Slide 1: Full Year ended 30 June 2023
Full Year ended 30 June 2023 Creating Value by Providing a Pathway to Decarbonisation and Circularity 15 August 2023
Slide 2: Disclaimer
Disclaimer The material contained in this document is a presentation of information about the Group’s activities current at the date of the presentation, 15 August 2023. It is provided in summary form and does not purport to be complete. It should be read in conjunction with the Group’s periodic rep
Slide 3: Agenda
Agenda Results Overview Alistair Field, Group CEO Financial Results Stephen Mikkelsen, Group CFO Strategic Progress & Outlook Alistair Field, Group CEO Sims Metal Redwood City, CA 3
Slide 4: Results Overview
Results Overview Alistair Field, Group CEO 4
Slide 5: Resilient Performance In Subdued Markets
Resilient Performance In Subdued Markets All Metal segments faced challenging market conditions, albeit to varying degrees, with some experiencing more pronounced impacts than others Resilient performance reflected the benefits of market and geographic diversification Effective cash flow management
Slide 6: FY23 Themes
FY23 Themes Resilient result in the face of lower prices, subdued scrap availability, and inflationary pressures Substantially lower performance compared to the record high in FY22 • Statutory EBIT of $293.0 million, down 62.1% 1 • Underlying EBIT of $252.2 million, down 66.6% 2 • Return on Producti
Slide 7: Summary of Financial Outcomes
Summary of Financial Outcomes Maintained financial resilience with solid operating cash flow, notwithstanding lower profit Sales Revenue Sales Volumes $8,061.1 million $7,972 thousand tonnes FY22 FY22 $9,264.4 million -13.0% 8,106 thousand tonnes -1.7% Underlying EBITDA 1 Operating Cash Flow $474.9
Slide 8: Employee Health & Safety
Employee Health & Safety Excellent safety performance in FY23 Lost Time Injury Rate 50% reduction in • Focus on critical safety risks and related control Recordable and Lost 0.4 0.38 Time Injuries measures continued to drive excellent safety FY19 vs FY23 performance 0.29 0.27 0.23 • Investments in t
Slide 9: Sustainability
Sustainability Substantial progress in narrowing the gender pay equity gap OPERATE RESPONSIBLY PARTNER FOR CHANGE AAA rating • Lowest on record Total Recordable Injury Rate • Gender pay equity gap dropped to 2.9% from 8.2% in • Launched Innovate FY22 Reconciliation Action Plan 14th most sustainable
Slide 10: Lower Prices and Weaker Markets
Lower Prices and Weaker Markets Lower ferrous and non-ferrous prices, in line with contractionary manufacturing activity in most regions 1. Ferrous¹ - Steep decline in average price in FY23 vs FY22 2. Global Manufacturing PMI² - Deterioration in steel 70 demand indicators Baltic Exchange Handysize 7
Slide 11: Financial Results
Financial Results Stephen Mikkelsen, Group CFO 11
Slide 12: Group Financial Performance
Group Financial Performance A$m FY23 FY22 Change • Revenue down 13.0% driven by declines in average Statutory EBITDA 515.7 976.4 (47.2%) sales prices of 10.4% and proprietary sales volumes of 1.7% Statutory EBIT 293.0 773.6 (62.1%) • Metal trading margin down by 15.2% driven by Statutory NPAT 181.1
Slide 13: Business Segment Financial Performance
Business Segment Financial Performance Underlying EBIT¹ (A$m) FY23 FY22 Change Sales volumes FY23 FY22 Change (‘000 tonnes) Metal Business² 204.8 550.1 (62.8%) Metal Business² 7,972 8,106 (1.7%) Sims Lifecycle Services 8.2 16.3 (49.7%) Global Trading 1,421 1,474 (3.6%) Other Brokerage 39 127 (69.3%)
Slide 14: North America Metal
