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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Steel Dynamics, Inc.    STLD

STEEL DYNAMICS, INC.

(STLD)
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Steel Dynamics : Investor Presentation November 30, 2020

11/30/2020 | 02:49pm EST

Investor Presentation

30 November 2020

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 market places, Steel Dynamics' production capacities, shipments, 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) the effects of uncertain economic conditions; (2) the effects of pandemics or other health issues, such as the recent novel coronavirus outbreak (COVID-19); (3) cyclical and changing industrial demand; (4) changes in conditions in any of the steel or scrap-consuming sectors of the economy which affect demand for our products, including the strength of the non-residential and residential construction, automotive, manufacturing, appliance, energy, and other steel-consuming industries; (5) fluctuations in the cost of key raw materials and supplies (including steel scrap, iron units, zinc, graphite electrodes, and energy costs) and our ability to pass on any cost increases; (6) the impact of domestic and foreign imports, including trade policy, restrictions, or agreements; (7) unanticipated difficulties in integrating or starting up new, acquired or planned businesses or assets; (8) risks and uncertainties involving product and/or technology development; and (9) occurrences of unexpected plant outages or equipment failures.

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, Free Cash Flow and Free Cash Flow Conversion, 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, Free Cash Flow and Free Cash Flow Conversion 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.

30 November 2020 1

Differentiated and Proven Business Culture

We are a leading North American steel producer with a differentiated and proven business model

Consistent best-in-class performance

Led North American steel peers in EBITDA margin in eachof the last 10 years

Differentiated business model delivering strong profitability and cash flow

High value-added product mix and diversified customer base drives strong free cash flow conversion

Smart growth - Gaining market share and growing with customers

Organic and transactional growth drive supply-chain differentiation and higher steel mill utilization

100% of steel produced with electric-arc-furnace technology

Significantly much lower environmental impact than traditional technologies - Recycled scrap primary raw material

Strong balance sheet provides strategic flexibility for current operations and prudent growth

Q3 2020 net leverage of 1.4x - Committed to maintaining investment grade ratings

Sustainable shareholder value creation and distribution growth

Maintain a positive dividend profile complemented by share repurchases when appropriate

30 November 2020 2

Differentiated and Proven Business Culture

Steel Dynamics - One of the largest and most differentiated steel producers and metals recyclers in North America

2019

Revenue: $10.5B

Net Income: $671M

Adj. EBITDA: $1.3B1

Steel Shipping Capacity: 13M tons

Market leader producing premium, value-added, diversified steel products, serving growing markets

Modern, state-of-the-art efficiently configured and flexible production facilities

Highly variable (85%), low cost structure

Vertically connected and controlled supply chain

Environmentally-friendly,recycling-basedelectric-arc-furnace (EAF) technology

Respected and experienced management team, driving our innovative, entrepreneurial culture

Highly motivated, safety focused and performance-based incentivized team of approximately 9,500 individuals

  1. The reconciliation to GAAP net income is provided in the appendix to this presentation.
  2. Based on 2019 steel sales.

³ Based on 2019 steel shipments.

Premium / value-added product mix2

15% Hot Roll Sheet

Coated

42%

10%

Structural

Sheet

5%

MBQ

2%

Other

Value-Added

Steels 68%

5% 8% 5%

5%3%

Rail

Shapes

Cold

Engineered

Hot Roll

SBQ

Roll

and Pickled

Sheet

& Oiled

Sheet

Serving diverse, growing steel end-markets3

Other Manufacturing

18%

Ag, Equipment, & Mining

6%

Non-Energy Pipe & Tube

6%

Energy

7%

Transportation & Rail

8%

Automotive

12%

Appliance / HVAC

6%

Light Commercial / Residential

18%

Construction-

Related

Heavy Non-Residential

7%

43%

Metal Building

12%

30 November 2020 3

Differentiated and Proven Business Culture

We have a proven track record of delivering smart growth and shareholder value creation

2020: Columbus

Coating Line

Addition

2019: Achieved

Investment Grade

Credit Ratings

1996

2014: Flat Roll Steel

Mill Acquisition -

Shipments

Columbus

Steel: 794,000 tons

2002: SBQ Steel Mill

2006: Merchant &

Specialty Steel

Acquisition

Acquisition - 2 Mills

2002: Structural

Steel Mill -

Greenfield

2018: Flat Roll Steel

1996: Flat Roll Steel

Mill - Greenfield

Processing Facility

Acquisition -

Heartland

2007: Ferrous and

2007: Galvanizing

Nonferrous Metals

Facilities Acquisition -

Recycling

2000: 1st Steel

The Techs

Acquisition -

Fabrication Facility -

OmniSource

Greenfield

2019-2021:

