Slide 1: Financial Results
Financial Results Half year ended 31 December 2020 16 February 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, 16 February 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 r
Slide 3: Agenda
Agenda Results Overview Alistair Field, Group CEO Financial Results Stephen Mikkelsen, Group CFO Strategic Progress & Outlook Alistair Field, Group CEO 360-degree virtual engagement room enables community participation in an accessible and flexible manner for proposed Campbellfield Resource Renewal
Slide 4: 1H FY21 Themes
1H FY21 Themes Significantly better results, higher prices, and substantial progress in strategic growth plans Price recovery driven by limited supply and increased demand in many industrial sectors ▪ Market prices improved throughout the period, particularly during November and December 2020; howev
Slide 5: Summary of Financial Outcomes
Summary of Financial Outcomes All profitability metrics showed strong improvement Sales Revenue Sales Volumes $2,452.0 million 4.310 million tonnes 1H FY20 1H 1H 4.30 FY20 million | 2H 4.25 million $2,709.6 million -9.5% 4.474 million tonnes -3.7% Underlying1 EBITDA Net Cash Balance $155.0 million $
Slide 6: Employee Health & Safety
Employee Health & Safety Lowest ever recorded number of injuries All incidents significantly reduced ▪ Safety remains the most important priority for all 80 stakeholders 60 ▪ Actual recordable injuries decreased 12% and lost 40 time injuries decreased 11% 20 ▪ Decrease in hours worked by office base
Slide 7: Sustainability
Sustainability Sustainability goals drive economic, environmental and social value OPERATE RESPONSIBLY CLOSE THE LOOP 1 Foster a safe work environment 5 Become carbon neutral by 2042 and achieve net zero by 2050 1.1 Total Recordable Injury Frequency Rate (TRIFR) ≤ 1 5.1 Reduce Scope 1 and 2 emission
Slide 8: Group Financial Performance
Group Financial Performance A$m 1H FY20 1H FY21 % Chg ▪ Strong earnings growth due to: Sales revenue 2,709.6 2,452.0 -9.5% ▪ Lower operating costs, which are on track to Statutory EBITDA 30.5 177.1 480.7% achieve annualised cost savings in excess of $70 Underlying EBITDA1 74.9 155.0 106.9% million i
Slide 9: Markets
Markets Meaningful price improvement in November and December 2020 but slight softening early 2021 Ferrous – Improved pricing since April 2020 lows Intake volumes remain at ~85% of the FY19 average Proprietary intake volumes (‘000 tonnes) 500 700 450 600 90% Turkey HMS 80:20 Price 500 (US$ / tonne)
Slide 10: Financial Results
Financial Results Stephen Mikkelsen, Group CFO 10
Slide 11: Business Segment Financial Performance
Business Segment Financial Performance Strong earnings growth across the metal businesses Sales volumes Underlying EBIT1 (A$m) 1H FY20 1H FY21 Chg % (‘000 tonnes) 1H FY20 1H FY21 Chg % North America Metal2 2,275 2,151 -5.5% North America Metal 0.1 24.6 NMF 2 ANZ Metal 806 807 0.1% UK Metal2 662 706
Slide 12: North America Metal
North America Metal Significantly improved earnings due to lower operating costs and improved margins A$m 1H FY20 1H FY21 % Chg ▪ Underlying EBIT of $24.6 million, up $25.9 million over prior corresponding period on 1 Underlying EBIT 0.1 24.6 NMF Underlying EBIT (constant currency) 0.1 26.0 NMF cons
