Slide 1: Financial Results
Financial Results Full year ended 30 June 2021 17 August 2021
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, 17 August 2021. 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: FY21 Themes
FY21 Themes Strong and sustained second half recovery has delivered significant margin growth Price recovery driven by increased demand in many industrial sectors ▪ Material improvement in market prices, particularly in the second half ▪ Proprietary sales volumes increased by 8.0% and proprietary in
Slide 5: Summary of Financial Outcomes
Summary of Financial Outcomes All profitability metrics showed major improvement Sales Revenue Sales Volumes $5,916.3 million 8.593 million tonnes FY20 1H 4.30 million | 2H 4.25 million FY20 $4,908.5 million 20.5% 8.154 million tonnes 5.4% Underlying1 EBITDA Net Cash Balance $579.9 million $8.3 mill
Slide 6: Employee Health & Safety
Employee Health & Safety Lowest ever recorded number of injuries, despite adverse changing conditions in FY21 Actual incidents significantly reduced year over year ▪ Proactive lead indicator programs drove significant safety improvement, including 140 120 ▪ Lowest number of critical risk incidents 1
Slide 7: Sustainability
Sustainability We are pleased with our progress across each of the pillars, despite COVID-19 disruption Sims’ Sustainability Pillars FY21 Update ▪ Executed the Safety Risk Incident Operate Responsibly: Foundation of a sustainable company Programme ▪ Implemented control measures to prevent We commit
Slide 8: Group Financial Performance
Group Financial Performance ▪ Strong earnings growth due to: A$m FY20 FY21 % Chg ▪ Higher sales revenue and volumes Sales revenue 4,908.5 5,916.3 20.5% ▪ Lower operating costs with cost savings of Statutory EBITDA 35.7 507.3 1,321.0% $75 million in FY21 compared to FY19; and Underlying EBITDA1 144.9
Slide 9: Markets
Markets Large price increases in FY21 vs FY20 and unprecedented size of global stimulus package Ferrous1 – Improved pricing since April 2020 lows 2H FY21 intake volumes at ~96% of the FY19 average 550 700 600 96% 500 Turkey HMS 80:20 Price Proprietary intake volumes 450 500 (US$ / tonne) 400 400 (‘0
Slide 10: Financial Results
Financial Results Stephen Mikkelsen, Group CFO 10
Slide 11: Business Segment Financial Performance
Business Segment Financial Performance Strong earnings growth and volume recovery across all business segments Sales volumes Underlying EBIT1 (A$m) FY20 FY21 Chg % FY20 FY21 Chg % (‘000 tonnes) North America Metal2 4,042 4,318 6.8% North America Metal (39.0) 137.0 451.3% ANZ Metal 2 1,428 1,537 7.6%
Slide 12: North America Metal
North America Metal Significantly improved earnings due to lower operating costs and improved margins ▪ Underlying EBIT of $137.0 million, up $191.2 million A$m FY20 FY21 % Chg over prior corresponding period on constant Underlying EBIT1 (39.0) 137.0 451.3% currency basis driven by: Underlying EBIT
Slide 13: Australia & New Zealand Metal
Australia & New Zealand Metal Improved earnings supported by higher ferrous and non-ferrous margins and cost reductions ▪ Underlying EBIT was $103.6 million, up 104.3% over A$m FY20 FY21 % Chg prior corresponding period driven by: Underlying EBIT1 50.7 103.6 104.3% ▪ Higher gross margins per tonne i
Slide 14: UK Metal
