second quarter 2020 investor call presentation...this presentation contains some predictive...

21 July 2020

Second Quarter 2020Investor Call Presentation

21 July 2020 1Differentiated and Proven Business Culture

Forward Looking Statements and Non-GAAP Financial Measures

Forward-Looking StatementsThis 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 MeasuresSteel 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.


1.4

2.4 2.72.7

5.0 5.1

Steel Dynamics Industry²

Total Recordable Injury Rate1

Safety is Our Number One Value

Each of our platforms perform

meaningfully better than

industry benchmarks

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, and Severity Rate is defined as OSHA days away from work x 200,000 / hours worked2 Source: 2018 U.S. DOL Bureau of Labor Statistics

Steel Steel Fabrication

Metals Recycling

Total 2019 Recordable Injury Rate1 By Platform

Lost Time Injury Rate1 Severity Rate1

2.3

1.81.5

1.81.9 1.9

2015 2016 2017 2018 2019 Q2'20 TTM

24.9

10.9

14.2

10.4 10.7

6.3

2015 2016 2017 2018 2019 Q2'20 TTM

0.66

0.34 0.330.25

0.330.27

2015 2016 2017 2018 2019 Q2'20 TTM

YTD 2020 TRIR improved to 1.7

YTD 2020 Lost Time Injury Rate improved to .18

YTD 2020 Severity Rate

improved to 3.25


Net Income (dollars in millions)

Revenue (dollars in billions) Adjusted Operating Income1 (dollars in millions)

Adjusted EBITDA1 (dollars in millions)

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

Record High

Record High

Record High

Record High

Financial Strength in Diverse Market Environments

3rd Best Year

2nd Best Year

3rd Best Year

3rd Best Year

$861$1,067

$1,738

$987$843

2016 2017 2018 2019 Q2'20 TTM

$382

$813

$1,258

$671 $535

2016 2017 2018 2019 Q2'20 TTM

$1,172$1,405

$2,074

$1,338$1,158

2016 2017 2018 2019 Q2'20 TTM

$7.8

$9.5

$11.8$10.5

$9.5

2016 2017 2018 2019 Q2'20 TTM


Annual Steel Operations Results

Steel Operations Shipments (millions of tons)

Record High

Acquired Heartland Flat Roll Division Q3 2018 and United Steel Supply March 2019.

Processing Locations¹ Shipments (included above)(thousands of tons)

¹ Processing locations include Heartland (flat roll), Techs (flat roll), United Steel Supply (flat roll) and Vulcan (SBQ).

Our processing locations represented 15% of total steel shipments in 2019, and the associated steel procurement cost represented 16% of our steel operations’ cost of goods sold.

Operating Income (dollars in millions)

Record High

6.6 6.9 7.27.7 7.6

2.6 2.8 3.4 3.1 3.1

9.2 9.7

10.6 10.8 10.7

2016 2017 2018 2019 Q2'20 TTMFlat Roll Long Products

809 880

1,070

1,668 1,731

2016 2017 2018 2019 Q2'20 TTM

$941$1,114

$1,855

$1,048$906

2016 2017 2018 2019 Q2'20 TTM


Annual Metals Recycling Results

Ferrous Shipments (millions of gross tons)

Nonferrous Shipments (millions of pounds)

66% of 2019 and 68% of Q2 2020 TTM ferrous scrap volume was sold to Steel Dynamics’ own steel mills

Adjusted Operating Income¹ (dollars in millions)

¹ Adjusted operating income excludes non-cash goodwill and asset impairment charges of $6 million in 2016.

5.1 5.0 5.14.6

4.3

2016 2017 2018 2019 Q2'20 TTM

1,104 1,087 1,1311,068

949

2016 2017 2018 2019 Q2'20 TTM

$40

$85 $88

$28

2016 2017 2018 2019 Q2'20 TTM

$0



Annual Steel Fabrication Results

Shipments (thousands of tons)

Record High

Record High

$91 $87

$62

$119 $124

2016 2017 2018 2019 Q2'20 TTM

563627 642 644 666

2016 2017 2018 2019 Q2'20 TTM


Net Income (dollars in millions)

Revenue (dollars in billions) Operating Income (dollars in millions)

Adjusted EBITDA1 (dollars in millions)

