Reliance (RS) J.P. Morgan Industrials Conference 2025 summary

Business model and operations

• Operates as a diversified metal service center, warehousing and processing metals for smaller customers and just-in-time delivery needs.

• Over 50% of sales are carbon steel, 16% aluminum, 15% stainless, with additional fabrication and toll processing services.

• Average order size is under $3,000, with 40% of orders delivered next day and 50% involving value-added processing.

• Growth driven by 76 acquisitions since 1994, focusing on small to mid-sized, well-run companies while maintaining decentralized operations.

• Local decision-making and entrepreneurial spirit are emphasized to stay close to customer needs.

End market trends and demand outlook

• Largest exposures are non-residential construction and general manufacturing, each at 30–35% of sales.

• Demand remained steady through 2024 despite declining metal prices; data centers and public works were strong, while ag equipment and consumer products were weak.

• Aerospace is 10% of sales, with steady activity and expected growth as build rates increase.

• Automotive business is primarily toll processing, with stable volumes and minimal tariff impact expected.

• Semiconductor market has slowed due to inventory build-up, with normalization expected by year-end.

Tariffs and pricing environment

• Tariffs historically benefited the industry by lifting domestic prices and earnings profile.

• Over 95% of metal is sourced domestically, positioning well for potential tariff changes.

• Higher prices are seen as positive, but excessive tariffs could temporarily restrict activity.

• Some pre-buying activity observed as customers anticipate price changes and supply constraints.