Slide 1: Full Year ended 30 June 2022
Full Year ended 30 June 2022 Creating Value by Providing a Pathway to Decarbonisation for our Customers 16 August 2022
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, 16 August 2022. 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 3
Slide 4: Results Overview
Results Overview Alistair Field, Group CEO 4
Slide 5: FY22 – a very strong year…
FY22 – a very strong year… Record EBIT, in line with guidance range, despite freight price volatility, inflationary pressures, and COVID lockdowns A high-quality result driven by excellent margin per tonne across all metal businesses Significant improvement in operating cash flow Robust proprietary
Slide 6: …underpinned by disciplined strategy execution
…underpinned by disciplined strategy execution • Entered new JV with an auto-recycler1 • Acquired long-term gas rights: 11 LFG projects • Launched programme to improve scrap sourcing including 5MW of power generation capacity in and procurement efficiencies Aust/NZ and 9.0MW in the US via the Sims E
Slide 7: FY22 Themes
FY22 Themes Record full year 2022 financial results, despite volatile conditions Underlying EBIT1 approximately doubled compared to FY21 driven by strong trading margins across the metal businesses • Statutory EBIT of $773.6 million, up 146.4% over prior corresponding period • Underlying EBIT of $75
Slide 8: Summary of Financial Outcomes
Summary of Financial Outcomes High-quality result - materially increased sales volume, revenue, and profit. Significantly higher cash flow distribution while maintaining a strong balance sheet. Sales Revenue Sales Volumes $ 9,264.4 million 8,106 million tonnes FY21 FY21 12.2% 56.6% 7,225 million ton
Slide 9: Employee Health & Safety
Employee Health & Safety Strong safety performance with the lowest ever Total Recordable Injury Frequency Rate 160 48% • Implementation of the Critical Risk Management 140 reduction in strategy delivered sequential improvements since FY19 120 Recordable Injuries • Proactive lead indicator programmes
Slide 10: Sustainability
Sustainability Strengthened ESG credentials Ranked 11th in the Global 100 list Received maximum AAA of most sustainable companies, rating ranked for the 8th time Ranked #6 in Sustainability Included in Financial Magazine Top 100 companies in Times/Nikkei Asia inaugural sustainability 1 APAC Climate
Slide 11: Sustainability
Sustainability Strong progress against FY25 goals OPERATE RESPONSIBLY CLOSE THE LOOP PARTNER FOR CHANGE • Lowest ever recordable Total • Brought forward carbon • Became a signatory to the UN Recordable Injury Rate neutrality target by 12 years Global Compact • Achieved Board gender diversity • Trans
Slide 12: Markets
Markets Ferrous and non-ferrous prices were volatile and above FY21 average levels driven by strong global demand for recycled metal 1. Ferrous1 – FY22 average price above FY21 levels 2. Freight2 – FY22 average price above FY21 levels Baltic Exchange Handysize Index 700 2,250 Turkey HMS 80:20 Price
Slide 13: Financial Results
Financial Results Stephen Mikkelsen, Group CFO 13
Slide 14: Group Financial Performance
Group Financial Performance Record EBIT performance driven by growth in trading margin • Higher selling prices and sales volumes resulted in a A$m FY21 FY22 Change 56.6% increase in sales revenue Sales Revenue 5,916.3 9,264.4 56.6% • 43.6% increase in trading margins of the Metal Statutory EBITDA 50
Slide 15: EBIT Waterfall Chart
EBIT Waterfall Chart Record EBIT performance driven by growth in trading margin • EBIT increase of $369.5 million in FY22 Million $AUD compared to FY21 • JV contribution of $144.8 million was primarily from SAR • Acquisitions of Atlantic Recycling Group and Recyclers Australia contributed $21.0 mill
Slide 16: Business Segment Financial Performance
Business Segment Financial Performance Near doubling of year-on-year EBIT. Improved volumes driven by NAM and SA Recycling Trading Margin FY21 FY22 Change Sales volumes FY21 FY22 Change (‘000 tonnes) Trading Margin – Metals (A$m) 1,071.5 1,539.1 43.6% Metal Business2 7,225 8,106 12.2% Global Trading