UK Metal Lower operating costs and higher volumes and margins delivered significant earnings improvement ▪ Underlying EBIT of $45.7 million, up $78.4 million over A$m FY20 FY21 % Chg prior corresponding period on constant currency Underlying EBIT1 (31.9) 45.7 243.3% basis Underlying EBIT (31.9) 46.5
Slide 15: Sims Lifecycle Services
Sims Lifecycle Services Strong interest in SLS expertise and growing market share ▪ Underlying EBIT for remaining businesses was $21.8 A$m FY20 FY21 % Chg million, an increase of $21.3 million on constant Underlying EBIT1 16.9 21.8 29.0% currency basis over the prior corresponding period Underlying
Slide 16: SA Recycling
SA Recycling Significant improvement due to increased volumes and higher margins A$m FY20 FY21 % Chg ▪ Underlying EBIT was $157.8 million, up $163.5 million over prior corresponding period on Underlying EBIT (50% share)1 12.1 157.8 1204.1% constant currency basis Underlying EBIT 12.1 175.6 1351.2% (
Slide 17: Global Trading
Global Trading ▪ Underlying EBIT represents external and SA A$m FY20 FY21 % Chg Recycling brokerage less the costs of running Brokerage Gross Margin 9.6 11.3 17.7% the global trading operations Operating Costs (24.8) (28.7) -15.7% ▪ FY21 brokerage export volumes decreased Underlying EBIT 1 (15.2) (1
Slide 18: Corporate & Other
Corporate & Other Sims Municipal Recycling showing early signs of some recovery Corporate (A$m) FY20 FY21 % Chg Corporate Underlying EBIT1 (57.6) (66.8) -16.0% ▪ Operating costs increased largely due to higher variable employee benefits expense Underlying EBIT (57.6) (71.0) -25.0% (constant currency
Slide 19: Operating Costs
Operating Costs Achieved $75 million of predominantly fixed cost savings in FY21 compared to FY19 FY21 Predominantly Fixed Costs1,2 ▪ Delivered $75 million in predominantly fixed cost savings in FY21 vs FY19 ▪ Note: $20 million of these further cost reductions require implementation of the ERP syste
Slide 20: Net Cash Position
Net Cash Position Increased working capital from higher prices and strong inventory position A$m FY21 ▪ Significantly increased prices and a very strong year Opening Net Cash 110.4 end inventory position increased working capital Underlying net profit 284.1 ▪ Year end inventory was largely sold and
Slide 21: Capital Expenditure
Capital Expenditure Disciplined increase in capital expenditure following FY20 “freeze” ▪ Capex of $161.4 million in FY21 of which $33 million Capital Expenditure relates to the Alumisource acquisition ▪ Growth capex is focused on ferrous and non-ferrous 250 volumes and the first Resource Renewal Fa
Slide 22: SaaS - Accounting Policy Changes
SaaS - Accounting Policy Changes A recent accounting interpretation edict resulted in a $60.8 million software asset write off ▪ On 27 April 2021, the International Financial Reporting Standards (“IFRS”) Interpretations Committee (“IFRIC”) departed from long standing global practices and determined
Slide 23: Strategic Progress & Outlook
Strategic Progress & Outlook Alistair Field, Group CEO 23
Slide 24: SA Recycling
SA Recycling Delivered a strong performance, benefiting from the contribution of acquisition sales volumes… FY17-FY21 acquisitions accounted for ~ 600,000 tonnes of FY21 sales, representing 15.4% of SA Recycling total volumes 1 10 acquisitions / 20 new # operating sites since 1 2017 SA Recycling 3 o
Slide 25: SA Recycling