Planned Sinton, Texas

Greenfield EAF Flat

Roll Steel Mill

2019 Shipments

  • Steel: Record10.8M tons
  • Metals Recycling: 4.6M gross tons ferrous and 1.1B pounds nonferrous
  • Steel Fabrication: Record644,000 tons

Experienced, entrepreneurial leadership has delivered significant value

through disciplined M&A and strategic capital investments

1 Based on the period from 1996 to December 31, 2019.

30 November 2020 4

Differentiated and Proven Business Culture

Consistent best-in-classthrough-cycle financial performance

Our six strategic pillars delivering

sustained, profitable growth

EBITDA Margin1

1

11%

2

Peer 1

Peer 2

Peer 3

Peer 4

3

2012

2013

2014

2015

2016

2017

2018

2019

Q3'20

TTM

Safety

Goal of zero injuries - No accidents

Culture

Foster a team of energetic, positive,

driven, innovative and diverse individuals

Customer Commitment

Focus on being a preferred partner by providing quality products and unique supply-chain solutions

4

5

6

Growth

Intentional margin expansion and consistency through-the-cycle

Innovation

Drive innovation to improve safety, quality, productivity and resource sustainability

Financial Strength

Higher utilization and lower costs provide strong cash flow generation

1 EBITDA is calculated as earnings before interest, taxes, depreciation, and amortization (excludes non-cash asset impairments). See the reconciliation to GAAP net income for Steel Dynamics in the appendix to this presentation. Peers include: Nucor, AK Steel, US Steel, and Commercial Metals Company (CMC). Source: Respective SEC filings. CMC data for annual periods ended

November 30 and Q3 2020 TTM period ended August 31, 2020. Q3 2020 TTM EBITDA Margin for Peer 4 could not be calculated based on data disclosed, as the peer was acquired in 2020.30 November 2020 5

Differentiated and Proven Business Culture

Our differentiated business model maximizes cash generation through-the-cycle

Metals Recycling

-

11% 2019 Revenue

Steel Operations

-

Low-cost, efficient, green

- 66% of 2019 ferrous shipments were to

- 76% 2019 Revenue

our internal steel operations

- Low-cost, modern, efficient

- Premium value-added focus

6 Electric-Arc-Furnace

Metals Recycling

Steel Mills

Our steel operations have

a secure supply of high-

quality scrap from our

metals recycling

Steel Fabrication

operations, and also

benefit from base-load

-

9% 2019 Revenue

"pull-through" volume

-

Manufacturing operations support

from our manufacturing

base-load,"pull-through" volume

operations.

for SDI steel operations

Note: Above representation based on the Company's est. annual capacity, except for Metals Recycling, Steel Fabrication, and United Steel Supply which are actual 2019 shipments.

30 November 2020 6

Differentiated and Proven Business Culture

Our differentiated business model results in higher through-cycle steel utilization

We achieve consistently higher through-cycle steel utilization compared to our peers, driven by our low-cost, vertically connected business model, and diversified value-added product portfolio and supply-chain solutions.

Steel Mill Production Utilization

96%

94%

89%

82%

82%

88%

88%

87%

88%

85%

79%

79%

73%

78%

80%

80%

74%

75%

77%

78%

74%

70%

70%

71%

65%

56%

22%

24%

23%

28%

29%

25%

27%

23%

21%

21%

19%

17%

18%

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Q1'20

Q2'20

Q3'20

Domestic Steel Industry Production Utilization (%)

Domestic Steel Imports Excluding Semi-finished as a % of Apparent Domestic Consumption Steel Dynamics Steel Mill Production Utilization (%)

2020

Est. Annual SDI Steel Mill Production Capacity

(Thousands of Tons)

Flat Roll Group - Butler

3,200

- Columbus

3,200

Structural & Rail

2,200

Engineered Bar

950

Roanoke Bar

720

Steel of West Virginia

555

Total¹

10,825

Q3 2020 SDI Steel Mill Production

2,320

Q3 2020 SDI Steel Mill Utilization

85%

  • Excludes our processing divisions capacity of approximately 2.4 million tons.

