Sims Ltd. · ASX:SGM
Sims — Shareholder Meeting (November 2006)
24 slides from Sims's shareholder meeting presentation, Nov 17, 2006
Slide 1: HTT
HTT ce ti i i
Slide 2: Good Morning Everyone
Good Morning Everyone, Thank you for coming to hear about Sims Group's fiscal 2006 performance and our latest news.
Slide 3: Hugo Neu merger completed
Pn Ci Aili aah h Winco ANN GRO As many of you will recall, the merger with Hugo Neu had already been completed by last year's Annual General Meeting.
Slide 4: New Jersey mega shredder
This is another view of the New Jersey mega shredder the Chairman has already referred to. A similar machine will shortly be commissioned in Los Angeles completing the major processing equipment replacement programme highlighted at the time of the merger.
Slide 5: Recycling Solutions Division growth
Q i it _wcw Ne SEMIS GROUP Another highlight has been our Recycling Solutions Division which continues to grow through both greenfield development and acquisitions.
Slide 6: Acquisition of M+R in Germany
wy Most recently has been the acquisition of M + R, a specialist non ferrous recycler in Germany. M +R has a rapidly developing E-recycling business which will complement our existing operations in Holland and allow us to better exploit opportunities arising frorn legislation driven recycling in the
Slide 7: Health and Safety
(een ‘ S EO TN ess ROL WUT ii Tic MTCC Health and Safety continues to be in the forefront of our minds in everything we do.
Slide 8: Lost time injury frequency rate
co Sonia hail IM In 2006, the Group, excluding our new US assets, maintained the encouraging lost time injury frequency rate achieved in 2005. The inclusion, however, of a higher rate at our acquired businesses illustrates that we have work to do to bring safety performance in the US inline with the
Slide 9: Safety, Health & Environment & Community (SHEC)
Safety across the Group has been incorporated within a new regime called “Safety, Health & Environment & Community” (SHEC) which imposes a stringent management and reporting discipline across the Group, with emphasis on accountability at all levels. Our responsibilities to the environment are becomi
Slide 10: Energy conservation from recycling
oes ! cy Pin i, This slide demonstrates the positive impact of our core business on energy conservation. If the steel produced from our recycled product had, instead, been produced through conventional blast furnaces, nearly four times the amount of energy would have been used. Put another way, usin
Slide 11: Compacting cars in the outback
cI On a lighter note, | recall at an AGM some years ago a shareholder enquiring as to why there were so many abandoned cars in Central Australia and demanded we do something about it to fulfil our community obligations. Well, at that time it was simply not economically viable to do so, but | am plea
Slide 12: Technology and R&D advances
IU Tl il a i i Finally, | want to acknowledge the technological and R & D advances which the Group has made during the year. The focus has been on materials separation, not only metals, but also glass and plastics. As our business becomes more competitive the need to deliver on our technology initia
Slide 13: EBIT by region
The following slides will give an insight into how we made our money in fiscal 2006. 37% of EBIT came from Australia, 18% from Europe and 41% from North America. We expect the North American figure to increase this year, as these figures only included 8 months contribution from Hugo Neu. 13
Slide 14: EBIT by product
UNI evi) LAA AA it Kk Ferrous, (including the non ferrous bi-product from shredding) continues to represent the lions share of EBIT, although both ferrous EBIT and its percentage contribution to Group EBIT reduced compared to 2005's spectacular performance. This was offset by growth in our non ferro
Slide 15: EBIT movement
08 ; i ree i sig jennie it vMovement do Fo we SAS) SS GROUP SMU) LOMA l ti a This slide illustrates in a different way what | have just said, namely that the decline in the ferrous contribution which was more than offset by growth elsewhere. 15
Slide 16: Record sales tonnes
i jn nn TAK NN | ‘i Si i Sales tonnes increased as a result of the contribution from the Hugo Neu businesses to a record 7.7 million tonnes for the year. 16
Slide 17: Exports of tonnes sold
ann INI NINN These tonnes were delivered around the world with 67% being exported from their country of origin to global markets. 17
Slide 18: Share price outperformance
All of these factors helped to contribute to our successful year. We saw Sims’ share price out perform the S & P / ASX 200 index ending the year up 46%. This was not without a severe correction in the early part of calendar 2006 which serves as a warning as to the volatile and competitive markets in
Slide 19: Base metals and ferrous scrap prices
es Ty area eee ‘ Hi hoc SMS GaGa i gy NL ‘ Z ih Lh This conveniently brings me to this slide which shows the movements throughout the year in base metals and ferrous scrap prices. Of these, copper, aluminium and ferrous are by far the most important to your Company's earnings. The spectacular increa
Slide 20: China and scrap markets
Time for a few words about China. Throughout 2006, China was the most important market for non ferrous scrap, and this remains the case today. The opposite is true for ferrous material. You would be entitled to ask why is this so, when China has accounted for 81% of the growth in global steel produc
Slide 21: Chinese steel making types
iii. NN ‘San The answer lies in the type of steel making adopted in China. As this slide shows nearly 90% of Chinese production growth is through conventional steel making for which the scrap is not the principal raw material. In fact, in the short term China is perhaps more of a threat to our ferro
Slide 22: Chinese steel production and margin pressure
Production in China now exceeds consumption with China consequently a significant exporter of steel products into the markets of our other global steel making customers. This, and an increasingly competitive market on the procurement side of our business caused, in part by significant increases in s
Slide 23: Growth strategy and outlook
Ih Fgh While we continue to deal with daily movements in our markets, we are also working hard on delivering our growth strategy. In our metal recycling business a number of “bolt-on” acquisitions are under consideration with one or more expected to be concluded in the near future. The Recycling Sol
Slide 24: EAE
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