Sims Ltd. · ASX:SGM
Sims — Non-Deal Roadshow (May 2023)
45 slides from Sims's roadshow presentation, May 31, 2023
Slide 1: Creating Value by Providing a Pathway to Decarbonisation and Circularity
Change photo For personal use only FIX DATE Creating Value by Providing a Pathway to Decarbonisation and Circularity UK Roadshow 31 May – 1 June 2023
Slide 2: Disclaimer
For personal use only Disclaimer The material contained in this document is a presentation of information about the Group’s activities current at the date of the presentation, 31 May to and 1 June 2023. It is provided in summary form and does not purport to be complete. It should be read in conjunct
Slide 3: Overview of Sims Limited
For personal use only Overview of Sims Limited 3
Slide 4: Sims Limited
For personal use only Sims Limited The group at glance: • Publicly listed Australian Company (ASX: SGM; OTC: SMSMY) • Market capitalisation approximately A$2.8 billion (26 May 2023) • FY22 Total sales volumes of 10.6 million tonnes1 • FY22 Revenue A$9,264.4 million • FY22 Underlying EBIT A$756.1 mil
Slide 5: Create a world without waste to preserve our planet
Create a world without waste For personal use only to preserve our planet Driving value through a purpose-led strategy We enable the re-use of finite natural resources and the decarbonisation of our customers’ supply chain, directly creating measurable positive impact for individuals, communities, i
Slide 6: Our Role in decarbonisation
Our Role in decarbonisation Sims Metal enables the decarbonisation of the metal industry For personal use only Sims Direct, Value Chain and Steel production accounts for Steel produced via a US EAF Avoided Emissions FY21 7% of global emissions, and is75% lower in Scope 1 & 15 28% of industrial emiss
Slide 7: Our Role in decarbonisation
Our Role in decarbonisation Through circularity, our adjacent businesses address environmental-related problems For personal use only Sims Lifecycle Services Sims Resource Renewal For FY22, the total avoided emissions impact was 439 kilotonnes of CO 2e – that’s equivalent to taking more than 90,000
Slide 8: Our business
Our business Is underpinned by positive trends and key competitive advantages For personal use only Structural Market Tailwinds Unique capabilities 107 years’ experience in recycling Increased environmental concerns for our Dedicated in-house engineering team customers More stringent environmental c
Slide 9: Rapidly changing environments
Rapidly changing environments Acceleration of existing trends and emergence of new ones For personal use only SOCIAL CHANGE FROM 2020 • Community activism is increasing its impact through social media and better coordination • New ENVIRONMENTAL • Climate change action has grown in urgency across gov
Slide 10: Actively managing our business portfolio
Actively managing our business portfolio Adapting to evolving market conditions. Seeking to sell underperforming, For personal use only undervalued or underutilised assets and recycle proceeds to grow core business Sims Limited Core Adjacent Divestment Sims Metal Sims Resource Sims Lifecycle Sims Mu
Slide 11: Sims Metal
For personal use only Sims Metal Operating in Australia for more than 104 years At centre of the circular economy and a key enabler of decarbonisation The world’s largest public recycler of metals by volume Operations in Australia, New Zealand, USA and UK 11
Slide 12: Global footprint
Global footprint Extensive network of facilities enables global sourcing of infeed and UK Metal diversity of sales outlets For personal use only 28 1,614 Facilities 4 Shredders FY22 Intake Volumes2 Australia , New Zealand & PNG Metal 51 1,586 8 North America Metal 57 5,071 12 SA Recycling3 124 4,874
Slide 13: FY22 Sims Metal
For personal use only FY22 Sims Metal Segment Breakdown Product Breakdown 2% Sales Volumes 5% 17% Sales Volumes 15% 52% 16% 93% North America Metal ANZ Metal UK Metal Global Trading & Other Brokerage 22% Sales Revenue 6% 72% Ferrous Non-Ferrous Shredder Recovery Non-Ferrous Retail 13
Slide 14: Strategy
