Slide 1: Positioned for Tomorrow: Financial Results FY17
For personal use only Positioned for Tomorrow Financial Results Full year ended 30 June 2017 25 August 2017
Slide 2: Agenda
Agenda For personal use only Results Overview Alistair Field, Group CEO Financial Results Amit Patel, Acting Group CFO Summary & Outlook Alistair Field, Group CEO Metal Shredder in Kwinana, Western Australia 2
Slide 3: Higher earnings, net cash and dividend distributions
Higher earnings, net cash and dividend distributions For personal use only Significant improvement in earnings and return on capital Underlying EBIT of $182 million, up 214% over prior year Underlying NPAT of $120 million, up 216% over prior year Underlying Return on Capital of 8.0%, including
Slide 4: FY17 financial highlights
FY17 financial highlights For personal use only Sales Revenue Sales Volumes $5,079 million 8.70 million tonnes FY16 1H 4.30 million | 2H 4.25 million FY16 +9% +2% $4,652 million 8.55 million Underlying1 EBITDA Net Cash $295 million $373 million (30 June 2017) 1H $61 million | 2H $123 million FY16 As
Slide 5: Safety remains our first priority
Safety remains our first priority For personal use only Safety performance Safety remains our most important priority Since the start of FY13 total recordable injuries are down 60% Total Recordable Injury Frequency Rate (TRIFR)1 3.5 3.3 60% reduction in TRIFR Lower TRIFR has prevented the occu
Slide 6: Consistent earnings growth through the year
Consistent earnings growth through the year For personal use only Underlying EBIT by Quarter1 Earnings growth in each sequential quarter notwithstanding variations in sales volumes Stable earnings growth was supported by: 70 2.6 Steadily rising ferrous & non-ferrous 60 2.4 prices supporting wi
Slide 7: Positioned for Tomorrow: Financial Results
For personal use only Positioned for Tomorrow Financial Results Amit Patel, Acting Group CFO 7
Slide 8: Group financial performance
Group financial performance For personal use only A$m FY16 FY17 % Chg Sales revenue increased 9% due primarily to stronger commodity prices Sales revenue 4,651.7 5,079.4 9.2 Statutory EBITDA 83.0 313.5 277.7 Underlying EBITDA increased 60%, based on better metal margins and higher volumes Underl
Slide 9: Business segment financial performance
Business segment financial performance For personal use only Underlying EBIT (A$m) FY16 FY17 Chg % North America Metals underlying EBIT of $72 million North America Metals 2.3 72.4 NMF - Improved metal spreads due to rising prices and ANZ Metals 39.7 62.7 57.9 greater metal processing yields Europ
Slide 10: Adjusted underlying volumes meaningfully improved
Adjusted underlying volumes meaningfully improved For personal use only Sales volumes (‘000 tonnes) FY16 FY17 Chg % Sales Volumes by Region North America Metals 5,772 5,454 (5.5) Adjusting for operations divested in North less divested operations (360) (63) America and 3rd party brokerage, sales v
Slide 11: Cash flow from earnings driving strong free cash flow
Cash flow from earnings driving strong free cash flow For personal use only A$m FY16 FY17 Operating cash flow of $266 million driven by: Underlying EBITDA 184.4 294.7 - Higher underlying EBITDA Change in working capital (8.0) (9.9) - Offset slightly by working capital Interest and tax 1.0 (2.4)
Slide 12: Strategic Progress & Outlook
For personal use only Positioned for Tomorrow Strategic Progress & Outlook Alistair Field, Group CEO 12
Slide 13: Tracking towards FY18 return on capital target
Tracking towards FY18 return on capital target For personal use only 10.0% 10% 9% 8.0% 8% 7% Return on Capital1 6% 5.5% 5% 4.6% 4% 3% 2.6% 2.3% 2% 1% 0% FY13 FY14 FY15 FY16 FY17 target FY18 1) Return on Capital = (Underling EBIT – Tax at effective tax rate of 30%) / (Net Assets + Net Debt) 13
Slide 14: FY18 roadmap of priorities
FY18 roadmap of priorities For personal use only Accelerate Capital Projects • Need for timely delivery on project deadlines • Near-term capital prioritisation on yield enhancing & customer focused product developments - Optimise non-ferrous separation plant yields - Upgrade non-ferrous bi-product q
