Slide 1: Full Year ended 30 June 2024
Full Year ended 30 June 2024 Creating Value by Providing a Pathway to Decarbonisation and Circularity 20 August 2024
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, 20 August 2024. 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 & Strategic Progress Stephen Mikkelsen, Group CEO & Managing Director Financial Results Warrick Ranson, Group CFO Outlook Stephen Mikkelsen, Group CEO & Managing Director Sims Metal Redwood City, CA 3
Slide 4: Results Overview
Results Overview Stephen Mikkelsen, Group CEO & Managing Director 4
Slide 5: FY24 Financial Results Overview
FY24 Financial Results Overview FY24 FY23 Change • Sales volumes down 1.7% with in a challenging market Sales Revenue (A$m) 8,562.7 8,061.1 6.2% Sims Trading Margin – Metal (A$m) 1 1,412.2 1,378.9 2.4% • Sales revenue of $8,562.7 million reflecting acquisition, volume and non ferrous price Total Und
Slide 6: Strong Safety Performance
Strong Safety Performance SAFETY • Continuous improvement strategy driving best-in-class Total Recordable Injury safety performance. TRIFR at 0.99 Frequency Rate (TRIFR)¹ 2.00 1.70 • 17 sites added via acquisition with rapid adoption of key critical risk measures 1.29 1.22 1.18 1.08 0.99 • Launched
Slide 7: Market Dynamics
Market Dynamics Global Chinese Steel Exports (Mt)¹ NA Domestic Scrap demand EAF (Mt)² Markets 106.8 27 90.3 Short ferrous scrap supply - ANZ and UK 66.9 67.3 18 64.3 53.7 Challenging 9 seaborne market primarily driven by 0 weak global steel FY20 FY22 FY24 FY26F FY28F production 2019 2020 2021 2022 2
Slide 8: Price Trends: Metals & Freight
Price Trends: Metals & Freight 1. Ferrous¹ - Lower than FY23 2 2.Freight - Geopolitical Impact 500 Baltic Handysize Index 800 Turkey HMS 80:20 Price 450 (US$ / tonne) FY23 Average 600 400 FY24 Average 350 400 300 200 Jul- Sep- Nov- Jan- Apr- Jun- Aug- Nov- Jan- Mar- Jun- Jun-23 Aug-23 Oct-23 Dec-23
Slide 9: FY24 Ferrous Metal Volumes
FY24 Ferrous Metal Volumes¹ Unprocessed Scrap 2H vs 1H (kt)² Domestic Sales 2H vs 1H (kt)³ NAM 204 NAM 198 SAR 103 SAR 165 ANZ (63) ANZ (8) Non-Dealer Sources 2H vs 1H (kt)² NAM 59 SAR 118 ANZ (27) 1 Restated 1H FY24 percentages 2 Ferrous Intake Volumes 3 Ferrous Sales Volumes 9
Slide 10: Strategic Update & Outlook
Strategic Update & Outlook Stephen Mikkelsen, Group CEO & Managing Director 10
Slide 11: Business Strategy
Business Strategy Same Purpose Create a World Without Waste to Preserve our Planet Tighter Focus Metals (NAM, ANZ, SAR) core operations and SLS target high growth segment Redefined Elevate Customer & Improve Market Strong Margin Focus Optimise Global Robust Financial Strategic Supplier Centricity Re
Slide 12: Business Simplification
Business Simplification OCTOBER 2023 JANUARY 2024 Operations Commercial Operations 206 Roles Removed SLS Commercial • 3 Executive Leaders Finance SLS • 12 Vice Presidents • 20 Director Level Roles CEO CEO HR Finance • $46m in Annualised Legal Savings Strategic Business HR Development Business Legal
Slide 13: NAM - Ongoing Transformation
NAM - Ongoing Transformation ¹ Domestic Optionality and Prices ADVANCED MARGIN OPTIMISATION 60% Unprocessed Ferrous $450 Scrap Buy-side (% of Total Volume)¹ 40% • Enhanced purchasing transparency using $400 56% 64% advanced data analytics • Implemented buyer’s incentive program $350 20% • Diversifie
