgitter, which diminishes their risk-reward appeal [9][10] - **Preferred Companies**: - **Carbon Steel**: voestalpine is favored due to its resilient EBITDA/t and manageable decarbonization investments [10] - **Stainless Steel**: Acerinox is preferred for its strong earnings profile supported by US exposure and high-margin alloys business [11] Financial Performance - The steel sector is trading at approximately a 34% discount to its historical average on EV/normalized EBITDA, but consensus earnings downgrades for 2025 are anticipated [9][10] - Companies like thyssenkrupp have seen their shares double year-to-date, but the valuation appears stretched with a 20-30% premium to their sum-of-the-parts (SotP) valuation [10] Market Dynamics - **Construction and Automotive Demand**: These sectors are identified as key demand drivers for steel, but current indicators suggest a slowdown in growth [21][22] - **Global Steel Production**: The center of gravity for global steel production is shifting towards Asia, with significant production expected from China [19][27] Trade and Inventory Insights - EU steel imports are heavily influenced by countries like Turkey, South Korea, and China, with specific quotas set for various products [81][87] - Steel inventories across the value chain are being monitored, with US steel inventory indexed to January 2019 showing fluctuations [71] Economic Indicators - The construction confidence indicator in the EU has shown a decline, reflecting lower confidence in the sector [38] - In China, cement production growth has been negative, indicating potential challenges in construction-related steel demand [43] Conclusion - The steel industry is currently in a phase of waiting for a demand inflection, with key indicators suggesting continued weakness in both carbon and stainless steel markets. The focus remains on managing costs and navigating the challenging demand landscape while identifying potential investment opportunities in resilient companies like voestalpine and Acerinox [9][10][11]

Investment Rating - The report maintains an 'In-Line' industry view for the steel sector, indicating a balanced risk-reward profile [7]. Core Insights - Carbon steel prices are experiencing softening momentum, with continued downside risks expected in the near term due to unclear demand recovery [6]. - Stainless steel demand is anticipated to remain lackluster, trailing carbon steel recovery, with no inflection expected in 2025 [8]. - The sector is currently trading at a ~34% discount to its historical average on EV/normalized EBITDA, but consensus earnings downgrades for 2025 are anticipated [9]. Carbon Steel Summary - The report highlights that EU HRC spreads have risen above historical averages due to supportive trade policies and prospects for defense/infrastructure spending [6]. - ArcelorMittal and voestalpine are identified as the most preferred companies in carbon steel, with voestalpine showing resilience in EBITDA/t during the downturn [10]. - Thyssenkrupp shares have seen significant re-rating, but the report suggests that the current valuation may not reflect the underlying business's cash needs and earnings potential [10]. Stainless Steel Summary - Acerinox is favored in the stainless steel segment due to its resilient earnings profile and exposure to the US/alloys market [11]. - The report notes that Aperam's diversified business model may not be enough to counteract the weak demand in Europe, impacting near-term earnings momentum [11]. - The overall stainless steel market is expected to face challenges due to global growth concerns and below-average spreads in the EU/US [8]. Demand Drivers - Key demand drivers for steel include construction and automotive sectors, with significant contributions from building & infrastructure and mechanical equipment [21][22]. - The report emphasizes that the automotive sector's performance is crucial for steel demand, particularly in Western Europe and the US [27][30]. Supply and Trade Dynamics - The report discusses the steel supply landscape, noting that major producers in the EU and China are adjusting production levels in response to demand fluctuations [65][68]. - It highlights the net trade flows of steel, with China being a significant exporter, impacting the EU market dynamics [80][81]. Valuation and Performance - The report provides a snapshot of equity performance, indicating that steel equities have re-rated sharply, with some companies trading at premiums to their sum-of-the-parts valuations [10][12]. - The overall steel sector's performance is compared against indices like MSCI Europe and STOXX Europe, showing varied performance across different companies [13][16].

Core Insights - Ryerson Holding Corporation reported a net sales of $1.14 billion for Q1 2025, reflecting a 12.7% increase from Q4 2024, driven by strong transactional sales and market share gains [5][8] - The company experienced a net loss of $5.6 million, or $0.18 per diluted share, which is an improvement compared to a net loss of $7.6 million in Q1 2024 [8][27] - Adjusted EBITDA, excluding LIFO, was $32.8 million, showing a significant increase of 218.4% from Q4 2024 [8][25] Financial Highlights - Revenue for Q1 2025 was $1,135.7 million, down 8.4% year-over-year but up 12.7% quarter-over-quarter [3][5] - Tons shipped increased to 500,000, up 11.9% from the previous quarter and slightly up 0.6% year-over-year [3][8] - Average selling price per ton was $2,271, a 0.8% increase from Q4 2024 but down 8.9% year-over-year [3][8] Cost and Margin Analysis - Gross margin contracted to 18.0% in Q1 2025 from 19.0% in Q4 2024, primarily due to rising costs of goods sold [6][26] - Excluding LIFO, gross margin improved to 18.6%, up 220 basis points from the previous quarter [6][26] - Operating expenses increased by 7.2% to $202.1 million, driven by higher personnel-related expenses, but decreased by $14.7 million compared to the prior year [7][8] Debt and Liquidity - Total debt at the end of Q1 2025 was $497.3 million, with net debt at $463.7 million, reflecting a sequential increase [10][8] - Cash and cash equivalents rose to $33.6 million, a 21.3% increase from the previous quarter [10][8] - The company reported a cash conversion cycle of 66.5 days, indicating improved working capital management [10][8] Market Position and Outlook - Ryerson gained market share in the industry, with transactional sales increasing by 12% year-over-year [8][4] - The company anticipates Q2 2025 net sales to range between $1.15 billion and $1.19 billion, with average selling prices expected to rise by 3% to 4% [13][8] - Management emphasized ongoing improvements in operational productivity and capital investments aimed at long-term growth [4][5]