Slide 1: Financial Results for the Half Year Ended 31 December 2007
For personal use only FINANCIAL RESULTS FOR THE HALF YEAR ENDED 31 DECEMBER 2007 building the world’s leading recycling company . . . Sims Group Limited ASX Code: SGM Jeremy Sutcliffe, CEO Ross Cunningham, CFO 22 February 2008
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 22 February 2008. The presentation may contain forward looking statemen
Slide 3: Agenda
Agenda For personal use only 1. CEO Overview – Jeremy Sutcliffe 2. Financial Results – Ross Cunningham 3. Markets & Outlook – Jeremy Sutcliffe 4. Questions 3
Slide 4: CEO Overview
For personal use only building the world’s leading recycling company . . . CEO Overview Jeremy Sutcliffe
Slide 5: Highlights
Highlights For personal use only Sales revenue of $2.73 billion up 4.0% on HY07 EBITDA of $211.3 million down 3.6% on HY07 Net profit after tax of $102.2 million down 9.5% on HY07, in line with previous guidance after taking into account the recently-announced change in accounting treatment
Slide 6: Financial Overview
Financial Overview For personal use only HY08 HY07 Change (%) Sales Revenue ($m) 2,727 2,623 4.0 EBITDA ($m) 211.3 219.2 (3.6) EBIT ($m) 172.0 182.9 (6.0) NPAT ($m) 102.2 112.9 (9.5) EPS (cents) 81.1 90.6 (10.5) ROCCE (%) (annualised) (post-amortisation) 19.1 22.3 (14.3) ROE (%) (half year) (post-am
Slide 7: Sales Revenue by Region
Sales Revenue by Region For personal use only HY 2008 HY 2007 20.1% 19.6% 29.7% 27.9% Australia, NZ & Asia North America Europe 50.2% 52.5% Change (%) North America revenues up 12.6% on HY07 in $m HY08 HY07 USD, but flat after translation into AUD Australia, NZ & Asia 807.8 733.4 10.1 Europe rev
Slide 8: EBIT by Region
EBIT by Region For personal use only HY 2 0 0 8 HY 2007 16.1% 14.4% 35.3% Australia, NZ & Asia 40.3% North America Europe 48.6% 45.3% $m HY08 HY07 Change (%) EBIT by region is presented pre-amortisation of other intangibles Australia, NZ and Asia 65.2 78.9 (17.4) North America 89.6 87.8 2.1 Nort
Slide 9: EBIT By Product
EBIT By Product For personal use only HY 2008 HY 2007 21.4% 12% Ferrous Trading incl. NFSR 6.2% Ferrous Brokerage 51.5% 41.5% 1.6% Non Ferrous Trading 8.6% Non Ferrous Brokerage (incl.stainless) Manufacturing / JVs / Sims Steel 7.2% 24.6% Recycling Solutions 16.8% 4.5% 4.1% $m HY08 HY07 Change (%)
Slide 10: EBIT Change by Region
EBIT Change by Region For personal use only 200 -14 +2 +2 -1 150 $ million 183 172 100 50 HY07 EBIT Australia, NZ & Europe (incl. UK) North America Intangibles HY08 EBIT Asia Australia, NZ & Asia ($14m) Europe (incl. UK) $2m North America $2m Intangibles ($1m) 10
Slide 11: EBIT Change by Product
EBIT Change by Product For personal use only 200 +20 +5 -8 -1 150 -22 -5 $ million 183 100 172 50 IH07 Ferro No n Recy Man Corp Inta n IH08 E BIT us ( i Ferr cl ing uf./ JVs/ or ate gible E BIT ncl . ous Solu Si ms Cost s NSF ti ons S te e s R) l Ferrous (incl. NFSR) ($22m) Non Ferrous ($5m) R
Slide 12: Intake Volumes
Intake Volumes HY 2008 For personal use only HY 2007 4.2% 1.2% Ferrous Shredded incl. NFSR 4.1% 1.0% 41.8% 40.8% Other Processed Ferrous 28.8% 30.8% Ferrous Brokerage Non Ferrous Trading / Brokerage Other 24.3% 23.0% Total Tonnes (‘000) HY08 HY07 Change (%) Ferrous Shredded (incl. NFSR) 1,867.3 1,97
Slide 13: Sales Volumes
Sales Volumes For personal use only HY 2008 HY 2007 Ferrous Shredded incl. NFSR 3.8% 2.5% 4.5% 2.0% Other Processed Ferrous 42.3% 30.7% 18.7% 46.2% Ferrous Brokerage Non Ferrous Trading / Brokerage Other 28.6% 20.7% Total Tonnes (‘000) HY08 HY07 Change (%) Ferrous Shredded incl. NFSR 1,988.3 1,971.5
Slide 14: Sales by Destination
Sales by Destination For personal use only HY 2008 HY 2007 15.2% 18.0% 27.5% 29.9% 14.7% 10.5% 3.4% 2.6% 5.2% 12.2% 3.3% 15.2% 24.4% 17.9% EUROPE Ferrous exports increasing, particularly into the Mediterranean and South-East Asia NE ASIA CHINA & HK SE ASIA & OCEANIA Chinese ferrous imports remai
Slide 15: Sims Recycling Solutions
Sims Recycling Solutions For personal use only Continues to grow impressively and contribute strongly to Group revenue and profits SRS EBIT (pre-corporate costs and amortisation of other intangibles) of $47.2 million up significantly by 76.3% on HY07 and by 17.4% on the second half of FY07 SRS
Slide 16: Financial Results
For personal use only building the world’s leading recycling company . . . Financial Results Ross Cunningham
Slide 17: Group Income Statement