Slide 13: Australia & New Zealand Metal
Australia & New Zealand Metal Improved earnings supported by higher non-ferrous margins and cost reductions A$m 1H FY20 1H FY21 % Chg ▪ Underlying EBIT was $27.6 million, up 23.8% Underlying EBIT 1 22.3 27.6 23.8% over prior corresponding period due to: Proprietary Sales Volumes (‘000 tonnes) 806 80
Slide 14: UK Metal
UK Metal Lower operating costs and higher volumes and margins delivered significant earnings improvement A$m 1H FY20 1H FY21 % Chg ▪ Underlying EBIT of $10.5 million, up $42.1 Underlying EBIT 1 (28.4) 10.5 137.0% million over prior corresponding period on Underlying EBIT (constant currency) (28.4) 1
Slide 15: Sims Lifecycle Services
Sims Lifecycle Services Commercial interest remains robust with a focus on innovation to re-use more parts A$m 1H FY20 1H FY21 % Chg ▪ Underlying EBIT for remaining businesses was $6.8 million, an increase of $6.0 million Underlying EBIT1 14.8 6.8 -54.1% Underlying EBIT from remaining over the prior
Slide 16: SA Recycling
SA Recycling Significant improvement due to increased volumes and higher margins A$m 1H FY20 1H FY21 % Chg ▪ Underlying EBIT was $24.4 million, up $25.7 Underlying EBIT (50% share) 1 - 24.4 NMF million over prior corresponding period on Underlying EBIT (constant currency) - 25.7 NMF constant currenc
Slide 17: Global Trading
Global Trading Lower brokerage volumes reflect reduced export volumes from SA Recycling A$m 1H FY20 1H FY21 % Chg ▪ Underlying EBIT represents external and Brokerage Gross Margin 5.9 5.5 -6.8% SA Recycling brokerage less the costs of Operating Costs (12.9) (13.4) -3.9% running the global trading ope
Slide 18: Corporate & Other
Corporate & Other Transparency of costs for growth businesses and flat Corporate costs at constant currency Corporate (A$m) 1H FY20 1H FY21 % Chg Corporate 1 Underlying EBIT (31.3) (30.0) 4.2% ▪ Corporate costs flat over prior Underlying EBIT (constant currency) (31.3) (31.1) 0.6% corresponding peri
Slide 19: Operating Costs
Operating Costs On track for $75 million of predominantly fixed cost savings in FY21 compared to FY19 1H FY21 Predominantly Fixed Costs1,2 ▪ Achieved FY21 annualised predominantly fixed cost savings of $75 million compared to estimated $70 million savings in FY21 vs FY19 ▪ Note: $20 million of these
Slide 20: Net Cash Position
Net Cash Position Strong improvement in net cash position A$m 1H FY21 ▪ Solid balance strength with net cash of Opening Net Cash 110.4 $165.4 million Net profit 53.0 Depreciation & amortisation 98.6 ▪ Working capital contributed $20.9 million Joint venture non-cash income, net of dividends (22.6) to
Slide 21: Capital Expenditure
Capital Expenditure Strong cash position enables strategic growth initiatives Capital Expenditure ▪ Forecast capex of $140 million in 2H FY21 Forecast growth capex of which $80 million is growth capex 250 is largely ERP, Minto including the Alumisource acquisition land purchase and Sims Resource Ren
Slide 22: Strategic Progress & Outlook
Strategic Progress & Outlook Alistair Field, Group CEO 22
Slide 23: Global ERP Implementation
