2. FORWARD-LOOKING STATEMENT AND
NON-GAAP MEASURE
This presentation may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. These
forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ materially from those projected in
these statements.
Further information on factors that could affect the Company’s financial
and other results are included in the Company’s Annual Report on Form
10-K for the year ended December 31, 2007 and other reports on file with
the Securities and Exchange Commission.
For data included within this presentation that is considered a “non-
GAAP financial measure” any reconciliations required by Regulation G
will be provided.
2
3. COMPANY PROFILE
• A Fortune 500 company founded in 1939 in Los
Angeles that went public in 1994
• NYSE company with $7.26 billion in 2007 annual net
revenues and $1.91 billion in revenues for the three
months ended March 31, 2008
• One of the largest metals service center companies
in the U.S.
• Provides value added metals processing services
• Distributes a full-line of over 100,000 products
to more than 125,000 customers
• More than 180 locations in 37 states and Belgium,
Canada, China, South Korea and United Kingdom
3
4. THE ROLE OF RELIANCE
Primary Producers Reliance Steel & Aluminum Co. End Users
> Pre-production > Over 125,000 customers
processing including:
> Over 5,375,000 orders
• Slitting (average order size $1,350)
• Cutting in 2007
• Sawing
> 21,400 transactions
• Leveling
per business day in 2007
• Shearing
• Blanking > Just-in-time 24-hour delivery
• Burning
> No customer represented
• Toll processing
more than 1.0% of total
> Inventory management 2007 sales
> Just-in-time delivery
> Over 100,000 products
> Approximately 85% of sales
from repeat customers
4
5. RECENT ACCOMPLISHMENTS
• Best-ever 2007 fiscal year financial results
• Record 2007 sales of $7.26 billion, up 26%
and net income of $408.0 million, up 15%
and $5.36 earnings per diluted share, up
11% (stock split adjusted)
• Completed five acquisitions in 2007 and
one acquisition so far in 2008
• 25% dividend increase to $.10 per share
• Purchased 4.1 million shares of common
stock under the Share Repurchase Plan
5
6. AGGRESSIVE ACQUISITION STRATEGY
• More than 40 acquisitions since 1994 IPO
• Immediately accretive to shareholders
• Minimum 15% pre-tax ROI
• Current management and employees remain in
place
• Brand name stays in the community
6
7. INTERNAL GROWTH ACCOMPLISHMENTS
• Liebovich Bros. opened a new facility in WI and Siskin Steel
& Supply expanded facility in TN
• Phoenix Metals added new locations in OH and PA and
moved into a larger, more efficient facility in AL
• Precision Strip expanded AL facility and increased
Allegheny Steel Distributors facility in PA
• Doubled the size of AMI Metals facility in Belgium and
expanded the Valex Korea operation
• New Valex facility in Shanghai, China
• $124 million in 2007 and budgeted $210 million for 2008
7
8.
9. 2007 SALES BY PRODUCT
11%Ca rbon S t e e l P la t e
9%Ca rbon S t e e l Tubing
10%Ca rbon S t e e l Ba r
7%Ca rbon S t e e l S t ruc t ura ls
4%Ga lva niz e d S t e e l S & C
3%Hot Rolle d S t e e l S & C
2%Cold Rolle d S t e e l S & C
7%Aluminum Ba r & Tube
5%He a t Tre a t e d Aluminum P la t e
4%Common Alloy Aluminum S & C
1%He a t Tre a t e d Aluminum S & C
2%Common Alloy Aluminum P la t e
9%S t a inle ss S t e e l Ba r & Tube
6%S t a inle ss S t e e l S & C
3%S t a inle ss S t e e l P la t e
7%Alloy Ba r & Rod
1%Alloy Tube
5%Ot he r
1%Ele c t ropolishe d S S Tubing
2%Toll P roc e ssing
9
10. 2007 SALES BY COMMODITY
Other Toll
Alloy 5% 2%
9%
Carbon Steel
46%
Stainless Steel
19%
Aluminum
19%
10
11. 2007 SALES BY REGION
Northeast
Foreign California
Pacific NW 5% 6%
16%
8%
MidAtlantic
4%
Mountain
5%
Southeast
19%
Midwest West/SW
25% 12%
11
12. BROAD GEOGRAPHIC COVERAGE
National Network
More than 180 locations in 37 states and Belgium,
Canada, China, South Korea and United Kingdom
12
13. GEOGRAPHIC, PRODUCT AND
CUSTOMER DIVERSITY
• More than 180 locations in 37 states and Belgium, Canada,
China, South Korea and United Kingdom
• Full range of over 100,000 products
– Non-residential construction, general manufacturing and
transportation categories including aerospace, truck trailer and
rail car, energy, oil and gas, semiconductor, electronics and
wind turbines markets
– Diversified customer base of more than 125,000 customers
– No customer represented more than 1.0% of 2007 sales
– Toll processing 2% of sales
13
14. MARKET CONDITIONS
• Proven ability to perform in all types of
operating environments
• All sectors performing reasonably well
• Healthy metals pricing
• Oil, gas and energy end markets strongest
• Geographic regions remain healthy
• Favorable industry consolidation and acquisition
opportunities
14
15. NET SALES
(Millions of $)
$7,255
$5,742
6000
5000
4000 $3,367
$2,943
3000
$1,908
$1,842
$1,882
2000
1000
0
2003 2004 2005 2006 2007 2007 2008
March 31
15
16. NET INCOME
(Millions of $)
$408.0
400 $354.5
350
300
$205.4
250
$169.7
200
$111.7 $107.4
150
100 $34.0
50
0
2003 2004 2005 2006 2007 2007 2008
March 31
16
18. 2007 FINANCIAL HIGHLIGHTS
• Strong financial position and ready access to capital
• Managed working capital well in 2007
• Operating cash flow of $639 million, or $8.40 per diluted share
• Net-debt-to total capital ratio of 33.1% at March 31, 2008 and
32.4% at December 31, 2007
• Book value of $28.81 at March 31, 2008 and $28.12 at
December 31, 2007
• Investment grade credit rating
18
19. Stock Price Performance
$ 600
Reliance Steel &
500 Aluminum Co.
S & P 500
400
Russell 2000
300
New Peer Group
200
Old Peer Group
100
0
12/02 12/03 12/04 12/05 12/06 12/07
* $100 Invested on December 31, 2002 in stock or index – including
reinvestment of dividends. Fiscal Year ending December 31.
19
20. SHAREHOLDER VALUE
• 48 years of consecutive quarterly cash dividends
• 25% dividend rate increase effective 2008 1Q to $.10 per share
• Increased regular dividend 15 times (since 1994 IPO)
• Committed to shareholder value - 2007 ROE of 23%
• Dividend payments increased 1,700% (since 1994 IPO)
• Stock value compound annual growth rate of 24% at
March 31, 2008 (since 1994 IPO)
• Named to the 2007 Fortune 500 list
20
21. CORPORATE SUSTAINABILITY
• Economic sustainability
• Environmental stewardship
• Social well-being, health and safety
21
22. INVESTMENT HIGHLIGHTS
• A market leader within the metals service center industry
• Diversification of products, customers and geography serve to reduce
volatility in operating performance
• Favorable industry dynamics supported by healthy end use markets
• Unique, decentralized operating structure focused on profitability and
working capital management
• Demonstrated ability to grow existing businesses and also identify
and make accretive acquisitions
• Experienced management team with solid track record
• Financial strength and discipline to support continued growth
22
