Ryerson Holding: Navigating a Challenging Year and Looking Ahead

As we delve into the financial performance of Ryerson Holding Corporation (RYI) for the full year 2024, it's clear that the company faced a challenging macro environment marked by depressed demand, decreasing prices, and ongoing margin compression across stainless, carbon, and aluminum commodity bellwethers. Despite these headwinds, Ryerson managed to achieve several operational milestones and maintain a strong cash flow position.

In 2024, Ryerson accomplished two important milestones of its growth and network optimization strategy. First, the company made significant strides in bringing major capex projects online, including the opening of a 900,000 square foot service center in University Park, IL, and the start-up of a service center modernization project in Shelbyville, KY. These investments aimed to improve the company's operating model and customer experience, ultimately driving future profitability. Additionally, Ryerson launched its 'integration and optimization' phase, which contributed to realizing $60 million in annualized expense reductions while further weaving capex, systems, and acquisition investments made over the past three years into a cohesive intelligent service center network.

Ryerson's strategic initiatives also led to strong operating cash flow generation of $92.2 million in Q4 2024 and $204.9 million for the full year. The company ended the year with debt of $468 million and net debt of $440 million, compared to $522 million and $487 million, respectively, on September 30, 2024. This demonstrates the company's ability to manage its capital effectively while investing in growth and operational improvements.

However, Ryerson's net loss and declining sales in 2024 reflect the challenging macro environment and the company's significant investments in capital expenditures (capex) and operational improvements. The company's sales volume in Q4 2024 was 447,000 tons, a 7.8% decrease quarter over quarter, and its average selling price (ASP) was $2,254 per ton, a 3% decrease quarter over quarter. Gross margin expanded by 110 basis points (bps) to 19% in Q4 2024, but this was not enough to offset the decline in revenue and ASP.

Ryerson's net loss in 2024 can be attributed to several key factors, including the decline in revenue, decreasing ASP, margin compression, and increased expenses. The company's revenue decreased by 10% from $5.11 billion in 2023 to $4.6 billion in 2024, while its ASP per ton decreased by 9.7% from $2,629 in 2023 to $2,374 in 2024. Gross margin decreased by 190 bps from 20.0% in 2023 to 18.1% in 2024, and warehousing, delivery, selling, general, and administrative expenses as a percentage of revenue increased by 190 bps from 15.5% in 2023 to 17.4% in 2024.

Despite these challenges, Ryerson's management team remains optimistic about the company's future prospects. The company's strategic initiatives, combined with the expected improvement in cyclical industry conditions, should lead to higher and less volatile earnings in the future. As more of these investments operationalize to their expected potential in 2025 and beyond, Ryerson and its stakeholders should see the proof of their hard work.



In conclusion, Ryerson Holding Corporation faced a challenging macro environment in 2024, leading to a net loss and declining sales. However, the company's strategic initiatives, including major capex projects and network optimization, contributed to strong operating cash flow generation and a healthy liquidity profile. As the company continues to operationalize and integrate these assets into its network, investors can expect higher and less volatile earnings in the future.