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

Quarterly Consolidated Results

$2.8$2.5

$2.4$2.6

$2.1

Q2'19 Q3'19 Q4'19 Q1'20 Q2'20

$285

$228

$182

$274

$159

Q2'19 Q3'19 Q4'19 Q1'20 Q2'20

$194

$151

$121

$187

$75

Q2'19 Q3'19 Q4'19 Q1'20 Q2'20

$365

$315

$270

$356

$217

Q2'19 Q3'19 Q4'19 Q1'20 Q2'20



Quarterly Steel Operations Results

Steel Operations Shipments (millions of tons)

Record High

Processing Locations¹ Shipments (included above)(thousands of tons)

¹ Processing locations include Heartland, Techs, United Steel Supply and Vulcan.

Our processing locations represented 17% of total steel shipments in Q2 2020, and the associated steel procurement cost represented 19% of our steel operations’ cost of goods sold.

2.0 1.9 1.9 2.01.8

0.8 0.8 0.8 0.80.7

2.8 2.7 2.7 2.8 2.5

Q2'19 Q3'19 Q4'19 Q1'20 Q2'20Flat Roll Long Products

445 448422 426 435

Q2'19 Q3'19 Q4'19 Q1'20 Q2'20

$295

$240$201

$293

$172

Q2'19 Q3'19 Q4'19 Q1'20 Q2'20


Operating Income (Loss) (dollars in millions)

Quarterly Metals Recycling Results

Ferrous Shipments (millions of gross tons)

Nonferrous Shipments (millions of pounds)

75% of Q2 2020 ferrous scrap volume was sold to Steel Dynamics’ own steel mills

1.2 1.21.1

1.2

0.8

Q2'19 Q3'19 Q4'19 Q1'20 Q2'20

266 257 253272

167

Q2'19 Q3'19 Q4'19 Q1'20 Q2'20

$11

$3

($5)

$8

($6)

Q2'19 Q3'19 Q4'19 Q1'20 Q2'20



Quarterly Steel Fabrication Results

Shipments (thousands of tons)

Record High

157169 174

163 160

Q2'19 Q3'19 Q4'19 Q1'20 Q2'20

$31

$35$33

$29$27

Q2'19 Q3'19 Q4'19 Q1'20 Q2'20


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

Steel Mill Production Utilization

We achieve consistently higher through-cycle steel utilization compared to our domestic peers, driven by our low-cost, vertically connected business

model, and diversified value-added product portfolio and end markets.

Source: AISI, U.S. Department of Commerce, Accenture1 Domestic Steel Imports Excluding Semi-finished as a % of Apparent Domestic Consumption for the second quarter 2020 is through May 2020.

70%74% 75% 77% 78%

70% 71%74%

78% 80% 80%

55%

21% 22%24% 23%

28% 29%25% 27%

23%19% 17%

21%

73%

82% 82%88% 88%

79%

87%89%

96%

88%

94%

79%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1'20 Q2'20¹

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

Flat Roll Group - Butler 3,200

- Columbus 3,200

Structural & Rail 2,200

Engineered Bar 950

Roanoke Bar 720

Steel of West Virginia 555 Total 10,825

Q2 2020 SDI Steel Mill Production 2,132

Q2 2020 SDI Steel Mill Utilization 79%

Est. Annual SDI Steel Mill Production Capacity(Thousands of Tons)


$510 $681 $397 $479

$751 $591 $974

$1,240

$1,835

$881

$319

$1,086 $868

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q2'20 TTM

5-year average: $1.1 billion

5-year average: $564 million

1 “Free Cash Flow” is defined as Adjusted EBITDA – Capital Investments. The Adjusted EBITDA and Free Cash Flow reconciliations to GAAP net income are provided in the appendix to this presentation.