Slide 17: North America Metal
North America Metal Very strong earnings growth driven by increased trading margin. Intake volumes above pre- Covid levels ▪ Sales volumes up by 17.7% due to post-COVID A$m FY21 FY22 Change economic recovery, acquisitions and new feeder yards Proprietary Sales Volumes (‘000 tonnes) 4,318 5,081 17.7%
Slide 18: Australia & New Zealand Metal
Australia & New Zealand Metal Strong EBIT result despite COVID restrictions in 1H22 and impacts of floods in Queensland A$m FY21 FY22 Change • 54.2% increase in sales revenue due to 55.2% increase in Proprietary Sales Volumes average selling prices 1,537 1,532 (0.3)% (‘000 tonnes) • Trading margins
Slide 19: UK Metal
UK Metal Strong earnings growth driven by increased trading margin A$m FY21 FY22 Change • Sales volumes up by 9.0% • 60.6% increase in sales revenue due to 47.3% increase in Proprietary Sales Volumes (‘000 tonnes) 1,370 1,493 9.0% average selling prices Sales revenue 993.3 1,594.9 60.6% • Trading ma
Slide 20: Sims Lifecycle Services
Sims Lifecycle Services Repurposed unit growth and market share gains despite supply chain constraints A$m FY21 FY22 Change • 28.6% growth in repurposed units, despite supply chain constraints limiting the release of cloud Repurposed units (million) 2.1 2.7 28.6% material Sales revenue 318.9 327.0 2
Slide 21: SA Recycling
SA Recycling Record EBIT growth with significant trading margin expansion and sales volume growth A$m FY21 FY22 Change • Sims’ interest grew by 89.2% to $298.5 million, compared to the prior corresponding period due to: Proprietary Sales Volumes 3,706 4,941 33.3% • Significant trading margin expansi
Slide 22: SA Recycling
SA Recycling Strong growth in FY22 and a track record of stable trading margin percentages 5% 40% 35% 350 32% 33% 31% 30% 29% 300 6% Trading Margin 30% 250 A$ / tonne 200 20% 243 312 150 Sales Volume 100 10% 170 185 174 178 89% FY22 50 0% 0 FY17 FY18 FY19 FY20 FY21 FY22 Trading Margin A$/t Trading M
Slide 23: Global Trading, Corporate & Other
Global Trading, Corporate & Other LMS Energy and SMR reported earnings growth Global Trading (A$m) FY21 FY22 Change Global Trading • Underlying EBIT represents external and SA Underlying EBIT1 (17.4) (20.3) 16.7% Recycling brokerage less the costs of running the Corporate (A$m) FY21 FY22 Change glob
Slide 24: Cash generation
Cash generation Strong cashflow conversion from reduced investment in working capital Million $AUD • Strong operating performance translated into four times improvement in operating cashflows • Quarterly lag in SA Recycling’s dividend payment • Additional working capital investment required in FY22:
Slide 25: Net cash movement
Net cash movement 48.2% of operating cash generated was returned to shareholders Million $AUD • $414.2 million increase in cash inflow from operating activities due to strong FY22 operational performance • Sale of 51% stake in SMR for $76.5 million • $93.5 million paid for Pinkenba site, Queensland.
Slide 26: Capital Expenditure
Capital Expenditure Focused on disciplined capital expenditure Capital Expenditure 350 • Total capex of $276.2 million in FY22 was comprised of $148.6 million in Sustaining Capex, and $127.6 300 million in Growth Capex 250 • Growth Capex included spend of $93.5 million in Pinkenba, $10.7 million in
Slide 27: Strategic Progress & Outlook
Strategic Progress & Outlook Alistair Field, Group CEO 27
Slide 28: Business Strategy
Business Strategy Grow core business and leverage synergies to expand into adjacent markets Sims Metal Sims Resource Renewal Sims Lifecycle Sims Energy Sims Municipal Recycling Fortify and grow Utilise waste to create Grow product Expand proven business Develop recycling sustainable profits new reve
Slide 29: Metal – Acquisitions