Slide 14: NAM - Cultural Alignment
NAM - Cultural Alignment • Reorganised commercial teams and introduced new talent • Aligned buyer incentive structure • Leveraged data for better decision- making and strategy • Increased accountability across teams • Commenced implementation of S&OP framework for better planning, execution, logisti
Slide 15: Executing on Acquisitions
Executing on Acquisitions Alumisource ARG Northeast Metal Baltimore Scrap Rationale • “Green aluminum” • Expand presence in • Secure assets adjacent to • Consolidate position in strategy Baltimore DC, bridging gap existing operations Maryland, and DC markets • Secure best in class between Fairless a
Slide 16: SLS Growth
SLS Growth Quality Led Execution +41.90% Repurposed Units Expanded circular centre footprint in Netherlands and CAGR Since FY21 Singapore for enhancing services and increasing capacity in strategic locations Capital Lite Expansion Further expansion of Field Services in North America & EMEA, operatin
Slide 17: FY24 Summary
FY24 Summary 1. NAM delivered trading margin growth in FY24 and returned to profit in Q4 FY24 2. ANZ maintained strong supplier/customer network 3. Divested UK Metals after strategic review determined best value pathway 4. Divested remaining share of Closed Loop 5. SLS achieved strong growth after s
Slide 18: Financial Results
Financial Results Warrick Ranson, Group CFO 18
Slide 19: Group Financial Performance
Group Financial Performance FY24 FY24 FY23 Total Group Continuing A$m Total Group Total Group Change • Statutory NPAT of $(57.8) million impacted by LMS Operations sale, asset carrying value review, closures and Statutory EBITDA 361.7 334.5 515.7 (35.1)% interest costs Statutory EBIT 130.1 72.6 293.
Slide 20: Margin Uplift In Second-Half FY24
Margin Uplift In Second-Half FY24 Sims Metal Trading Margin¹ Sims Metal Trading Margin¹ FY23 vs FY24 1H vs 2H +2.4% -1.0 ppts +16.2% +1.1ppts 758.8 1,412.2 20.0 19.0 19.5 18.4 1,378.9 653.4 Trading Margin (A$m) Trading Margin (%) Trading Margin (A$m) Trading Margin (%) FY23 FY24 FY23 FY24 1H 2H 1H 2
Slide 21: Financial Performance By Segment
Financial Performance By Segment Sales volumes Underlying EBIT¹ (A$m) FY24 FY23 Change FY24 FY23 Change (‘000 tonnes) Metal Segments² 169.4 368.3 (54.0)% Metal Segments² 10,394 10,457 (0.6)% Sims Lifecycle Services 17.7 8.2 115.9% Global Trading & Other Brokerage 1,322 1,460 (9.5)% Global Trading Op
Slide 22: EBIT 1H vs 2H Results by Segment
EBIT 1H vs 2H Results by Segment Million $AUD 9.3 29.5 1.2 4.9 7.9 (17.0) 13.4 8.8 0.8 1H FY24 NAM SA Recycling ANZ UK Global Trade SLS Corporate & Other 2H FY24 22
Slide 23: Risk-Based Approach
Risk-Based Approach Threats and Opportunities Response • New growth markets emerging • Market optionality and diversification • Established markets facing challenges • Improved relationship with domestic mills and • NA demand driven by EAF and infrastructure built domestic logistic capabilities in N
Slide 24: US Metal Segments
US Metal Segments NAM SA Recycling A$m FY24 FY23 Change A$m FY24 FY23 Change Proprietary Sales Volumes Proprietary Sales Volumes 5,000 5,063 (1.2)% 5,026 4,969 1.1% (‘000 tonnes) (‘000 tonnes) Sales Revenue 4,768.6 4,519.0 5.5% Sales Revenue 4,479.8 3,924.6 14.1% Trading Margin 1,436.8 1,417.6 1.4%
