Slide 1: Credit Suisse Roadshow
2 December 2021 Credit Suisse Roadshow
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, 2 December 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 re
Slide 3: Speakers
Speakers Alistair Field Elise Gautier Stephen Mikkelsen Group CEO Group Chief Risk & Group CFO Compliance Officer 3
Slide 4: Today's Agenda
TODAY’S AGENDA Overview of Sims Limited Structural Market Tailwinds Alistair Field Strategy Sustainability Elise Gautier Finance Stephen Mikkelsen Alistair Field Q&A Elise Gautier Stephen Mikkelsen 4
Slide 5: Overview of Sims Limited
Overview of Sims Limited 5
Slide 6: Sims Limited: the group at a glance
Sims Limited The group at glance • Publicly listed Australian Company (ASX: SGM; OTC: SMSMY) • Market capitalisation approximately A$2.8B 2 Dec 2021 • World’s largest public recycler of metals by volume • Total sales volumes of 8,593 million tonnes • FY21 revenue A$5,916.3 million • FY21 underlying
Slide 7: Integrated business model
Integrated business model We provide solutions that solve multi-decade challenges related to decarbonisation and circular economy Metal Sims Lifecycle Municipal Resource Renewable Recycling Services Recycling Renewal Energy Buys, processes and sells Leads urban recycling in Plans in place to Sims ow
Slide 8: Global coverage
Global coverage UK Metal 28 Joint Venture facilities – North America & Australia 4 124 Australia & New Zealand Metal 48 8 North America Metal 50 10 SA Recycling 151 Facilities Sims Lifecycle Shredders Services 18 1 It doesn’t include PSC’s shredders 8
Slide 9: FY21 Segment overview
FY21 Segment overview FY21 % of Group EBIT1 North America Metal 35 ANZ Metal 27 UK Metal 12 Sims Lifecycle Services 6 SA Recycling 41 Global Trading (5) Corporate & Other (16) Total 100% 1 Underlying earnings excludes significant non-recurring items, the impact of non-qualifying hedges, and internal
Slide 10: Metal recycling process
Metal recycling process FERROUS NON-FERROUS We buy ferrous metal (obsolete We buy non-ferrous metal from and new production off cuts) from peddlers, metal dealers metal dealers; industrial, mining, manufacturers (production waste management, demolition offcuts), generators of electricity, and auto w
Slide 11: Metal – FY21 Volumes
Metal – FY21 Volumes SALES VOLUMES INTAKE VOLUMES By Segment By Segment North America Metal North America Metal 16% 16% ANZ Metal ANZ Metal 16% 16% UK Metal 51% UK Metal 50% 17% Global Trading & Other 18% Global Trading & Other Brokerage Brokerage Non-Ferrous vs Ferrous Domestic vs Export 4% 16% Fer
Slide 12: Structural Market Tailwinds
Structural Market Tailwinds 12
Slide 13: Structural market tailwinds
Structural market tailwinds Driven by decarbonisation commitments across countries and companies COMPANIES1 GOVERNMENT – NET ZERO TARGET STATUS2 Percentage of total global GHG emissions across all nations “At least one fifth (21%) of the 43% world’s 2,000 largest public companies, representing sales
Slide 14: Structural market tailwinds
Structural market tailwinds A circular economy is key to achieve net-zero targets Moving to renewables can address 55 percent of global GHG emissions to meet the UN climate goals, it will be essential to address the remaining 45 percent that comes from manufacturing everyday products Ellen Macarthur
Slide 15: Structural market tailwinds
Structural market tailwinds Significant opportunity in Ferrous 7% of global Producing new steel from ferrous scrap An electric arc furnace can be charged greenhouse emissions are requires60% less energy and with 100% Steel scrap. A basic produced by the global reduces CO2 emissions by 58% oxygen fur
Slide 16: Structural market tailwinds
Structural market tailwinds Emerging industries are expected to drive demand for non-ferrous metal Electric Vehicles1 Renewable Energy1 Annual copper consumption in EVs Aluminium demand in the solar energy and ICE vehicles sector under base case, AET-2 and AET-1.5 scenarios • Annual aluminium demand
Slide 17: Structural market tailwinds
Structural market tailwinds There is rising demand for repurposing units due to significant carbon reduction benefits and growth of the cloud industry ▪ In FY21 there were estimated to be 85 million units suitable for repurposing in the cloud1 ▪ Enterprise data storage is expected to grow 250% over
Slide 18: Markets
Markets Large price increases in FY21 vs FY20 and unprecedented size of global stimulus package Ferrous1 – Improved pricing since April 2020 lows Government fiscal spending COVID-19 vs GFC2 (in % of GDP)3 600 30.0% Turkey HMS 80:20 Price 25.4% 500 25.0% (US$ / tonne) 400 20.0% 16.3% 16.2% 16.5% 300
Slide 19: Sims is poised to capitalise on market tailwinds
Sims is poised to capitalise on market tailwinds 19
Slide 20: Well-positioned towards macro trends
Well-positioned towards macro trends Sims is a unique investment in global decarbonisation Engineering and 104 years of technical Global operations with technology to create expertise and domestic and export better quality of relationships in recycling transportation & logistics products and solve s
