Slide 1: Financial Results
Financial Results Half year ended 31 December 2021 15 February 2022 1
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, 15 February 2022. It is provided in summary form and does not purport to be complete. It should be read in conjunction with the Group’s periodic r
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: Results Overview
Results Overview Alistair Field, Group CEO 4
Slide 5: HY22 Key Takeaways
HY22 Key Takeaways EBIT above guidance range despite freight price volatility, inflationary pressures and COVID lockdowns A high-quality result driven by excellent margin per tonne across all metal businesses Significant improvement in operating cash flow Proprietary intake volumes were near to pre-
Slide 6: Solid Progress on Strategic Initiatives
Solid Progress on Strategic Initiatives • Announced acquisition of Atlantic Recycling Group (US) and Recyclers Australia (Australia) Metal • Established new feeder yards in New Bern, Ewing, Fernley in the US and Minto in Australia • Developed innovative non-ferrous products to help our customers to
Slide 7: HY22 Themes
HY22 Themes Earnings momentum accelerated into HY22 Underlying EBIT grew sixfold compared to HY21 driven by strong trading margins across the metal businesses Statutory EBIT of $341.4 million, up 334.9% over prior corresponding period Underlying EBIT1 of $361.7 million, up 541.3% over prior corr
Slide 8: Summary of Financial Outcomes
Summary of Financial Outcomes Achieved a high-quality result with sales volume, revenue, profit growth and margin expansion. Significantly higher cash flow distribution and balance sheet strength maintained Sales Revenue Sales Volumes $4,265.0 million 4.685 million tonnes HY21 HY21 9% 74% 4.310 mill
Slide 9: Employee Health & Safety
Employee Health & Safety Achieved strong safety performance with the lowest recorded number of injuries year-on-year since HY19 Total Incidents Proactive lead indicator programmes focused on Significant reductions HY19 to HY22 standardisation of controls continued to drive safety -42% improvements
Slide 10: Sustainability
Sustainability Strengthened ESG credentials Received maximum AAA Ranked 11th in the Ranked #6 in rating Selected in world- Global 100 list of Sustainability first investment most sustainable Magazine Top 100 Terra Carta Seal for fund that applies companies, ranked companies in creation of Māori valu
Slide 11: Sustainability
Sustainability Making strong progress against FY25 goals OPERATE RESPONSIBLY CLOSE THE LOOP PARTNER FOR CHANGE • Lowest ever recordable injury rate • Transition of largest site • Became a signatory to the UN • Met target set for Board gender (Claremont New Jersey) to Global Compact diversity renewab
Slide 12: Markets
Markets Ferrous and non-ferrous prices remained at multi-year highs driven by strong global demand for recycled metal Ferrous1 – Prices remained at elevated levels in HY22 Freight2 – Prices rose steeply in HY22 60 550 HY22 average HY22 Baltic Handy average Turkey HMS 80:20 Price 500 50 450 (US$ / to
Slide 13: Financial Results
Financial Results Stephen Mikkelsen, Group CFO 13
Slide 14: Group Financial Performance
Group Financial Performance Excellent EBIT performance driven by growth in trading margin A$m HY21 HY22 Change 73.9% increase in sales revenue compared to prior corresponding period from higher selling prices and Sales Revenue 2,452.0 4,265.0 73.9% sales volumes Trading Margin 1 636.5 922.8 45.0%
Slide 15: Business Segment Financial Performance
Business Segment Financial Performance More than a sixfold increase in EBIT. Improved volumes driven by NAM and SA Recycling Sales volumes Underlying EBIT1 (A$m) HY21 HY22 Change HY21 HY22 Change (‘000 tonnes) Metal Business2 3,664 3,941 7.6% 2 Metal Business 62.7 266.5 325.0% Global Trading 567 675
Slide 16: North America Metal
North America Metal Very strong earnings growth driven by increased trading margin A$m HY21 HY22 Change Sales volumes up 11.3% due to post-COVID economic recovery, acquisitions and new feeder Proprietary Sales Volumes 2,151 2,395 11.3% yards (‘000 tonnes) 87.2% increase in sales revenue due to h
Slide 17: Australia & New Zealand Metal
Australia & New Zealand Metal Strong first-half EBIT result despite COVID restrictions Sales volumes consistent with HY21 A$m HY21 HY22 Change 70.5% increase in sales revenue due to 72.2% Proprietary Sales Volumes (‘000 tonnes) 807 799 (1.0%) increase in average selling prices Sales Revenue 478.