Slide 15: Capital allocation towards high returning internal initiatives
Capital allocation towards high returning internal initiatives For personal use only Capital Expenditure Strong net cash balance of $373 million as of 30 June 2017 to support strong pipeline of 250 internal initiatives Forecast total capex of $180 million to $200 200 million in FY18 Growth cap
Slide 16: Pipeline of strong returning internal initiatives
Pipeline of strong returning internal initiatives For personal use only FY17 FY18 FY19 Sale and closure of non-core assets Metals Recovery Plant (MRP) at Kwinana Dredging Claremont channel Rail connection in Chicago Plus additional projects not listed FY17 initiatives delivered $40 million
Slide 17: Conclusion & outlook
Conclusion & outlook For personal use only FY17 Highlights Underlying EBIT of $182 million, significantly higher than $58 million in the prior year Underlying Return on Capital of 8.0% and moving towards FY18 target Final dividend of 20 cents, plus a special dividend of 10 cents FY18 Objective
Slide 18: Appendix
For personal use only Positioned for Tomorrow Appendix 18
Slide 19: Further reduction in volume break-even point
Further reduction in volume break-even point For personal use only Volume break even reduction Sales volume break-even point further lowered to 6.9 million tonnes, improving business stability and increasing earnings 11.9 leverage to higher future sales volume 12 42% reduction in conditions Break-
Slide 20: Declining steel exports from China, lifting ferrous scrap demand & prices
Declining steel exports from China, lifting ferrous scrap demand & prices For personal use only China Steel Exports China’s exports of steel have been declining vs Ferrous Scrap Price since mid-2016 - China’s annual steel exports have fallen 24% since 140 400 July 2016 - Lower exports are supporti
Slide 21: Metal recycling industry beginning to rationalise
Metal recycling industry beginning to rationalise For personal use only US Industry-wide Over 160 reported closures of metals recycling Metals Recycling Closures facilities since the start of 2015 (cumulative since 2014) 200 # of facilities closed 150 100 Consolidation taking place through bankr
Slide 22: Group Profit & Loss
Group Profit & Loss For personal use only A$m FY16 FY17 Chg % Sales revenue 4,651.7 5,079.4 9.2 Statutory EBITDA 83.0 313.5 277.7 Underlying EBITDA 184.4 294.7 59.8 Statutory EBIT (215.5) 201.2 NMF Underlying EBIT 58.0 182.4 214.5 Net Interest expense (9.7) (10.2) 5.2 Statutory tax benefit 8.7 12.6
Slide 23: North America Metals
North America Metals For personal use only A$m FY16 FY17 Chg % Sales Revenue 2,352.6 2,417.5 2.8 Statutory EBITDA 53.5 151.4 183.0 Underlying EBITDA 75.7 135.3 78.7 Depreciation 61.7 54.0 (12.5) Amortisation 11.7 8.9 (23.9) Statutory EBIT (145.8) 88.5 NMF Underlying EBIT 2.3 72.4 NMF Assets 1,145.0
Slide 24: Australia & New Zealand Metals
Australia & New Zealand Metals For personal use only A$m FY16 FY17 Chg % Sales Revenue 743.6 981.4 32.0 Statutory EBITDA 58.0 90.9 56.7 Underlying EBITDA 66.6 91.3 37.1 Depreciation 26.0 28.2 8.5 Amortisation 0.9 0.4 (55.6) Statutory EBIT 31.1 62.3 100.3 Underlying EBIT 39.7 62.7 57.9 Assets 481.7 5
Slide 25: Europe Metals
Europe Metals For personal use only A$m FY16 FY17 Chg % Sales Revenue 759.1 924.3 21.8 Statutory EBITDA (15.7) 50.5 NMF Underlying EBITDA 32.4 47.4 46.3 Depreciation 13.8 12.0 (13.0) Amortisation - - - Statutory EBIT (29.7) 38.5 NMF Underlying EBIT 18.6 35.4 90.3 Assets 245.2 329.2 34.3 Intake Volum
Slide 26: Global E-Recycling
Global E-Recycling For personal use only A$m FY16 FY17 Chg % Sales Revenue 792.7 726.9 (8.3) Statutory EBITDA (2.6) 30.6 NMF Underlying EBITDA 19.2 28.2 46.9 Depreciation 11.2 8.2 (26.8) Amortisation 0.4 - NMF Statutory EBIT (60.2) 22.4 NMF Underlying EBIT 7.6 20.0 163.2 Assets 447.9 382.1 (14.7) Em
Slide 27: Corporate & Unallocated
Corporate & Unallocated For personal use only A$m FY16 FY17 Chg % Sales Revenue 3.7 29.3 691.9 Statutory EBITDA (10.2) (9.9) 2.9 Underlying EBITDA (9.5) (7.5) 21.1 Depreciation 0.7 0.6 (14.3) Amortisation - - - Statutory EBIT (10.9) (10.5) 3.7 Underlying EBIT (10.2) (8.1) 20.6 Assets 251.1 347.5 38.
