Slide 1: Financial results for the full year ended 30 June 2008
For personal use only Financial results for the full year ended 30 June 2008 Sims Group Limited ASX Code: SGM NYSE Code: SMS Dan Dienst, Group CEO Jeremy Sutcliffe, Executive Director Rob Larry, CFO 29 August 2008
Slide 2: Disclaimer
Disclaimer For personal use only This presentation for Sims Group Limited (Sims) is designed to provide a high level overview of aspects of the operations of Sims. The material set out in the presentation is current as at 29 August 2008. The presentation may contain forward looking statements about
Slide 3: Agenda
For personal use only Agenda 1. Overview – Dan Dienst & Jeremy Sutcliffe 2. Financial Results – Rob Larry 3. Markets & Outlook – Dan Dienst 4. Questions
Slide 4: Overview
For personal use only Overview Dan Dienst & Jeremy Sutcliffe
Slide 5: Sims Today
Sims Today For personal use only • World’s and North America’s largest metal and electronics recycler • Four continents • 20 countries • Over 230 locations • Over 6,000 employees (7,500 including affiliates) • A$6 billion plus market cap (ASX top 40) - Sims has been the 5th best share price performe
Slide 6: Highlights
Highlights For personal use only • Record financial results – – Sales revenue of A$7.67 billion up 38.2% on FY07 – EBITDA of A$777.9 million up 69.3% on FY07 – EBIT of A$683.3 million up 77.9% on FY07 – NPAT of A$433.2 million up 81.0% on FY07 – NPAT of A$250.6 million for Q4 FY08 – Earnings per sha
Slide 7: Financial Overview
Financial Overview For personal use only FY08 FY07 Change (%) Sales Revenue ($m) 7,666 5,549 38% EBITDA ($m) 777.9 459.3 69% EBIT ($m) 683.3 384.2 78% NPAT ($m) 433.2 239.3 81% EPS (cents) 306.0 191.6 60% ROCCE (%) (post-amortisation) 29.1% 22.8% (28%) ROE (%) (post-amortisation) 14.6% 18.7% (22%) O
Slide 8: Sales Revenue by Region
Sales Revenue by Region For personal use only F 2008 F 2007 17.1% 20.6% 22.7% 26.4% Australia, NZ & Asia North America Europe 60.2% 53.0% Change • Group revenues up significantly on FY07 due to $m FY08 FY07 (%) – inclusion of MM business from 14 March 2008 – extremely favourable ferrous market condi
Slide 9: Sales Revenue by Product
Sales Revenue by Product For personal use only F 2008 Ferrous Trading inc. NFSR F 2007 7% 8% 5% Non-Ferrous Shred 5% Recovery 4% 7% Ferrous Brokerage 42% 14% Non-Ferrous Brokerage 49% Non-Ferrous Brokerage 16% Manufacturing/JVs/Sims Steel 18% Recycling Solutions 18% 4% 3% $m FY08 FY07 Change • Ferro
Slide 10: EBIT by Region
EBIT by Region For personal use only F 2008 F 2007 13.3% 17.4% Australia, NZ & Asia North America 27.4% Europe 45.8% 36.8% 59.3% Change • Operating results from North America were $m FY08 FY07 (%) outstanding mainly reflecting an extremely strong Australia, NZ & Asia 201.8 147.9 36 ferrous performan
Slide 11: EBIT by Product
EBIT by Product For personal use only F 2008 Ferrous Trading inc. F 2007 NFSR 11% 14% Ferrous Brokerage 11% 6% Non-Ferrous Trading 4% 3% Non-Ferrous Brokerage 51% 8% 63% Manufacturing/JVs/Sims 4% Steel 21% Recycling Solutions 4% $m FY08 FY07 Change • EBIT by product is presented pre-corporate costs
Slide 12: EBIT Change by Region
EBIT Change by Region For personal use only 800 700 -7 -29 600 +253 500 $ million +28 400 +54 683 300 200 384 100 0 FY07 EBIT Australia, NZ & Europe (inc. UK) North America Intangibles Group Corporate FY08 EBIT Asia Costs Australia, NZ & Asia $54m Europe (incl. UK) $28m North America $253m Intangibl
Slide 13: EBIT Change by Product