Strategy Targeted and disciplined growth strategy For personal use only Metal Growth Strategy Grow non-ferrous retail business in the US and expand ferrous volumes in favourable regions Ferrous Large markets Strategic lens to identify organic and M&A growth • Essential for material generation to opp
Slide 15: SA Recycling
For personal use only SA Recycling 15
Slide 16: SA Recycling overview
For personal use only SA Recycling overview 130 Facilities1 23 Shredders1 Operations in 16 States1 4.9 million tonnes 4.9 Sales Volumes +3300 employees1 Intake Volumes in FY222 in FY222 1 2023 year-to-date 16 2 SAR volumes 100%
Slide 17: SA Recycling
SA Recycling Strong growth in FY22 and a track record of stable trading margin percentages For personal use only FY22 Sales Volume FY22 Sales Revenue 5% 6% 29% 58% 89% 13% Ferrous Non-Ferrous Shredder Recovery Non-Ferrous Retail 17
Slide 18: SAR's rapid growth since 2017
SAR’s rapid growth since 2017 Successful acquisition integration For personal use only • PSC Metals • Pirkle • DMW Metals Recycling • Southern Recycling • Tennessee Valley Recycling • Alter Trading • Metro • Good to Go • American Metal Recycling • Georgia Recyclers • Metals USA Recycling • The Scrap
Slide 19: SA Recycling's business priorities
For personal use only SA Recycling’s business priorities • Integration of closed acquisitions • Enhance presence in existing footprint • Investment in technology and infrastructure • Further downstream investment to produce mill ready products, semi-finished products, or reduce dependency on interme
Slide 20: Sims Lifecycle Services
For personal use only Sims Lifecycle Services 20
Slide 21: Global leader in circular cloud solutions
For personal use only Global leader in circular cloud solutions Global Circular Cloud Consistent Reuse Servers Compliant Redeploy Networking Comprehensive Reengineer Storage Sustainable Recycle 21
Slide 22: Why SLS is best in market
Why SLS is best in market Strong competitive advantages to continue to demonstrate growth For personal use only Integrated service provider Global Enabling service sustainability Sims Lifecycle Services Linked to the A secure larger Sims partner Group 22
Slide 23: Pillars of growth
Pillars of growth For personal use only Expand services Grow current clients New clients • Fulfilment • Geographies • Co-locators • On site services • Services • Hyperscalers • Global Box • Enterprises e.g. Programme Fortune 500 • Sustainability 23
Slide 24: Growth delivery & execution
Growth delivery & execution For personal use only Operational Technical Innovation Readiness Development • Dedicated • Industry knowledge • Innovation with a experienced team and leadership growth mindset • New services and • Operational solutions • Delivery through a locations structured approach 2
Slide 25: Demonstrated growth
Demonstrated growth For personal use only Consistent repurposed unit growth Repurposed unit % growth year-on-year Sims Repurposed Units 1.7 (million) 1.2 Targeting 8.5 m repurposed units in 0.7 FY25 0.2 1H21 2H21 1H22 2H22 1H23 25
Slide 26: Sims Resource Renewal
For personal use only Sims Resource Renewal 26
Slide 27: SRR is a key element of delivering Sims' Purpose
SRR is a key element of delivering Sims’ Purpose For personal use only SRR’s vision is to transform hard to treat ASR and plastic waste into higher value, useful products for society • Divert 1 million tonnes of Sims Metal ASR away from landfill • Increase recycled content in products as a pathway t
Slide 28: Demonstration plant operations
Demonstration plant operations Validating technology, gas and vitrified product qualities For personal use only • Operations to commence in June for an initial test period of up to six months • Priority is on safe operations with extensive testing of start up, shutdown and emergency response • Will
Slide 29: Demonstration plant outcome
Demonstration plant outcome Optimise commercial facility capital investment For personal use only Plastics/ASR • Equipment performance, integrity and reliability will optimise future commercial scale facility design • Will inform product qualities and the basis for a range of products best Olefins S
Slide 30: Output product optionality