North America Metal Lower EBIT driven by falling sale prices and strong domestic competition A$m FY23 FY22 Change • 11.9% decrease in sales revenue due to an 11.8% (18.2% constant currency) decrease in average sale prices, Proprietary Sales Volumes combined with flat sales volumes 5,063 5,081 (0.4%)
Slide 15: SA Recycling
SA Recycling Increased trading margin percentage. Second half EBIT recovery assisted by robust domestic ferrous markets A$m FY23 FY22 Change • Revenue down 9.5% (16.0% constant currency) driven by lower Proprietary Sales Volumes selling prices 4,969 4,941 0.6% (‘000 tonnes) • Proprietary sales volum
Slide 16: US Ferrous Scrap Prices
US Ferrous Scrap Prices Second-half domestic market significantly stronger than export market Shred Scrap Prices (US$/t)¹ FY23 Ferrous Volumes 550 28% 500 67% 450 $85/tonne 400 average price 72% differential in Q4 350 33% 300 Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- NAM SAR 22 22 22 23 23 23 23
Slide 17: Australia & New Zealand Metal
Australia & New Zealand Metal Robust performance despite challenging market conditions A$m FY23 FY22 Change • 7.7% decrease in sales revenue Proprietary Sales Volumes • Trading margin reduced by only 7.7% despite challenging 1,510 1,532 (1.4%) (‘000 tonnes) market conditions Sales Revenue 1,563.7 1,
Slide 18: UK Metal
UK Metal Strong competition for intake volumes, particularly for shredder infeed A$m FY23 FY22 Change • 10.8% decrease in sales revenue driven by a decline of 5.2% in average sale prices and 6.3% in sales volumes Proprietary Sales Volumes 1,399 1,493 (6.3%) • Trading margin down 16.2%, driven by cha
Slide 19: Sims Lifecycle Services
Sims Lifecycle Services Repurposed unit growth and market share gains despite supply chain constraints Consistent repurposed unit growth 2.0 • Repurposed units up 40.7%, despite impacts of supply Sims Repurposed Units 1.8 chain constraints and delayed refresh rates from 1.6 hyperscalers 1.4 • Revenu
Slide 20: Global Trading, Corporate & Other
Global Trading, Corporate & Other Global Trading (A$m) FY23 FY22 Change Global Trading Underlying EBIT 1 (24.3) (20.3) 19.7% • Decline in underlying EBIT reflected lower export shipments by SA Recycling and higher costs Corporate (A$m) FY23 FY22 Change associated with strategic initiatives Underlyin
Slide 21: Cash Generation
Cash Generation Solid cashflow from working capital release Million $AUD • Statutory EBITDA of $515.7 million 125.7 • Working capital release $125.7 million driven by a focus on reducing inventory levels and lower metal prices 515.7 (57.6) • JV distribution of $57.6 million, primarily SAR (61.9) 31.
Slide 22: Net cash movement
Net cash movement Million $AUD 63.9 449.2 (232.5) (61.6) (81.8) (102.7) (123.6) (14.6) (31.8) (135.5) Net Cash 1 Jul Net Operating Assets Sales Capex Acquisitions Leases Dividend Share Buyback Other Net Cash 30 22 Cashflow Jun 23 22
Slide 23: Capital Expenditure
Capital Expenditure Focused on disciplined capital expenditure Capital Expenditure 350 • Total capex of $232.5 million in FY23 was comprised 300 of $171.5 million in Sustaining Capex, and $61.0 million in Growth Capex 250 • Growth Capex included investment in Sims Resource A$ million 200 Renewal's R
Slide 24: Strategic Update & Outlook
Strategic Update & Outlook Alistair Field, Group CEO 24
Slide 25: Strategy
Strategy Capitalises on decarbonisation, infrastructure, and technology tailwinds Mega Trends Implications Sims Strategy Positioning Environmental Metal Metal • Global Commitment to lower carbon • Demand for low-carbon recycled Ferrous: emissions materials to drive higher prices across • Geographic
Slide 26: Enhancing NAM's Growth Strategy: Baltimore Scrap Corp
