Steel & Tube – NZX Virtual Investor Event May 2023

Company Announcement
10 May 2023







Steel & Tube Holdings Limited, PO Box 58880, Botany, Auckland 2163, New Zealand
P +64 4 570 5000 www.steelandtube.co.nz


NZX VIRTUAL INVESTOR EVENT
Steel & Tube CEO Mark Malpass will be presenting at the NZX’s Virtual Investor Event today (10 May
2023) at 11.00 am. Steel & Tube encourages all interested parties to register to attend this webinar.

Register at https://register.gotowebinar.com/register/7364748116393408861


ENDS

For media or investor enquiries, please contact: Jackie Ellis Tel: +64 27 246 2505 or
email: jackie@ellisandco.co.nz


For further information please contact:
Mark Malpass
Steel & Tube CEO
Tel: +64 27 777 0327
Email: mark.malpass@steelandtube.co.nz
Richard Smyth
Steel & Tube CFO
Tel: +64 21 646 822
Email: richard.smyth@steelandtube.co.nz

---

NZX Investor Presentation
10 May 2023

Agenda
•About Steel & Tube
•Growth Strategy
•Guidance and Outlook
•Investing in STU
•Discussion
2

3
Steel & Tube
Our purpose is to make life easier for customers
needing steel solutions
•One of NewZealand’s leading providers of steel
solutions
•A proud NewZealand company, celebrating our
70
th
year of trading
•We offer NewZealand’s most comprehensive
range of steelproducts, services and solutions
•Our stable of best-in-class businesses are some of
this country’s leadingsteel suppliers
As at 31 December 2022
•850 Team Members
•27 Sites across NZ,
excluding one
transitional site in
Hamilton
About Us

4
Our business divisions
Products sourced from preferred
steel mills and distributed through
our national network
Products processed before sale, typically
on a contract or project basis, including
onsite installation services
Distribution
Infrastructure
SteelPiping SystemsChain & Rigging
FasteningsRural ProductsStainless Steel
RoofingCoil ProcessingReinforcing
PurlinsComFlor/ CFDLMesh
About Us

5
Extensive range of products and solutions
Primary product and service
offering by participants
Steel distributionPlate processing Coil processingStainless steelEngineering steelReinforcing steelWireRoofingFasteners
Steel & Tube

5

5

5

5

5

5

5

5

5
Fletcher Steel

j

5

5

5

5

5

55
Vulcan

5

5

5

5

5
United Industries

5

5

5

55
Asmuss

55

5

5
Summit Steel & Wire

5

55

5
Wakefield Metals

5

5
About Us

6
Building a long term
sustainable business
6
Supporting our
people and
customers
Maximising steel’s
contribution to a
sustainable and low
emission society
Delivering value
to our
shareholders
Steel sustainability
Steel offers a number of advantages in a future
where climate change and extreme weather events
are likely to become more common
•Steel is a lightweight but strong product that
provides durability, and is 100% recyclable and
reusable
•As demonstrated with the Canterbury rebuild,
steel is an optimal choice of construction
material – builds faster with less disruption,
flexible, extends building life, minimal waste,
optimal thermal performance
•Steel is infinitely recyclable, durable, non-toxic
and inert
About Us

7
Clear growth strategy in place
Strategic Goals
1. Customer
To be the preferred
supplier for steel
solutions and
products
2. Growth
Increase value
through organic
growth and
programmatic
smaller M&A
3. Shareholder
Deliver increasing
value and returns
for our
shareholders
Growth Strategy
4. Sustainability
Financially rewarding
for our shareholders
and positive for our
people, our
customers and our
planet

8
Strategic pathways: Buildingon strong foundations to strengthen the core and
investing in high value products, services and sectors for growth
Strategic InitiativeEarly
stage
Hitting
its stride
Full
benefit
Continue to
strengthen the core
Continue to build best-in -class customer experience and accelerate shift to digital sales