Group Income Statement For personal use only $m HY08 HY07 Change Change (%) Sales Revenue 2,727 2,623 104 4.0 EBITDA 211.3 219.2 (7.9) (3.6) EBIT 172.0 182.9 (10.9) (6.0) Net Interest Expense (16.4) (12.7) (3.7) 29.1 Tax Expense (53.3) (57.4) 4.1 (7.1) Net Profit After Tax 102.2 112.9 (10.7) (9.5) 1
Slide 18: Group Balance Sheet
Group Balance Sheet For personal use only $m HY08 HY07 Change Change (%) Current Assets 863.2 720.5 142.7 19.8 Non-current Assets 1,369.5 1,277.3 92.2 7.2 Total Assets 2,232.7 1,997.8 234.9 11.8 Current Liabilities 341.3 279.1 62.2 22.3 Non-current Borrowings 492.0 400.3 91.7 22.9 Other Non-current
Slide 19: Group Cash Flow
Group Cash Flow For personal use only $’000 HY08 HY07 Change Change (%) Earnings Before Interest & Tax 172.0 182.9 (10.9) (6.0) Non Cash Items Depreciation & Amortisation 39.3 36.3 3.0 8.3 Provisions (4.3) 2.1 (6.4) (304.8) Net Profit on Disposal of Assets (2.5) (0.5) (2.0) 400.0 Net Business Purcha
Slide 20: Australia, NZ & Asia Regional Results
Australia, NZ & Asia Regional Results For personal use only HY08 HY07 Change (%) Sales Revenue ($m) 807.8 733.4 10.1 EBITDA ($m) 73.6 85.0 (13.4) EBIT ($m) (post-corporate costs and pre-amortisation) 65.2 78.9 (17.4) Assets ($m) 522.4 433.7 20.5 Employees 1,439 1,204 19.5 Sales Margin (%) 19.2 21.2
Slide 21: North America Regional Results
North America Regional Results For personal use only HY08 HY07 Change (%) Sales Revenue ($m) 1370.1 1376.2 (0.4) EBITDA ($m) 98.6 97.2 1.4 EBIT ($m) (post-corporate costs and pre-amortisation) 89.6 87.8 2.1 Assets ($m) 1,121.9 1,046.9 7.2 Employees 1,629 1,322 23.2 Sales margin (%) 17.3 17.3 - ROCCE
Slide 22: Europe Regional Results
Europe Regional Results For personal use only HY08 HY07 Change (%) Sales Revenue ($m) 549.1 513.0 7.0 EBITDA ($m) 39.1 36.1 8.3 EBIT ($m) (post-corporate costs and pre-amortisation) 29.7 27.9 6.5 Assets ($m) 588.3 517.2 13.7 Employees 1,226 972 26.1 Sales margin (%) 28.0 29.0 (3.4) ROCCE (%) (post-c
Slide 23: Metal Management Merger Update
For personal use only building the world’s leading recycling company . . . Metal Management Merger Update Jeremy Sutcliffe
Slide 24: Metal Management Merger Update
Metal Management Merger Update For personal use only F-4 Registration Statement cleared by SEC and mailed to Metal Management stockholders, with Metal Management stockholder meeting to be held on 14 March 2008 If merger is approved by Metal Management stockholders, it is expected that the merger
Slide 25: Metal Management Exchange Ratio Update
Metal Management Exchange Ratio Update For personal use only 65 60 55 US$ 50 45 40 Sep 07 Oct 07 Nov 07 Dec 07 Jan 08 Metal Management price Implied offer value 25
Slide 26: Markets & Outlook
For personal use only building the world’s leading recycling company . . . Markets & Outlook Jeremy Sutcliffe
Slide 27: Ferrous Scrap Prices & Freight
Ferrous Scrap Prices & Freight For personal use only 500 Unprecedented rise in ferrous 460 price to record highs U S $ /t 420 380 340 300 Subsequent easing of freights Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 from record highs, although HMS No. 1 C&F Korea ferrous scrap price like
Slide 28: Non Ferrous Prices
Non Ferrous Prices For personal use only Deterioration in non ferrous prices, particularly in 2Q08 2,900 2,800 2,700 – LME Aluminium price hit a low US$/t 2,600 2,500 of US$2,375 per tonne on 18 2,400 September 2007 from a high 2,300 of US$2,791 per tonne on 20 2,200 Jul 07 Aug 07 Sep 07 Oct 07 No
Slide 29: Exchange Rates
Exchange Rates For personal use only During HY08, the average 0.95 Australian/US exchange 0.90 rate was 87 cents AUD/USD 0.85 (compared to 77 cents for the first half in the 2007 0.80 financial year) 0.75 Jul 07 Aug 07 Sep 07 Oct 07 Nov 07 Dec 07 Jan 08 Feb 08 Half on half, currency movements ha
Slide 30: Outlook
Outlook For personal use only The rapid escalation of US dollar C&F ferrous prices began in mid- December 2007. Although, in large part, this occurred too late to positively impact January sales, ferrous margins will expand significantly as 3Q08 progresses. Higher non ferrous prices will also posi
Slide 31: Share Price from July 2007
Share Price from July 2007 For personal use only 34 32 Price (rebased to Sims Group) 30 28 26 24 22 20 Jul 07 Aug 07 Sep 07 Oct 07 Nov 07 Dec 07 Jan 08 Feb 08 Sims Group S&P/ASX 200 All Ordinaries S&P/ASX 200 Industrials 31
Slide 32: Questions
For personal use only building the world’s leading recycling company . . . Questions