Source: AISI, U.S. Department of Commerce, Accenture

30 November 2020 7

Differentiated and Proven Business Culture

Our differentiated business model is a proven cash generator in all demand environments

Doubled Average Annual Free

Cash Flow

Free Cash Flow1 (dollars in millions)

5-year average: $1.1 billion

5-year average: $564 million

$1,086

$793

$1,835

$974

$1,240

$881

$510

$681

$751

$591

$397

$479

$69

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Q3'20 TTM

Excluding 2019 and Q3 2020 TTM funding

of $205M and $724M, respectively, for our

new Texas flat roll steel mill, our 2019 and

Q3 2020 TTM free cash flow would have

Strong "Through-Cycle" Cash

been $1.1B and $.8B and our 2019 and Q3

Generation

2020 TTM free cash flow conversion would

Free Cash Flow Conversion1

88%

88%

have been 81% and 73%.

87%

84%

83%

79%

80%

81%

72%

73%

64%

66%

6%

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

Q3'20 TTM

1 "Free Cash Flow" is defined as Adjusted EBITDA - Capital Investments. "Free Cash Flow Conversion" is defined as Free Cash Flow / Adjusted EBITDA. The Adjusted EBITDA and Free Cash Flow reconciliations to GAAP net income are provided in the appendix to this presentation.

30 November 2020 8

Differentiated and Proven Business Culture

Strong track record of delivering smart growth and attractive returns

2012

2019

Steel Shipments

Net Income

Cash Flow from

Operations

Adjusted EBITDA

Margin1

ROIC2

Average

Market Cap

Net Leverage

Liquidity

5.8 million tons

$164 million

$446 million

9%

4%

$3 billion

2.9x

$1.5 billion

10.8 million tons

+85%

$671 million

+300%

$1.4 billion

+200%

13%+45%

10%+190%

$7 billion

+145%

0.8x(2.1x)

$2.8 billion

+85%

  1. See the reconciliation to GAAP net income in the appendix to this presentation.
  2. ROIC defined as Net Income / Average Invested Capital; Invested Capital defined as (Total Debt + Total Book Value of Equity)

30 November 2020 9

Differentiated and Proven Business Culture

We are operating from a position of strength, investing to deliver our next phase of meaningful growth

Timing

Leveraging expertise to create next generation EAF production capabilities, while gaining market share from disadvantaged, high-cost competitors and imports

New Sinton, Texas Greenfield Flat Roll Steel Mill

Mid-20211

Current estimated investment of approximately $1.9 billion1

Continuing to grow and diversify premium, value-added product capabilities and unlock value of existing operations

  • Columbus Flat Roll Division $160 million Metallic Coating Line, with galvanized and aluminized coating capability
  • Roanoke Bar Division $38 million Reinforcing Bar Expansion
  • Structural and Rail Division $82 million Reinforcing Bar Expansion

First prime coil July 2020

Q2 2018

Q1 2019

Collectively, these primary strategic growth investments provide estimated incremental annual EBITDA of over $425M on a through- cycle historical spread basis.

Growing high-margin downstream manufacturing to provide optional base-load,"pull-through" volume for our steel operations

United Steel Supply Coated Flat Roll Steel Distributor,

March 2019

75% Acquisition of Equity Interest, Valued at $134 million

Heartland Flat Roll Steel Acquisition $434 million (includes $98 million of working capital)

June 2018

1 Estimated project cost and start-up timeline.

30 November 2020 10

Differentiated and Proven Business Culture

Columbus Flat Roll Division 3rd state-of-the-art metallic coating line addition, with galvanized and aluminized coating capability

Congratulations to the team on

running their 1st prime coil!