Free Cash Flow1 (dollars in millions)

Doubled Average Annual Free Cash Flows

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

Excluding 2019 and Q2 2020 TTM funding of $205M and $549M, respectively, for our

new Texas flat roll steel mill, our 2019 and Q2 2020 TTM free cash flow would

have been $1.1B and $.9B


Timing

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

Planned Sinton, Texas Greenfield Flat Roll Steel Mill Current estimated investment of approximately $1.9 billion1 Mid-20211

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

Columbus Flat Roll Division $155 million Galvanizing LineFirst prime

coil July 2020

Roanoke Bar Division $38 million Reinforcing Bar Expansion Q2 2018

Structural and Rail Division $82 million Reinforcing Bar Expansion Q1 2019

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

March 2019

Heartland Flat Roll Steel Acquisition $434 million (includes $98 million of working capital) June 2018

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

1 Estimated project cost and start-up timeline.

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


Columbus Flat Roll Division third state-of-the-art galvanizing line

Congratulations to the team on running their 1st prime coil!

July 9, 2020


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

Track Record

Strategically Compelling

Smart Growth

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 are beyond existing EAF-based production capabilities

Latest generation of advanced high strength steel grades, including automotive and energy grades

Diversified, higher-quality value-added product mix

Targeting underserved markets reliant on imports with long lead times and inferior product quality

Competitively advantaged location

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

1 Source: CRU2 Source: U.S. Department of Commerce

Investment “Next Generation” electric-arc-furnace (EAF) 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 benefits Widths (38” to 84”) and gauges from 0.047” to 1.00” / Produce up to 52.5 ton coils

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


Planned Sinton, Texas flat roll steel mill drives next generation of growth and next generation EAF steelmaking capability

Location Benefits

Customer-centric logistics, providing shorter lead times and meaningful customer 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 more than 800,000 annual tons of local steel processing and consumption capability

Proximity to prime ferrous scrap generation via the four-state Texas region and Mexico, and cost-effective access 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, transloading opportunities with a third class I railroad, 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

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)

1 Source: 2017 CANACERO information published through AISI, market study including imports by regional ports, producer shipments and confidential customer information2 Source: CRU

Houston

Other flat roll steel producers

Steel Dynamics flat roll steel mills

Sinton

Monterrey


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

Initial EstimatedSinton Product Mix¹

Estimated Sinton Shipments by Region¹

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

60%12%

7%

12%

9%

Hot RollPickled & OiledCold RollGalvanizedPainted

70%

30%

United StatesMexico

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 one market to another based on underlying demand.


Best-in-class performance

Strong cash flow generating business

modelStrong balance sheet Significant strategic

optionality

• Strong free cash flow conversion

• Leading EBITDA margin

• 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

• 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

• 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

Capital allocation framework, committed to investment grade ratings

$2.3 billionGrowth

$2.1 billionCapital Returned to Shareholders

1 Period ended June 30, 2020.

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

1.3

1.0

0.60.8

1.0

0.0

0.5

1.0

1.5

2.0

2.5

2016 2017 2018 2019 Q2' 20

$ 1.6 BInternal Capital

Investments$ 0.8 B

Dividends

$ 0.7 BM&A $ 1.3 B

Share Repurchases


$400

$750

$400

$600 $500

2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

Strong liquidity and conservative credit metrics

Staggered debt maturity profile2 (dollars in millions)Strong liquidity (dollars in millions)

Low leverage, low-cost debt (dollars in millions)June 30,

2020x Adjusted EBITDA¹

Cash and cash equivalents and short-term investments $ 1,566

2.800% senior notes, 2024 400 0.3x2.400% senior notes, 2025 400 0.3x4.125% senior notes, 2025 350 0.3x5.000% senior notes, 2026 400 0.3x3.450% senior notes, 2030 600 0.5x3.250% senior notes, 2031 500 0.4xOther obligations 98 0.1xTotal debt $ 2,748 2.4xNet debt $ 1,182 1.0xAdjusted TTM EBITDA¹ $ 1,306

¹ June 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 $98 million.

No Near-Term Maturities

In June 2020, we refinanced $400M of existing 5.250% senior notes due 2023 and $500M of existing 5.500% senior notes due 2024 with the issuance of $400M of 2.400% notes due 2025 and $500M of 3.250% notes due 2031.

