Sims Ltd. · ASX:SGM
Sims — Sims Metal Management — H1 FY2013 Earnings Presentation
44 slides from Sims's earnings presentation, Feb 22, 2013
Slide 1: Interim results – Supplemental Materials
For personal use only Interim results – Supplemental Materials Half year ended 31 December 2012 Daniel W. Dienst, Group Chief Executive Officer Rob Larry, Group Chief Financial Officer 22 February 2013
Slide 2: Disclaimer
Disclaimer For personal use only Cautionary Statements Regarding Forward-Looking Information This presentation may contain forward-looking statements, including statements about Sims Metal Management’s financial condition, results of operations, earnings outlook and prospects. Forward-looking statem
Slide 3: Appendices
Appendices For personal use only A. Financial Results Details B. Progress Towards Strategic Goals C. Macroeconomic Analytics D. Summary of Restated Financial Statements 3
Slide 4: Appendix A) Financial Results Details
For personal use only Sunset Park, NY – Municipal Recycling Appendix A) Financial Results Details 4
Slide 5: Financial Overview
Financial Overview For personal use only Restated HY 2013 HY 2012 Change (%) Sales Revenue ($m) 3,428.5 4,583.9 (25.2) EBITDA ($m) 32.6 99.5 (67.2) Underlying EBITDA ($m)* 93.8 140.0 (33.0) Goodwill & Intangible Asset Impairment ($m) 291.3 672.3 (56.7) Depreciation ($m) 50.3 51.4 (2.1) Amortisation
Slide 6: Sales Revenue by Region
Sales Revenue by Region For personal use only HY 2013 HY 2012 16.7% 13.9% Australasia 19.7% 23.7% North America Europe 59.6% 66.4% $m HY 2013 HY 2012 Change (%) • HY2013 sales revenue was mostly impacted by a 1.2 million tonne (17%) reduction in shipments compared Australasia 573.6 639.2 (10.3) to P
Slide 7: Sales Revenue by Product
Sales Revenue by Product For personal use only HY 2013 HY 2012 0.8% Ferrous Trading 1.4% 15.3% 10.8% Non Ferrous Shred Recovery 47.0% 47.9% Ferrous Brokerage 18.3% 19.2% Non Ferrous Trading/Brokerage Recycling Solutions 17.4% 13.3% 4.4% Manufacturing/JVs 4.2% $m HY 2013 HY 2012 Change (%) • Ferrous
Slide 8: EBITA by Region
EBITA (pre-goodwill & intangible asset impairment) by Region For personal use only $50 41.2 $40 $30 ($’s in millions) $20 15.7 9.1 HY 2013 $10 (11.9) (0.3) $0 HY 2012 -$10 (1.9) (5.0) (2.7) -$20 (12.9) -$30 (25.7) Restated 1. EBITA by Region is before any add-back $m HY 2013 HY 2012 Change (%) of si
Slide 9: Significant Items by Region
Significant Items by Region For personal use only North Group After-Tax Australasia Europe Pre-Tax Total America Corporate Total $m HY 2013 Goodwill & Intangible Asset Impairment $ - $ 283.7 $ - $ 7.6 $ 291.3 $ 259.0 Inventory Adjustments to Net Realisable Value - 2.7 18.0 - 20.7 15.3 Redundancy Pro
Slide 10: EBITA by Product
EBITA (pre-goodwill & intangible asset impairment) by Product For personal use only $60 $50 47.7 ($’s in millions) $40 29.5 31.0 $30 HY 2013 12.9 18.3 $20 14.5 HY 2012 8.8 $10 5.8 5.2 $0 -$10 -6.0 Restated • EBITA by product is presented pre-corporate costs $m HY 2013 HY 2012 Change (%) (both group
Slide 11: Intake Volumes by Region
Intake Volumes by Region For personal use only HY 2013 HY 2012 13.8% 14.3% 11.9% 12.5% Australiasia North America Europe 71.9% 75.6% Restated Total Tonnes (‘000’s) HY 2013 HY 2012 Change (%) Australasia 859 907 (5.3) North America 4,314 5,500 (21.6) Europe 827 865 (4.4) Total 6,000 7,272 (17.5) 11
Slide 12: Intake Volumes by Product
