Sims Ltd. · ASX:SGM
Sims — Shareholder Meeting (November 2007)
41 slides from Sims's shareholder meeting presentation, Nov 21, 2007
Slide 1: Annual General Meeting 21 November 2007
For personal use only ANNUAL GENERAL MEETING 21 NOVEMBER 2007 building the world’s leading recycling company . . . Sims Group Limited ASX Code: SGM Paul Mazoudier, Chairman Jeremy Sutcliffe, CEO
Slide 2: Disclaimer
Disclaimer For personal use only This presentation for Sims Group Limited is designed to provide a high level overview of aspects of the operations of Sims Group Limited. The material set out in the presentation is current as at 21 November 2007. The presentation may contain forward looking statemen
Slide 3: Chairman's Address
For personal use only building the world’s leading recycling company . . . Paul Mazoudier Chairman’s Address
Slide 4: Highlights
Highlights For personal use only Sales revenue of $5.5 billion (up 48% on FY06) Net profit after tax of $254.4 million (up 29% on FY06) Earnings per share of 203.6 cents (up 17% on FY06) Dividends per share of 120 cents up 14% on FY06 166 physical operations globally (up from 122 at end FY
Slide 5: Dividend Policy
Dividend Policy For personal use only Higher earnings base from outside Australia reduces Sims’ capacity to frank future dividends At the outset, it is contemplated that the combined group will return in the order of 45-55% of net profit after tax to shareholders The Company will evaluate the
Slide 6: Group Chief Executive Officer
For personal use only building the world’s leading recycling company . . . Jeremy Sutcliffe Group Chief Executive Officer
Slide 7: Sims in FY07
For personal use only building the world’s leading recycling company . . . Sims in FY07
Slide 8: Sustainability – Health and Safety
Sustainability – Health and Safety For personal use only Our number ONE priority LTI Frequency Rates 25 Significant improvements over 20 5 years, but 15 – lost time injury (LTI) frequency 10 was slightly up to 6.5 (from 5.8 5 in FY06) 0 2003 2004 2005 2006 2007 – medically treated injury (MTI) f
Slide 9: Sustainability - Energy
Sustainability - Energy For personal use only Total CO2 footprint - 219,744 tonnes – slightly down on FY06 Embedded energy savings from Iron Ore / Integrated recycling activities Mill Energy 142 – ferrous alone - enough to power PJ used to produce almost 40% of Australian homes for 8.8 million o
Slide 10: FY07 Strategic Initiatives
FY07 Strategic Initiatives For personal use only Metal Recycling – completion of Hugo Neu integration in the US – Adams joint venture in Southern California – acquisition of Cymru Metals Recycling Limited in the UK – local acquisitions and greenfields developments in Australia Sims Recycling Sol
Slide 11: Proposed Merger with Metal Management, Inc.
Proposed Merger with Metal Management, Inc. For personal use only Announced on 25 September 2007 Merger of Sims Group and Metal Management, Inc. (Metal Management), a leading US metals recycling group listed on the New York Stock Exchange (NYSE) Consistent with Sims’ goal to “grow its core met
Slide 12: Strategic Rationale
Strategic Rationale For personal use only Transaction criteria Consistent? 1 Holds strong market position yes 2 Domestic or export marketing flexibility yes 3 Platform for future growth yes 4 Strong management yes 5 Enhances shareholder value yes 12
Slide 13: About Metal Management
For personal use only building the world’s leading recycling company . . . About Metal Management
Slide 14: Metal Management Operations
Metal Management Operations For personal use only Illinois Indiana Michigan Connecticut Ohio New Jersey New York Utah Pennsylvania Kentucky Arizona Tennessee Colorado Texas Arkansas Mississippi Alabama 14
Slide 15: Metal Management Overview
Metal Management Overview For personal use only Sales tonnes 2003 – 2007 EBITDA 2003 – 2007 6.0 200 176 187 5.6 5.5 150 Million tonnes 5.2 116 5.0 5.0 102 4.9 US$m 5.0 100 58 4.5 50 4.0 0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Source: Metal Management Company announcements 15
Slide 16: Metal Management Overview
Metal Management Overview For personal use only Metal Management share Metal Management return price performance on net assets 70 40% 60 30% 50 30% 26% 25% 25% RONA (% ) 40 US$ 20% 16% 30 20 10% 10 0% 0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Metal Management S&P500 (rebased) Source: Bloom
Slide 17: Sims Metal Management post-merger
For personal use only building the world’s leading recycling company . . . Sims Metal Management post-merger
Slide 18: Combined Group Profile
Combined Group Profile For personal use only Market capitalisation Tonnage - FY07 6.0 4.9 5.0 20 Market cap (A$bn) 5.6 15.2 M illio n to n n e s 4.0 3.5 15 3.0 9.6 1.9 10 2.0 1.4 1.0 5 0.0 0 Sims Metal Sims Schnitzer Metal Sims Metal Sims Metal Management Management Management Management Source: Blo
Slide 19: Experienced and Effective Management Team
Experienced and Effective Management Team For personal use only 19
Slide 20: Combined Group's North American Profile
Combined Group’s North American Profile For personal use only Metal Management Sims 20
Slide 21: North American Revenue
North American Revenue For personal use only North American revenue (FY07) Sims Group Sims Metal Management 18% 40% 60% 82% Export Domestic 21