Global ERP Implementation Achieved key milestones for sales, outbound logistics and human resources Business area Milestones Achieved Status Update Successful roll out in: ▪ Programme remains on budget Sales and outbound logistics ▪ Global Non-Ferrous Trading ▪ Global inability to travel has ▪ North
Slide 24: Strategic growth: Ferrous and non-ferrous
Strategic growth: Ferrous and non-ferrous Identified and executed strategic growth opportunities in favourable geographies Growing in Sydney with Minto site acquisition Alumisource Corporation acquisition ▪ Establish presence in Sydney’s rapidly growing ▪ Leading aluminium processor with strong Sout
Slide 25: Sims Resource Renewal
Sims Resource Renewal Convert 1 million tonnes of ASR to quality products each year by 2030 Partner for Change: Community engagement Rocklea Pilot Facility ▪ Strong positive community and stakeholder ▪ Submitted development application engagement via virtual events and face to face ▪ Anticipating st
Slide 26: Conclusion & Outlook
Conclusion & Outlook 1H FY21 result positions Sims well to implement strategic growth initiatives 1H FY21 ▪ Significantly improved financial performance including higher margins and lower operating costs, which are on track to achieve annualised cost savings in excess of $70 million in FY21 compared
Slide 27: Questions & Answers
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Slide 28: Appendix
Appendix SS O) 28
Slide 29: Product Segment Volumes
Product Segment Volumes Sales volumes (‘000 tonnes) 1H FY20 1H FY21 Chg % Intake volumes (‘000 tonnes) 1H FY20 1H FY21 Chg % North America Metal 2,275 2,151 -5.5% North America Metal 2,239 2,013 -10.1% ANZ Metal 806 807 0.1% ANZ Metal 809 742 -8.3% UK Metal 662 706 6.6% UK Metal 661 703 6.4% Total P
Slide 30: Group Profit & Loss
Group Profit & Loss A$m FY16 FY17 FY18 FY19 FY20 1H FY20 1H FY21 Chg % Sales revenue 4,651.7 5,079.4 6,448.0 6,640.0 4,908.5 2,709.6 2,452.0 -9.5% Statutory EBITDA 83.0 313.5 395.8 358.1 35.7 30.5 177.1 480.7% Underlying EBITDA 190.4 292.4 392.3 363.4 144.9 74.9 155.0 106.9% Statutory EBIT (215.5) 2
Slide 31: North America Metal
North America Metal A$m FY16 FY17 FY18 FY19 FY20 1H FY20 1H FY21 Chg % Sales Revenue 1,942.5 1,984.0 2,607.1 2,725.6 2,061.7 1,133.0 1,067.0 -5.8% Statutory EBITDA 35.2 106.0 121.0 124.8 (16.2) 12.4 61.2 393.5% Underlying EBITDA 84.8 124.4 159.5 162.6 55.0 43.4 70.5 62.4% Depreciation 51.9 45.0 46.9
Slide 32: Investment in SA Recycling
Investment in SA Recycling A$m FY16 FY17 FY18 FY19 FY20 1H FY20 1H FY21 Chg % Statutory EBIT1 (120.6) 26.3 67.8 41.0 12.1 - 24.4 NMF Underlying EBIT1 (1.5) 26.3 68.5 35.9 12.1 - 24.4 NMF Assets 126.8 131.9 180.7 211.1 277.5 207.4 265.2 27.9% 2 Intake Volumes (000's) 2,005 2,557 3,477 3,473 3,250 1,6
Slide 33: Australia & New Zealand Metal
Australia & New Zealand Metal A$m FY16 FY17 FY18 FY19 FY20 1H FY20 1H FY21 Chg % Sales Revenue 743.6 981.4 1,071.0 1,203.7 924.8 503.5 478.3 -5.0% Statutory EBITDA 58.0 90.9 121.6 125.6 92.3 42.3 69.0 63.1% Underlying EBITDA 75.6 102.4 126.2 137.9 103.7 47.8 54.3 13.6% Depreciation 26.0 28.2 29.1 31
Slide 34: UK Metal
UK Metal A$m FY16 FY17 FY18 FY19 FY20 1H FY20 1H FY21 Chg % Sales Revenue 759.1 924.3 1,203.0 1,186.9 869.8 487.6 428.0 -12.2% Statutory EBITDA (15.7) 50.5 42.0 19.7 (59.4) (46.6) 17.8 138.2% Underlying EBITDA 43.8 54.2 50.5 39.5 (4.3) (13.5) 22.6 267.4% Depreciation 13.8 12.0 14.9 18.3 26.8 14.5 12