Slide 25: Australia & New Zealand Metal
Australia & New Zealand Metal A$m FY24 FY23 Change • Volume improvement: new industrial and cable sourcing Proprietary Sales Volumes (‘000 tonnes) 1,593 1,510 5.5% • Non-ferrous provided pricing relief against export market headwinds Sales Revenue 1,595.1 1,563.7 2.0% • Costs increased: waste levies
Slide 26: UK Metal
UK Metal A$m FY24 FY23 Change • Asset held for sale Proprietary Sales Volumes • Against a backdrop of tight metal scrap supply, (‘000 tonnes) 1,288 1,399 (7.9)% Proprietary Sales Volumes down 7.9% • Trading Margin up 3.7%; down 3.4% at constant Sales Revenue 1,367.3 1,423.4 (3.9)% currency Trading M
Slide 27: Sims Lifecycle Services
Sims Lifecycle Services A$m FY24 FY23 Change • Repurposed units up 60.5%, due to increased existing customer activity and new customers Repurposed units (million) 6.1 3.8 60.5% • Revenue up 7.5%, with change in product mix. Prior Sales revenue 349.7 325.4 7.5% year includes Sims Precious Metals 1 Un
Slide 28: Global Trading, Corporate & Other
Global Trading, Corporate & Other Global Trading Operations FY24 FY23 Change Global Trading Operations (A$m) • External and SA Recycling brokerage less the 1 Underlying EBIT (20.2) (24.3) (16.9%) costs of running the global trading operations • Underlying EBIT loss down 16.9%, reflecting tighter Cor
Slide 29: Operating Costs Including D&A
Operating Costs Including D&A Million $AUD 10.9 1,674.3 23.8 13.1 7.8 5.0 8.9 29.2 74.0 1,595.2 (16.9) 36.1 1,521.2 1,485.1 FY23 Translational Rebased Acquisitions Revised Cost People Depreciation Project Waste Other Employee Other FY24 FX FY23 Cost Base Saving Costs & Costs Charges Operating Incent
Slide 30: Corporate and Functional Costs
Corporate and Functional Costs FY24 Central Costs ($m) 2.3% vs FY23 $4.4 4.7% vs FY23 $17.7 • Restructuring • Strategic UK Metal Review $45.7 • Systems development and support • Senior staff departures $45.6 18.8% 18.4% vs FY23 vs FY23 Corporate Head Office Operational Functions Projects Other Entit
Slide 31: Cost Reduction Program
Cost Reduction Program Annualised Cost Savings ($m) $15 - $20 Original Target Further opportunities • Strategic review of People: Roles Removed operating base $46 • Procurement initiatives Delivered in FY24 • Overhead structure (excluding UK Metal) Project Savings: NAM/ ANZ $18 31
Slide 32: Net Cash Movement
Net Cash Movement Million $AUD 259.1 202.5 (340.0) (55.0) (135.5) (214.3) 0.8 (88.9) (40.6) (411.9) Net Cash 1 Jul Net Operating LMS Baltimore Scrap Alumisource Capex Leases Dividend Other Net Cash 30 Jun 23 Cashflow 24 32
Slide 33: Capital Expenditure
Capital Expenditure 300 • Majority of total capital expenditure is metal-related 250 • Sustaining capex of $196.5 million. Spend prioritised on essential plant and facility maintenance, safety, 200 and compliance A$ million 150 • $17.7 million of Growth Capex to fund various projects including: new
Slide 34: Capital Management
Capital Management UK Metal • Binding agreement to sell UK Metal for after tax proceeds of approximately $385 million • Transaction expected to be completed before Q1 FY25 Circular Services • Signed a letter of intent to sell remaining interest in Circular Services for approximately $50 million Sale