Slide 18: UK Metal
UK Metal Strong earnings growth driven by increased trading margin A$m HY21 HY22 Change Sales volumes up 5.8% 73.9% increase in sales revenue due to 64.4% Proprietary Sales Volumes (‘000 tonnes) 706 747 5.8% increase in average selling prices Sales revenue 428.0 744.4 73.9% Trading margins lif
Slide 19: Sims Lifecycle Services
Sims Lifecycle Services Strong EBIT growth driven by higher repurposed units and market share gains A$m HY21 HY22 Change Significant Underlying EBIT advancement in HY22 resulting in 45.6% growth over the prior corresponding Repurposed units (million) 0.9 1.3 44.4% period Sales revenue 152.3 166.0
Slide 20: SA Recycling
SA Recycling Record EBIT growth with significant trading margin expansion and sales volume growth A$m HY21 HY22 Change Underlying EBIT of $128.7 million, up $427.5% million reflecting: Proprietary Sales Volumes Significant trading margin expansion (‘000 tonnes) (50% of SA 929 1,102 18.6% tonnes)
Slide 21: Global Trading
Global Trading Gross margin expansion driven by strong market prices A$m HY21 HY22 Change Underlying EBIT represents external and SA Recycling brokerage less the costs of running the global trading Brokerage Volumes operations 567 675 19.0% (‘000 tonnes) Higher brokerage gross margin resulted fr
Slide 22: Corporate & Other
Corporate & Other LMS Energy and SMR reported earnings growth Corporate Corporate (A$m) HY21 HY22 Change Corporate costs increased on the prior Underlying EBIT1 (30.0) (47.0) 56.7% corresponding period due to: Expanded capability to support business Sims Municipal Recycling transformation HY21 H
Slide 23: Net Cash Position
Net Cash Position Substantial increase in operational cashflow funded acquisition in ANZ, capital expenditure and increased cashflow distribution through buyback and dividends A$m H1 FY22 Operating cash flow of $290.8 million in 1H FY22. Opening Net Cash 8.3 Primary uses of funds included: Underly
Slide 24: Cash Generation
Cash Generation Significant improvement in H1 FY22 operating cash flow 2H FY21 Operating cash flow increased from negative $19.9 million in 2H FY21 to positive $290.8 million in 1H FY22, a $310.7 million improvement, largely due to a substantially smaller increase in working capital ($289.7 million
Slide 25: Capital Expenditure
Capital Expenditure Focused on disciplined capital expenditure Capital Expenditure Total capex of $81.3 million in HY22 was comprised of $61.8 million in Sustained Capex, and $19.5 million 250 in Growth Capex 200 Growth capex includes spend of $5.6 million in Sims Resource Renewal and $4.9 milli
Slide 26: Strategic Progress & Outlook
Strategic Progress & Outlook Alistair Field, Group CEO 26
Slide 27: Business Strategy
Business Strategy Grow core business and leverage synergies to expand into adjacent markets Sims Metal Sims Resource Renewal Sims Lifecycle Sims Energy Sims Municipal Recycling Fortify and grow Utilise waste to create new Grow product stewardship Expand proven business Develop recycling solutions su
Slide 28: Delivered on Strategy in HY22
Delivered on Strategy in HY22 Maintained growth momentum in the core business, continued to build adjacent businesses, and strengthened strategic positioning across the portfolio Continued to build momentum in achieving the FY25 strategic targets Strengthened market position in the Metal and SA
Slide 29: Solidified NAM’s Competitive Advantage