Enhancing NAM's Growth Strategy Baltimore Scrap Corp Acquisition Company Overview • Baltimore Scrap Corp operates 17 facilities across the Northeast US, including four shredding facilities • Four shredders with rail access, and 80 railcars • Land at all key sites to be included in the acquisition •
Slide 27: Enhancing NAM's Growth Strategy: Northeast Metal Traders
Enhancing NAM's Growth Strategy Northeast Metal Traders Acquisition Company Overview • Northeast Metal Traders operates on a single large-scale site in Philadelphia, PA, and is one of the largest copper recyclers in US • Full scale copper granulator and multiple non-ferrous balers • ~60,000 sales to
Slide 28: Outlook
Outlook We are confident in the medium and long-term fundamentals of the business Short-term • Global steel demand remains subdued as we enter the first half of FY24 • Demand for ferrous scrap in the USA spurred on by infrastructure spending and EAF steelmaking production is expected to remain robus
Slide 29: Questions & Answers
Questions & Answers 29
Slide 30: Appendix
Appendix 30
Slide 31: Product Segment Volumes
Product Segment Volumes Sales volumes (‘000 tonnes) FY23 FY22 Change Intake volumes (‘000 tonnes) FY23 FY22 Change North America Metal 5,063 5,081 (0.4%) North America Metal 4,903 5,071 (3.3%) ANZ Metal 1,510 1,532 (1.4%) ANZ Metal 1,492 1,586 (5.9%) UK Metal 1,399 1,493 (6.3%) UK Metal 1,322 1,614
Slide 32: Product Segment Volumes
Product Segment Volumes Sales revenue ($m) FY23 FY22 Change Ferrous 5,244 6,337 (17.2%) Non-Ferrous Retail 1,839 1,925 (4.5%) Non-Ferrous Shredder Recovery 598 560 6.8% Sales revenue 7,681 8,822 (12.9%) Sales volumes (‘000 tonnes) FY23 FY22 Change Ferrous 8,744 9,042 (3.3%) Non-Ferrous Retail 459 44
Slide 33: Group Profit & Loss
Group Profit & Loss A$m FY18 FY19 FY20 FY21 FY22 FY23 Change Sales revenue 6,448.0 6,640.0 4,908.5 5,916.3 9,264.4 8,061.1 (13.0%) Statutory EBITDA 395.8 358.1 35.7 507.3 976.4 515.7 (47.2%) Underlying EBITDA 392.3 363.4 144.9 579.9 958.9 474.9 (50.5%) Statutory EBIT 278.6 225.0 (239.1) 314.0 773.6
Slide 34: North America Metal
North America Metal A$m FY18 FY19 FY20 FY21 FY22 FY23 Change Sales Revenue 2,607.1 2,725.6 2,061.7 2,669.9 4,453.4 3,924.6 (11.9%) Trading Margin ($) 584.6 609.0 481.2 591.7 919.9 748.9 (18.6%) Trading Margin (%) 22.4% 22.3% 23.3% 22.2% 20.7% 19.1% (1.6)ppts Statutory EBITDA 121.0 124.8 (16.2) 194.2
Slide 35: Investment in SA Recycling
Investment in SA Recycling A$m FY18 FY19 FY20 FY21 FY22 FY23 Change 1 Statutory EBIT 67.8 41.0 12.1 157.8 302.5 180.2 (40.4)% 1 Underlying EBIT 68.5 35.9 12.1 157.8 298.5 163.5 (45.2)% Assets 180.7 211.1 277.5 345.8 512.4 584.8 14.1 % Intake Volumes (‘000) ² 3,477 3,473 3,250 3,809 4,874 4,978 2.1 %
Slide 36: Australia & New Zealand Metal
Australia & New Zealand Metal A$m FY18 FY19 FY20 FY21 FY22 FY23 Change Sales Revenue 1,071.0 1,203.7 924.8 1,098.9 1,694.4 1,563.7 (7.7%) Trading Margin ($) 326.9 344.8 286.3 337.5 455.2 420.2 (7.7%) Trading Margin (%) 30.5% 28.6% 31.0% 30.7% 26.9% 26.9% — ppts Statutory EBITDA 121.6 125.6 92.3 147.
Slide 37: UK Metal
UK Metal A$m FY18 FY19 FY20 FY21 FY22 FY23 Change Sales Revenue 1,203.0 1,186.9 869.8 993.3 1,594.9 1,423.4 (10.8%) Trading Margin ($) 183.4 196.8 128.5 195.6 250.4 209.8 (16.2%) Trading Margin (%) 15.2% 16.6% 14.8% 19.7% 15.7% 14.7% (1.0)ppts 2 Statutory EBITDA 42.0 19.7 (59.4) 54.2 77.9 15.4 (80.2
Slide 38: Global Trading
Global Trading A$m FY18 FY19 FY20 FY21 FY22 FY23 Change Sales Revenue 733.5 690.9 550.8 745.8 1,128.5 824.0 (27.0%) 1 Statutory EBITDA 19.0 23.3 8.2 21.9 55.8 12.1 (78.3%) Underlying EBITDA (12.3) (14.9) (13.9) (16.4) (19.2) (23.1) 20.3% Depreciation 0.1 0.2 1.3 1.0 1.1 1.2 9.1% Amortisation — — — —
