Russel Metals (TSE:RUS) executives used the company’s 2025 year-end and fourth-quarter earnings call to frame the year’s performance as part of a multi-year portfolio repositioning effort, highlighting higher revenue and EBITDA, continued capital returns to shareholders, and the closing of its most recent acquisition from Klöckner.
Management emphasized multi-year portfolio reshaping and cash deployment
Chief Financial Officer Martin Juravsky said management views both the fourth quarter and full-year 2025 results as a continuation of a broader plan underway for several years. He pointed to approximately CAD 2.2 billion of cash flow generated since 2020, including asset sales and operating cash flow. Juravsky said the company deployed that capital across reinvestment initiatives and acquisitions, shareholder returns, and balance sheet de-risking.
On Samuel, Juravsky said Russel planned to reduce footprint, gain efficiencies, and repatriate redundant capital. He noted that when the sale of the Delta, B.C. property is completed “in the coming couple of months,” Russel expects to have reduced initial capital by almost 50%, with an implied purchase price multiple “close to 4x average EBITDA.” He also said the company expects to recognize a “meaningful gain” on the real estate sale when it closes.
On Tampa Bay Steel, acquired in December 2024, Juravsky described it as a strong standalone business with “value-added non-ferrous components” and a “beachhead” to expand in Florida. He said Tampa Bay was a “steady contributor” in 2025 and helped position Russel to acquire seven Klöckner branches in the U.S., including two in Florida.
Full-year 2025 results: revenue, margins, and returns improved
Juravsky summarized 2025 results as follows: revenue up 9%, gross margins up 90 basis points, and EBITDA dollars up 13%. He attributed the improvement to contributions from 2024 acquisitions, the impact of recent capital projects, and “generally, improved market conditions on average in 2025 versus 2024.”
Russel reported 2025 capital expenditures of CAD 74 million, which management said was below its expected multi-year run rate as certain projects were completed and other initiatives are still being scoped. Juravsky said the company expects to average closer to CAD 100 million per year for a few years, and described a multi-year capex pipeline of approximately CAD 200 million, including opportunities at the former Klöckner branches.
Juravsky also highlighted return metrics, stating Russel generated 15% return on invested capital in 2025 and averaged 18% per year over the past three years. In response to an analyst question about whether returns had bottomed, management argued that 2024 and 2025 were difficult and volatile markets and said it was “hard to say what’s a peak, what’s a trough,” emphasizing performance “through the cycle.”
Fourth-quarter details: seasonality, one-off items, and Klöckner closing
In the fourth quarter, Juravsky said revenue was down 6% from the third quarter due to typical seasonal volume declines, but up 5% from the prior-year quarter. He said Q4 margins were flat versus Q3, “better than I expected,” aided by margin improvement late in the quarter, which he said sets the stage for a modest same-store margin pickup in Q1 2026 versus Q4 2025.
Juravsky also outlined items that affected the quarter’s comparability, including:
- CAD 3 million expense from mark-to-market on stock-based compensation (versus a CAD 2 million recovery in Q3).
- CAD 2 million of operating losses at Western Canada locations in transition due to equipment moves, which management said are now largely complete.
- About CAD 1 million of costs related to the Klöckner transaction.
- CAD 2 million tariff recovery related to Canadian government charges on inventory in transit that had been expensed in Q3.
- About CAD 1 million gain on the sale of various pieces of equipment.
Russel generated CAD 53 million in cash from working capital in Q4, which Juravsky said is typical seasonally. He cautioned that working capital is likely to reverse in Q1 due to seasonal activity pickup, higher prices impacting working capital, and annual variable compensation payments.
The company’s Klöckner acquisition closed on December 31. Juravsky said the estimated purchase price is now $95 million (CAD 130 million), reduced from the previously announced level due to refinement of closing working capital. He also said the capital required to operate the acquired branches could increase from the level deployed at closing. Juravsky cited disclosed figures that the acquired branches generated around $550 million of revenue in 2025 and around $30 million of adjusted EBITDA in 2025, and said he expects the transaction to be “very economically attractive.”
Market conditions: early-year demand and pricing improved, with some end-market divergence
Management said sheet and plate prices increased in many categories over the past couple of months, with hot-rolled coil and plate prices up about $70 to $80 per ton since late November. Juravsky said demand was solid early in the new year and supply chain inventories in both Canada and the U.S. remained “reasonable” and within a normal range.
CEO John Reid said purchasing manager index (PMI) strength was consistent with what the company is hearing from customers, and noted mill capacity utilization rates “creeping towards 80%,” which he said typically supports pricing power. Reid said management is “pretty bullish” on Q1 and described optimism across most end markets, while calling out agriculture as still “languishing.” He cited strength in equipment manufacturing, data centers, solar and wind participation, and positive developments in energy.
On geographic trends, Reid said demand appears “a little stronger in the U.S. right now,” though he said Russel is seeing upticks in both Canada and the U.S., with tariff dynamics creating some impact in Canada.
Capital returns and balance sheet flexibility remained central themes
Juravsky said Russel returned CAD 182 million to shareholders in 2025, including CAD 86 million of share buybacks and CAD 96 million of dividends. In Q4, buybacks totaled CAD 25 million, and the company repurchased about 600,000 shares at an average price of around CAD 40.58. Since August 2022, Russel has repurchased 14% of shares outstanding for CAD 326 million, or “a little under CAD 38 per share,” according to Juravsky.
The company’s quarterly dividend of CAD 0.43 per share was paid in December, and management said it declared another CAD 0.43 per share dividend payable in March.
On leverage and liquidity, management said Russel ended the year with CAD 184 million of net debt and emphasized extended maturities and flexibility. Juravsky noted Russel is now investment grade with both S&P and DBRS, and said liquidity increased to CAD 653 million prior to the Klöckner closing, ending the year with net debt to invested capital of 10% after the transaction and “over CAD 500 million of liquidity.”
Management reiterated a disciplined and opportunistic approach to capital allocation, saying it continually recalibrates between internal investment, acquisitions, dividends, and buybacks based on relative attractiveness, without pursuing “growth for the sake of growth.”
About Russel Metals (TSE:RUS)
Russel Metals is one of the largest metals distribution companies in North America with a growing focus on value-added processing. It carries on business in three segments: metals service centers, energy field stores and steel distributors. Its network of metals service centers carries an extensive line of metal products in a wide range of sizes, shapes and specifications, including carbon hot rolled and cold finished steel, pipe and tubular products, stainless steel, aluminum and other non-ferrous specialty metals.
