Sims Ltd. · ASX:SGM
Sims — Bank of America Merrill Lynch Global Metals & Mining Conference 2016
26 slides from Sims's conference presentation, May 11, 2016
Slide 1: 2016 Investor Presentation
For personal use only 2016 Investor Presentation Bank of America Merrill Lynch - Global Metals & Mining Conference 11 May 2016 ASX: SGM USOTC: SMSMY www.simsmm.com
Slide 2: Business Highlights
Business Highlights For personal use only Company Global leader in metals and electronics recycling with over $6 billion in annual sales revenue Operations in 20 countries with balanced sales mix across ferrous and non-ferrous metals Best in class people, technology, trading, and logistics Strategy
Slide 3: Strong core metals recycling business and diversification through electronics recycling
Strong core metals recycling business and diversification through electronics recycling For personal use only Metals Recycling Sales Revenue 10.5m tonnes of secondary metals sales in FY15 By Business (FY15) 200+ facilities with operations in 6 countries 13% Export capabilities across North America,
Slide 4: Balanced sales mix
Balanced sales mix ~40% of sales generated by non-ferrous & other products For personal use only Ferrous Metals Sales Revenue By Product (FY15) Heavy Melt Steel Bundles & Bales Shredded Steel Plate & Structural 2% 13% Non-Ferrous Shred Recovery Zorba (aluminium based) Zurik (stainless steel based) N
Slide 5: Diverse supply base
Diverse supply base For personal use only Post Industrial % Key Supplier Groups Stampings & clippings 12-14% Borings & turnings 3-5% 6% 6% Other 1-3% Total ~20% 10% Obsolete Material % 45% Construction & demolition 20-30% 12% Passenger vehicles 15-25% Major appliances 5-10% 21% Other light iron 5-10
Slide 6: Best in class assets and operations
Best in class assets and operations For personal use only 27 high-powered metal shredders across 5 countries Best-in-class non-ferrous metals separation technology Dedicated engineering teams Industry leading metal-yield and waste reduction methods 6
Slide 7: Largest global trade network with export and domestic customers in 60 countries
Largest global trade network with export and domestic customers in 60 countries For personal use only Sales to external customers United States 23% China 13% Turkey 12% Australia 6% United Kingdom 5% Taiwan 4% South Korea 4% Export Domestic Operations Global Trading Offices Export destinations 7
Slide 8: Capturing export or domestic premiums through industry's deepest trading network
Capturing export or domestic premiums through industry’s deepest trading network For personal use only Export vs Domestic Price Premium Export Advantages 80 Exporting from the US, UK & Australasia, with 13 deep water ports globally Export Premium 60 15 global trading offices across 5 40 continents,
Slide 9: Strategic target to deliver double-digit return on capital by FY18
5 year strategic target to deliver double-digit return on capital by FY18 For personal use only Grow Optimise Market share growth through organic investment and patient selective acquisitions Streamline Strengthen supplier relationships Leverage emerging technologies in e-recycling across metals Exp
Slide 10: Internal initiatives to optimise key profit drivers
Internal initiatives to Optimise key profit drivers for stronger earnings through the cycle For personal use only Key Profit Drivers Raw Material Availability Leading market position in large urban centers to retain and grow volumes Supplier Relationships Supplier Relationships Strengthening supplie
Slide 11: Volume break-even lowered with upside leverage retained
Volume break-even lowered with upside leverage retained when volumes recover For personal use only 14 Majority of processing capacity retained for volume recovery 12 Internal initiatives will have reduced the Sales volumes (million tonnes) volume break-even point for EBIT by 10 over 40% by the end o
Slide 12: Capital management strategy
Capital management strategy: Maintaining a strong balance sheet is the first priority For personal use only Net Cash of $373 million1 Cash • Preservation of cash for future Strong and consistent free cash flow Management working capital requirements Reinvesting back into the business Sustaining • On