SA Recycling …and zorba sales benefitting from increase increased prices ▪ The business is significantly influenced by 1,900 movements in zorba prices due its position in the 1,700 competitive landscape 1,500 ▪ Average market zorba prices1 in FY21 was $1,292 vs (US$ / tonne) Zorba Price 1,300 $797 i
Slide 26: Sims Lifecycle Services
Sims Lifecycle Services Demonstrated growth with large addressable market potential Demonstrated growth each half year ▪ A repurposed unit is any unit that re-enters the market by being: ▪ Resold; ▪ Redeployed; but 16 ▪ Excludes units that are shredded. Underlying EBIT Remaining Business 14 ▪ Repurp
Slide 27: Sims Resource Renewal
Sims Resource Renewal Convert 1 million tonnes of ASR to quality products each year by 2030 Rocklea Pilot Facility ▪ Received statutory planning approval ▪ Anticipate operations to commence first half calendar 2022 Campbellfield Resource Renewal Facility ▪ Confirmed hydrogen as the most suitable out
Slide 28: Conclusion & Outlook
Conclusion & Outlook A very strong FY21 financial performance has continued into FY22, outlook positive FY21 ▪ Significantly improved financial performance, including $75 million cost savings compared to FY19 ▪ 2H FY21 proprietary intake volumes showing strong recovery ▪ Substantial progress on stra
Slide 29: Questions & Answers
“ill “Ss =foe 4 Questions & Answers
Slide 30: Appendix
Appendix SS O) 30
Slide 31: Product Segment Volumes
Product Segment Volumes Sales volumes (‘000 tonnes) FY20 FY21 Chg % Intake volumes (‘000 tonnes) FY20 FY21 Chg % North America Metal 4,042 4,318 6.8% North America Metal 4,180 4,432 6.0% ANZ Metal 1,428 1,537 7.6% ANZ Metal 1,513 1,527 0.9% UK Metal 1,221 1,370 12.2% UK Metal 1,192 1,412 18.5% Total
Slide 32: Group Profit & Loss
Group Profit & Loss A$m FY17 FY18 FY19 FY20 FY21 Chg % Sales revenue 5,079.4 6,448.0 6,640.0 4,908.5 5,916.3 20.5% Statutory EBITDA 313.5 395.8 358.1 35.7 507.3 1,321.0% Underlying EBITDA 292.4 392.3 363.4 144.9 579.9 300.2% Statutory EBIT 201.2 278.6 225.0 (239.1) 314.0 231.3% Underlying EBIT 180.1
Slide 33: North America Metal
North America Metal A$m FY17 FY18 FY19 FY20 FY21 Chg % Sales Revenue 1,984.0 2,607.1 2,725.6 2,061.7 2,669.9 29.5% Statutory EBITDA 106.0 121.0 124.8 (16.2) 194.2 1,298.8% Underlying EBITDA 124.4 159.5 162.6 55.0 226.4 311.6% Depreciation 45.0 46.9 53.2 90.2 89.1 1.2% Amortisation 8.9 7.9 9.7 3.8 0.
Slide 34: Investment in SA Recycling
Investment in SA Recycling A$m FY17 FY18 FY19 FY20 FY21 Chg % Statutory EBIT1 26.3 67.8 41.0 12.1 157.8 1,204.1% Underlying EBIT1 26.3 68.5 35.9 12.1 157.8 1,204.1% Assets 131.9 180.7 211.1 277.5 345.8 24.6% Intake Volumes (000's) 2 2,557 3,477 3,473 3,250 3,809 17.2% Sales Volumes (000's) 2 2,548 3
Slide 35: Australia & New Zealand Metal
Australia & New Zealand Metal A$m FY17 FY18 FY19 FY20 FY21 Chg % Sales Revenue 981.4 1,071.0 1,203.7 924.8 1,098.9 18.8% Statutory EBITDA 90.9 121.6 125.6 92.3 147.6 59.9% Underlying EBITDA 102.4 126.2 137.9 103.7 156.6 51.0% Depreciation 28.2 29.1 31.2 52.8 52.9 -0.2% Amortisation 0.4 0.2 0.2 0.2 0
Slide 36: UK Metal
UK Metal A$m FY17 FY18 FY19 FY20 FY21 Chg % Sales Revenue 924.3 1,203.0 1,186.9 869.8 993.3 14.2% Statutory EBITDA 50.5 42.0 19.7 (59.4) 54.2 191.2% Underlying EBITDA 54.2 50.5 39.5 (4.3) 71.3 1,758.1% Depreciation 12.0 14.9 18.3 26.8 25.6 4.5% Amortisation - 0.3 0.9 0.8 - -100.0% Statutory EBIT 38.