Slide 22: EBIT by Geography
EBIT by Geography For personal use only EBIT by geography (FY07) Sims Group Sims Metal Management 17% 12% 26% 38% 45% 62% Australasia North America Europe 22
Slide 23: Extensive Potential Synergies Identified
Extensive Potential Synergies Identified For personal use only Administration Chartering, loading ASR waste disposal Total c.US$35 million per Corporate office annum to be achieved in the first full financial year following the merger Stevedoring Non–trade group purchasing Export market related 23
Slide 24: NYSE Listing
NYSE Listing For personal use only Sims will retain ASX listing of ordinary shares Under the merger, Sims will issue ADRs to Metal Management shareholders, with 1 ADR being equivalent to 1 ordinary share in Sims Metal Management ADRs will trade on the NYSE Sims Metal Management to be registe
Slide 25: Strategy and Outlook
For personal use only building the world’s leading recycling company . . . Strategy and Outlook
Slide 26: Share Price Performance
Share Price Performance For personal use only 35 30 Price (A$) 25 20 15 10 Nov 04 May 05 Nov 05 May 06 Nov 06 May 07 Nov 07 26
Slide 27: Share Price Volatility
Share Price Volatility For personal use only 60 30 day volatility (%) 50 Average = 31.5% 40 30 20 10 Average = 14.9% 0 Nov 06 Jan 07 Mar 07 May 07 Jul 07 Sep 07 Nov 07 S&P/ASX 200 Sims Group 27
Slide 28: Market Outlook
Market Outlook For personal use only Metals Prices – Global environment and demand remain strong – nothing has changed – Iron ore negotiations an important indicator Freight – Bulk ocean freight rates at all time highs – Availability of cheap containers impairing ability to adjust buy prices to
Slide 29: First Half FY08 Earnings Outlook
First Half FY08 Earnings Outlook For personal use only First Quarter NPAT of $57.3 million, down 16% on Q1 FY07 Freight, currency and buy price competition continue to compress margin. Non ferrous margin contracting although still high by historical standards Metal Management merger synergies
Slide 30: Paul Mazoudier, Chairman
For personal use only building the world’s leading recycling company . . . Paul Mazoudier Chairman
Slide 31: 1. Accounts & Reports
1. Accounts & Reports For personal use only “To receive and consider the financial statements of the Company and its controlled entities for the year ended 30 June 2007 and the related Directors’ Report, Directors’ Declaration and Auditor’s Report.” 31
Slide 32: 2.1 Re-election of Mr. Ross Cunningham
2.1 Re-election of Mr. Ross Cunningham For personal use only “That Mr. Ross Cunningham, who retires by rotation at the Annual General Meeting in accordance with the Company’s Constitution and the ASX Listing Rules, be re-elected as an Executive Director of the Company.” 32
Slide 33: 2.2 Re-election of Mr. Christopher Renwick
2.2 Re-election of Mr. Christopher Renwick For personal use only “That Mr. Christopher Renwick, who, having been appointed as an additional Director since the last Annual General Meeting, retires at the Annual General Meeting in accordance with the Company’s Constitution and the ASX Listing Rules, b
Slide 34: 2.3 Re-election of Mr. Mike Iwanaga
2.3 Re-election of Mr. Mike Iwanaga For personal use only “That Mr. Mike Iwanaga, who, having been appointed as an additional Director since the last Annual General Meeting, retires at the Annual General Meeting in accordance with the Company’s Constitution and the ASX Listing Rules, be re- elected
Slide 35: 3. Constitution Amendments - HNC
3. Constitution Amendments - HNC For personal use only “That the Constitution of the Company be amended in the manner set out in Annexure A of the Notice of Meeting.” 35
Slide 36: 4. Constitution Amendments – Mitsui & Co
4. Constitution Amendments – Mitsui & Co For personal use only “That the Constitution of the Company be amended in the manner set out in Annexure B of the Notice of Meeting.” 36
Slide 37: 5. Remuneration of Non-Executive Directors
5. Remuneration of Non-Executive Directors For personal use only “That in accordance with clause 21.1(a) of the Company’s Constitution and ASX Listing Rule 10.17, the maximum aggregate cash remuneration which may be paid to Directors (other than Executive Directors) for services rendered as Director
Slide 38: 6. Long Term Incentive Plan - Jeremy Sutcliffe
6. Participation in the Sims Group Long Term Incentive Plan by Mr Jeremy Sutcliffe For personal use only “That approval is given for the purposes of ASX Listing Rule 10.14 for Mr Jeremy Sutcliffe, the Group Chief Executive, to have issued to him, effective 25 September 2007, 224,534 performance righ
Slide 39: 7. Long Term Incentive Plan - Ross Cunningham
7. Participation in the Sims Group Long Term Incentive Plan by Mr Ross Cunningham For personal use only “That approval is given for the purposes of ASX Listing Rule 10.14 for Mr Ross Cunningham, Executive Director, to have issued to him, effective 25 September 2007, 66,847 performance rights, and th
Slide 40: 8. Remuneration Report
8. Remuneration Report For personal use only “That the Remuneration Report for the year ended 30 June 2007 (as set out in the Directors’ Report) is adopted.” 40
Slide 41: Sims Group - 90 Years of Recycling
For personal use only building the world’s leading recycling company . . . Sims Group - 90 Years of Recycling