July 9, 2020

30 November 2020 11

Differentiated and Proven Business Culture

Our new Sinton, Texas flat roll steel mill provides transformational growth

Once completed as planned, will represent over a 25% increase in our annual steel production capacity

Investment

Track

Record

Strategically Compelling

  • "Next Generation" electric-arc-furnace flat roll steel mill, including a higher-margin,value-added galvanizing line (550k tons) and paint line (250k tons)
  • Estimated 3.0 million tons of annual production capability
  • Differentiated production capabilities, with meaningful customer and supply-chain benefits
    • Widths (38" to 84") and gauges from 0.047" to 1.00" / Produce up to 52.5 ton coils
  • Our team has an unparalleled track record for delivering organic investments "on time" and "on budget", creating significant value
  • Expertise delivering "Next Generation", state-of-the-art steel production facilities
  • "Next Generation" capabilities that goes beyond existing EAF-based production capabilities
  • Latest generation of advanced high strength steel grades, including automotive and energy grades
  • Diversified, higher-qualityvalue-added product mix
  • Targeting underserved markets reliant on imports with long lead times and inferior product quality
  • Competitively advantaged location

Smart

Growth from import share gains and higher-growth,steel-consuming markets

Mexican flat roll steel consumption grew over 20% from 2013 - 20191, with shipments of 15M tons in 2019

Growth

Mexican market imported 6M tons of flat roll steel or over 40% in 20192

  1. Source: CRU
  2. Source: U.S. Department of Commerce

30 November 2020 12

Differentiated and Proven Business Culture

New greenfield Sinton, Texas flat roll steel mill drives transformational growth and "next-generation" EAF steelmaking

Estimated 27 million tons in Targeted Regional Markets

  • Texas and Surrounding States = 7 million tons1
  • West Coast = 4 million tons1

Mexico = 15 million tons2 (~45% imported)

Location Benefits

No Flat Roll Steel

Production Capacity

Houston

Sinton

SDI's New Texas Mill

Monterrey

Steel Dynamics flat roll steel mills

Other flat roll steel producers

  • Customer-centriclogistics, providing shorter lead times and working capital savings
  • Central to the largest domestic consumption of flat roll Galvalume® and construction painted products, with the ability to effectively compete with excessive imports
  • Available acreage to allow customers to locate on-site, providing logistic savings and steel mill volume base-loading opportunities, representing 800,000 to 1.0M annual tons of local steel processing and consumption capability
  • Proximity to prime ferrous scrap generation via the four-state Texas region and Mexico through our existing metals recycling platform and our recent acquisition of Zimmer, a Mexican metals recycling company
  • Cost-effectiveaccess to pig iron through the deep-water port of Corpus Christi, as well as other alternative iron units
  • Excellent logistics provided by on-site access to two class I railroads, proximity to a major U.S. highway system, and access to the deep-water port of Corpus Christi
  • Existing, mature and dependable power, natural gas, and water sources

1 Source: 2017 CANACERO information published through AISI, market study including imports by regional ports, producer shipments and confidential customer information

2 Source: CRU

30 November 2020 13

Differentiated and Proven Business Culture

Sinton, Texas flat roll steel mill provides value-added product diversification

Sinton's targeted markets are similar to our other flat roll operations including construction,

automotive, energy tubulars, appliance, and other manufacturing. Like our other steel

operations, we can quickly pivot from one market to another based on underlying demand.

Estimated Sinton

Estimated Sinton

Product Mix¹

Shipments by Region¹

9%

12%

Hot Roll

30%

Pickled & Oiled

United States

7%

Cold Roll

Mexico

60%

Galvanized

Painted

12%

70%

1 Based on a pro-forma full year of production at the Flat Roll Group Southwest - Sinton Division.

30 November 2020 14

Differentiated and Proven Business Culture

Capital allocation framework, committed to growth and investment grade ratings

Best-in-class performance

  • Strong free cash flow conversion
  • Leading EBITDA margin

Strong cash flow

generating business

model

  • Capital investments largely funded through cash flow
  • Acquisitions funded to maintain credit flexibility and prudent liquidity while ensuring strong strategic logic, cultural fit, levering core competencies, and clear execution roadmap

Strong balance sheet

  • Broad access to low- cost debt
  • Net leverage managed to not exceed 2.0x through-cycle
  • Subsequent to an acquisition, committed to deleveraging in a timely manner

Significant strategic

optionality

  • Current growth strategy plans funded through free cash flow and debt capacity
  • Flexible shareholder distributions - maintain positive dividend profile and use share repurchases as appropriate

Balanced Capital Allocation - $5.6 billion Cash Flow

from Operations over the last five years1

Conservative net leverage while growing and

returning capital to shareholders

$2.6 billion

Growth

$ 0.7 B

M&A

$ 1.9 B

Internal

Capital

Investments

1 Period ended September 30, 2020.

$2.1 billion

Capital Returned to Shareholders

$ 1.3 B

Share

Repurchases

$ 0.8 B

Dividends

2.5

2.0

1.5

1.3

1.4

1.0

1.0

0.8

0.6

0.5

0.0

2016

2017

2018

2019

Q3' 20

30 November 2020 15

Differentiated and Proven Business Culture

Strong liquidity and conservative credit metrics

Strong liquidity (dollars in millions)