Solidified NAM’s Competitive Advantage Continued to expand footprint in the coastal markets that offer the potential for top tier processing facilities and bulk export optionality Canada1 1 1 1 Acquisition in HY22: 1 3 • 3 Facilities including 1 5 5 1 Shredder 2 4 1 Access to 15 ports 3 1 3 1 6 1 8
Slide 30: SA Recycling Accelerated Growth
SA Recycling Accelerated Growth Strengthened strategic position through four acquisitions in HY22 1 4 Acquisitions in HY22: 1 6 • 35 Facilities including 9 Shredders 2 9 Access to 3 ports 1 1 5 1 2 3 3 36 5 8 1 2 2 8 4 3 18 1 1 3 1 8 Shredders Facilities 4 10 1Shredders and facilities include JVs 30
Slide 31: Sims Resource Renewal
Sims Resource Renewal Construction of Rocklea pilot facility on track; acceleration of Queensland commercial facility underway Queensland Rocklea Pilot Facility Development approval granted by the Brisbane City Council and the Queensland Government in July 2021 Construction of the plant is progr
Slide 32: Sims Lifecycle Services
Sims Lifecycle Services SLS is well positioned to capitalise on the increased redeployment services New contracts closed with Fortune 100 Pre-Supply hyperscalers and enterprises enabled by: Chain Disruptions Full suite service offering Resale / Recycle Units Redeploy Geographic expansion in Ireland
Slide 33: Enhanced SMR Strategic Position
Enhanced SMR Strategic Position Joint Venture to accelerate innovation and expand SMR’s operations into new markets in the US Transaction Strategic Rationale • Announced on 30 December 2021 the sale of • Strong alignment with CLP – a leading circular 50.46% of Sims Municipal Recycling to a group of
Slide 34: Outlook
Outlook First-half strength has continued into the second half, underpinned by strong prices and demand Momentum has, to date, continued into 2H FY22 across Sims Metal and SA Recycling. Intake levels are solid, as non-ferrous commodity prices track higher than the 1H FY22 averages and ferrous pric
Slide 35: Questions & Answers
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Slide 36: Appendix
Appendix 36
Slide 37: Product Segment Volumes
Product Segment Volumes Sales volumes (‘000 tonnes) HY21 HY22 Change Intake volumes (‘000 tonnes) HY21 HY22 Change North America Metal 2,151 2,395 11.3% North America Metal 2,013 2,389 18.7% ANZ Metal 807 799 (1.0%) ANZ Metal 742 808 8.9% UK Metal 706 747 5.8% UK Metal 703 702 - Total Proprietary Vo
Slide 38: Group Profit & Loss
Group Profit & Loss A$m FY17 FY18 FY19 FY20 FY21 HY21 HY22 Change Sales revenue 5,079.4 6,448.0 6,640.0 4,908.5 5,916.3 2,452.0 4,265.0 73.9% Statutory EBITDA 313.5 395.8 358.1 35.7 507.3 177.1 442.0 149.6% Underlying EBITDA 292.4 392.3 363.4 144.9 579.9 155.0 462.3 198.3% Statutory EBIT 201.2 278.6
Slide 39: North America Metal
North America Metal A$m FY17 FY18 FY19 FY20 FY21 HY21 HY22 Change Sales Revenue 1,984.0 2,607.1 2,725.6 2,061.7 2,669.9 1,067.0 1,997.2 87.2% Statutory EBITDA 106.0 121.0 124.8 (16.2) 194.2 61.2 171.3 179.9% Underlying EBITDA 124.4 159.5 162.6 55.0 226.4 70.5 189.7 169.1% Depreciation 45.0 46.9 53.2
Slide 40: Investment in SA Recycling
Investment in SA Recycling A$m FY17 FY18 FY19 FY20 FY21 HY21 HY22 Change Statutory EBIT1 26.3 67.8 41.0 12.1 157.8 24.4 128.7 427.5% Underlying EBIT1 26.3 68.5 35.9 12.1 157.8 24.4 128.7 427.5% Assets 131.9 180.7 211.1 277.5 345.8 265.2 403.3 52.1% Intake Volumes (‘000) 2 2,557 3,477 3,473 3,250 3,8
Slide 41: Australia & New Zealand Metal