Slide 37: Global Trading
Global Trading A$m FY17 FY18 FY19 FY20 FY21 Chg % Sales Revenue 386.6 733.5 690.9 550.8 745.8 35.4% Statutory EBITDA 3.1 19.0 23.3 8.2 21.9 167.1% Underlying EBITDA (15.3) (12.3) (14.9) (13.9) (16.4) -18.0% Depreciation 0.1 0.1 0.2 1.3 1.0 23.1% Amortisation - - - - - - Statutory EBIT 3.0 18.8 23.1
Slide 38: Sims Lifecycle Services
Sims Lifecycle Services A$m FY17 FY18 FY19 FY20 FY21 Chg % Sales Revenue 726.9 758.4 746.5 408.0 318.9 -21.8% Statutory EBITDA 30.6 34.5 26.4 9.9 21.2 114.1% Underlying EBITDA 36.3 39.7 34.5 28.2 31.1 10.3% Depreciation 8.2 8.4 8.5 11.3 9.3 17.7% Amortisation - - - - - - Statutory EBIT 22.4 26.1 17.
Slide 39: Corporate & Other
Corporate & Other A$m FY17 FY18 FY19 FY20 FY21 Chg % Sales Revenue 76.2 75.0 86.4 93.4 89.5 -4.2% Statutory EBITDA 6.1 (10.1) (2.7) (11.2) (89.6) -700.0% Underlying EBITDA (35.9) (39.8) (32.1) (35.9) (47.7) -32.9% Depreciation 9.5 9.4 10.9 15.6 15.0 3.8% Amortisation - - - - - - Statutory EBIT (3.4)
Slide 40: Financial Summary – Group
Financial Summary – Group A$m FY17 FY18 FY19 FY20 FY21 Group Results Sales Revenue 5,079.4 6,448.0 6,640.0 4,908.5 5,916.3 Underlying EBITDA 292.4 392.3 363.4 144.9 579.9 Underlying EBIT 180.1 275.1 230.3 (57.9) 386.6 Underlying NPAT 118.3 188.6 161.9 (58.1) 284.1 Underlying EPS (cents per share) 59
Slide 41: Financial Summary – Segment
Financial Summary – Segment A$m FY17 FY18 FY19 FY20 FY21 Sales Revenue North America Metal 1,984.0 2,607.1 2,725.6 2,061.7 2,669.9 ANZ Metal 981.4 1,071.0 1,203.7 924.8 1,098.9 UK Metal 924.3 1,203.0 1,186.9 869.8 993.3 Sims Lifecycle Services 726.9 758.4 746.5 408.0 318.9 Global Trading 386.6 733.5
Slide 42: Financial Summary – Segment (cont.)
Financial Summary – Segment (cont.) A$m FY17 FY18 FY19 FY20 FY21 Proprietary sales tonnes (‘000)1 North America Metal 4,344 4,865 4,887 4,042 4,318 ANZ Metal 1,530 1,585 1,763 1,428 1,537 UK Metal 1,589 1,691 1,602 1,221 1,370 Total 7,463 8,141 8,252 6,691 7,225 Underlying EBIT2 North America Metal
Slide 43: Financial Summary – Product
Financial Summary – Product A$m FY17 FY18 FY19 FY20 FY21 Sales tonnes (‘000) Ferrous Trading 7,009 7,709 7,817 6,301 6,870 Non Ferrous 454 432 435 390 355 Brokerage 1,237 1,715 1,551 1,463 1,368 Total 8,700 9,856 9,803 8,154 8,593 Sales Revenue Ferrous Metal 3,136.1 4,381.6 4,505.4 3,286.2 4,288.9 N
Slide 44: Income Tax Expense – FY21
Income Tax Expense – FY21 A$m Profit Before Tax Income Tax Expense Effective Tax % Statutory Result 302.5 73.1 24.2% Significant Items 72.6 17.9 24.7% Normalised Results 374.3 91.0 24.3% 44
Slide 45: Lease Standard Impact – FY21
Lease Standard Impact – FY21 A$m EBIT EBITDA Underlying Result 386.6 579.9 Lease Depreciation N/A 73.5 Lease Interest Expense 7.4 7.4 Underlying Result Excluding Lease Standard Impact 379.2 499.0 45
Slide 46: Significant items
Significant items FY20 Pre-Tax FY20 After-Tax FY21 Pre-Tax FY21 After-Tax A$m Total Total Total Total Legacy brand write offs 27.3 20.6 - - Other intangible asset impairments 44.7 34.7 - - ERP software implementation costs - - 60.8 45.8 JobKeeper grant income, net of amount voluntarily returned - -