Metal – Acquisitions Volume contribution in FY22 Non-Ferrous Ferrous & Non-ferrous Alumisource Atlantic Recycling Group Announced on 12 February FY21 Announced on 16 December 2021 Rationale: increase non-ferrous volumes and Rationale – Enter new geographic market and access technology to enhance qua
Slide 30: Metal – Acquisition of Pinkenba land
Metal – Acquisition of Pinkenba land A strategic asset to enable our growth and sustainability targets • Portside land (~140,000 m2) in Brisbane • One of only a handful of private deep-water berths in Brisbane • Total consideration of AUD$93.5 million • Capacity – berthing Handymax vessels up to 50,
Slide 31: SA Recycling leveraged M&A to grow
SA Recycling leveraged M&A to grow Continued to create value through successful M&A integration FY22 Acquisitions FY22 Pro-forma Sales Volume1 1.2 million tonnes1 Integration is progressing well and 4.2 million tonnes meeting expectations Pre-Acquisitions Acquisitions 1Acquisition sales volumes used
Slide 32: Sims Lifecycle Services
Sims Lifecycle Services Strengthened foundations to accelerate growth when the operating environment normalises Strengthened the engineering team Continued to grow market share1 3.2% 2.7% Critical areas of expertise 2.3% SLS ‘Market Share • Product sales 1.5% • Engineering / tech / operational readi
Slide 33: Sims Resource Renewal
Sims Resource Renewal Progressing well towards achieving commercial operation Rocklea Pilot Facility Rendered image of Rocklea Pilot Facility • Construction and fabrication is progressing well. Operations expected to commence in February 2023 Queensland • Selected Pinkenba as preferred site for the
Slide 34: Delivered on Strategy in FY22
Delivered on Strategy in FY22 Maintained growth momentum in the core business, continued to build adjacent businesses, and strengthened strategic positioning across the portfolio ✓ Embedded a safety culture in the business – FY22 was the safest year on record ✓ Continued to build momentum in achievi
Slide 35: Outlook
Outlook We remain very confident in the medium and long-term fundamentals of the business. Softer economic conditions have impacted our markets in the short term. • Short-term outlook remains uncertain due to significant volatility: • Aggressive interest rate rises to combat rapidly increasing infla
Slide 36: Questions & Answers
Questions & Answers 36
Slide 37: Appendix
Appendix 37
Slide 38: Product Segment Volumes
Product Segment Volumes Sales volumes (‘000 tonnes) FY21 FY22 Change Intake volumes (‘000 tonnes) FY21 FY22 Change North America Metal 4,318 5,081 17.7% North America Metal 4,432 5,071 14.4% ANZ Metal 1,537 1,532 (0.3)% ANZ Metal 1,527 1,586 3.9% UK Metal 1,370 1,493 9.0% UK Metal 1,412 1,614 14.3%
Slide 39: Product Segment Volumes
Product Segment Volumes Sales revenue ($m) FY21 FY22 Change Ferrous 3,946 6,337 60.6% Non-Ferrous Retail 1,188 1,925 62.0% Non-Ferrous Shredder Recovery 346 560 61.8% Sales revenue 5,480 8,822 61.0% Sales volumes (‘000 tonnes) FY21 FY22 Change Ferrous 8,053 9,042 12.3% Non-Ferrous Retail 362 445 22.
Slide 40: Group Profit & Loss
Group Profit & Loss A$m FY17 FY18 FY19 FY20 FY21 FY22 Change Sales revenue 5,079.4 6,448.0 6,640.0 4,908.5 5,916.3 9,264.4 56.6% Statutory EBITDA 313.5 395.8 358.1 35.7 507.3 976.4 92.5% Underlying EBITDA 292.4 392.3 363.4 144.9 579.9 958.9 65.4% Statutory EBIT 201.2 278.6 225.0 (239.1) 314.0 773.6
Slide 41: North America Metal
North America Metal A$m FY17 FY18 FY19 FY20 FY21 FY22 Change Sales Revenue 1,984.0 2,607.1 2,725.6 2,061.7 2,669.9 4,453.4 66.8% Trading Margin ($) 472.1 571.7 576.4 456.8 568.6 881.4 55.0% Trading Margin (%) 23.8% 21.9% 21.1% 22.2% 21.3% 19.8% (1.5)ppts Statutory EBITDA 106.0 121.0 124.8 (16.2) 194
Slide 42: Investment in SA Recycling
Investment in SA Recycling A$m FY17 FY18 FY19 FY20 FY21 FY22 Change Statutory EBIT1 26.3 67.8 41.0 12.1 157.8 302.5 91.7% Underlying EBIT1 26.3 68.5 35.9 12.1 157.8 298.5 89.2% Assets 131.9 180.7 211.1 277.5 345.8 512.4 48.2% Intake Volumes (‘000) 2 2,557 3,477 3,473 3,250 3,809 4,874 28.0% Sales Vo