We are committed to maintaining investment grade credit ratings

$1,566

$2,754

1566

$1,188

Revolver availability

Cash and cash equivalents and

short-term investments

Total liquidity

We executed a5 year $1.2B

unsecured credit facility December 2019

As of June 30, 2020


1,1481,140

1,117

1,081

2015 2016 2017 2018

Energy Intensity2

0.24 0.24

0.21 0.21

2015 2016 2017 2018

Greenhouse Gas Emission Intensity1

We are committed to sustainability

Matching operations to sustainability

Source: Our 2018 Sustainability Update located on our website at www.steeldynamics.com/Sustainability.aspx

1 Metric tons of Scope 1 CO2 equivalent emissions/cast steel ton2 KWH / ton of steel produced

99% of our total system water demand was reused during 2018

In 2018, we estimate our CO2 emissions for our six electric-arc-furnace steel mills were 13% of the World

Steel Association average CO2 emissions

In 2018, our energy intensity for our six electric-arc-furnace steel mills was 11% of the World Steel Association average energy intensity.

EAF steel production uses a fraction of the energy and has a fraction of the carbon footprint vs. blast furnace technology

We are one of the largest nonferrous metals recyclers and the 2nd largest ferrous recycler in the U.S.

We reintroduced 1.1 billion pounds of recycled nonferrous scrap into the manufacturing life cycle in 2019

We reintroduced 11 million tons of recycled ferrous scrap into the manufacturing life cycle in 2019


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

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

Sustainable shareholder value creation and distribution growth

APPENDIX


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-Added Finishing /

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

Pittsburgh, PA¹– The Techs / Acquired Flat

Roll Galvanizing Facilities– 1.0M Tons Galvanized– 3 Galvanizing Lines

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– 2 Galvanizing Lines– 1 Paint Line

Flat Roll Steel Group8.4M Tons Annual Shipping Capacity

Long Product Steel Group4.6M Tons Annual Shipping Capacity

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

Terre Haute, IN¹ – Heartland / Acquired Flat Roll

Processing Facility– 1.0M Tons– 1 Galvanizing Line

Our primary steel operations – at a glance

1 Processing locations


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

Dollars in millions 2016 2017 2018 2019Q2'20

TTMConsolidated Operating Income 728$ 1,067$ 1,722$ 987$ 843$

Asset Impairment Charge 133 - - - - Non-cash Purchase Accounting - - 16 - -

Adjusted Operating Income 861$ 1,067$ 1,738$ 987$ 843$

Dollars in millions 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Q2'20

TTMNet Income (Loss) 130$ 266$ 142$ 164$ 92$ (145)$ 360$ 806$ 1,256$ 678$ 546$

Income Taxes (Benefit) 83 158 62 99 73 (97) 204 129 364 197 157 Net Interest Expense 166 172 154 123 135 153 141 124 104 99 97 Depreciation 171 177 180 192 229 263 261 265 283 286 284 Amortization 46 40 36 32 28 25 29 29 28 30 30 Noncontrolling Interests 12 13 21 26 65 15 22 7 3 (7) (11)

EBITDA 608$ 826$ 595$ 636$ 622$ 214$ 1,017$ 1,360$ 2,038$ 1,283$ 1,103$

Unrealized Hedging (Gains) / Losses 2 (4) (3) 5 (5) 3 1 5 (6) 3 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 43 Asset Impairment Charge 13 - 8 - 213 429 120 - - - - Refinancing Charges - - 3 2 - 3 3 3 - 8 8

Adjusted EBITDA 643$ 848$ 621$ 666$ 863$ 706$ 1,172$ 1,405$ 2,074$ 1,338$ 1,158$

Less Capital Investments 133 167 224 187 112 115 198 165 239 452 839

Free Cash Flow 510$ 681$ 397$ 479$ 751$ 591$ 974$ 1,240$ 1,835$ 886$ 319$


Steel Dynamics – Quarterly Adjusted EBITDA Reconciliation

Dollars in millions Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020Net Income 197$ 153$ 124$ 191$ 79$

Income Taxes 60 49 26 57 24 Net Interest Expense 25 24 25 22 26 Depreciation 73 71 70 71 70 Amortization 7 7 9 7 7 Noncontrolling Interests (2) (2) (2) (3) (3)

EBITDA 360$ 302$ 252$ 345$ 203$

Unrealized Hedging (Gains) / Losses (4) 4 1 (1) - Inventory Valuation - - - 1 - Equity-Based Compensation 9 9 14 11 9 Refinancing Charges - - 3 - 5

Adjusted EBITDA 365$ 315$ 270$ 356$ 217$

second quarter 2020 investor call presentation...this presentation contains some predictive...

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