Sims Ltd. · ASX:SGM

Sims — Sims Metal Management — H1 FY2012 Earnings Presentation

35 slides from Sims's earnings presentation, Feb 17, 2012

  1. Slide 1: Results Presentation: Fiscal 2012 Half Year Ended 31 December 2011

    For personal use only Results Presentation Fiscal 2012 Half Year Ended 31 December 2011 Daniel W. Dienst Group Chief Executive Officer Robert C. Larry Group Chief Financial Officer

  2. Slide 2: Disclaimer

    Disclaimer This presentation may contain forward looking statements, including statements about Sims Metal Management’s financial For personal use only condition, results of operations, earnings outlook and prospects. Forward looking statements are typically identified by words such as “plan,” “beli

  3. Slide 3: Key Points for Half Year Ended 31 December 2011

    For personal use only Key Points for Half Year Ended 31 December 2011 Daniel W. Dienst Group Chief Executive Officer

  4. Slide 4: Group Safety Frequency Rates

    Group Safety Frequency Rates Safety remains a critical focus for SimsMM. For personal use only 30 25 Frequency Rates 20 15 LTI FR MTI FR 10 Here’s Where It 5 Gets 0 Tougher! 2008 2009 2010 2011 YTD 2012 Revolutionary changes have taken hold, but more work remains on our journey to becoming ‘World Cl

  5. Slide 5: Underlying Results in a Challenging Environment

    Underlying Results in a Challenging Environment For personal use only • Sales Revenue of $4.6 billion in HY 2012 vs $3.9 billion in HY 2011, a 16% increase • Underlying EBITDA of $141 million in HY 2012 vs $138 million in HY 2011, a 2.3% increase • Underlying EBIT of $77 million in HY 2012 vs $71 mi

  6. Slide 6: Statutory Results in a Challenging Environment

    Statutory Results in a Challenging Environment For personal use only • Sales revenue of $4.6 billion • EBITDA of $69 million • EBIT of ($553 million) • Net Loss After Tax of ($557 million) • Diluted EPS of (270.0 cents) • Dividend of 10 cents per share (represents a payout ratio of 55 percent of net

  7. Slide 7: From Challenges to Opportunities and Evolution

    From Challenges to Opportunities and Evolution… Across all Businesses and Geographies For personal use only • Group Level  Execute on external growth opportunities across all geographies, business lines and new markets.  Invest in the efficiencies of our processing facilities.  Be the recycling i

  8. Slide 8: North American Metals (NAM)

    North American Metals (NAM) For personal use only • After years of robust growth and acquisitions, NAM has faced an evolving set of challenges since the GFC in 2008-2009.  Immediate GFC Effect: LOW ARISINGS + HIGH COST BASE = NEGATIVE RETURN MODEL  Post-GFC Effect: CONTINUED LOW ARISINGS + IMPROVE

  9. Slide 9: North American Metals (cont.)

    North American Metals (cont.) For personal use only • Current Action Plan  Flatten management structure further.  Targeted decentralization, resulting in more agile and quicker ‘microregion’ decision making with strict P&L and CCE responsibility.  Rigorous use of analytics to empower local manage

  10. Slide 10: Sims Recycling Solutions (SRS)

    Sims Recycling Solutions (SRS) • SRS operates in extremely diverse markets globally, ranging from advanced to developing For personal use only electronic recycling markets.  SRS has developed a proven system of analysis for determining correct time for market entry and technology implementation bas

  11. Slide 11: Australasia

    Australasia For personal use only • SimsMM is committed to continued investment in this ‘best of breed’, high returning asset base.  Management has developed a business strategy built, in part, on synergies with other business lines and regions. • Current Action Plan  Improve recovery yields at sh

  12. Slide 12: New Markets — Go to the Scrap

    New Markets — Go to the Scrap SimsMM continues to evaluate markets around the world that will be new generators of industrial For personal use only • and post-consumer recyclables.  Efforts have been heavily concentrated in the People’s Republic of China (PRC) and Hong Kong (a SAR).  The PRC, toge

  13. Slide 13: CTG Investment Summary: The First Leg of SimsMM's PRC Strategy

    CTG Investment Summary: The First Leg of SimsMM’s PRC Strategy The investment in (CTG) provides the following: For personal use only  The proverbial ‘Win…Win’.  Upside exposure in a young, publicly listed company with immense growth potential, which shares SimsMM’s core values of growth, safety an

