ResultsPresentation Fiscal2012HalfYearEnded31December2011 - PowerPoint PPT Presentation

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

Disclaimer฀฀ from฀those฀expressed฀or฀implied฀by฀these฀forward฀looking฀statements.฀You฀are฀cautioned฀not฀to฀place฀undue฀reliance฀on฀these฀ Please฀note฀that฀all฀references฀to฀$฀or฀dollars฀herein฀are฀references฀to฀Australian฀dollars,฀unless฀otherwise฀indicated.฀ ฀ (www.simsmm.com)฀for฀more฀information฀on฀the฀Company฀and฀recent฀developments.฀฀ these฀forward฀looking฀statements฀to฀reflect฀events฀or฀circumstances฀after฀the฀date฀of฀this฀release.฀Please฀visit฀our฀website฀ referred฀to฀in฀this฀release.฀Except฀to฀the฀extent฀required฀by฀applicable฀law฀or฀regulation,฀we฀undertake฀no฀obligation฀to฀update฀ us฀ or฀ any฀ person฀ acting฀ on฀ our฀ behalf฀ are฀ expressly฀ qualified฀ in฀ their฀ entirety฀ by฀ the฀ cautionary฀ statements฀ contained฀ or฀ All฀subsequent฀written฀and฀oral฀forward฀looking฀statements฀concerning฀the฀matters฀addressed฀in฀this฀release฀and฀attributable฀to฀ ฀ statements,฀which฀speak฀only฀as฀of฀the฀date฀of฀this฀release.฀ Because฀these฀forward฀looking฀statements฀are฀subject฀to฀assumptions฀and฀uncertainties,฀actual฀results฀may฀differ฀materially฀ This฀ presentation฀ may฀ contain฀ forward฀ looking฀ statements,฀ including฀ statements฀ about฀ Sims฀ Metal฀ Management’s฀ financial฀ ฀ the฀Company’s฀Annual฀Report฀on฀Form฀20F,฀which฀we฀filed฀with฀the฀SEC฀on฀14฀October฀2011.฀฀ Securities฀Exchange฀and฀the฀United฀States฀Securities฀and฀Exchange฀Commission฀(SEC),฀including฀the฀risk฀factors฀described฀in฀ materially฀from฀these฀forward฀looking฀statements฀include฀those฀discussed฀and฀identified฀in฀filings฀we฀make฀with฀the฀Australian฀ our฀ plans฀ and฀ strategies฀ is฀ subject฀ to฀ inherent฀ uncertainty.฀ Factors฀ that฀ may฀ cause฀ actual฀ results฀ or฀ earnings฀ to฀ differ฀ These฀forward฀looking฀statements฀involve฀certain฀risks฀and฀uncertainties.฀Our฀ability฀to฀predict฀results฀or฀the฀actual฀effects฀of฀ ฀ expressions.฀ such฀as฀“plan,”฀“believe,”฀“expect,”฀“anticipate,”฀“intend,”฀“outlook,”฀“estimate,”฀“forecast,”฀“project”฀and฀other฀similar฀words฀and฀ condition,฀results฀of฀operations,฀earnings฀outlook฀and฀prospects.฀Forward฀looking฀statements฀are฀typically฀identified฀by฀words฀ 2

Key Points for Half Year Ended 31 December 2011 Daniel฀W.฀Dienst฀ Group Chief Executive Officer

Group฀Safety฀Frequency฀Rates฀฀ Safety฀remains฀a฀critical฀focus฀for฀SimsMM.฀฀฀ Gets฀ Where฀It฀ Here’s฀ remains฀on฀our฀journey฀to฀becoming฀‘World฀Class’.฀฀฀ Revolutionary฀changes฀have฀taken฀hold,฀but฀more฀work฀ Frequency฀Rates฀ Tougher!฀ 30 25 20 LTI FR 15 MTI FR 10 5 0 2008 2009 2010 2011 YTD 2012 4

Underlying฀Results฀in฀a฀Challenging฀Environment฀฀ Underlying฀EBIT฀of฀$77฀million฀in฀HY฀2012฀vs฀$71฀million฀in฀HY฀2011,฀a฀7.7%฀increase฀ Shipment฀tonnes฀of฀7.2฀million฀in฀HY฀2012฀vs฀6.5฀million฀in฀HY฀2011,฀a฀9.5%฀increase฀ ฀ Intake฀tonnes฀of฀7.3฀million฀in฀HY฀2012฀vs฀6.6฀million฀in฀HY฀2011,฀a฀9.7%฀increase฀ ฀ Underlying฀NPAT฀of฀$46฀million฀in฀HY฀2012฀vs฀$43฀million฀in฀HY฀2011,฀a฀7.1%฀increase฀ ฀ ฀ increase฀ Underlying฀EBITDA฀of฀$141฀million฀in฀HY฀2012฀vs฀$138฀million฀in฀HY฀2011,฀a฀2.3%฀ ฀ Sales฀Revenue฀of฀$4.6฀billion฀in฀HY฀2012฀vs฀$3.9฀billion฀in฀HY฀2011,฀a฀16%฀increase฀ • • • • • • 5

Statutory฀Results฀in฀a฀Challenging฀Environment฀ Net฀Loss฀After฀Tax฀of฀($557฀million)฀ profit฀after฀tax฀before฀non-cash฀goodwill฀impairment)฀ Dividend฀of฀10฀cents฀per฀share฀(represents฀a฀payout฀ratio฀of฀55฀percent฀of฀net฀ ฀ ฀ Diluted฀EPS฀of฀(270.0฀cents)฀ Net฀debt฀of฀$324฀million฀as฀of฀31฀December฀2011,฀representing฀12%฀of฀total฀capital฀ ฀ ฀ Non-cash฀impairment฀of฀goodwill฀in฀the฀amount฀of฀$614฀million฀ EBIT฀of฀($553฀million)฀ ฀ EBITDA฀of฀$69฀million฀ ฀ Sales฀revenue฀of฀$4.6฀billion฀ ฀ • • • • • • • • 6

