Sims Ltd. · ASX:SGM
Sims — Sims Metal Management — FY2013 Earnings Presentation
38 slides from Sims's earnings presentation, Aug 23, 2013
Slide 1: Financial Results, Full year ended 30 June 2013
For personal use only Financial Results Full year ended 30 June 2013 Geoffrey N. Brunsdon, Chairman Rob Larry, Group Chief Financial Officer 23 August 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: Financial Overview
Financial Overview For personal use only Sales Revenue Cash from operations $7,193m -20% $297m 3% Underlying EBITDA1 Net Debt $191m -25% $154m -47% Underlying EBIT1 Gearing (ND/ND+E) $68m -45% 7% -35% Underlying NPAT1 Underlying EPS1 $17m -77% 8.3c -77% Statutory NPAT Statutory EPS -$466m -25% -228.
Slide 4: Key Earnings Drivers
Key Earnings Drivers For personal use only A$m Underlying EBITDA1 of $191m, down 25% 253 -12 North America EBITDA increased by $29m, 29 lifted by higher sales margins and lower 191 controllable costs, offset by lower volumes and -74 -5 falling average scrap metal prices Australasia EBITDA fell by $1
Slide 5: Operational Gains in North America
Operational Gains in North America For personal use only A$m A$/t 150 18 North America underlying EBITDA1 of $104m 16 improved 39% over FY12 130 14 Underlying EBIT margins expanded to $7/t in 110 2H FY13, in spite of declining ferrous and 12 90 non-ferrous scrap prices 10 North America Metals underl
Slide 6: Reductions Across Controllable Cost Base
Reductions Across Controllable Cost Base For personal use only $60m in net underlying controllable cost savings within targeted businesses Headcount reduced by 279 employees in FY13, 85% (237) of the total occurring in 2H FY13 Cost savings expected to be sustainable until intake volumes change mater
Slide 7: Key Scrap Generation Drivers
Key Scrap Generation Drivers For personal use only US Consumer Confidence1 160 Improvement in key scrap generation drivers 140 US consumer confidence up 13% over 2012 120 13% US light vehicle sales up 6% over 2012 100 80 US household appliance manufacturers 60 40 shipments up 7% over 2012 20 US Ligh
Slide 8: Operational Overview
Operational Overview For personal use only 20 Sales Volumes (mt) FY12 FY13 14.503 15 12.786 11.080 9.377 10 5 1.772 1.764 1.651 1.645 0 North America Australasia Europe Total 140 124 EBIT1 (A$m) 100 75 62 68 56 60 37 20 -19 -20 -2 North America Australasia Europe Total Group Lower brokerage Lower in
Slide 9: North America Regional Results
North America Regional Results For personal use only A$m FY2013 FY2012 Chg % Performance Revenue 4,534.6 6,027.0 (24.8) North America underlying EBITDA of $104m improved 39% over FY12 EBITDA1 104.4 75.1 39.0 Prudent selective buying led to sales margin EBIT1 36.7 (1.5) - per tonne improvement, offse
Slide 10: Australasia Regional Results
Australasia Regional Results For personal use only A$m FY2013 FY2012 Chg % Performance Australasia underlying EBITDA of $88m Revenue 1,083.1 1,228.1 (11.8) lower by 12%, largely due to lower gains from EBITDA1 87.7 99.5 (11.8) commodity derivatives held for hedging purposes EBIT1 61.7 74.6 (17.2) Sa
Slide 11: Europe Regional Results
Europe Regional Results For personal use only A$m FY2013 FY2012 Chg % Performance Revenue 1,575.3 1,780.6 (11.5) European Region underlying EBITDA of $10m down 88% over FY12 EBITDA1 10.2 84.0 (87.9) Sales margin decline primarily reflecting drop EBIT1 (19.2) 56.1 (134.2) in non-ferrous and precious
Slide 12: Product Category Results
Product Category Results For personal use only EBITA1 (A$m) FY2013 FY2012 Chg % Performance Ferrous EBITA declined by 9%, due to lower Ferrous2 116.0 128.0 (9.4) sales volumes, most significantly in ferrous Non Ferrous 57.0 77.1 (26.1) brokerage Non-Ferrous EBITA was lower by 26% due to SRS 24.3 94.