Slide 13: Market Update: Improved market fundamentals
Market Update: Improved market fundamentals has driven higher ferrous demand and prices For personal use only Turkey: Import Ferrous Scrap vs Market has dramatically changed during Export Rebar Spread the first quarter of 2016, with China once 350 again driving the market 300 Steel mills in China ti
Slide 14: Market Update: Strong 2H FY16 earnings recovery
Market Update: Strong 2H FY16 earnings recovery For personal use only A$m FY13 FY14 FY15 FY16 Forecast Exit Run Rate Underlying EBIT 67 119 142 $140 million Exit Run Rate Return on Capital 2.3% 4.6% 5.5% 6% 2H FY16 Market Update Significant earnings recovery expected during 2H FY16, driven by increm
Slide 15: Summary
Summary For personal use only Global leader in metals and electronics recycling Lifting through the cycle earnings by lower costs and higher metal margins On track to deliver double-digit return on capital by FY18 Significant net cash position, providing balance sheet strength and capital management
Slide 16: Appendix
For personal use only Appendix ASX: SGM USOTC: SMSMY www.simsmm.com
Slide 17: Diverse ferrous and non-ferrous product portfolio
Diverse ferrous and non-ferrous product portfolio For personal use only Ferrous Non Ferrous Electronics Recycling Heavy Melt Steel (HMS) Copper Circuit Boards Shredded Steel Zorba (Shredded Aluminum) End of life IT assets Note: The above images include only a selection of product types sold 17
Slide 18: The Metals Recycling Process
The Metals Recycling Process For personal use only Post Industrial Weighing, Inspection, Non Ferrous Factory stampings, clippings, & Sorting Copper, Aluminum, turnings, and borings Zinc, Lead, Nickel Obsolete Goods Vehicles, appliances, construction & demolition, railroads, steel cans Processing Sor
Slide 19: The Electronics Recycling Process
The Electronics Recycling Process For personal use only 19
Slide 20: Metals Recycling Global Footprint
Metals Recycling Global Footprint For personal use only Europe Metals North America Metals Australia & New Zealand Metals Australia New Zealand Metal Shredder / Key Metals Recycling facility Metal Shredder (50% JV owned) 20
Slide 21: Electronics Recycling Global Footprint
Electronics Recycling Global Footprint For personal use only Europe, Africa, and Middle East UAE Europe North America South Africa United States Asia Pacific India Singapore Australia New Zealand Electronics Recycling facility 21
Slide 22: Financial Summary – Group
Financial Summary – Group For personal use only A$m FY10 FY11 FY12 FY13 FY14 FY151 1H FY151 1H FY16 Group Results Sales Revenue 7,453 8,847 9,036 7,193 7,129 6,311 3,363 2,412 Underlying EBITDA 379 414 253 190 242 263 153 61 Underlying EBIT 235 283 123 67 119 142 95 -5 Underlying NPAT 127 182 74 17
Slide 23: Financial Summary – Segment
Financial Summary – Segment For personal use only A$m FY10 FY11 FY12 FY13 FY14 FY151 1H FY151 1H FY16 Sales Revenue North America Metals 4,834 5,782 5,773 4,256 3,996 3,417 1,913 1,236 ANZ Metals 1,126 1,300 1,190 1,047 1,188 1,053 554 377 Europe Metals 783 954 1,056 935 1,063 1,037 513 372 Global E
Slide 24: Financial Summary – Segment (cont.)
Financial Summary – Segment (cont.) For personal use only A$m FY10 FY11 FY12 FY13 FY14 FY15 1H FY15 1H FY16 Sales tonnes (‘000) North America Metals 9,906 10,964 11,080 9,377 8,152 7,018 3,818 2,990 ANZ Metals 1,578 1,764 1,765 1,764 2,054 1,874 944 700 Europe Metals 1,394 1,466 1,651 1,645 1,609 1,
Slide 25: Financial Summary – Segment (cont.)
Financial Summary – Segment (cont.) For personal use only A$m FY10 FY11 FY12 FY13 FY14 FY151 1H FY151 1H FY16 Sales tonnes (‘000) Ferrous Trading 9,068 10,115 10,320 9,396 9,331 8,325 4,426 3,361 Ferrous Brokerage 3,264 3,518 3,597 2,840 1,918 1,617 801 688 Non Ferrous 565 571 586 550 566 539 273 25
Slide 26: Disclaimer
Disclaimer For personal use only The material contained in this document is a presentation of information about the Group’s activities current at the date of the presentation. It is provided in summary form and does not purport to be complete. It should be read in conjunction with the Group’s period
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