Slide 21: Clear pathway to deliver on FY25 targets
Clear pathway to deliver on FY25 targets Guided by our purpose Rooted in our Strategy FY25 Business Targets Create a world without Metal Recycling waste to preserve our planet Expand metal volumes in Ferrous – 9.6 million tonnes favourable geographies Grow U.S. non-ferrous business Non-ferrous – 300
Slide 22: Sims has technology to deliver enhanced metal yields and quality
Sims has technology to deliver enhanced metal yields and quality • The benefits of supplying high-quality products are: • Price premium o Sims produces 99% metallic zorba, furnace ready high-grade copper and furnace ready twitch, red/grey heavy • Reduce further our customers’ carbon footprint • Acqu
Slide 23: Sustainability
Sustainability Elise Gautier 23
Slide 24: Our ESG journey
Our ESG journey Published first First disclosure Sims Purpose Reconciliation Awarded Terra to the CDP articulated Action Plan Carta Seal 2005 2008 2013 2018 2020 2021 Named Corporate First standalone Named First standalone Knights Global Top 100 Sustainability executive with TCFD report Most Sustain
Slide 25: Our achievements
Our achievements 2021 - named Top Selected in world-first 100 Global Most ACSI assessed Sims investment fund that Sustainable Terra Carta Seal for Received maximum Limited as a ‘Leader’ applies Māori values Corporations for the creation of AAA rating in ESG reporting and principles in seventh time s
Slide 26: Sustainability Framework
Sustainability Framework 26
Slide 27: Sustainability Framework
Sustainability Framework 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
Slide 28: Sustainability highlights
Sustainability highlights 2.1m 1.2 TRIFR % renewable 19 electricity used cloud storage units Lowest total recordable across our facilities1 repurposed injury frequency rate (TRIFR) to date >650k of the executive 4 out of 9 Board Our Performance The Sims Purpose leadership team members are tonnes of
Slide 29: Finance
Finance Stephen Mikkelsen, Group CFO 29
Slide 30: Summary of FY21 Financial outcomes
Summary of FY21 Financial outcomes All profitability metrics showed major improvement Sales Revenue Sales Volumes $5,916.3 million 8.593 million tonnes FY20 1H 4.30 million | 2H 4.25 million FY20 $4,908.5 million 20.5% 8.154 million tonnes 5.4% Underlying1 EBITDA Net Cash Balance $579.9 million $8.3
Slide 31: Operating costs
Operating costs Achieved $75 million of predominantly fixed cost savings in FY21 compared to FY19 FY21 Predominantly Fixed Costs1,2 ▪ Delivered $75 million in predominantly fixed cost savings in FY21 vs FY19 ▪ Note: $20 million of these further cost reductions require implementation of the ERP syste
Slide 32: Finance overview
Finance overview 250 CAPITAL EXPENDITURE FY21 200 150 Sims Resource • Acquisition of Alumisource A$ million Renewal Alumisource 100 acquisition • Announced share buyback of Growth Capex up to $150 million1 50 Sustaining Capex 0 FY17 FY18 FY19 FY20 FY21 FY22F RETURN ON PRODUCTIVE ASSETS DIVIDENDS DEC
Slide 33: 1H FY22 Trading update
1H 22 Trading update Earnings momentum continued into 1H FY22 driven by strong trading margins across all major segments Group ▪ Forecasted underlying EBIT of $310 to $350 million in 1H FY22 driven by North America businesses, representing approximately a sixfold increase from the prior comparable p
Slide 34: Trading update
Trading update North America Metal ▪ Delivered a very strong trading margin for 1Q FY22 driven by a strong trading margin per tonne and good sales volumes ▪ Intake volumes were up on both the prior comparable period and the FY19 average Australia & New Zealand Metal ▪ Delivered a strong trading marg
Slide 35: Macro trends
Macro trends Positive trends present a multi-year structural-growth opportunity for Sims ▪ Ongoing or announced stimulus spending will increase demand for steel intensive infrastructure spending and drive retail consumption. Post consumption scrap will also increase. Positive for metal recycling (bo
Slide 36: Q&A
Q&A 36
Slide 37: Appendix
Appendix SS O) 37
Slide 38: Employee Health & Safety
Employee Health & Safety Lowest ever recorded number of injuries, despite adverse changing conditions in FY21 Actual incidents significantly reduced year over year ▪ Proactive lead indicator programs drove significant safety improvement, including 140 120 ▪ Lowest number of critical risk incidents 1
Slide 39: Sustainability
Sustainability We are pleased with our progress across each of the pillars, despite COVID-19 disruption Sims’ Sustainability Pillars FY21 Update ▪ Executed the Safety Risk Incident Operate Responsibly: Foundation of a sustainable company Programme ▪ Implemented control measures to prevent We commit
Slide 40: Group Financial Performance
Group Financial Performance ▪ Strong earnings growth due to: A$m FY20 FY21 % Chg ▪ Higher sales revenue and volumes Sales revenue 4,908.5 5,916.3 20.5% ▪ Lower operating costs with cost savings of Statutory EBITDA 35.7 507.3 1,321.0% $75 million in FY21 compared to FY19; and Underlying EBITDA1 144.9
Slide 41: On track to deliver on FY25 targets
On track to deliver on FY25 targets 41