Intake Volumes by Product For personal use only HY 2013 HY 2012 Ferrous Shredded 4.7% 0.3% 3.8% 0.3% (incl. NFSR) Other Processed Ferrous 21.1% Ferrous Brokerage 25.5% 36.9% 36.7% Non Ferrous Trading/Brokerage Other 37.0% 33.7% Restated • Ferrous brokerage tonnes associated with Total Tonnes (‘000’s
Slide 13: Sales Volumes by Region
Sales Volumes by Region For personal use only HY 2013 HY 2012 13.4% 15.2% 11.3% 12.0% Australiasia North America Europe 71.4% 76.7% Total Tonnes (‘000’s) HY 2013 HY 2012 Change (%) Australasia 899 855 5.1 North America 4,233 5,488 (22.9) Europe 795 808 (1.6) Total 5,927 7,151 (17.1) 13
Slide 14: Sales Volumes by Product
Sales Volumes by Product For personal use only HY 2013 HY 2012 Ferrous Shredded 4.5% 0.3% 4.0% 0.4% (inc. NFSR) Other Processed Ferrous 21.3% 37.6% Ferrous Brokerage 37.3% 25.1% Non Ferrous Trading/Brokerage Other 36.3% 33.2% Total Tonnes (‘000’s) HY 2013 HY 2012 Change (%) • Ferrous brokerage tonne
Slide 15: Group Income Statement
Group Income Statement For personal use only Restated $m HY 2013 HY 2012 Change ($) Change (%) Sales Revenue $ 3,428.5 $ 4,583.9 (1,155.4) (25.2) EBITDA 32.6 99.5 (66.9) (67.2) Underlying EBITDA 93.8 140.0 (46.2) (33.0) EBIT (320.9) (637.1) 316.2 49.6 Underlying EBIT 31.6 75.7 (44.1) (58.3) Net Inte
Slide 16: Group Balance Sheet
Group Balance Sheet For personal use only Restated As of 31 As of 30 June $m December 2012 2012 Change ($) Change (%) Current Assets $ 1,356.0 $ 1,429.1 (73.1) (5.1) Non-current Assets 1,721.2 2,079.9 (358.7) (17.2) Total Assets 3,077.2 3,509.0 (431.8) (12.3) Current Liabilities 645.2 734.2 (89.0) (
Slide 17: Strategic Capital Allocations & Distribution to Shareholders
Strategic Capital Allocations & Distribution to Shareholders For personal use only $m HY 2013 HY 2012 Change ($) Net Cash Inflow from Operating Activities $ 76.4 $ 17.0 $ 59.4 CAPEX, net 77.7 65.0 12.7 Acquisitions, net of cash acquired 20.0 64.3 (44.3) Share Repurchases 8.6 25.2 (16.6) Dividends 20
Slide 18: North America Regional Results
North America Regional Results For personal use only HY 2013 HY 2012 Change (%) Sales Revenue ($m) $ 2,043.3 $ 3,044.1 (32.9) EBITDA ($m) (1) $ (0.5) $ 24.5 (102.0) Underlying EBITDA ($m) (2) $ 37.9 $ 40.9 (7.3) Depreciation ($m) (25.2) (26.4) 4.5 EBITA ($m) (1) $ (25.7) $ (1.9) (1,252.6) Underlying
Slide 19: Australasia Regional Results
Australasia Regional Results For personal use only HY 2013 HY 2012 Change (%) Sales Revenue ($m) $ 573.6 $ 639.2 (10.3) EBITDA ($m) (1) $ 27.9 $ 53.7 (48.0) Underlying EBITDA ($m) (2) $ 32.5 $ 55.4 (41.3) Depreciation ($m) (12.2) (11.9) (2.5) EBITA ($m) (1) $ 15.7 $ 41.8 (62.4) Underlying EBITA ($m)
Slide 20: Europe Regional Results
Europe Regional Results For personal use only Restated HY 2013 HY 2012 Change (%) Sales Revenue ($m) $ 811.6 $ 900.6 (9.9) EBITDA ($m) $ 7.7 $ 22.0 (65.0) Underlying EBITDA ($m) (1) $ 25.9 $ 44.4 (41.7) Depreciation ($m) (12.7) (12.9) 1.6 EBITA ($m) $ (5.0) $ 9.1 (154.9) Underlying EBITA ($m) (1) $
Slide 21: Appendix B) Progress Towards Strategic Goals
For personal use only Newport, UK – Metals Recycling Appendix B) Progress Towards Strategic Goals
Slide 22: Progress towards strategic goals
Progress towards strategic goals For personal use only 1) Targeted cost reduction 2) Portfolio optimization • Underlying controllable costs reduced by $28m in • Solidify leadership positions in core markets North America Metals, $10m in Australia Metals, • Divestment of non-core or low ROI businesse
