Steel & Tube – NZSA Presentation – August 2023

NZSA Waikato Branch Meeting
31 August 2023

Agenda
•About Steel & Tube
•Performance & Sustainability
•Growth Strategy
•Q&A
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Intro Video

Making life
easier for
customers
needing steel
solutions
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Steel & Tube
•One of NewZealand’s leading providers of
steel solutions
•A proud NewZealand company, with over
69years of trading history
•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
27Sites
Nationwide

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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

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Primary product and service offering by participants
Steel distributionPlate processing Coil processingStainless steelEngineering steelReinforcing steelWireRoofingFasteners
Steel & Tube
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Fletcher Steel
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Vulcan
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United Industries
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Asmuss
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Summit Steel & Wire
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Wakefield Metals
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Project Strive –
company wide reset
to refocus, reduce
costs and streamline
the business
Our journey
Our goal is to be the best in the sector, the preferred choice for steel
products and solutions and a trusted partner for our customers.
FY21 – FY22
Embedded value.
Focus moving to
growth. Covid
headwinds
FY23 onwards
Value of turnaround
now apparent. Strong
focus on growth with
clear strategy in place
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FY18 - FY20

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FY23 further demonstrated Steel & Tube’s value
•Strong financial performance despite market conditions
•Robust operating model that will deliver through the economic cycle
•Clear focus on continuing to strengthen the core and investing in
high value products, services and sectors
•Record operating cash flows reflecting steady revenues
•Full year dividend in line with policy of 60% to 80% of adjusted NPAT

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Results at a glance
Successful strategy execution driving resilient performance
Revenue
$589.1m
-1.7%
EBITDA
$51.9m
-22.1%
EBIT
$31.0m
-34.9%
NPAT
$17.0m
-43.7%
Volume
146,409t
-12.4%
Earnings Before Interest and Tax (EBIT), Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), Net Profit AfterTax (NPAT) | ROFE: Return on Funds Employed, calculated as Normalised EBIT over Average Funds Employed (Net Debt
(including Lease Liability) + Equity). FY22 had previously been calculated using debt, the percentage has been restated to use net debt consistent with the company’s peers | Non-GAAP earnings reconciliation at the end of the presentation
ROFE
9.9%
FY22: 15.4%
Normalised
EBITDA
$52.9m
-20.9%
Normalised
EBIT
$32.1m
-33.0%
•Solid financial performance,
at top of guidance
•Achieved Steel & Tube’s
second highest revenue
result, just shy of last year’s
exceptional super cycle result
•Record net cash inflow from
operating activities of
~$100m, almost double that
of the previous record cash
inflow result
•No bank debt and a positive
cash balance, representing a
~$50m improvement

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Repositioned the business for
more challenging economic
cycle while investing in growth
Group balance sheetsummary
•Significant reduction in inventory
•Freeing up cash as inventory position reduced
•Disciplined management of working capital
•Strong cashflows supporting strategic initiatives
•Fully repaid debt with substantial bank facility in
place to fund growth
•Subsequent to 30 June 2023, completed the
renewal of the $100m bank facility
$mFY23FY22
Trade and other receivables79.3 103.3
Inventories139.2 192.5
Trade and other payables(69.4)(89.0)
Working Capital149.1 206.8
Total Facility
100.0 100.0
Borrowings
-(51.0)
Available Facility/Undrawn
100.0 49.0
Cash and cash equivalents
6.5 8.0
Borrowings-(51.0)
Net Cash/(Debt)6.5 (43.0)
Net Tangible Assets (NTA) 194.6 202.2
ROFE (%)
9.9%15.4%

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Building a
sustainable
business
Continuing strength in key
metrics in FY23
Customer Satisfaction
NPS 42 (FY22: 40)
Employee Safety Measure
eTRIFR1.14 (FY22: 1.13)
Employee Engagement
Employee NPS 35 (FY22: 35)
Net Promoter Score (NPS): Measure of customer/employee satisfaction
Customer NPS industry average is 32
Employee NPS industry average is 18
Employee Total Recordable Injury Frequency Rate (eTRIFR): Employee safety measure
Long term business sustainability
supported by balance sheet strength
through the economic cycle with capacity
for growth investment
Continued commitment to Quality, Health
and Safety with ongoing independent
inspection systems
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Sustainable Steel
Steel facilitates a
circular economy
•Infinitely recyclable
•Reduced construction waste
•Durable
•Non-toxic and inert
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ESG Initiatives
New BYD EV in Christchurch
LED replacement program complete
Scrap steel collection

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Strategic pathways
Overall goal to deliver gross margin improvement – benefits expected
from FY24 onwards
•Best-in -class customer experience
•Cross sell products and services
•Accelerate shift to digital sales
•Drive gross margin $/tonne
•Operating efficiency
Continue to Strengthen the Core
•High value products, diversified materials
and value-added services
•Diversify customer segments and build
scale
•Primary focus is on organic investment
and programmatic smaller M&A in direct
adjacent sectors
Grow High Value Products,
Services and Sectors