Slide 28: FY17 income tax expense considerations
FY17 income tax expense considerations For personal use only A$m Profit Before Tax Income Tax Expense Effective Tax % Statutory Result 191.0 12.6 (6.6) Reconciling items: Recognition of previously unrecognised tax (65.6) losses Underlying Results 191.0 (53.0) 27.7% 28
Slide 29: Significant items by region – FY17
Significant items by region – FY17 For personal use only NA ANZ Europe Global Pre-Tax After-Tax FY17 (A$m) Unallocated Metals Metals Metals E-Recycling Total Total Reversal of fixed asset 0.9 (0.5) - (1.4) - (1.0) (0.3) impairment Gain on sale of property (24.3) - - - - (24.3) (24.3) Net expenses re
Slide 30: Significant items by region – FY16
Significant items by region – FY16 For personal use only NA ANZ Europe Global Pre-Tax After-Tax FY16 (A$m) Unallocated Metals Metals Metals E-Recycling Total Total Goodwill impairment - - 0.2 43.1 - 43.3 34.2 Other intangible asset 6.8 - - 2.9 - 9.7 8.6 impairment Impairment of investment in 119.1 -
Slide 31: Financial summary - Group
Financial summary - Group For personal use only A$m FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Group Results Sales Revenue 7,453 8,847 9,036 7,193 7,129 6,311 4,652 5,079 Underlying EBITDA 379 414 253 190 242 263 184 295 Underlying EBIT 235 283 123 67 119 142 58 182 Underlying NPAT 127 182 74 17 69 102
Slide 32: Financial summary – Segment
Financial summary – Segment For personal use only A$m FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Sales Revenue North America Metals 4,834 5,782 5,773 4,256 3,996 3,417 2,353 2,418 ANZ Metals 1,126 1,300 1,190 1,047 1,188 1,053 744 981 Europe Metals 783 954 1,056 935 1,063 1,037 759 924 Global E-Recycli
Slide 33: Financial summary – Segment (cont.)
Financial summary – Segment (cont.) For personal use only A$m FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Sales tonnes (‘000) North America Metals 9,906 10,964 11,080 9,377 8,152 7,018 5,772 5,454 ANZ Metals 1,578 1,764 1,765 1,764 2,054 1,874 1,418 1,656 Europe Metals 1,394 1,466 1,651 1,645 1,609 1,58
Slide 34: Financial summary – Segment (cont.)
Financial summary – Segment (cont.) For personal use only A$m FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Sales tonnes (‘000) Ferrous Trading 9,068 10,115 10,320 9,396 9,331 8,325 6,768 7,009 Ferrous Brokerage 3,264 3,518 3,597 2,840 1,918 1,617 1,307 1,237 Non Ferrous 565 571 586 550 566 539 476 454 To
Slide 35: Metals Recycling global footprint
Metals Recycling global footprint For personal use only Europe Metals North America Metals UK United States & Canada Australia & New Zealand Metals Australia New Zealand Metal Shredder / Key Metals Recycling facility Metal Shredder (50% JV owned) 35
Slide 36: 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 36
Slide 37: 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, 25 August 2017. It is provided in summary form and does not purport to be complete. It should be read in conjunction with th