Slide 23: Targeted cost reductions achieved
1) Targeted cost reductions achievedM For personal use only North America Metals • Controllable costs reduced by $4.7m per month exceeding $4m per month target U.K. Metals • Controllable costs reduced by $0.8m per month, inline with management expectations, with the business continuing to track towa
Slide 24: Further cost reductions identified
1) Mwith further cost reductions identified For personal use only North America Metals • Management is targeting a further $2 million per month in cost reductions bring the aggregate cost savings to $6 million per month by the end of FY13 Australia Metals • Management projects cost reductions to sta
Slide 25: Asset portfolio optimization
2) Asset portfolio optimization For personal use only North America Metals • Directing capital to the highest returning assets, with emphasis towards “brown water ” (river) and “blue water” (export) facilities in scrap rich regions where we can achieve a leadership position, source control, and soli
Slide 26: North American Metals asset portfolio
2) North American Metals asset portfolio For personal use only * Richmond Steel 50% JV in British Columbia, Canada not shown 26 Solidifying leadership positions in strategic markets
Slide 27: E-Recycling platform
3) E-Recycling platform For personal use only US$bn Global E-Recycling Market • Leveraging unrivalled global footprint to capture Revenue Forecasts 25 new customer relationships 20 17% CAGR • Creating synergies through sharing our best-in- 15 class technology and business practices across 10 global
Slide 28: Advance in emerging economies
4) Advance in emerging economies For personal use only Implied Chinese ferrous scrap consumption 160 China 140 Mt annualized • Over 50% of global secondary copper smelting 120 Domestic 100 Imports capacity 80 60 • Implied ferrous scrap consumption more than 40 tripled over the past 10 years 20 0 • M
Slide 29: Advance in emerging economies
4) Advance in emerging economies For personal use only New Market Entry Platform Established Market Platform Municipal Metals Metals Full Service E-recycling Recycling Trading Recycling Offering South United United India Vietnam China Canada Africa Kingdom States Papua New Singapore U.A.E. Malaysia
Slide 30: Appendix C) Macroeconomic Analytics
For personal use only Claremont Terminal, NJ – Metals Recycling Appendix C) Macroeconomic Analytics
Slide 31: US scrap generation set to accelerate
US scrap generation set to accelerate For personal use only US scrap generation is tied to GDP growth 14,000 US GDP (constant terms) 12,000 US$bn 10,000 R² = 0.814 8,000 6,000 4,000 Scrap Generation 2,000 thousand tonnes 0 0 20,000 40,000 60,000 80,000 Source: USGS, BEA US scrap generation accelerat
Slide 32: US consumer scrap lifting off all-time lows
US consumer scrap lifting off all-time lows For personal use only Post consumer shreddable material tracking near 30 year lows 80 Kg per capita LT Avg 70 60 50 40 30 20 10 0 Source: Conference Board, NADA, EPA, AHAM, US Census * Ferrous scrap from vehicles, major appliances, steel packaging & contai
Slide 33: US consumer activity key to scrap recovery
US consumer activity key to scrap recovery For personal use only • Positive signals in the US as consumer confidence has steadily increased, yet remains materially lower than pre-GFC highs • Improved consumer confidence will likely translate into increased generation of consumer scrap from vehicles