Output product optionality Multiple product choices create greater commercial flexibility For personal use only • Explore a range of products including alternative fuels, to enable optionality, on the journey to full circularity of plastics • Take a customer centric approach to each market and produ
Slide 31: Sims Resource Renewal
Sims Resource Renewal Disciplined program to realise emerging market value For personal use only • FY24 Demonstration Plant Commitments: • No material capex investment • Operating costs for base testing ~$2 million • Continue a disciplined commercial plant development process, applying a capital gat
Slide 32: HY23 Financial Highlights
For personal use only HY23 Financial Highlights 32
Slide 33: A resilient performance in HY23
A resilient performance in HY23 against a challenging trading and operating environment For personal use only Sales volume growth in Metal EBIT was impacted by challenging macro and operating conditions, although above guidance Lower trading margin reflected challenging market conditions across all
Slide 34: Group Financial Performance
Group Financial Performance As expected, EBIT result was impacted by lower margins and increased operating costs For personal use only A$m HY23 HY22 Change Sales revenue 3,831.2 4,265.0 (10.2)% • Proprietary intake volumes down 3.2% Statutory EBITDA 270.2 442.0 (38.9)% • Revenue down 10.2% driven by
Slide 35: Business segment financial performance
For personal use only Business segment financial performance Underlying EBIT1 (A$m) HY23 HY22 Change Sales volumes HY23 HY22 Change (‘000 tonnes) Metal Business2 87.3 266.5 (67.2)% Metal Business2 3,995 3,941 1.4% Sims Lifecycle Services 7.0 9.9 (29.3)% Global Trading 562 675 (16.8)% SA Recycling 49
Slide 36: Cash generation
Cash generation Lower inventory and prices released working capital For personal use only Million $AUD • Working capital of $186.8 million release, driven by lower inventory and metal prices • Provisions of $85.6 million includes incentive payments related to FY22 322.0 • Tax payments of $31.7 milli
Slide 37: Net cash movement
Net cash movement Operating cashflow up by 10.7% For personal use only Million $AUD • Cash inflow from operating activities of $322.0 million increase • Cash received for asset sales included Doremus land for $36.5 million • Capex spend of $127.2 million, includes $23 million in delayed growth proje
Slide 38: Capital Expenditure
Capital Expenditure Focused deployment of capital. Quickly adapted to market changes while continued For personal use only supporting growth Capital Expenditure • Total capex of $127.2 million in HY23 was comprised of 300 $92.4 million in Sustaining Capex 250 • $34.8 million spend in Growth Capex •
Slide 39: Sustainability
For personal use only Sustainability 39
Slide 40: Our sustainability strategy
Our sustainability strategy Designed to drive positive impact on society, environment and all our stakeholders For personal use only Our strategy comprises 9 ambitions or goals 40
Slide 41: Targets for accountability and transparency
27 targets for accountability and transparency In 2022 updated climate ambition and targets to accelerate emissions reduction across the business For personal use only OPERATE RESPONSIBLY CLOSE THE LOOP 1 Foster a safe work environment 5 Achieve net zero by 2050 1.1 Total Recordable Injury Frequency
Slide 42: Employee Health & Safety
Employee Health & Safety Excellent safety performance continued in HY23 For personal use only 53 Total Injuries 29% reduction in • Strategic focus on improvement of control Recordable and Lost Time 43 Injuries measures continued to drive excellent safety 38 HY23 vs HY22 performance 34 24 • Maintaine
Slide 43: Strengthened sustainability credentials
Sustainability Strengthened sustainability credentials For personal use only Ranked 14th in the Global 100 list of most sustainable companies Received maximum AAA rating DJSI Australia constituent A- score 43
Slide 44: Appendix
For personal use only Appendix 44
Slide 45: Metal operations
Metal operations For personal use only Sorting, Baling, Container, Foundries, Smelters, Granulation + Polishing Truck, Rail Refineries SHELMO, Insulated Wire Non-Ferrous Retail Zorba + ZSP Polishing + Container, Foundries, Smelters, Zurik Advanced Truck, Rail Refineries Separation Collection, Sims F