Slide 35: Global Trading
Global Trading A$m FY16 FY17 FY18 FY19 FY20 1H FY20 1H FY21 Chg % Sales Revenue 352.6 386.6 733.5 690.9 550.8 293.2 284.2 -3.1% Statutory EBITDA 3.2 3.1 19.0 23.3 8.2 3.0 4.1 36.7% Underlying EBITDA (10.5) (15.3) (12.3) (14.9) (13.9) (6.4) (7.4) -15.6% Depreciation 0.1 0.1 0.1 0.2 1.3 0.6 0.5 16.7%
Slide 36: Sims Lifecycle Services
Sims Lifecycle Services A$m FY16 FY17 FY18 FY19 FY20 1H FY20 1H FY21 Chg % Sales Revenue 792.7 726.9 758.4 746.5 408.0 247.9 152.3 -38.6% Statutory EBITDA (2.6) 30.6 34.5 26.4 9.9 13.8 10.2 -26.1% Underlying EBITDA 23.3 36.3 39.7 34.5 28.2 21.1 12.4 -41.2% Depreciation 11.2 8.2 8.4 8.5 11.3 6.3 5.6
Slide 37: Corporate & Other
Corporate & Other A$m FY16 FY17 FY18 FY19 FY20 1H FY20 1H FY21 Chg % Sales Revenue 61.2 76.2 75.0 86.4 93.4 44.4 42.2 -5.0% Statutory EBITDA 6.4 6.1 (10.1) (2.7) (11.2) 5.6 (9.6) NMF Underlying EBITDA (25.1) (35.9) (39.8) (32.1) (35.9) (17.5) (21.8) -24.6% Depreciation 10.4 9.5 9.4 10.9 15.6 7.5 7.8
Slide 38: Financial Summary – Group
Financial Summary – Group A$m FY16 FY17 FY18 FY19 FY20 1H FY20 1H FY21 Group Results Sales Revenue 4,651.7 5,079.4 6,448.0 6,640.0 4,908.5 2,709.6 2,452.0 Underlying EBITDA 190.4 292.4 392.3 363.4 144.9 74.9 155.0 Underlying EBIT 64.0 180.1 275.1 230.3 (57.9) (23.2) 56.4 Underlying NPAT 42.9 118.3 1
Slide 39: Financial Summary – Segment
Financial Summary – Segment A$m FY16 FY17 FY18 FY19 FY20 1H FY20 1H FY21 Sales Revenue North America Metal 1,942.5 1,984.0 2,607.1 2,725.6 2,061.7 1,133.0 1,067.0 ANZ Metal 743.6 981.4 1,071.0 1,203.7 924.8 503.5 478.3 UK Metal 759.1 924.3 1,203.0 1,186.9 869.8 487.6 428.0 Sims Lifecycle Services 79
Slide 40: Financial Summary – Segment (cont.)
Financial Summary – Segment (cont.) A$m FY16 FY17 FY18 FY19 FY20 1H FY20 1H FY21 Proprietary sales tonnes (‘000)1 North America Metal 4,517 4,344 4,865 4,887 4,042 2,275 2,151 ANZ Metal 1,377 1,530 1,585 1,763 1,428 806 807 UK Metal 1,350 1,589 1,691 1,602 1,221 662 706 Total 7,244 7,463 8,141 8,252
Slide 41: Financial Summary – Product
Financial Summary – Product A$m FY16 FY17 FY18 FY19 FY20 1H FY20 1H FY21 Sales tonnes (‘000) Ferrous Trading 6,768 7,009 7,709 7,817 6,301 3,521 3,502 Non Ferrous 476 454 432 435 390 222 162 Brokerage 1,307 1,237 1,715 1,551 1,463 731 646 Total 8,551 8,700 9,856 9,803 8,154 4,474 4,310 Sales Revenue
Slide 42: Income Tax Expense – 1H FY21
Income Tax Expense – 1H FY21 A$m Profit Before Tax Income Tax Expense Effective Tax % Statutory Result 73.2 20.2 27.6% Significant Items (22.1) (6.4) 29.0% Normalised Results 51.1 13.8 27.0% 42
Slide 43: Lease Standard Impact – 1H FY21
Lease Standard Impact – 1H FY21 A$m EBIT EBITDA Underlying Result 56.4 155.0 Lease Depreciation N/A 37.7 Lease Interest Expense 3.7 3.7 Underlying Result Excluding Lease Standard Impact 52.7 113.6 43
Slide 44: Significant items
Significant items 1H FY20 Pre-Tax 1H FY20 After-Tax 1H FY21 Pre-Tax 1H FY21 After-Tax A$m Total Total Total Total Legacy brand write offs 14.6 11.0 - - Other intangible asset impairments 13.0 9.4 - - JobKeeper grant income - - (11.8) (8.3) Non-recurring gain on asset disposition - - (6.6) (4.7) Rest