Vulcan Steel Limited Analysis

Overview

Vulcan is the only Australasian-wide, pure-play, value-added steel distributor and processor, with approximately 260kt of products sold in FY21. Vulcan distributes steel products, including carbon steel, stainless steel and engineering steel to a diversified customer base including customers in engineering, manufacturing, fabricating, transport, mining and a broad range of other market segments. Vulcan also provides value-added processing services for steel coils, steel plate, stainless steel and engineering steel. Vulcan cuts, drills, slits and shapes for fabrication, assembly or downstream processing by customers. Vulcan generated pro forma revenue and EBITDA in FY21 of NZ$731.5m and NZ$129.7m respectively, and had 842 employees as at 30 June 2021.

The Company was founded in Auckland in 1995 by Peter Wells and has since grown to 29 operating locations across Australia and New Zealand, serving an average of c.7,000 active trading accounts each month in FY21. Vulcan’s core business is focused on the distribution of steel, stainless steel and other steel across Australia and New Zealand. The Company also offers processing of steel plate, steel coil, stainless steel plate and engineering steel.

Vulcan is able to service a broad range of customers by operating as an intermediary between steel producers and end-users. Vulcan’s scale and longstanding relationships with its suppliers enable the Company to offer a broad product range, comprising c.12,000 individual SKUs in Australia and c.7,500 SKUs in New Zealand at 30 June 2021.

Vulcan generates the majority of its revenue from its Australian operations (62% of revenue in FY21) and has access to a diverse range of end-markets across both Australia and New Zealand. Vulcan has a diversified customer base, with its largest customer accounting for 2% of FY21 revenue and its top 20 customers accounting for 13% of FY21 revenue. Vulcan operated at ~98% distribution DIFOT in FY21, an indicator of its strong operational performance and commitment to outstanding customer service.

Vulcan is characterised by a flat organisational structure where managers in each region are empowered to autonomously manage inventory levels to meet customer demand. Vulcan has developed a fit-for-purpose IT system that is designed to enable staff to seamlessly access key financial and operational metrics in real-time. This assists staff to make better decisions, and improves responsiveness and inventory management. Further, Vulcan operates an in-house trucking fleet, with 92 owned trucks and 12 third-party cartage trucks as at 30 June 2021 across Australasia. This is uncommon in the industry and enables end-to-end control of the process, with an ability to provide customised delivery across Vulcan’s entire range of solutions, including next-day delivery for distribution products.

Vulcan has a proven track record of growing earnings both organically and through acquisitions. Vulcan has numerous opportunities for growth including ongoing business improvement initiatives, entry into new geographies, expansion of product and/or service offerings and opportunistic acquisitions.

Performance

The following information was extracted from Vulcan Steel Limited's ("VSL") FY25 results, released on 26 August 2025:

Vulcan Steel Limited (Vulcan), an Australasian-wide industrial product distributor and valueadded processor has announced its results for the financial year ended 30 June 2025 (FY25).

• Reported NPAT1 of NZ$15.7m4, down 60.6% from NZ$40m in FY24
• Reported EBITDA2 of NZ$109m, down 26.1% from NZ$147.6m in FY24

-Adjusted NPAT1, 3 of NZ$17.9m, down 55% from NZ$40m in FY24

• Adjusted EBITDA2, 3 of NZ$112.1m, down 24% from NZ$147.6m in FY24

-Operating cashflow of NZ$105.0m, down 37.8% from $168.7m in FY24

Following on from FY24, our performance in FY25 continued to be shaped by persistent and evolving economic challenges across both the New Zealand and Australian markets. The broader trading environment remained difficult, characterised by delayed investment decisions, widespread disruptions to global trade, and heightened geopolitical uncertainties. These external factors have had a tangible impact on our financial outcomes.

Despite these challenges, as a Group we achieved a reduction in net debt of NZ$44 million over the financial year. This outcome underscores the resilience of our operations and the success of our disciplined financial management.