Australia & New Zealand Metal A$m FY17 FY18 FY19 FY20 FY21 HY21 HY22 Change Sales Revenue 981.4 1,071.0 1,203.7 924.8 1,098.9 478.3 815.6 70.5% Statutory EBITDA 90.9 121.6 125.6 92.3 147.6 69.0 119.5 73.2% Underlying EBITDA 102.4 126.2 137.9 103.7 156.6 54.3 121.4 123.6% Depreciation 28.2 29.1 31.2
Slide 42: UK Metal
UK Metal A$m FY17 FY18 FY19 FY20 FY21 H1 FY21 H1 FY22 Change Sales Revenue 924.3 1,203.0 1,186.9 869.8 993.3 428.0 744.4 73.9% Statutory EBITDA2 50.5 42.0 19.7 (59.4) 54.2 17.8 38.7 117.4% Underlying EBITDA 54.2 50.5 39.5 (4.3) 71.3 22.6 42.3 87.2% Depreciation 12.0 14.9 18.3 26.8 25.6 12.1 12.9 6.6
Slide 43: Global Trading
Global Trading A$m FY17 FY18 FY19 FY20 FY21 HY21 HY22 Change Sales Revenue 386.6 733.5 690.9 550.8 745.8 284.2 484.3 70.4% Statutory EBITDA1 3.1 19.0 23.3 8.2 21.9 4.1 8.1 97.6% Underlying EBITDA (15.3) (12.3) (14.9) (13.9) (16.4) (7.4) (10.5) 41.9% Depreciation 0.1 0.1 0.2 1.3 1.0 0.5 0.6 20.0% Amo
Slide 44: Sims Lifecycle Services
Sims Lifecycle Services A$m FY17 FY18 FY19 FY20 FY21 HY21 HY22 Change Sales Revenue 726.9 758.4 746.5 408.0 318.9 152.3 166.0 9.0% Statutory EBITDA 30.6 34.5 26.4 9.9 21.2 10.2 12.1 18.6% Underlying EBITDA 36.3 39.7 34.5 28.2 31.1 12.4 14.7 18.5% Depreciation 8.2 8.4 8.5 11.3 9.3 5.6 4.8 (14.3%) Amo
Slide 45: Corporate & Other
Corporate & Other A$m FY17 FY18 FY19 FY20 FY21 HY21 HY22 Change Sales Revenue 76.2 75.0 86.4 93.4 89.5 42.2 57.5 36.3% Statutory EBITDA 6.1 (10.1) (2.7) (11.2) (89.6) (9.6) (36.3) 278.1% Underlying EBITDA (35.9) (39.8) (32.1) (35.9) (46.9) (21.8) (24.0) 10.1% Depreciation 9.5 9.4 10.9 15.6 15.0 7.8
Slide 46: Financial Summary – Group
Financial Summary – Group A$m FY17 FY18 FY19 FY20 FY21 HY21 HY22 Group Results Sales Revenue 5,079.4 6,448.0 6,640.0 4,908.5 5,916.3 2,452.0 4,265.0 Underlying EBITDA 292.4 392.3 363.4 144.9 579.9 155.0 462.3 Underlying EBIT 180.1 275.1 230.3 (57.9) 386.6 56.4 361.7 Underlying NPAT 118.3 188.6 161.9
Slide 47: Financial Summary – Segment
Financial Summary – Segment A$m FY17 FY18 FY19 FY20 FY21 HY21 HY22 Sales Revenue North America Metal 1,984.0 2,607.1 2,725.6 2,061.7 2,669.9 1,067.0 1,997.2 ANZ Metal 981.4 1,071.0 1,203.7 924.8 1,098.9 478.3 815.6 UK Metal 924.3 1,203.0 1,186.9 869.8 993.3 428.0 744.4 Sims Lifecycle Services 726.9
Slide 48: Financial Summary – Segment (cont.)
Financial Summary – Segment (cont.) A$m FY17 FY18 FY19 FY20 FY21 HY21 HY22 Proprietary sales tonnes (‘000)1 North America Metal 4,344 4,865 4,887 4,042 4,318 2,151 2,395 ANZ Metal 1,530 1,585 1,763 1,428 1,537 807 799 UK Metal 1,589 1,691 1,602 1,221 1,370 706 747 Total 7,463 8,141 8,252 6,691 7,225
Slide 49: Financial Summary – Product
Financial Summary – Product A$m FY17 FY18 FY19 FY20 FY21 HY21 HY22 Sales tonnes (‘000) Ferrous Trading 7,009 7,709 7,817 6,301 6,870 3,502 3,724 Non-Ferrous 454 432 435 390 355 162 217 Brokerage 1,237 1,715 1,551 1,463 1,368 646 744 Total 8,700 9,856 9,803 8,154 8,593 4,310 4,685 Sales Revenue Ferro
Slide 50: Income Tax Expense – HY22
Income Tax Expense – HY22 A$m Profit Before Tax Income Tax Expense Effective Tax rate Statutory Result 332.3 79.1 23.8% Significant Items 20.3 4.2 20.7% Normalised Results 352.6 83.3 23.6% 50
Slide 51: Significant Items
Significant Items HY21 Pre-Tax HY21 After-Tax FY22 Pre-Tax FY22 After-Tax A$m Total Total Total Total ERP software implementation costs1 - - 23.7 17.9 JobKeeper grant income, net of amount voluntarily returned (11.8) (8.3) - - Non-recurring gain on property sale (6.6) (4.7) (6.2) (4.6) Restructuring