  14. Slide 14: Group Financial Performance

    For personal use only Group Financial Performance Robert C. Larry Group Chief Financial Officer

  15. Slide 15: Group Financial Performance

    Group Financial Performance HY 2012 HY 2011 Change (%) For personal use only Sales Revenue ($m) 4,583.9 3,950.9 16.0 EBITDA ($m) 68.5 148.9 (54.0) Underlying EBITDA ($m)* 141.1 137.9 2.3 Goodwill Impairment ($m) 614.3 - - Depreciation ($m) 51.4 51.7 (0.6) Amortisation ($m) 12.9 14.8 (12.8) EBIT ($m)

  16. Slide 16: Group Balance Sheet

    Group Balance Sheet For personal use only As of 31 As of 30 June $m Change ($) Change (%) December 2011 2011 Current Assets 1,668.7 1,766.5 (97.8) (5.5) Non-current Assets 1,955.9 2,413.3 (457.4) (19.0) Total Assets 3,624.6 4,179.8 (555.2) (13.3) Current Liabilities 637.9 823.3 (185.4) (22.5) Non-cu

  17. Slide 17: Non-Cash Goodwill Impairment

    Non-Cash Goodwill Impairment For personal use only The Company recorded against HY 2012 results a $614 million ($594 million after-tax) non-cash charge due to a write-down in the carrying value of goodwill related to acquisitions and joint ventures made and accounted for prior to the end of Fiscal Y

  18. Slide 18: Regional Operating Statistics and Financial Results

    For personal use only Regional Operating Statistics and Financial Results Robert C. Larry Group Chief Financial Officer

  19. Slide 19: Sales Revenue by Region

    Sales Revenue by Region For personal use only HY 2012 HY 2011 13.9% Australasia 17.6% 17.2% 19.7% North America Europe 65.2% 66.4% Change $m HY 2012 HY 2011 (%) Australasia 639.2 679.4 (5.9) North America 3,044.1 2,575.4 18.2 Europe 900.6 696.1 29.4 Total $ 4,583.9 $ 3,950.9 16.0 19

  20. Slide 20: Sales Revenue by Product

    Sales Revenue by Product For personal use only HY 2012 HY 2011 10.8% Ferrous Trading 9.9% 1.4% 2.5% Non Ferrous Shred Recovery 0.4% 0.6% Ferrous Brokerage 47.9% 48.4% 17.9% Non Ferrous Trading 19.6% Non Ferrous Brokerage Manufacturing/JVs Recycling Solutions 17.4% 14.5% 4.2% 4.5% $m HY 2012 HY 2011

  21. Slide 21: EBIT by Region

    EBIT by Region $50 41.8 37.9 35.7 For personal use only $40 34.5 25.2 ($’s in millions) $30 $20 $10 HY 2012 -1.7 -12.9 HY 2011 $0 -1.5 -0.2 -$10 -$20 -14.8 Australiasia North America Europe Corporate Amortisation of intangibles Change Atypical items in HY2012 HY 2012 HY 2011 $m (%) other than goodwi

  22. Slide 22: EBIT by Product (pre-goodwill impairment)

    EBIT by Product (pre-goodwill impairment) 54.1 $60 53.7 50.0 51.4 For personal use only $50 ($’s in millions) $40 28.9 $30 23.1 HY 2012 $20 10.8 $10 6.1 5.8 HY 2011 0.6 1.0 -5.0 $0 -$10 Change $m HY 2012 HY 2011 (%) Ferrous Trading (incl. NFSR) 54.1 53.7 0.7 Ferrous Brokerage 6.1 10.8 (43.5) Non Fer

  23. Slide 23: Intake Volumes by Region

    Intake Volumes by Region For personal use only HY 2012 HY 2011 12.5% 10.3% 12.9% 11.7% Australiasia North America Europe 76.8% 75.8% Change * Intake volume growth in Europe in HY 2012 Total Tonnes (‘000’s) HY 2012 HY 2011 (%) is due in part to Dunn Brothers acquisition in Australasia 907 855 6.1 May

  24. Slide 24: Intake Volumes by Product

    Intake Volumes by Product For personal use only HY 2012 HY 2011 3.8% 0.5% Ferrous Shredded (incl. NFSR) 4.2% 0.3% Other Processed 36.4% Ferrous Ferrous Brokerage 40.5% 25.5% 20.9% Non Ferrous Trading/Brokerage Other 33.8% 34.1% Change * Ferrous brokerage tonnes includes sales Total Tonnes (‘000’s) H