EBIT Change by Product For personal use only 800 700 +59 -28 -7 -27 +25 600 +277 500 $ million 400 683 683 300 200 384 100 0 FY07 EBIT Ferrous Non Ferrous Recycling Manufacturing/ Corporate Intangibles FY08 EBIT (incl. NFSR) Solutions JVs/Sims Steel Costs Ferrous (incl. NFSR) $277m Non Ferrous ($27m
Slide 14: Intake Volumes
Intake Volumes For personal use only F 2008 F 2007 3.6% Ferrous Shredded 4.2% 28.0% inc. NFSR 27.6% 0.5% 0.6% Other Processed Ferrous Ferrous Brokerage 37.1% 39.5% Non-Ferrous Trading/Brokerage 30.8% 28.1% Other Change Total Tonnes (‘000) FY08 FY07 (%) Ferrous Shredded (inc. NFSR) 4,000 3,732 7 Othe
Slide 15: Sales Volumes
Sales Volumes For personal use only HY 2008 HY 2007 4.0% Ferrous Shredded 4.1% 26.9% inc. NFSR 27.2% 2.5% 2.0% Other Processed Ferrous Ferrous Brokerage Non-Ferrous 37.8% 37.8% Trading/Brokerage 28.9% Other 28.9% Change Total Tonnes (‘000) FY08 FY07 (%) Ferrous Shredded (inc. NFSR) 3,992 3,646 9 Oth
Slide 16: Sales by Destination
Sales by Destination For personal use only F 2008 F 2007 21% 19% 29% 32% 11% 13% 5% 4% 1% 9% 4% 3% 13% 19% 17% Europe • Domestic sales refer to sales in country of sourcing NE Asia China & HK SE Asia & Oceania Middle East USA/Canada South/Central America Domestic Sales 15
Slide 17: Sims Recycling Solutions
Sims Recycling Solutions For personal use only • SRS continues to exceed its internal growth target of 25% per annum • SRS EBIT (pre-corporate costs and amortisation of intangibles) of $89.6 million up significantly by 38.3% on FY07 • The result reflected a full year contribution from the businesses
Slide 18: Sustainability
Sustainability For personal use only Inputs • During FY08, the company handled a total of 11 million tonnes of ferrous material. The use of this secondary raw material by global steel mills avoided the emission of 23.5 million tonnes of CO2 to the atmosphere when compared with primary steel producti
Slide 19: Health and Safety
Health and Safety For personal use only • The company’s number one priority has been, and will continue to be, the safety and well-being of its employees, contractors and visitors to its sites Lost TIme Injury Frequency Rate • Lost time injury frequency rate was down to 25 5.6 in FY08(from 6.5 in FY
Slide 20: New Sims Metal Management Brand Identity
New Sims Metal Management Brand Identity For personal use only • Sims is adopting today a new brand identity • The new Sims Metal Management brand represents the merging of two industry leaders with common cultures and common visions for the future • The new identity is intended to reflect the combi
Slide 21: Financial Results
For personal use only Financial Results Rob Larry
Slide 22: Group Income Statement
Group Income Statement For personal use only $m FY08 FY07 Change Change (%) Sales Revenue 7,665.5 5,548.6 2,117.1 38 EBITDA 777.9 459.4 318.6 69 EBIT 683.3 384.2 299.1 78 Net Interest Expense (31.5) (28.0) (3.5) 12 Tax Expense (218.7) (116.8) (101.9) 87 Net Profit After Tax 433.2 239.3 193.8 81 21
Slide 23: Group Balance Sheet
Group Balance Sheet For personal use only $m FY08 FY07 Change Change (%) Current Assets 2,014.5 792.8 1,221.6 154 Non-current Assets 2,802.6 1,406.3 1,396.3 99 Total Assets 4,817.0 2,199.1 2,617.9 119 Current Liabilities 1,126.0 439.6 686.4 156 Non-current Borrowings 496.7 341.3 155.3 46 Other Non-c
Slide 24: Group Cash Flow
Group Cash Flow For personal use only $’000 FY08 FY07 Change Earnings Before Interest & Tax 683.3 384.2 299.1 Non Cash Items Depreciation & Amortisation 94.6 75.1 19.5 Provisions 24.2 (16.4) 40.6 Net profit/(loss) on disposal of assets 5.9 (0.4) 6.3 Net working capital change (463.3) 28.0 (491.3) In