Slide 43: Australia & New Zealand Metal
Australia & New Zealand Metal A$m FY17 FY18 FY19 FY20 FY21 FY22 Change Sales Revenue 981.4 1,071.0 1,203.7 924.8 1,098.9 1,694.4 54.2% Trading Margin ($) 256.7 298.3 312.8 260.3 313.6 423.1 34.9% Trading Margin (%) 26.2% 27.9% 26.0% 28.1% 28.5% 25.0% (3.5)ppts Statutory EBITDA 90.9 121.6 125.6 92.3
Slide 44: UK Metal
UK Metal A$m FY17 FY18 FY19 FY20 FY21 FY22 Change Sales Revenue 924.3 1,203.0 1,186.9 869.8 993.3 1,594.9 60.6% Trading Margin ($) 178.7 176.7 188.2 124.2 189.3 234.6 23.9% Trading Margin (%) 19.3% 14.7% 15.9% 14.3% 19.1% 14.7% (4.4) ppts Statutory EBITDA2 50.5 42.0 19.7 (59.4) 54.2 77.9 43.7% Under
Slide 45: Global Trading
Global Trading A$m FY17 FY18 FY19 FY20 FY21 FY22 Change Sales Revenue 386.6 733.5 690.9 550.8 745.8 1,128.5 51.3% Statutory EBITDA1 3.1 19.0 23.3 8.2 21.9 55.8 154.8% Underlying EBITDA (15.3) (12.3) (14.9) (13.9) (16.4) (19.2) 17.0% Depreciation 0.1 0.1 0.2 1.3 1.0 1.1 10.0% Amortisation - - - - - -
Slide 46: Sims Lifecycle Services
Sims Lifecycle Services A$m FY17 FY18 FY19 FY20 FY21 FY22 Change Sales Revenue 726.9 758.4 746.5 408.0 318.9 327.0 2.5% Statutory EBITDA 30.6 34.5 26.4 9.9 21.2 15.3 (27.8%) Underlying EBITDA 36.3 39.7 34.5 28.2 31.1 25.9 (16.7%) Depreciation 8.2 8.4 8.5 11.3 9.3 9.6 3.2% Amortisation - - - - - - -%
Slide 47: Corporate & Other
Corporate & Other A$m FY17 FY18 FY19 FY20 FY21 FY22 Change Sales Revenue 76.2 75.0 86.4 93.4 89.5 66.2 (26.0%) Statutory EBITDA 6.1 (10.1) (2.7) (11.2) (89.6) (35.6) 60.3% Underlying EBITDA (35.9) (39.8) (32.1) (35.9) (46.9) (77.6) (65.5)% Depreciation 9.5 9.4 10.9 15.6 15.0 10.9 (27.3)% Amortisatio
Slide 48: Financial Summary – Group
Financial Summary – Group A$m FY17 FY18 FY19 FY20 FY21 FY22 Group Results Sales Revenue 5,079.4 6,448.0 6,640.0 4,908.5 5,916.3 9,264.4 Underlying EBITDA 292.4 392.3 363.4 144.9 579.9 958.9 Underlying EBIT 180.1 275.1 230.3 (57.9) 386.6 756.1 Underlying NPAT 118.3 188.6 161.9 (58.1) 284.1 578.9 Unde
Slide 49: Financial Summary – Segment
Financial Summary – Segment A$m FY17 FY18 FY19 FY20 FY21 FY22 Sales Revenue North America Metal 1,984.0 2,607.1 2,725.6 2,061.7 2,669.9 4,453.4 ANZ Metal 981.4 1,071.0 1,203.7 924.8 1,098.9 1,694.4 UK Metal 924.3 1,203.0 1,186.9 869.8 993.3 1,594.9 Sims Lifecycle Services 726.9 758.4 746.5 408.0 318
Slide 50: Financial Summary – Segment (cont.)
Financial Summary – Segment (cont.) A$m FY17 FY18 FY19 FY20 FY21 FY22 Proprietary sales tonnes (‘000)1 North America Metal 4,344 4,865 4,887 4,042 4,318 5,081 ANZ Metal 1,530 1,585 1,763 1,428 1,537 1,532 UK Metal 1,589 1,691 1,602 1,221 1,370 1,493 Total 7,463 8,141 8,252 6,691 7,225 8,106 Underlyi
Slide 51: Financial Summary – Product
Financial Summary – Product A$m FY17 FY18 FY19 FY20 FY21 FY22 Sales tonnes (‘000) Ferrous Trading 7,009 7,709 7,817 6,301 6,870 7,664 Non-Ferrous 454 432 435 390 355 442 Brokerage 1,237 1,715 1,551 1,463 1,368 1,601 Total 8,700 9,856 9,803 8,154 8,593 9,707 Sales Revenue Ferrous Metal 3,136.1 4,381.
Slide 52: Income Tax Expense – FY22
Income Tax Expense – FY22 A$m Profit Before Tax Income Tax Expense Effective Tax rate Statutory Result 757.6 158.3 20.9% Significant Items 17.5 2.9 16.6% Normalised Results 775.1 161.2 20.8% 52
Slide 53: Significant Items
Significant Items FY21 Pre-Tax FY21 After-Tax FY22 Pre-Tax FY22 After-Tax A$m Total Total Total Total ERP software implementation costs 60.8 45.8 41.5 29.0 JobKeeper grant income, net of amount voluntarily returned (4.4) (3.1) - - Non-recurring gain on asset dispositions (6.1) (4.2) (79.1) (59.2) Re
Slide 54: Net Cash Position
Net Cash Position A$m FY21 FY22 Opening Net Cash 110.4 8.3 Underlying net profit 284.1 578.9 Depreciation & amortisation 193.3 202.8 Joint venture non-cash income, net of dividends (110.8) (138.7) Change in working capital (169.8) (58.8) Movement in tax balance (29.2) (14.7) ERP current year spend (
Slide 55: SLS Global Footprint
SLS Global Footprint -_