As of September 30, 2020

$1,188

Staggered debt maturity profile2 (dollars in millions)

$750

$600

$500

No Near-Term

$400

$400

Maturities

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

Low leverage, low-cost debt (dollars in millions)

$2,456

$1,2681268

Cash and cash

Revolver

Total liquidity

equivalents

availability

September 30,

x Adjusted

2020

EBITDA¹

Cash and cash equivalents

$1,268

2.800% senior notes, 2024

400

0.4x

2.400% senior notes, 2025

400

0.4x

4.125% senior notes, 2025

350

0.3x

5.000% senior notes, 2026

400

0.4x

3.450% senior notes, 2030

600

0.6x

3.250% senior notes, 2031

500

0.5x

Other obligations

105

0.1x

Total debt

$2,755

2.5x

Net debt

$1,487

1.4x

Adjusted TTM EBITDA¹

$1,082

In October 2020, we issued $350M of 1.650% senior notes due 2027 and $400M of 3.250% senior notes due 2050, with the proceeds intended to refinance $350M of 4.125% senior notes due 2025 and general corporate purposes.

We are committed to maintaining investment grade credit ratings

¹ September 30, 2020 Trailing Twelve Months Adjusted EBITDA. The reconciliation to GAAP net income is provided in the appendix to this presentation. 2 Excludes other debt obligations of $105 million.

30 November 2020 16

Differentiated and Proven Business Culture

We have a strong track record of returning significant cash to shareholders

65% of net income, or $2.1 billion returned to shareholders

over the last five years1

Cash Dividends (dollars in millions)

8 consecutive years of increases, more than doubling the distribution

Share Repurchases (dollars in millions)

Decreased outstanding

shares by over 15%

$136 $146

We increased

our cash

dividend

4% in Q1'20, and

$208

over 20% in both

$200

2018 and 2019.

$169

$524

$252$349

$25

$163

2016

2017

2018

2019 Q3'20 TTM

2016

2017

2018

2019 Q3'20 TTM

1 Period ended September 30, 2020.

30 November 2020 17

Differentiated and Proven Business Culture

Financial Strength in Diverse Market Environments

Revenue (dollars in billions)

Record

High

2nd Best

Year

$11.8

$10.5

$9.5

$9.4

$7.8

Adjusted Operating Income1 (dollars in millions)

Record

High

$1,738

3rd Best

Year

$1,067

$987

$861

$770

2016

2017

2018

2019

Q3'20 TTM

Net Income (dollars in millions)

Record

High

$1,258

3rd Best

Year

$813

$671

$484

$382

2016

2017

2018

2019

Q3'20 TTM

2016

2017

2018

2019

Q3'20 TTM

Adjusted EBITDA1 (dollars in millions)

Record

High

$2,074

3rd Best

Year

$1,405

$1,333

$1,172

$1,082

2016

2017

2018

2019

Q3'20 TTM

¹ Please see the reconciliation of these amounts to GAAP measures in the appendix to this presentation.

30 November 2020 18

Differentiated and Proven Business Culture

Safety is our number one value

COMMITTED TO WORLD-CLASS SAFETY RESULTS

Safety for Me

Control safety for yourself - Keeping

safety "Top-of-Mind"

Safety for My

Control safety for your team - Being one

another's "Keeper" / "See Something /

Team

Say Something / Do Something"

Platform Total Recordable Injury Rate1

Steel

Steel

Metals

During 2019, each of

Fabrication

Recycling

our platforms

performed

5.0

5.1

meaningfully better

than industry

benchmarks

2.7

2.7

2.4

1.4

Steel Dynamics

Industry²

Total Recordable Injury Rate1

2.3

2.0

1.9

1.8

1.8

1.5

Identification and elimination of hazardous exposures that could result in

Safety for All potentially significant life-altering injuries

  1. Total Recordable Injury Rate is defined as OSHA recordable incidents x 200,000 / hours worked and Lost Time Injury Rate is defined as OSHA days away from work cases x 200,000 / hours worked.
  2. Source: 2018 U.S. DOL Bureau of Labor Statistics