Slide 13: Financial Review
For personal use only Financial Review Rob Larry, Group CFO
Slide 14: Financial Overview
Financial Overview For personal use only Restated FY 2013 FY 2012 Change (%) Sales Revenue ($m) 7,193.0 9,035.7 (20.4) EBITDA ($m) (41.5) 182.2 (122.8) Underlying EBITDA ($m)* 191.4 253.4 (24.5) Goodwill & Intangible Asset Impairment ($m) 304.4 675.6 (54.9) Depreciation ($m) 101.1 103.1 (1.9) Amorti
Slide 15: Group Balance Sheet
Group Balance Sheet For personal use only Restated As of 30 June As of 30 June $m 2013 2012 Change ($) Change (%) Current Assets $1,159.4 $1,429.1 (269.7) (18.9) Non-current Assets 1,757.4 2,079.9 (322.5) (15.5) Total Assets 2,916.8 3,509.0 (592.2) (16.9) Current Liabilities 671.4 734.2 (62.8) (8.6)
Slide 16: Group Cash Flow
Group Cash Flow Restated For personal use only $m FY 2013 FY 2012 Change ($) (Loss) / Profit for the year ($466.1) ($622.5) $156.4 Adjustments for non-cash items Depreciation and amortisation 123.5 129.9 (6.4) Impairment of goodwill, PP&E & intangible assets 365.6 676.0 (310.4) Impairment in investm
Slide 17: Significant Items by Region
Significant Items by Region Group For personal use only After-Tax Australasia North America Europe Corporate Pre-Tax Total Total $m FY 2013 Non-cash Goodwill & Intangible Asset Impairment $ - $293.1 $3.7 $7.6 $304.4 $270.8 Impairment in investment in CTG 14.9 - 14.9 14.9 Fixed Asset Impairment - 17.
Slide 18: Strategy and Outlook
For personal use only Strategy and Outlook Geoffrey N. Brunsdon, Chairman
Slide 19: Progress Towards Strategic Goals
Progress Towards Strategic Goals For personal use only 1) Targeted Cost Reductions 2) Portfolio Optimisation Focus on costs savings beginning to yield Optimisation of asset portfolio to direct capital results with $45m in net underlying controllable towards highest returning businesses cost reductio
Slide 20: Continued Attention to Cost Savings
Continued Attention to Cost Savings For personal use only 7,000 Headcount Reductions Cost savings benefits weighted towards FY14 6,750 6,500 6,250 149 -224 6 -28 0 Cost savings actions accelerated in mid- -182 6,000 5,750 6,599 6,320 FY13 with 85% of the 279 net headcount 5,500 5,250 reductions occu
Slide 21: Managing the Asset Portfolio
Managing the Asset Portfolio For personal use only North America Actions: Divestitures of Arizona, Colorado, and Nashville JV in FY13. Sale of Aerospace Metals and Birmingham operation in July 2013 Outlook: New England ramp up with shredder online in 1H FY14, and stage one completion of NYC Municipa
Slide 22: Rapidly Restructuring UK Metals and SRS
Rapidly Restructuring UK Metals and SRS For personal use only Headcount Reductions 800 UK Metals New management team of Peter Bird 700 FY12 FY13 (Operations) and Paul Wright (Commercial) appointed 1 July, 2013 600 13% net headcount reductions in FY13, two 500 shredders idled & several small yards cl
Slide 23: Outlook
Outlook For personal use only CEO Appointment The Board continues to evaluate candidates and has narrowed the field to external candidates The Board expects to announce an appointment by the end of the first quarter of FY14 FY14 Trading Update & Outlook East Coast export ferrous scrap markets improv
Slide 24: Appendix: Reporting segment information
For personal use only Appendix Reporting segment information
Slide 25: Sales Revenue by Region
Sales Revenue by Region For personal use only FY 2013 FY 2012 15.1% 13.6% Australasia 19.7% 21.9% North America Europe 63.0% 66.7% $m FY 2013 FY 2012 Change (%) • FY2013 sales revenue was mostly impacted by a 1.7 million tonne (12%) reduction in shipments compared Australasia 1,083.1 1,228.1 (11.8)
Slide 26: Sales Revenue by Product
Sales Revenue by Product For personal use only FY 2013 FY 2012 0.8% Ferrous Trading 1.2% 13.5% 11.2% Non Ferrous Shred Recovery 48.1% 48.3% Ferrous Brokerage 18.3% 18.8% Non Ferrous Trading Recycling Solutions 14.5% Manufacturing/Other 17.4% 4.3% 3.6% $m FY 2013 FY 2012 Change (%) • Ferrous brokerag