Leverage opportunities to cross sell a wide range of products and services

Drive gross margin $/tonne through dynamic pricing and product procurement

Ongoing focus on operating model – warehouse operations, digitisingsupply chains and
customer facing channels

High value
products, services
and sectors
Continue to diversify customer segments and build scale in high value sectors

Expand plate processing offer and capability

Build niche market share through Kiwi Pipe & Fittings

Build high value product range via acquisition of Fasteners NZ

Growth Strategy

9
•Integration in line with
expectations with business
operating on Steel & Tube
systems
•Solid forward workload in the
pipeline
•Continued growth in customers
and earnings
•New product range extensions
supporting growth
•New high specification Plate
Processing & Press Brake
installed
•Earnings momentum building
with further expansion plans in
progress
Plate Processing
Kiwi Pipe & Fittings
Recent growth initiatives: Reporting back
Fasteners NZ
32
ORGANIC GROWTHPROGRAMMATIC M&A
Growth Strategy
Aluminum
•Selected range of high
demand, high value products
•Immediately earnings
accretive
•Pleasing initial demand

10
Strong and resilient financial
performance and shareholder value
Growth Strategy
1.Based on share price of $1.27 as at 30/06/2022
2.Based on share price of $1.27 as at 31/12/2022 using FY22 final and 1H23 interim
dividend
Financial and ESG outcomes
demonstrate value of strategy
4.9
1.86
1.13
1.10
0
2
4
6
FY20FY21FY221H23
TRIFR
5
19
3535
0
10
20
30
40
July 20July 21Apr 22Mar 23
eNPS SCORE
Employee Satisfaction
2
Employee Safety Measure
1
Carbon Reduction
3
24
34
4040
0
10
20
30
40
50
FY20FY21FY221H23
NPS SCORE
16.53
12.5
11.63
0
5
10
15
20
FY20FY21FY22
tCO2
-
e per tonne
(000s)
Industry Average: 32
1.TRIFR: Employee Total Recordable Injury Frequency Rate
2.Net Promoter Score (NPS): Measure of customer/employee satisfaction. Customer NPS industry average is 32
3.Reporting in accordance with Greenhouse Gas Protocols and includes all material emissions under Scope 1 and 2, with Scope 3 limited to business travel.
Customer Satisfaction
2
Industry Average: 18
FY221H23
Revenue $599.1m$315.3m
Normalised
EBITDA
$66.9m$31.6m
Dividend
Yield
11.4%
1
11.4%
2
NTA per
share
$1.22$1.17
ROFE14.6%13.8%

11
Well positioned to support Cyclone/floods rebuild
Steel is an essential construction material; Steel & Tube has the capability and capacity, as
well as the expertise to deliver innovative solutions to assist with rebuilding vital assets
Preliminary estimates put cost at between
$9 billion and $14.5 billion
•Cyclone Gabrielle is New Zealand’s costliest non-
earthquake natural disaster
•10,000 people displaced from their homes due
to floods/Cyclone
•Infrastructure rebuild expected to be staged
across multiple years to reduce demand on
stretched resources
•Government has indicated a new multi-year
capital expenditure plan across 2023 to 2026
Infrastructure
•Biggest impact from Cyclone is on
infrastructure
•Repair work needed to bridges, roads, rail links,
power substations and other infrastructure
Residential
•Estimated need for an additional 4,000 new
houses plus repair work to damaged
properties
Outlook