Slide 35: Outlook
Outlook Stephen Mikkelsen, Group CEO & Managing Director 35
Slide 36: Outlook
Outlook • A more agile sales and data-driven performance is expected to support NAM’s continued recovery, despite intense competition for scrap supply • We are optimistic about the sustained strength in zorba prices driven by energy transition and decarbonisation • Hyperscaler data centre market is
Slide 37: Questions & Answers
Questions & Answers 37
Slide 38: Appendix
Appendix 38
Slide 39: Product Segment Volumes
Product Segment Volumes Intake volumes (‘000 tonnes) FY24 FY23 Change Intake volumes (‘000 tonnes) FY24 FY23 Change North America Metal 4,999 4,903 2.0% Ferrous Trading¹ 7,252 7,324 (1.0)% ANZ Metal 1,497 1,492 0.3% Non-Ferrous Trading 530 393 34.9% UK Metal 1,286 1,322 (2.7)% Global Trading & Other
Slide 40: Product Segment Revenues
Product Segment Revenues Average Sims Metal Sales Price FY24 FY23 Change Ferrous 595.78 606.12 (1.7)% Non-Ferrous Shredder Recovery 2,511.01 2,671.05 (6.0)% Non-Ferrous Retail 4,807.35 4,339.65 10.8% Total Average Sims Metal Sales Price 926.62 862.74 7.4 % Sims Metal Sales Revenue ($m)¹ FY24 FY23 Ch
Slide 41: FY24 Metal Volumes
FY24 Metal Volumes ¹ 2 3 2 Source Destination Composition 1H24 FY24 1H24 FY24 1H24 FY24 NAM SAR ANZ 1 Restated 1H FY24 percentages 2 Ferrous Intake Volumes 3 Ferrous Sales Volumes 41
Slide 42: Group Profit & Loss
Group Profit & Loss A$m FY19 FY20 FY21 FY22 FY23 FY24 Change Sales revenue 6,640.0 4,908.5 5,916.3 9,264.4 8,061.1 8,562.7 6.2% Statutory EBITDA 358.1 35.7 507.3 976.4 515.7 334.5 (35.1%) Underlying EBITDA 363.4 144.9 579.9 958.9 474.9 304.8 (35.8%) Statutory EBIT 225.0 (239.1) 314.0 773.6 293.0 72.
Slide 43: North America Metal
North America Metal A$m FY19 FY20 FY21 FY22 FY23 FY24 Change Sales Revenue 2,725.6 2,061.7 2,669.9 4,453.4 3,924.6 4,479.8 14.1% Trading Margin ($) 609.0 481.2 591.7 919.9 748.9 784.3 4.7% Trading Margin (%) 22.3% 23.3% 22.2% 20.7% 19.1% 17.5% (1.6)ppts Statutory EBITDA 124.8 (16.2) 194.2 343.7 149.
Slide 44: Investment in SA Recycling
Investment in SA Recycling A$m FY19 FY20 FY21 FY22 FY23 FY24 Change 1 Statutory EBIT 41.0 12.1 157.8 302.5 180.2 102.2 (43.3)% 1 Underlying EBIT 35.9 12.1 157.8 298.5 163.5 102.2 (37.5)% Assets 211.1 277.5 345.8 512.4 584.8 606.0 3.6 % Intake Volumes (‘000) ² 3,473 3,250 3,809 4,874 4,978 5,744 15.4
Slide 45: Australia & New Zealand Metal
Australia & New Zealand Metal A$m FY19 FY20 FY21 FY22 FY23 FY24 Change Sales Revenue 1,203.7 924.8 1,098.9 1,694.4 1,563.7 1,595.1 2.0% Trading Margin ($) 344.8 286.3 337.5 455.2 420.2 410.3 (2.4%) Trading Margin (%) 28.6% 31.0% 30.7% 26.9% 26.9% 25.7% (1.2)ppts Statutory EBITDA 125.6 92.3 147.6 216
Slide 46: UK Metal
UK Metal A$m FY19 FY20 FY21 FY22 FY23 FY24 Change Sales Revenue 1,186.9 869.8 993.3 1,594.9 1,423.4 1,367.3 (3.9%) Trading Margin ($) 196.8 128.5 195.6 250.4 209.8 217.6 3.7% Trading Margin (%) 16.6% 14.8% 19.7% 15.7% 14.7% 15.9% 1.2ppts 1 Statutory EBITDA 19.7 (59.4) 54.2 77.9 15.4 (27.2) nmf Under
Slide 47: Global Trading