  25. Slide 25: Sales Volume by Region

    Sales Volume by Region For personal use only HY 2012 HY 2011 11.3% 12.0% 10.7% 13.6% Australiasia North America Europe 76.7% 75.7% HY HY Change Total Tonnes (‘000’s) 2012 2011 (%) Australasia 855 890 (3.9) North America 5,488 4,940 11.1 Europe 808 700 15.4 Total 7,151 6,530 9.5 25

  26. Slide 26: Sales Volume by Product

    Sales Volume by Product For personal use only HY 2012 HY 2011 4.0% 0.4% Ferrous Shredded (inc. NFSR) 4.3% 0.3% Other Processed Ferrous 37.3% Ferrous Brokerage 25.1% 21.5% 40.7% Non Ferrous Trading/Brokerage Other 33.2% 33.2% Change * Ferrous brokerage tonnes includes sales Total Tonnes (‘000’s) HY 2

  27. Slide 27: North America Results

    North America Results For personal use only HY 2012 HY 2011 Change (%) Sales Revenue ($m) $ 3,044.1 $ 2,575.4 18.2 EBITDA ($m)* $ 24.9 $ 65.2 (61.8) Underlying EBITDA ($m) $ 41.3 $ 65.2 (36.7) Depreciation ($m) (26.4) (29.5) 10.5 EBITA ($m) $ (1.5) $ 35.7 (104.2) Underlying EBITA ($m) $ 14.9 $ 35.7

  28. Slide 28: Australasia Results

    Australasia Results For personal use only HY 2012 HY 2011 Change (%) Sales Revenue ($m) $ 639.2 $ 679.4 (5.9) EBITDA ($m) $ 53.7 $ 35.7 50.4 Underlying EBITDA ($m) $ 55.4 $ 35.7 55.2 Depreciation ($m) (11.9) (10.5) (13.3) EBITA ($m) $ 41.8 $ 25.2 65.9 Underlying EBITA ($m) $ 43.5 $ 25.2 72.6 Goodwil

  29. Slide 29: Europe Results

    Europe Results For personal use only HY 2012 HY 2011 Change (%) Sales Revenue ($m) $ 900.6 $ 696.1 29.4 EBITDA ($m) $ 47.4 $ 49.3 (3.9) Underlying EBITDA ($m) $ 44.4 $ 49.3 (9.9) Depreciation ($m) (12.9) (11.4) (13.2) EBITA ($m) $ 34.5 $ 37.9 (9.0) Underlying EBITA ($m) $ 31.5 $ 37.9 (16.9) Goodwill

  30. Slide 30: Capital Management

    For personal use only Capital Management Robert C. Larry Group Chief Financial Officer

  31. Slide 31: On-Market Share Buy-Back

    On-Market Share Buy-Back For personal use only • On-market share buy-back commenced in October 2011, with 2.0 million shares Share Buy-Back purchased to date. • Average purchase price per share Purchased purchased is $12.78 to date. Authorised to Purchase • Future share purchases will be a Total fun

  32. Slide 32: Capital Allocations & Distributions to Shareholders

    Capital Allocations & Distributions to Shareholders For personal use only $m HY 2012 HY 2011 Change ($) CAPEX, net 65.0 77.3 (12.3) Acquisitions, net of cash acquired 64.3 42.9 21.4 Share repurchases 25.2 - 25.2 Cash dividends 48.7 35.4 13.3 32

  33. Slide 33: CAPEX Including Acquisitions for Half Year

    CAPEX Including Acquisitions for Half Year For personal use only Europe 29% $m HY 2012 North America 67.2 Australasia 26.5 Europe 39.2 North Australasia America 20% 51% • Invested nearly $133 million in acquisitions, strategic plant upgrades, technology implementation and business growth in HY 2012.

  34. Slide 34: Debt Structure: Consolidated Credit Facilities

    Debt Structure: Consolidated Credit Facilities For personal use only • Management has protected its balance $1,600 sheet to execute on smart growth $1,400 and financial market dislocation $1,154 opportunities. $1,200 • SimsMM has the strongest balance $1,000 Availability $’s in Millions sheet in the

  35. Slide 35: Sims Metal Management

    A SIMS METAL MANAGEMENT RIGHT. NOW. 2 = © @) D =) © ‘= 9 Q — @ a. — O LL

Sims Metal Management — H1 FY2012 Earnings Presentation on 6ix