12
Demand for steel continues despite challenging economic conditions
Positive long term macro trends will drive momentum
2
3
4
2
3
5
6
8
9
Mar-19Mar-20Mar-21Mar-22Mar-23
SQM (000s)
Consents $ ($bn)
Rolling 12months
Non-Residential Consents
Positive commercial investment continues
Consents $bnFloor Area
5
6
7
8
20
25
30
35
40
45
50
55
Mar-19Mar-20Mar-21Mar-22Mar-23
Rolling 12months
SQM (000s)
No. Consents (000’s)
Residential Consents
Long term demand and undersupply
ConsentsFloor Area
20
40
60
Mar-19Mar-20Mar-21Mar-22Mar-23
Source: Statistics New Zealand, BNZ – BusinessNZ PMI, Statistic NZ, NZIER
Steel & Tube is a diversified
business with limited
exposure to any one sector
50
70
90
110
130
150
170
190
Mar-19Mar-20Mar-21Mar-22Mar-23
Index (2010=100:sa)
Share of Sales (1H23)
42
30
10
11
6
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Other
Infrastructure
Engineering
Residential
Manufacturing
Commercial
construction
Performance of Manufacturing Index (PMI)
Headwinds affecting activity, long term remains positive
Outlook
Activity Index: Infrastructure Construction
Robust outlook with large scale projects

13
Outlook
Steel & Tube is well positioned to respond to the more challenging economic cycle and to
take advantage of new market and product opportunities, and the rebuilding programme
•Significant medium to long term opportunities expected from rebuild activity, climate
change, seismic strengthening and water services reform. $62 billion budgeted Government
spend on infrastructure 2022 to 2026, excluding Cyclone and flooding rebuild costs
•Healthy pipeline of infrastructure and commercial projects in place; manufacturing remains
steady
•Strong resilient balance sheet and cashflowsto support growth initiatives; focus remains on
gross margin $/tonne and actively managing costs
•Business growth to continue through organic expansion and programmatic smaller M&A
•Further strategic initiatives expected to be reflected in results from FY24 onwards
Outlook

14
FY23 Guidance
Normalised EBIT of between $28m and $32m and normalised EBITDA of between $48m
and $52m
1
.
•Tightening economic conditions and
weather events in past 10 months
•Strong revenues driven by elevated
international pricing
•2H23 volumes expected to be 10% to 15%
less than 1H23
•Higher input costs and cost pressures
impacting margins - underway with a
comprehensive cost out programme
•Track record of navigating changes
through economic cycles
•Resilient business platform - significant
reductions in debt and inventory, solid
underlying cashflows
1. Normalised EBITDA and Normalised EBIT have been adjusted to exclude non-trading adjustments of approx. $0.9m primarily relating to Software as a Service costs.
$millionsFY23
10 months
FY22
10 months
FY21
10 months
Revenue489.0
479.3384.6
EBITDA40.8
53.629.5
Normalised EBITDA41.7
54.028.6
EBIT23.6
37.914.8
Normalised EBIT24.5
38.313.8
NPAT12.424.17.4
Operating Cash flow77.9(38.1)20.5
Dividends paid19.114.62.0
Inventory152.2200.9108.3
Net (Debt)/Cash(9.2)(43.5)19.7
Guidance

15
1.Attractive shareholder returns and value
2.Quality business with strong foundations - well positioned
to succeed through the economic cycle
3.Leading supplier in a market with strong demand
4.Clear forward strategy and growth opportunities,
supported by strong balance sheet
5.Experienced board and management team – industry
knowledge and enhanced digital capability
Quality business with strong core
Five good reasons to invest in Steel & Tube
•Unmatched breadth of high-quality
product and solutions
•National network with regional strength
•Disciplined operational, supply chain
and inventory management
•Strong pricing governance and controls
and use of data analytics
•Enhanced customer value proposition
and high levels of customer service
•Digital leadership in traditional steel
sector
•Strong balance sheet and cashflow
management
Investing in STU
Steel & Tube is nimble and able to take advantage of new
market and product opportunities

