Reliance (RS) investor relations material

Company overview and strategy

• Operates as a metal service center with over 320 locations, focusing on processing and distribution of metals, primarily in North America but with some international presence.

• Emphasizes diversification across products, end markets, and geographies, with a decentralized operating model and a history of growth through acquisitions.

• Maintains local brands post-acquisition and targets small, quick-turn orders, with 40% of orders delivered next day.

• Value-added processing now features in 50% of orders, supporting higher gross profit margins of 29–31%.

• Consistent cash flow generation, even in down markets, with a countercyclical cash flow profile.

Market trends and demand outlook

• Demand has been steady over the past year and a half, with non-residential construction, data centers, and infrastructure as bright spots.

• Defense and aerospace sectors show strong prospects, while agriculture remains weak but may improve by 2026.

• Reshoring trends are real, with increased customer interest in moving supply chains to the US and Mexico, though uncertainty with Canada and Mexico is delaying investments.

• Investments in chip, automotive, and pharmaceutical sectors are notable examples of reshoring.

Tariffs and regulatory environment

• Tariffs since 2018 have reduced imports, supporting higher domestic prices and benefiting earnings, with the company able to pass on higher costs to customers.

• Over 95% of purchases are from US producers, strengthening domestic relationships and market share.

• Limited direct impact from operations in Canada and Mexico; most business remains US-focused.

• Aluminum tariffs increased costs, but the company works with customers to avoid demand destruction.

• Regulatory rollbacks and bonus depreciation have positively impacted cash flow and investment.