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•Solid forward project work
in the pipeline
•Leveraging our existing
network to expand the Kiwi
range nationally
•Earnings per share positive
in the first year
•FY23 revenue and EBIT
slightly up on FY22 despite
the slowdown in the
residential sector
•New product range
extensions supporting
growth
•Plate processing revenues
up 76% and Gross Margin $
up 75% year on year
•Earnings momentum
building with further
expansion plans in progress
Plate ProcessingKiwi Pipe & Fittings
Recent growth initiatives: Reporting back
Fasteners NZ
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ORGANIC GROWTHPROGRAMMATIC M&A
Aluminum
•Immediately earnings
accretive
•Pleasing initial demand
which is growing steadily
•Product margin $/tonne
has exceeded
expectations

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Macro opportunities
Significant exposure to climate resilience, infrastructure and essential water services
Infrastructure
•Govt budget in excess of $71bvs
$45b in previous 5 year period
•In excess of $92b in project
value in the pipeline
-Rebuild following extreme
weather events
-Major projects across health,
education, community
facilities, energy, water and
transport
-Mix of region-wide and
national projects
Steel is one of the world’s
most essential and sustainable
building products –
permanent, forever reusable
and the most recycled
substance on the planet.
Steel offers a number of
advantages in a future where
climate change and extreme
weather events are likely to
become more common.
Climate resilience
•Proven capability, capacity, and
expertise to deliver innovative
project solutions:
-Port rebuilds
-Wind and solar energy
-Coastal protection
-Resilient buildings

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Economic drivers
Build share of sales in growth sectors
Share of Sales (FY23)
35%
32%
12%
10%
7%
4%
Others
Resellers
Infrastructure
Residential
Commercial
Manufacturing
Demand primarily driven by residential market trends
Strong long term pipeline driven by climate investments, rebuild following
weather events, and catch up on low investment in prior years
Economic headwinds impacting growth, expected improvement mid-2024
Modest fall from peak 2023 levels expected, however strong pipeline
Expected to remain subdued in the short to medium term
Resellers
FY24
FY27
Infrastructure
Residential
Commercial
Manufacturing
Customer First
M&A / Growth Activity
Focus on Costs

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FY24 outlook
Market outlook
•Economic cycle likely to remain challenging;
recessionary environment to continue 1H24, as
well as usual slowdown in activity prior to election.
Expect 2H24 will see easing of macro trends –
interest rates, labour market, construction and
cost inflation
•Elevated Government investment offset by
weaker business and residential investment
•Significant medium to long term
opportunities; climate resilience, seismic
strengthening, rebuild activity and essential water
services. Government budgeted $71b spend on
infrastructure 2022 to 2026, excluding cyclone and
flooding rebuild costs
•Steel pricing volatility has reduced; stabilised
above pre-Covid levels
Well positioned to respond to the challenging
economic cycle and to take advantage of new
market and product opportunities, including
the rebuilding programme
•Healthy pipeline of infrastructure and commercial
projects in place; manufacturing remains steady
•Strong balance sheet and cashflowsto support
growth initiatives; focus remains on gross margin
$/tonne and actively managing costs with $5m
cost out programme underwayin FY24
•Business growth to continue through organic
expansion and M&A

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Steel & Tube is strongly positioned to deliver through
the economic cycle
Key Strengths
•Unmatched breadth of high-quality product and solutions
•National network with regional strength
•Enhanced customer value proposition and high levels of customer service
•Disciplined operational, supply chain and inventory management
•Strong pricing governance and controls and use of data analytics
•Experienced board and management team –industry knowledge and
enhanced digital capability

Discussion

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Non-GAAP financial information
Non-GAAP financial information: Steel & Tube uses several non-
GAAP measures when discussing financial performance. These
include Normalised EBITDA, 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 FY23 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 normalised earnings 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 years ended 30 June 2023 and 30 June
2022 reconcile to normalised earnings. Non-trading adjustments of
$(1.1) million are included in the FY23 results.
Year ended 30 JuneEBITDAEBIT
$000sFY23FY22FY23FY22
Reported 51,876 66,598 31,009 47,636
Loss on de-recognition of finance lease receivable128 -128 -
Holiday pay provision release-(854)-(854)
NZ IFRS 16 reversal of impairment(177)(527)(177)(527)
Software as a Service (SaaS) upfront expenditure
1,109 1,645 1,109 1,645
Normalised52,936 66,862 32,069 47,900

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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 (Net 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
Working Capital: This means the net position after Current
Liabilities are deducted from Current Assets. The major
individual components of Working Capital for the group are
Inventories, Trade and other receivables and Trade and
other payables. How the group manages these has an
impact on operating cash flow and borrowings

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•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