Slide 34: US shredding capacity moderating
US shredding capacity moderating For personal use only • Since 2006 the average horsepower (HP) of shredder installations has dropped materially, causing the national average HP of all installed shredders to drop 6% over past 6 years • Since 1998 total US shredder capacity by HP has grown at a moder
Slide 35: Increasing global demand for scrap
Increasing global demand for scrap For personal use only EAF Steel Production (ex-China) • Growth in Electric Arc Furnace (EAF) steel 400 % of total 50% EAF Production production driving higher ferrous scrap demand 40% 300 • Global EAF crude steel production has grown at a 30% CAGR of 4.1% over 2000
Slide 36: Appendix D) Summary of Restated Financial Statements
For personal use only North Haven, CT – Metals Recycling Appendix D) Summary of Restated Financial Statements
Slide 37: Financial Overview - Restated
Financial Overview - Restated For personal use only FY 2012 FY 2011 FY 2010 Sales Revenue ($m) 9,035.7 8,846.8 7,452.6 EBITDA ($m)* 182.2 423.7 343.1 Underlying EBITDA ($m) 253.2 414.0 350.5 Goodwill & Intangible Asset Impairment ($m)* 675.6 - 0.9 Depreciation ($m) 103.1 102.2 109.1 Amortisation ($m
Slide 38: EBITA by Region - Restated
EBITA (pre-goodwill & intangible asset impairment) by Region - Restated For personal use only $m FY 2012 FY 2011 FY 2010 Australasia 106.3 87.3 81.2 North America (1) (25.7) 140.6 113.1 Europe (2) 4.1 95.7 61.6 EBITA by Region $ 84.7 $ 323.6 $ 255.9 Unallocated Group Corporate Costs (5.6) (2.1) (21.
Slide 39: EBITA by Product - Restated
EBITA (pre-goodwill & intangible asset impairment) by Product - Restated For personal use only $m FY 2012 FY 2011 FY 2010 Ferrous Trading (incl. NFSR) (1) 52.2 181.7 133.2 Ferrous Brokerage 14.6 23.4 21.4 Non Ferrous Trading (2) 71.4 92.9 95.7 Non Ferrous Brokerage 1.1 1.6 3.2 Recycling Solutions (3
Slide 40: Intake Volumes by Region & Product – Restated
Intake Volumes by Region & Product – Restated For personal use only Total Tonnes (‘000’s) FY 2012 Australasia 1,791 North America 10,908 Europe* 1,687 Total 14,386 Total Tonnes (‘000’s) FY 2012 Ferrous Shred (inc. NFSR)* 5,021 Other Processed Ferrous 5,146 Ferrous Brokerage 3,613 Non Ferrous Trading
Slide 41: Group Income Statement - Restated
Group Income Statement - Restated For personal use only $m FY 2012 FY 2011 FY 2010 Sales Revenue $ 9,035.7 $ 8,846.8 $ 7,452.6 EBITDA* 182.2 423.7 343.1 Underlying EBITDA 253.2 414.0 350.5 EBIT* (623.3) 293.1 198.3 Underlying EBIT 123.3 283.4 206.6 Net Interest Expense (21.2) (23.9) (13.6) Tax Benef
Slide 42: Group Balance Sheet - Restated
Group Balance Sheet - Restated For personal use only $m FY 2012 FY 2011 FY 2010 Current Assets $ 1,429.1 $ 1,754.1 $ 1,486.9 Non-current Assets 2,079.9 2,413.3 2,745.6 Total Assets 3,509.0 4,167.4 4,232.5 Current Liabilities 734.2 819.9 672.1 Non-current Borrowings 329.9 291.2 116.6 Other Non-curren
Slide 43: Europe Regional Results - Restated
Europe Regional Results - Restated For personal use only FY 2012 FY 2011 FY 2010 Sales Revenue ($m) $ 1,780.6 $ 1,484.6 $ 1,191.3 EBITDA ($m)* 30.1 119.8 84.5 Underlying EBITDA ($m)* 84.5 116.1 91.9 Depreciation ($m) 26.0 24.1 22.9 EBITA ($m)* 4.1 95.7 61.6 Underlying EBITA ($m)* 58.4 92.0 69.0 Good
Slide 44: Prepared for Today, Positioned for Tomorrow
For personal use only Prepared for Today Positioned for Tomorrow 44
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