Slide 39: Sims Lifecycle Services
Sims Lifecycle Services A$m FY18 FY19 FY20 FY21 FY22 FY23 Change Sales Revenue 758.4 746.5 408.0 318.9 327.0 325.4 (0.5%) Statutory EBITDA 34.5 26.4 9.9 21.2 15.3 0.1 (99.3%) Underlying EBITDA 39.7 34.5 28.2 31.1 25.9 18.8 (27.4%) Depreciation 8.4 8.5 11.3 9.3 9.6 9.7 1.0% Amortisation — — — — — 0.9
Slide 40: Corporate & Other
Corporate & Other A$m FY18 FY19 FY20 FY21 FY22 FY23 Change Sales Revenue 75.0 86.4 93.4 89.5 66.2 — (100.0%) Statutory EBITDA (10.1) (2.7) (11.2) (89.6) (35.6) (14.3) 59.8% Underlying EBITDA (39.8) (32.1) (35.9) (46.9) (77.6) (97.0) (25.0%) Depreciation 9.4 10.9 15.6 15.0 10.9 3.1 (71.6%) Amortisati
Slide 41: Constant Currency Summary
Constant Currency Summary A$m FY23 FY23 FY22 Change Actual Constant Currency Actual NAM Sales revenue 3,924.6 3,641.2 4,453.4 (18.2)% Trading Margin 748.9 694.8 919.9 (24.5)% Net Operating Costs (569.3) (528.2) (524.4) 0.7% Underlying EBIT 55.5 51.5 293.4 (82.4)% UK Sales revenue 1,423.4 1,458.9 1,5
Slide 42: Financial Summary – Group
Financial Summary – Group A$m FY18 FY19 FY20 FY21 FY22 FY23 Group Results Sales Revenue 6,448.0 6,640.0 4,908.5 5,916.3 9,264.4 8,061.1 Underlying EBITDA 392.3 363.4 144.9 579.9 958.9 474.9 Underlying EBIT 275.1 230.3 (57.9) 386.6 756.1 252.2 Underlying NPAT 188.6 161.9 (58.1) 284.1 578.9 156.9 Unde
Slide 43: Financial Summary – Segment
Financial Summary – Segment A$m FY18 FY19 FY20 FY21 FY22 FY23 Sales Revenue North America Metal 2,607.1 2,725.6 2,061.7 2,669.9 4,453.4 3,924.6 ANZ Metal 1,071.0 1,203.7 924.8 1,098.9 1,694.4 1,563.7 UK Metal 1,203.0 1,186.9 869.8 993.3 1,594.9 1,423.4 Sims Lifecycle Services 758.4 746.5 408.0 318.9
Slide 44: Financial Summary – Segment (cont.)
Financial Summary – Segment (cont.) A$m FY18 FY19 FY20 FY21 FY22 FY23 1 Proprietary sales tonnes (‘000) North America Metal 4,865 4,887 4,042 4,318 5,081 5,063 ANZ Metal 1,585 1,763 1,428 1,537 1,532 1,510 UK Metal 1,691 1,602 1,221 1,370 1,493 1,399 Total 8,141 8,252 6,691 7,225 8,106 7,972 2 Under
Slide 45: Financial Summary – Product
Financial Summary – Product A$m FY18 FY19 FY20 FY21 FY22 FY23 Sales tonnes (‘000) Ferrous Trading 7,709 7,817 6,301 6,870 7,664 7,551 Non-Ferrous 432 435 390 355 442 454 Brokerage 1,715 1,551 1,463 1,368 1,601 1,427 Total 9,856 9,803 8,154 8,593 9,707 9,432 Sales Revenue Ferrous Metal 4,381.6 4,505.
Slide 46: Income Tax Expense – FY23
Income Tax Expense – FY23 A$m Profit Before Tax Income Tax Expense Effective Tax rate Statutory Result 264.9 83.8 31.6 % Significant Items (40.8) (16.6) 40.7 % Normalised Results 224.1 67.2 30.0 % 46
Slide 47: Significant Items
Significant Items FY23 Pre-Tax FY23 After-Tax FY22 Pre-Tax FY22 After-Tax A$m Total Total Total Total Gain on fair valuation of investment (49.2) (37.8) — — Non-recurring gains on asset disposals (36.5) (28.0) (79.1) (59.2) Non-qualified hedges 18.7 18.7 (16.7) (16.7) ERP Software Implementation Cos
Slide 48: Net Cash Position
Net Cash Position A$m FY23 FY22 Opening Net Cash (102.7) 8.3 Underlying net profit 156.9 578.9 Depreciation & amortisation 222.7 202.8 Joint venture non-cash income, net of dividends (57.4) (138.7) Change in working capital 125.7 (58.8) Movement in tax balance (5.7) (14.7) ERP current year spend (4.
Slide 49: Prior Year OFR Restatement
Prior Year OFR Restatement A$m FY22 Revised Disclosure FY22 Original Disclosure Revision North America Metals Sales revenue 4,453.4 4,453.4 — Trading maring 919.9 881.4 38.50 Operating cost (excluding D&A) (524.4) (485.9) (38.50) Underlying EBITDA 395.5 395.5 — Underlying EBIT 293.4 293.4 — Trading