Steel Dynamics : Fourth Quarter and Full Year 2021 Earnings Call

Fourth Quarter and Full Year 2021 Investor Call Presentation

January 25, 2022

Safety

Culture

Customer Commitment

Growth

Innovation

Financial Strength

Forward Looking Statements and Non-GAAP Financial Measures

Forward-Looking Statements

This presentation contains some predictive statements about future events, including statements related to conditions in domestic or global economies, conditions in steel and recycled metals marketplaces, Steel Dynamics' revenues, costs of purchased materials, future profitability and earnings, and the operation of new, existing or planned facilities. These statements, which we generally precede or accompany by such typical conditional words as "anticipate", "intend", "believe", "estimate", "plan", "seek", "project", or "expect", or by the words "may", "will", or "should", are intended to be made as "forward-looking", subject to many risks and uncertainties, within the safe harbor protections of the Private Securities Litigation Reform Act of 1995. These statements speak only as of this date and are based upon information and assumptions, which we consider reasonable as of this date, concerning our businesses and the environments in which they operate. Such predictive statements are not guarantees of future performance, and we undertake no duty to update or revise any such statements. Some factors that could cause such forward-looking statements to turn out differently than anticipated include: (1) domestic and global economic factors; (2) global steelmaking overcapacity and steel imports, together with increased scrap prices; (3) pandemics, epidemics, widespread illness or other health issues, such as the COVID-19 pandemic; (4) the cyclical nature of the steel industry and the industries we serve; (5) volatility and major fluctuations in prices and availability of scrap metal, scrap substitutes, and our potential inability to pass higher costs on to our customers; (6) cost and availability of electricity, natural gas, oil, or other resources are subject to volatile market conditions; (7) compliance with and changes in environmental and remediation requirements; (8) increased regulation associated with the environment, climate change, greenhouse gas emissions and sustainability; (9) significant price and other forms of competition from other steel producers, scrap processors and alternative materials; (10) availability of an adequate source of supply for our metals recycling operations; (11) cybersecurity threats and risks to the security of our sensitive data and information technology; (12) the implementation of our growth strategy; (13) litigation and legal compliance, (14) unexpected equipment downtime or shutdowns; (15) governmental agencies may refuse to grant or renew some of our licenses and permits; (16) our senior unsecured credit facility contains, and any future financing agreements may contain, restrictive covenants that may limit our flexibility; and (17) the impacts of impairment.

More specifically, we refer you to Steel Dynamics' more detailed explanation of these and other factors and risks that may cause such predictive statements to turn out differently than expected or anticipated, as set forth in our most recent Annual Report on Form 10-K under the headings Special Note Regarding Forward-Looking Statements and Risk Factors, in our quarterly reports on Form 10-Q or in other reports which we from time to time file with the Securities and Exchange Commission. These are available publicly on the SEC website, www.sec.gov, and on the Steel Dynamics website, www.steeldynamics.com: Investors: SEC Filings.

Note Regarding Non-GAAP Financial Measures

Steel Dynamics reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). Management believes that EBITDA, Adjusted EBITDA, Adjusted Operating Income and Free Cash Flow, non-GAAP financial measures, provide

additional meaningful information regarding Steel Dynamic's performance and financial

strength. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, Steel Dynamics' reported results prepared in accordance with GAAP. In addition, because not all companies use identical calculations, EBITDA, Adjusted EBITDA, Adjusted Operating Income and Free Cash Flow included in this presentation may not be comparable to similarly titled measures of other companies. The reconciliations of these non-GAAP measures to their most comparable GAAP measures are contained in the appendix at the end of this presentation.

2	January 25, 2022

Safety is Our Number One Value

Total Recordable Injury Rate1					Total 2021 Recordable Injury Rate1 By Platform
			2.3			Steel		Steel		Metals
								Fabrication	Recycling
1.9
1.9			Each of our			4.1
1.8				3.9
					operating platforms	3.6
1.5				consistently perform
					better than industry
					benchmarks			2.6
						2.1
				1.8

2017

2018

2019

2020

2021

	Steel Dynamics		Industry²

Lost Time Injury Rate1

0.59

0.39

0.330.33

0.25

2017

2018

2019

2020

2021

1. Total Recordable Injury Rate is defined as OSHA recordable incidents x 200,000 / hours worked, Lost Time Injury Rate is defined as OSHA days away from work cases x 200,000 / hours worked,
2. Source: 2020 U.S. DOL Bureau of Labor Statistics

3	January 25, 2022

Record Fourth Quarter and 2021 Performance

Q 4 a n d 2 0 2 1

H I G H L I G H T S

Record 2021

Operating and

Financial

Performance

Record Q4 2021

Operating and

Financial

Performance

• Record annual sales of $18.4 billion, operating income of $4.3 billion, and net income $3.2 billion
• Net Income of $15.56 per diluted share, $16.091 per diluted share excluding Sinton, Texas Flat Roll Steel Mill construction costs and other items
• Record cash flow from operations of $2.2 billion and adjusted EBITDA2 of $4.6 billion
• Steel operations achieved record operating income of almost $4.4 billion
• Steel fabrication operations achieved record shipments of 789,000 tons and more than tripled 2020 operating earnings to a record $365 million
• Metals Recycling operations achieved record operating income of $195 million
• Repurchased over $1.0 billion of common stock
• Net income of $1.1 billion, or $5.49 per diluted share
• Adjusted net income of over $1.11 billion or $5.78 per diluted share
• Adjusted EBITDA of over $1.52 billion
• Liquidity of $2.4 billion
• Shipping from our new Sinton flat rolled facility

¹ The adjusted net income reconciliation is provided in the appendix to this presentation.

2 The adjusted EBITDA reconciliation to GAAP net income is provided in the appendix to this presentation.

4	January 25, 2022

Fourth Quarter 2021 Financial Highlights

Net sales, Net income and adjusted EBITDA records reflect market strength and our differentiated circular business model

							Sequential	Prior Year
Dollars in millions, except per share data	Q4 2021	Q3 2021	Q4 2020	Change	Change
Net Sales	$5,311		$5,088		$2,601		$223		$2,710
Operating Income	1,429		1,322		259		107		1,170
Net Income attributable to Steel Dynamics, Inc.	1,091		991		188		100		903
Adjusted Net Income per Diluted Share¹	5.78		4.96		0.89		0.82		4.89
Adjusted EBITDA²	1,524		1,407		364		117		1,160
Operating Income
Steel Operations	1,367		1,351		298		16		1,069
Steel Fabrication Operations	238		89		25		149		213
Metals Recycling Operations	44		47		27		(3)		17

¹ The adjusted net income reconciliation is provided in the appendix to this presentation.

2 The adjusted EBITDA reconciliation to GAAP net income is provided in the appendix to this presentation.

5	January 25, 2022