Slide 25: North America Regional Results
North America Regional Results For personal use only FY08 FY07 Change (%) Sales Revenue ($m) 4,607.9 2,938.2 57 EBITDA ($m) 466.1 204.3 128 EBIT ($m) (pre-amortisation of intangibles) 437.4 184.1 138 Assets ($m) 3,435.7 1,167.7 194 Employees 5,236 1,470 256 Sales Margin (%) 17.2% 17.3% (1) ROCCE (%)
Slide 26: Australia, NZ & Asia Regional Results
Australia, NZ & Asia Regional Results For personal use only FY08 FY07 Change (%) Sales Revenue ($m) 1,745.1 1,465.4 19 EBITDA ($m) 216.6 160.3 35 EBIT ($m) (pre-group and other one-off 201.8 147.9 36 corporate recharges) Assets ($m) 685.8 514.8 33 Employees 1,342 1,216 10 Sales Margin (%) 22.8% 21.4
Slide 27: Europe Regional Results
Europe Regional Results For personal use only FY08 FY07 Change (%) Sales Revenue ($m) 1,312.6 1,144.9 15 EBITDA ($m) 116.6 87.3 33 EBIT ($m) (pre-amortisation of intangibles) 97.9 70.1 40 Assets ($m) 695.5 516.6 35 Employees 1,312 1,024 28 Sales Margin (%) 27.7% 28.2% (2) ROCCE (%) 24.1% 21.1% 14 26
Slide 28: Financial Performance Trends
Financial Performance Trends For personal use only EPS DPS 350 200 300 306.0 150 250 160 200 216.3 130 100 120 ¢ ¢ 150 191.6 105 174.2 86 100 122.6 50 50 82.2 54 54.0 36 0 0 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY02 FY03 FY04 FY05 FY06 FY07 FY08 ROCCE ROE 50 40 47.9 38.1 40 41.1 30 30 28.3 29.9 25.1 %
Slide 29: Strategy, Markets & Outlook
For personal use only Strategy, Markets & Outlook Dan Dienst
Slide 30: Strategy
Strategy For personal use only • Metal Recycling – Consolidation offers greatest opportunity to create shareholder value – Focus on North America (to consolidate existing positions and further extend footprint) and Europe – both large scale transactions (where opportunities exist) and bolt-on acquis
Slide 31: Markets - Ferrous Scrap Prices & Freight
Markets - Ferrous Scrap Prices & Freight For personal use only • Peak in global ferrous raw material prices during Q4 FY08, on the back of rapidly increasing demand for 800 steel and significant increases in steel prices throughout the world 600 US$/t • Since then, there has been a short-term shift
Slide 32: Markets - Non Ferrous Prices
Markets - Non Ferrous Prices For personal use only • Commodity markets continue to be extraordinarily volatile 3,250 3,000 – LME Aluminium price hit a low of US$/t 2,750 US$2,317 per tonne on 18 September 2007 and a high of US$3,292 per tonne 2,500 on 11 July 2008 2,250 Jul 07 Sep 07 Nov 07 Jan 08 M
Slide 33: Markets - Exchange Rates
Markets - Exchange Rates For personal use only • During FY08, the average Australian/US 1.00 exchange rate was 90 cents (compared to 0.95 79 cents for FY07) AUDUSD • Year on year, currency movements had a 0.90 negative $44 million EBIT impact on 0.85 translation of overseas earnings 0.80 • The recen
Slide 34: Outlook
Outlook For personal use only • Volatility, extreme at times, has been a hallmark of the commodity markets over the past few years • Despite a much tougher ferrous trading climate, we anticipate a strong result in Q1 FY09, albeit one not as strong as Q4 FY08. This confidence is based on a review of
Slide 35: Share Price from July 2007
Share Price from July 2007 For personal use only 45 40 +30% 35 30 A$ 25 -20% -19% 20 -29% 15 Jul 07 Sep 07 Nov 07 Jan 08 Mar 08 May 08 Jul 08 SMM S&P/ASX 200 All Ordinaries S&P/ASX 200 Industrials 34
Slide 36: Questions
For personal use only Questions