2015

2016

2017

2018

2019

Q3'20

TTM

Lost Time Injury Rate¹

0.66

0.34

0.35

0.33

0.33

0.25

2015

2016

2017

2018

2019

Q3'20

TTM

30 November 2020 19

Differentiated and Proven Business Culture

30 November 2020 20

We are committed to sustainability

Greenhouse Gas Emissions Intensity

Metric tons of CO2 equivalent emissions / cast steel metric ton

Scope 1 Emissions Intensity

1.62

1.72

0.20

0.21

0.20

N/A*

2017

2018

2019

Steel Dynamics 6 EAF steel mills

U.S. blast furnace average¹

Scope 2 Emissions Intensity

0.32

0.32

0.29

2017

2018

2019

Energy Intensity

GJ / cast steel metric ton

Matching operations to sustainability

19.9

20.2

EAF steel production uses a fraction of the energy and has a

fraction of the carbon footprint vs. blast furnace technology

We are the largest nonferrous metals recycler and the 2nd largest

5.0

5.0

ferrous recycler in the U.S.

4.9

N/A*

We reintroduced 1.1 billion pounds of recycled nonferrous

2017

2018

2019

scrap into the manufacturing life cycle in 2019

We reintroduced 11 million tons of recycled ferrous scrap

Steel Dynamics 6 EAF steel mills

World average²

into the manufacturing life cycle in 2019

Source: Our 2019 Sustainability Report located on our website at www.steeldynamics.com/Sustainability.aspx

¹Based on Scope 1 CO2 equivalent emissions reported to the U.S. EPA

²World Steel Association

*The 2019 information is not yet available

Differentiated and Proven Business Culture

Steel Dynamics steel production is 100% electric-arc-furnace

EAF vs. blast furnace technology

100%

of our steel mills water withdrawn was recycled and reused in 2019

84%

of the material used in our furnaces to produce steel was recycled ferrous scrap and internally generated iron substitutes

Source: Our 2019 Sustainability Report located on our website at www.steeldynamics.com/Sustainability.aspx ¹Based on Scope 1 CO2 equivalent emissions reported to the U.S. EPA

²World Steel Association

12%

our steel mills generated only 12% of the Scope 1 emissions per metric ton of average U.S. blast furnaces¹

25%

our steel mills required only 25% of the energy needed per metric ton versus world steel averages²

30 November 2020 21

Differentiated and Proven Business Culture

Our highly levered performance-based compensation programs drive opportunity

Our unique compensation culture promotes a balance of innovation, responsible growth, low-cost efficient operations, and risk mitigation

Individual

Base pay rewards an individual for performance and skill level

Performance

Teamwork and performance bonuses focus teams on quality,

Team Performance

cost control, and efficient use of assets

Promotes individual division success

Production / Conversion Costs / ROA

Unites all platforms to promote the success of

Company Wide PerformanceSteel Dynamics as a whole

Profit Sharing (8% of pretax earnings)

401k Match is also performance-based (ROA)

Aligns all teams with stakeholder interests

Stakeholder Alignmentin pursuit of long-term value creation

Company wide annual equity (RSU) award, with two year vesting

~85% of total potential compensation is

Performance Based Executive Compensationperformance-based

Based on ROE, ROA, revenue growth, operating margin, and cash flow margin

30 November 2020 22

Differentiated and Proven Business Culture

We are a leading North American steel producer with a differentiated and proven business model

Consistent best-in-class performance

Differentiated business model delivering strong profitability and cash flow

Smart growth - Gaining market share and growing with customers

100% of steel produced with electric-arc-furnace technology

Strong balance sheet provides strategic flexibility for current operations and prudent growth

Sustainable shareholder value creation and distribution growth

30 November 2020 23

Differentiated and Proven Business Culture

APPENDIX

Our primary steel operations - at a glance

We are one of the largest domestic steel producers, with approx. 13 million tons of steel shipping capability We have one of the most diversified product and end-market portfolios in the domestic steel industry