Global Trading A$m FY19 FY20 FY21 FY22 FY23 FY24 Change Sales Revenue 690.9 550.8 745.8 1,128.5 824.0 770.8 (6.5%) Statutory EBITDA 23.3 8.2 21.9 55.8 12.1 36.1 198.3% Underlying EBITDA (14.9) (13.9) (16.4) (19.2) (23.1) (19.0) (17.7%) Depreciation 0.2 1.3 1.0 1.1 1.2 1.2 —% Amortisation — — — — — —
Slide 48: Sims Lifecycle Services
Sims Lifecycle Services A$m FY19 FY20 FY21 FY22 FY23 FY24 Change Sales Revenue 746.5 408.0 318.9 327.0 325.4 349.7 7.5% Statutory EBITDA 26.4 9.9 21.2 15.3 0.1 29.8 29700.0% Underlying EBITDA 34.5 28.2 31.1 25.9 18.8 30.5 62.2% Depreciation 8.5 11.3 9.3 9.6 9.7 10.5 8.2% Amortisation — — — — 0.9 2.3
Slide 49: Corporate & Other
Corporate & Other A$m FY19 FY20 FY21 FY22 FY23 FY24 Change Sales Revenue 86.4 93.4 89.5 66.2 — — —% Statutory EBITDA (2.7) (11.2) (89.6) (35.6) (14.3) 55.0 484.6% Underlying EBITDA (32.1) (35.9) (46.9) (77.6) (97.0) (120.7) (24.4%) Depreciation 10.9 15.6 15.0 10.9 3.1 3.2 3.2% Amortisation - - - - -
Slide 50: Constant Currency Summary
Constant Currency Summary A$m FY24 FY24 FY23 Change Constant Actual Actual Currency NAM Sales revenue 4,479.8 4,362.5 3,924.6 11.2% Trading Margin 784.3 763.8 748.9 2.0% Net Operating Costs (632.5) (612.7) (569.3) 7.6% Underlying EBIT (12.6) (9.0) 55.5 (116.2)% UK Sales revenue 1,367.3 1,272.8 1,423
Slide 51: Financial Summary – Group
Financial Summary – Group A$m FY19 FY20 FY21 FY22 FY23 FY24 Group Results Sales Revenue 6,640.0 4,908.5 5,916.3 9,264.4 8,061.1 8,562.7 Underlying EBITDA 363.4 144.9 579.9 958.9 474.9 304.9 Underlying EBIT 230.3 (57.9) 386.6 756.1 252.2 42.9 Underlying NPAT 161.9 (58.1) 284.1 578.9 156.9 (45.4) Unde
Slide 52: Financial Summary – Segment
Financial Summary – Segment A$m FY19 FY20 FY21 FY22 FY23 FY24 Sales Revenue North America Metal 2,725.6 2,061.7 2,669.9 4,453.4 3,924.6 4,479.8 ANZ Metal 1,203.7 924.8 1,098.9 1,694.4 1,563.7 1,595.1 UK Metal 1,186.9 869.8 993.3 1,594.9 1,423.4 1,367.4 Sims Lifecycle Services 746.5 408.0 318.9 327.0
Slide 53: Financial Summary – Segment (cont.)
Financial Summary – Segment (cont.) A$m FY19 FY20 FY21 FY22 FY23 FY24 1 Proprietary sales tonnes (‘000) North America Metal 4,887 4,042 4,318 5,081 5,063 5,000 ANZ Metal 1,763 1,428 1,537 1,532 1,510 1,593 UK Metal 1,602 1,221 1,370 1,493 1,399 1,288 Total 8,252 6,691 7,225 8,106 7,972 7,881 2 Under
Slide 54: Financial Summary – Product
Financial Summary – Product A$m FY19 FY20 FY21 FY22 FY23 FY24 Sales tonnes (‘000)¹ 2 Ferrous Trading 7,817 6,301 6,870 7,664 7,550 7,365 Non-Ferrous 435 390 355 442 422 516 Brokerage 1,551 1,463 1,368 1,601 1,460 1,322 Total 9,803 8,154 8,593 9,707 9,432 9,203 3 Sales Revenue Ferrous Metal 4,505.4 3
Slide 55: Significant Items
Significant Items FY24 Pre- FY24 After- FY23 Pre- FY23 After- A$m FY24 A$m Tax Total Tax Total Tax Total Tax Total Statutory NPAT (57.8) Reported earnings 334.5 (57.8) 515.7 181.1 Significant Items 14.5 Significant items: Non-qualified hedges (2.1) Loss/(gain) on fair valuation of investment 48.1 36
Slide 56: Net Cash Position
Net Cash Position A$m FY24 FY23 Opening Net Cash (135.5) (102.7) Underlying net profit (45.4) 156.9 Depreciation & amortisation 261.9 222.7 Joint venture non-cash income, net of dividends (17.6) (57.4) Change in working capital 30.7 125.7 Movement in tax balance 63.3 (5.7) ERP current year spend — —