Slide 27: EBITA by Region
EBITA (pre-goodwill & intangible asset impairment) by Region For personal use only $125 106.4 $75 (22.4) ($’s in millions) 19.7 4.1 $25 (5.7) -$25 (2.6) FY 2013 (14.7) (25.7) (26.8) FY 2012 -$75 -$125 (145.0) -$175 Restated 1. EBITA by Region is before amortisation of $m FY 2013 FY 2012 Change (%) i
Slide 28: EBITA by Product
EBITA (pre-goodwill & intangible asset impairment) by Product For personal use only $80 72.4 57.8 $60 52.2 44.4 42.1 $40 ($’s in millions) 13.7 14.6 19.6 $20 FY 2013 $0 -$20 FY 2012 -$40 -28.7 -$60 -$80 -65.1 Restated • EBITA by product is presented pre-corporate costs (both $m FY 2013 FY 2012 Chang
Slide 29: Intake Volumes by Region
Intake Volumes by Region For personal use only FY 2013 FY 2012 12.9% 14.1% 11.7% 12.5% Australasia North America Europe 73.0% 75.8% Restated Total Tonnes (‘000’s) FY 2013 FY 2012 Change (%) Australasia 1,758 1,790 (1.8) North America 9,087 10,908 (16.7) Europe 1,608 1,688 (4.7) Total 12,453 14,386 (
Slide 30: Intake Volumes by Product
Intake Volumes by Product For personal use only FY 2013 FY 2012 Ferrous Shredded 4.5% 0.2% 3.9% 0.3% (incl. NFSR) Other Processed Ferrous 23.0% 25.1% 35.5% Ferrous Brokerage 34.9% Non Ferrous Trading/Brokerage Other 36.8% 35.8% Restated • Ferrous brokerage tonnes associated with Total Tonnes (‘000’s
Slide 31: Sales Volumes by Region
Sales Volumes by Region For personal use only FY 2013 FY 2012 12.9% 13.8% 11.4% 12.2% Australasia North America Europe 73.3% 76.4% Total Tonnes (‘000’s) FY 2013 FY 2012 Change (%) Australasia 1,764 1,772 (0.5) North America 9,377 11,080 (15.4) Europe 1,645 1,651 (0.4) Total 12,786 14,503 (11.8) 31
Slide 32: Sales Volumes by Product
Sales Volumes by Product For personal use only FY 2013 FY 2012 Ferrous Shredded 4.3% 0.3% 4.0% 0.3% (incl. NFSR) Other Processed Ferrous 22.2% 35.3% Ferrous Brokerage 35.1% 24.9% Non Ferrous Trading/Brokerage Other 37.9% 35.7% Total Tonnes (‘000’s) FY 2013 FY 2012 Change (%) • Ferrous brokerage tonn
Slide 33: Significant Items by Region – FY2013
Significant Items by Region – FY2013 Group For personal use only After-Tax Australasia North America Europe Corporate Pre-Tax Total Total $m FY 2013 Non-cash Goodwill & Intangible Asset Impairment $ - $293.1 $3.7 $7.6 $304.4 $270.8 Impairment in investment in CTG 14.9 - 14.9 14.9 Fixed Asset Impairm
Slide 34: Significant Items by Region – FY2012
Significant Items by Region – FY2012 For personal use only Group After-Tax Australasia North America Europe Corporate Pre-Tax Total Total $m FY 2012 Non-cash Goodwill & Intangible Asset $3.6 $569.1 $102.9 $ - $675.6 $652.9 Impairment Natural Disaster expenses, net of insurance (2.0) (0.7) - - (2.7)
Slide 35: North America Regional Results
North America Regional Results For personal use only FY 2013 FY 2012 Change (%) Sales Revenue ($m) $4,534.6 $6,027.0 (24.8) EBITDA ($m) (1) $45.5 $26.8 69.8 Underlying EBITDA ($m) (2) $104.4 $75.1 39.0 Depreciation ($m) 48.1 52.5 (8.4) EBITA ($m) (1) ($2.6) ($25.7) (89.9) Underlying EBITA ($m) (2) $
Slide 36: Australasia Regional Results
Australasia Regional Results For personal use only FY 2013 FY 2012 Change (%) Sales Revenue ($m) $1,083.1 $1,228.1 (11.8) EBITDA ($m) (1) $44.8 $130.5 (65.7) Underlying EBITDA ($m) (2) $87.7 $99.5 (11.8) Depreciation ($m) 25.1 24.1 4.1 EBITA ($m) (1) $19.7 $106.4 (81.5) Underlying EBITA ($m) (2) $62
Slide 37: Europe Regional Results
Europe Regional Results For personal use only Restated FY 2013 FY 2012 Change (%) Sales Revenue ($m) $1,575.3 $1,780.6 (11.5) EBITDA ($m) ($117.5) $30.1 (490.4) Underlying EBITDA ($m) (1) $10.2 $84.0 (87.9) Depreciation ($m) 27.5 26.0 5.8 EBITA ($m) ($145.0) $4.1 (3,636.6) Underlying EBITA ($m) (1)
Slide 38: Sales by Destination
Sales by Destination For personal use only FY2013 FY2012 12% 8% Domestic 8% 32% USA / Canada 32% 11% South / Central America Europe Middle East 20% 13% China & HK 1% 1% 3% Northeast Asia 2% 3% SE Asia / Oceania 3% 25% 26% 38