Discussion

17
Non-GAAP Financial
Non-GAAP financial information: Steel & Tube uses several non-
GAAP measures when discussing financial performance. These
include Normalised EBIT and Working Capital. Management believes
that these measures provide useful information on the underlying
performance of Steel & Tube’s business. They may be used
internally to evaluate performance, analyse trends and allocate
resources. Non- GAAP financial measures should not be viewed in
isolation nor considered as a substitute for measures reported in
accordance with NZ IFRS.
Non-trading adjustments/Unusual transactions: The financial
results for 1H23 (6 months) and FY22 (12 months) include
transactions considered to be non-trading in either their nature or
size. Unusual transactions can be as a result of specific events or
circumstances or major acquisitions, disposals or divestments that
are not expected to occur frequently. Excluding these transactions
from normalisedearnings can assist users in forming a view of the
underlying performance of the Group. The above reconciliation is
intended to assist readers to understand how the earnings reported
in the periods ended 30 June 2022 (12 months) and 31 December
2022 (6 months) reconcile to normalisedearnings. Non-trading
adjustments of $(0.3) million are included in the FY22 (12 months)
results and $(1.1)m are included in the 1H23 (6 months) results.
$000s1H23
FY22
1H23
FY22
Reported 30,482 66,598 20,34447,636
Loss on de-recognition of finance lease receivable
181
-
181 -
IFRS 16 impairment reversal
(113)
(527)
(113) (527)
Release of holiday pay provision
-
(854)
- (854)
Software as a Service (SaaS) upfront expenditure
1,068
1,645
1,068 1,645
Normalised 31,618 66,862 21,48047,900
EBITDA
EBIT

18
Glossary of Terms
EBIT: Earnings / (Loss) before the deduction of interest and
tax. This is calculated as profit for the year before net
interest costs and tax
EBITDA: Earnings / (Loss) before the deduction of interest,
tax, depreciation and amortisation. This is calculated as
profit for the year before net interest costs, tax, depreciation
and amortisation
ROFE: Return on Funds Employed. This is calculated as
Normalised EBIT over Average Funds Employed (Debt
(including Lease Liability) + Equity)
eNPS: Employee Net Promoter Score –assists in measuring
employee satisfaction and loyalty within the organisation
NPS: Net Promoter Score – assists in measuring customer
satisfaction and loyalty
Normalised EBIT/EBITDA: This means EBIT and EBITDA
excluding non-trading adjustments and unusual transactions
eTRIFR: Employee Total Recordable Injury Frequency Rate –
an important metric to assess safety performance
LTIFR: Lost Time Injury Frequency Rates - an important
metric to assess safety performance

19
•This presentation has been prepared by Steel & Tube Holdings
Limited (“STU”).The information in this presentation is of a general
nature only. It is not a complete description of STU.
•This presentation is not a recommendation or offer of financial
products for subscription, purchase or sale, or an invitation or
solicitation for such offers.
•This presentation is not intended as investment, financial or other
advice and must not be relied on by any prospective investor.It
does not take into account any particular prospective investor’s
objectives, financial situation, circumstances or needs, and does not
purport to contain all the information that a prospective investor
may require. Any person who is considering an investment in STU
securities should obtain independent professional advice prior to
making an investment decision, and should make any investment
decision having regard to that person’s own objectives, financial
situation, circumstances and needs.
•Past performance information contained in this presentation should
not be relied upon (and is not) an indication of future
performance.This presentation may also contain forward looking
statements with respect to the financial condition, results of
operations and business, and business strategy of STU. Information
about the future, by its nature, involves inherent risks and
uncertainties. Accordingly, nothing in this presentation is a promise
or representation as to the future or a promise or representation that
an transaction or outcome referred to in this presentation will
proceed or occur on the basis described in this presentation.
Statements or assumptions in this presentation as to future matters
may prove to be incorrect.
•A number of financial measures are used in this presentation and
should not be considered in isolation from, or as a substitute for, the
information provided in STU’s financial statements available at
www.steelandtube.co.nz.
•STU and its related companies and their respective directors,
employees and representatives make no representation or warranty
of any nature (including as to accuracy or completeness) in respect
of this presentation and will have no liability (including for
negligence) for any errors in or omissions from, or for any loss
(whether foreseeable or not) arising in connection with the use of or
reliance on, information in this presentation.
Disclaimer