Slide 1: Creating Value by Providing a Pathway for Decarbonisation to our Customers
For personal use only Creating Value by Providing a Pathway for Decarbonisation to our Customers Macquarie Conference 5 May 2022
Slide 2: Disclaimer
Disclaimer The material contained in this document is a presentation of information about the Group’s For personal use only activities current at the date of the presentation, 5 May 2022. It is provided in summary form and does not purport to be complete. It should be read in conjunction with the Gr
Slide 3: Stephen Mikkelsen, CFO
For personal use only Stephen Mikkelsen CFO 3
Slide 4: Strategy
For personal use only Strategy 4
Slide 5: Structural Market Tailwinds
Structural Market Tailwinds Create strategic opportunities for Sims For personal use only Increased environmental concerns for our Electrification and energy transition to customers drive copper and aluminium prices higher More stringent environmental controls lift standards Global push for high qua
Slide 6: Decarbonisation of the Metal Industry
Decarbonisation of the Metal Industry Using recycled metal is paramount to reduce carbon emissions For personal use only 7% of global Steel produced from EAF emits An electric arc furnace can be greenhouse emissions 83% less CO2/tonne compared charged with 100% steel scrap. A are produced by the to
Slide 7: Well Positioned to Capitalise on Trends
Well Positioned to Capitalise on Trends Our capabilities and business strategy continue to match the accelerated tailwinds For personal use only Competitive Advantages Growth Strategy Technology & People • Dedicated in-house engineering team Grow core business and leverage synergies to • Best-in-cla
Slide 8: Business Strategy
Business Strategy Grow core business and leverage synergies to expand into adjacent markets For personal use only 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
Slide 9: Metal Business
Metal Business We seek to deliver on the metal targets through a very targeted and disciplined growth strategy For personal use only Grow non-ferrous retail business in the US and expand metal volumes in favourable regions Ferrous Strategic lens to identify organic and M&A growth opportunities • Coa
Slide 10: Sustainability rankings and ratings
For personal use only Ranked #6 in Sustainability Ranked 11th in the Global Magazine’s Top100 100 list of most sustainable Sustainability Companies in sustainability companies, ranked for the 8th time Ranked 87th in the Terra Carta Seal for Clean200 global list of creation of sustainable publicly tr
Slide 11: Accelerating Decarbonisation of Our Business
Accelerating Decarbonisation of Our Business Brought forward carbon neutrality target by 12 years For personal use only Targets set in line with SBTi Sims Carbon Emissions Tonnes of Co2e 2025 2030 ▪ 23% reduction in Carbon neutral in direct direct operations operations (scope 1 & 2) (scope 1 & 2) ▪
Slide 12: Strong Commitment To Sustainability
For personal use only Strong Commitment To Sustainability • Carbon neutrality target brought forward by 12 years • Achieved board diversity target ahead of schedule • Continuous improvement driving strong safety performance • Sims makes a measurable contribution to decarbonisation • Achieved many mi
Slide 13: Finance
For personal use only Finance 13
Slide 14: 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 For personal use only Sales Revenue Sales Volumes $4,265.0 million 4.685 million tonnes HY21
Slide 15: Business Segment Financial Performance
Business Segment Financial Performance More than a sixfold increase in EBIT. Improved volumes driven by NAM and SA Recycling For personal use only Sales volumes Underlying EBIT1 (A$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%
Slide 16: Cash Generation
Cash Generation Significant improvement in H1 FY22 operating cash flow For personal use only 2H FY21 Operating cash flow increased from negative $19.9 million in 2H FY21 to positive $290.8 million in 1H FY22, a $310.7 million improvement, largely due to a substantially smaller increase in working ca
Slide 17: Trading Margins & Operating Costs
Trading Margins & Operating Costs Metal Recycling Trading Margin For personal use only 30% 300 23% 23% 25% 22% 21% 22% 22% 250 • Margin in percentage terms typically steady through Trading Margin A$ / tonne 20% 200 the cycle. 15% 150 • Steady margins reflect the value added through 10% 194 100 mater
Slide 18: Revenue Composition
Revenue Composition 1/3rd of revenues from non-ferrous metals For personal use only 3% 5% • Despite total non-ferrous metals accounting for less than 10% of sales volumes, in revenue terms, non- ferrous accounts for nearly 1/3rd of sales for the metals recycling business. Sales Volume • Aluminium an
Slide 19: Inflationary Impacts
Inflationary Impacts Positive: Strong commodity tailwinds, partially offset by cost headwinds For personal use only Tailwinds Headwinds • Higher commodity prices for ferrous and non- • Meaningful upward pressure on labour costs as ferrous metals, combined with a relatively well as tight availability
Slide 20: Balance Sheet
Balance Sheet Working capital requirements tightly aligned to Working capital relative to sales is more stable For personal use only commodity prices through the cycle 10% 800 1,000 8% % Sales Revenues 600 800 A$ million 600 6% 400 400 4% 200 200 2% 0 0 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 HY22 0
Slide 21: Capital Expenditure
Capital Expenditure Disciplined and appropriate capital expenditure program For personal use only 250 • FY22 has seen a pick-up in the rate of capital spend post-COVID as activity levels return to normal. • Going forward, sustaining capital expenditure is 200 expected to approximate depreciation (ex
Slide 22: Capital Management
Capital Management Prudent capital management, aligned to shareholder value For personal use only Summary of Priorities Recycling Capital 1. Target $100 million net cash excluding significant changes • SMR – sold 50.5% stake for approximately US$45.4 in working capital attributable to commodity pric
Slide 23: Outlook Remains Strong
Outlook Remains Strong 3Q22 performance tracked in line with 2Q22 and 4Q22 commenced strongly For personal use only • EBIT momentum has, to date, continued into 4Q22. Intake levels remain solid benefitting from strengthened non-ferrous and ferrous commodity prices • SA Recycling’s acquisition of PSC
Slide 24: Questions & Answers
For personal use only Answers Questions & 24