Flat Roll Steel Group

8.4M Tons Annual Shipping Capacity

Butler, Indiana

- Greenfield EAF Steel Mill

- 3.2M Tons

- 3 Galvanizing Lines

- 2 Paint Lines

Columbus, Mississippi

- Acquired / Expanded EAF Steel Mill

- 3.2M Tons

- 3 Galvanizing Lines

- 1 Paint Line

Terre Haute, IN¹

- Heartland / Acquired Flat Roll

Processing Facility

- 1.0M Tons

- 1 Galvanizing Line

Pittsburgh, PA¹

- The Techs / Acquired Flat

Roll Galvanizing Facilities

- 1.0M Tons Galvanized

- 3 Galvanizing Lines

1 Processing locations

Long Product Steel Group

4.6M Tons Annual Shipping Capacity

Columbia City, Indiana

  • Greenfield EAF Steel Mill
  • 2.2M Tons
  • Structural and Rail

Pittsboro, Indiana

  • Acquired / Expanded EAF Steel Mill
  • 950K Tons
  • Special-bar-quality
  • Value-AddedFinishing / Inspecting Lines

Roanoke, Virginia

  • Acquired / Expanded EAF Steel Mill
  • 720K Tons
  • Merchant and Rebar

Huntington, WV

  • Acquired / Expanded EAF Steel Mill
  • 555K tons
  • Specialty Shapes

30 November 2020 25

Differentiated and Proven Business Culture

Steel Dynamics - Adjusted EBITDA, Free Cash Flow and Adjusted Operating Income Reconciliations

Q3'20

Dollars in millions

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

TTM

Net Income (Loss)

$130

$266

$142

$164

$ 92

$ (145)

$ 360

$ 806

$1,256

$ 678

$ 498

Income Taxes (Benefit)

83

158

62

99

73

(97)

204

129

364

197

137

Net Interest Expense

166

172

154

123

135

153

141

124

104

99

91

Depreciation

171

177

180

192

229

263

261

265

283

286

286

Amortization

46

40

36

32

28

25

29

29

28

30

30

Noncontrolling Interests

12

13

21

26

65

15

22

7

3

(7)

(13)

EBITDA

$608

$826

$595

$636

$622

$

214

$1,017

$1,360

$2,038

$1,283

$1,029

Unrealized Hedging (Gains) / Losses

2

(4)

(3)

5

(5)

3

1

5

(6)

3

-

Inventory Valuation

6

9

6

7

10

28

1

3

2

1

1

Equity-Based Compensation

14

17

12

16

23

29

30

34

40

43

44

Asset Impairment Charge

13

-

8

-

213

429

120

-

-

-

-

Refinancing Charges

-

-

3

2

-

3

3

3

-

3

8

Adjusted EBITDA

$643

$848

$621

$666

$863

$

706

$1,172

$1,405

$2,074

$1,333

$1,082

Less Capital Investments

133

167

224

187

112

115

198

165

239

452

1,013

Free Cash Flow

$510

$681

$397

$479

$751

$

591

$

974

$1,240

$1,835

$

881

$

69

Q3'20

Dollars in millions

2016

2017

2018

2019

TTM

Consolidated Operating Income

$

728

$ 1,067

$ 1,722

$

987

$

770

Asset Impairment Charge

133

-

-

-

-

Non-cash Purchase Accounting

-

-

16

-

-

Adjusted Operating Income

$

861

$ 1,067

$ 1,738

$

987

$

770

30 November 2020 26

Differentiated and Proven Business Culture

Disclaimer

SDI - Steel Dynamics Inc. published this content on 30 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 November 2020 19:48:02 UTC


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Financials (USD)
Sales 2020 9 533 M - -
Net income 2020 537 M - -
Net Debt 2020 1 779 M - -
P/E ratio 2020 15,5x
Yield 2020 2,55%
Capitalization 8 246 M 8 246 M -
EV / Sales 2020 1,05x
EV / Sales 2021 0,92x
Nbr of Employees 8 385
Free-Float 75,0%
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Technical analysis trends STEEL DYNAMICS, INC.
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TrendsBullishBullishBullish
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Consensus
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Mean consensus OUTPERFORM
Number of Analysts 11
Average target price 39,10 $
Last Close Price 39,20 $
Spread / Highest target 14,8%
Spread / Average Target -0,26%
Spread / Lowest Target -18,4%
EPS Revisions
Managers and Directors
NameTitle
Mark D. Millett President, Chief Executive Officer & Director
Keith E. Busse Non-Independent Non-Executive Chairman
Theresa E. Wagler CFO, Principal Accounting Officer & Executive VP
Robert E. Francis Chief Information Officer & Vice President
Richard P. Teets Director
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