Slide 1: Market Update & Share Buy-back
For personal use only Market Update & Share Buy-back November 2015 Galdino Claro, Group CEO Fred Knechtel, Group CFO
Slide 2: 1H FY16 market trend
1H FY16 market trend For personal use only Ferrous scrap prices fell at the start 1H FY16, Heavy Melt Scrap East Coast Export (FOB) then stabilised in August 300 Ferrous prices subsequently fell again sharply 275 by 30% from mid-September to November Copper and Aluminium prices also weakened,
Slide 3: Resetting Plan
Resetting Plan For personal use only > 10% Resetting Plan Align fixed cost base to match lower volume Return on Capital Underlying EBIT 5.5% Grow 4.6% Optimise 2.3% Streamline FY13 FY14 FY15 H1 FY16 2H FY16 FY18 run rate year end Target run rate Underlying EBIT Return on Capital The resetting plan w
Slide 4: New Streamline initiatives to reset the business
New Streamline initiatives to reset the business For personal use only A new set of Streamline cost reduction measures are being initiated to align fixed costs and the operational footprint with lower expected volumes Streamline actions are developed to either improve, close or divest under-perf
Slide 5: Related significant items and impairments
Related significant items and impairments For personal use only $230 million estimated in related significant items Management will work to minimise restructure costs through asset improvement, asset swap or asset sale Less than $20 million cash cost in FY16 Approximately 70% of total restru
Slide 6: FY16 earnings outlook
FY16 earnings outlook For personal use only 1H FY16 underlying EBIT is expected to be around break-even 1H FY16 statutory EBIT could be a significant loss as a result of potential asset, goodwill, and intangible impairment related to the business resetting plans Underlying EBIT is currently ex
Slide 7: Strategic plan target
Strategic plan target For personal use only Management’s strategic goal remains to deliver above cost of capital returns, regardless of external conditions This financial goal is embedded in the strategic target to achieve 10% ROIC by FY18 Management believes the resetting plan in combination
Slide 8: On-market share buy-back
On-market share buy-back For personal use only Sims Metal Management today announced its intention to commence an on-market buy- back program for up to 10% of the Company’s issued capital over the next 12 months The announcement follows the successful completion of a number of recent divestments
Slide 9: Summary
Summary For personal use only Extreme challenges facing the entire metal recycling industry in 1H FY16 As a result of a rapid fall in ferrous and non-ferrous prices, intake volumes declined meaningfully since the start of the fiscal year Due to these pressures, 1H FY16 underling EBIT is expect