฀ From฀Challenges฀to฀Opportunities฀and฀Evolution…฀ world.฀ ฀ remain฀our฀best฀piece฀of฀technology.฀ ฀ ฀ Across฀all฀Businesses฀and฀Geographies฀฀ ฀ new฀markets.฀ Group฀Level฀ ฀฀ •  Execute฀on฀external฀growth฀opportunities฀across฀all฀geographies,฀business฀lines฀and฀  Invest฀in฀the฀efficiencies฀of฀our฀processing฀facilities.฀  Be฀the฀recycling฀industry฀leader฀in฀material฀recovery฀and฀technology฀breakthroughs.฀  Nurture,฀invest,฀attract฀and฀retain฀the฀best฀and฀brightest฀in฀our฀industry.฀฀People฀  Stand฀amongst฀the฀safest฀and฀most฀sustainable฀manufacturing฀companies฀in฀the฀ 7

North฀American฀Metals฀(NAM)฀ Post-GFC฀Effect:฀ CONTINUED฀LOW฀ARISINGS฀+฀IMPROVED฀COST฀BASE฀=฀ RECOVERY฀ CHARACTERISTICS฀WITH฀LEVERAGE฀TO฀A฀MORE฀MEANINGFUL฀U.S.฀MACRO฀ FURTHER฀COST฀BASE฀IMPROVEMENTS฀=฀MORE฀ACCEPTABLE฀RETURN฀ Immediate฀GFC฀Effect:฀ LOW฀ARISINGS฀+฀HIGH฀COST฀BASE฀=฀NEGATIVE฀RETURN฀ Modestly฀Improved฀Operating฀Climate:฀ MODESTLY฀IMPROVED฀ARISINGS฀+฀ Lingering฀GFC฀Effect:฀ MODESTLY฀IMPROVED฀ARISINGS฀+฀IMPROVED฀COST฀BASE฀=฀ After฀years฀of฀robust฀growth฀and฀acquisitions,฀NAM฀has฀faced฀an฀evolving฀set฀of฀ • challenges฀since฀the฀GFC฀in฀2008-2009.  MODEL  BREAKEVEN฀RETURNS  POSITIVE฀BUT฀UNACCEPTABLE฀RETURN฀CHARACTERISTICS  8

North฀American฀Metals฀(cont.)฀ investment฀and฀targeted฀expansion.฀ AND฀(2)฀preserves฀the฀enormous฀leverage฀and฀upside฀to฀a฀more฀meaningful฀cyclical฀upturn฀ that฀(1)฀will฀have฀markedly฀improved฀return฀characteristics฀in฀the฀current฀operating฀climate฀ operating฀costs฀lower,฀increasing฀efficiencies฀and฀improving฀margins,฀resulting฀in฀a฀business฀ This฀approach฀will฀(and฀has฀already฀begun)฀to฀effect฀a฀meaningful฀change฀in฀NAM,฀driving฀ greenfield฀development.฀฀GET฀CLOSER฀TO฀FEEDSTOCK.฀ in฀the฀U.S.฀economy.฀฀ granular฀level.฀ decision฀making฀with฀strict฀P&L฀and฀CCE฀responsibility.฀ Current฀Action฀Plan฀ •  Flatten฀management฀structure฀further.฀  Targeted฀decentralization,฀resulting฀in฀more฀agile฀and฀quicker฀‘microregion’฀  Rigorous฀use฀of฀analytics฀to฀empower฀local฀managers฀to฀compete฀at฀the฀most฀  Protect฀NAM฀facilities฀from฀competitor฀encroachment฀via฀efficiency/technology฀  Deeper฀dive฀into฀the฀scrap฀reservoir฀via฀feeder฀yard฀acquisitions฀and/or฀ • 9

Sims฀Recycling฀Solutions฀(SRS)฀ Current฀Action฀Plan฀ Management฀has฀developed฀a฀consistent฀global฀strategy,฀tailored฀to฀local฀customers,฀ facilities.฀฀ immediate฀and฀sustainable฀advantages฀can฀be฀acquired.฀ America฀and฀APAC.฀ refurbishment฀and฀resale,฀i.e.฀recent฀acquisition฀of฀S3i.฀฀ techniques฀as฀these฀factors฀define฀the฀European฀e-recycling฀space.฀ markets.฀ market฀entry฀and฀technology฀implementation฀based฀on฀its฀experiences฀in฀these฀varied฀ electronic฀recycling฀markets.฀฀฀ SRS฀operates฀in฀extremely฀diverse฀markets฀globally,฀ranging฀from฀advanced฀to฀developing฀ regulations฀and฀market฀evolution.฀฀฀ •  SRS฀has฀developed฀a฀proven฀system฀of฀analysis฀for฀determining฀correct฀time฀for฀ •  Continue฀the฀development฀and฀implementation฀of฀advanced฀processing฀and฀recovery฀  Increasing฀importance฀of฀B2B,฀focusing฀on฀complex฀materials,฀and฀B2C฀focusing฀on฀  Continue฀to฀export฀technologies฀and฀techniques฀to฀developing฀markets฀like฀North฀  Growth฀in฀all฀regions฀will฀continue฀to฀come฀via฀organic฀growth฀and฀acquisitions,฀when฀  Expand฀global฀footprint฀by฀increasing฀integration฀with฀existing฀metal฀recycling฀ • 10