SIMS LIMITED — Annual Report 2009

Aug 27, 2009

Financial results for the full year ended 30 June 2009 Sims Metal Management Limited ASX Code: SGM NYSE Code: SMS

Supplemental Information

28 August 2009

Disclaimer

This presentation may contain forward-looking statements, including statements about Sims Metal Management’s financial condition, results of operations, earnings outlook and prospects. Forwardlooking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project” and other similar words and expressions.

These forward-looking statements involve certain risks and uncertainties. Our ability to predict results or the actual effects of our plans and strategies is subject to inherent uncertainty. Factors that may cause actual results or earnings to differ materially from these forward-looking statements include those discussed and identified in filings we make with the Australian Securities Exchange and the United States Securities and Exchange Commission (“SEC”), including the risk factors described in the Company’s Annual Report on Form 20-F, which we filed with the SEC on 10 December 2008.

Because these forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements. You are cautioned not to place undue reliance on these statements, which speak only as of the date of this release.

All subsequent written and oral forward-looking statements concerning the matters addressed in this release and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this release. Except to the extent required by applicable law or regulation, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this release.

Please note that all references to $ or dollars herein are references to Australian dollars, unless otherwise indicated.

Financial Overview

	FY 2009	FY 2008	Change (%)
Sales Revenue ($m) EBITDA ($m) Depreciation ($m) Amortisation ($m) EBIT Pre-goodwill impairment ($m) EBIT Post-goodwill impairment ($m) NPAT Pre-goodwill impairment ($m) NPAT Post-goodwill impairment ($m) EPS (cents) Pre-goodwill impairment EPS (cents) Post-goodwill impairment Net cash inflow from operating activities ($m) Capital Expenditures ($m) Net Debt ($m) Net Debt/(Net Debt + Equity) (%) Sales Tonnes (‘000) (exc. associates) Final Dividend (including special dividend) (100% franked) (cents per share)	8,636.2 259.0 120.7 50.1 88.2 (102.9) 40.8 (150.3) 22.5 (82.9) 554.5 187.5 105.6 3.6 13,212.0 10	7,665.6 790.5 65.8 29.3 695.4 692.1 443.4 440.1 313.2 310.9 247.5 129.7 264.9 8.5 11,656.7 75	12.7 (67.1) 83.4 71.0 (87.3) (114.9) (90.7) (134.1) (92.8) (126.7) 124.0 44.6 (60.1) - 13.3 (86.7)

Sales Revenue by Region

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FY 2009
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FY 2008
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12.9% 13.4%
73.7%
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17.1%
22.8%
Australasia
North America
Europe
60.1%
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$m	FY 2009	FY 2008	Change (%)
Australasia North America Europe	1,158.6	1,745.1	(33.6)
	6,368.5	4,607.9	38.2
	1,109.1	1,312.6	(15.5)
Total	$ 8,636.2	$ 7,665.6	12.7

• FY2008 only includes the MMI acquisition for three months. FY2008 pro-forma sales revenue inclusive of the MMI merger was $10.2 billion.

Sales Revenue by Product

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FY 2009
2.6%
6.7%
1.5%
12.3%
48.7%
25.0%
3.2%
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FY 2008
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4.7%
7.3%
Ferrous Trading
3.6%
Non Ferrous Shred Recovery
Ferrous Brokerage 13.7%
49.7%
Non Ferrous Trading
Non Ferrous Brokerage
Manufacturing/Other
17.9%
Recycling Solutions 3.1%
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$m	FY 2009	FY 2008	Change (%)
Ferrous Trading Non Ferrous Shred Recovery Ferrous Brokerage Non Ferrous Trading Non Ferrous Brokerage Manufacturing/Other Recycling Solutions	$ 4,201.4 278.5 2,162.8 1,065.6 127.8 221.6 578.5	$ 3,807.3 240.0 1,373.8 1,052.9 271.2 361.2 559.2	10.4 16.1 57.4 1.2 (52.9) (38.7) 3.5
Total	$ 8,636.2	$ 7,665.6	12.7

• Ferrous brokerage sales associated with SAR JV were A$1.3 billion and A$0.5 billion, in FY2009 and FY2008, respectively.

EBIT by Region

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$500
441.1
$400
$300
209.4
153.8
$200 FY 2009
46.9 97.9
$100 FY 2008
(32.3) (50.1)
$0
(30.1) (23.7) (29.3)
-$100
Australasia North America Europe Corporate Costs Intangibles
($'s in millions)
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$m	FY 2009	FY 2008	Change (%)
Australasia North America Europe	46.9	209.4	(77.6)
	153.8	441.1	(65.1)
	(30.1)	97.9	(130.7)
EBIT by Region Group Corporate Costs Amortisation of intangibles*	$ 170.6	$ 748.4	(77.2)
	(32.3)	(23.7)	36.3
	(50.1)	(29.3)	71.0
EBIT (pre-goodwill impairment)	$ 88.2	$ 695.4	(87.3)
Non-cash goodwill impairment	(191.1)	(3.3)	-
EBIT (post-goodwill impairment)	($ 102.9)	$ 692.1	(114.9)

Atypical items in FY09 other than goodwill impairment:	Australasia	North America	Europe
Inventory Adjustments NF contract adj’s Redundancy accruals Asset impairments Sox compliance Other	9.3	71.2	38.9
	9.5	19.1	7.4
	1.7	3.8	-
	2.2	11.4	-
	4.7	4.4	0.6
	2.6	15.8	-
Total	$ 30.0	$ 125.7	$ 46.9

*EBIT by Region is before add back of atypicals other than goodwill impairment, group corporate costs and amortisation of intangibles.

EBIT by Product (pre-goodwill impairment)

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$600
511.9
$500
$400
258.3
$300
94.5
$200 40.1 66.9 71.4 89.6 FY 2009
$100 31.4 22.6
FY 2008
$0
($100) (8.3) (7.3)
(62.5)
($’s in millions)
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$m	FY 2009	FY 2008	Change (%)
Ferrous Trading (incl. NFSR) Ferrous Brokerage Non Ferrous Trading Non Ferrous Brokerage Manufacturing/JVs/Other Recycling Solutions	258.3 40.1 (62.5) (8.3) 71.4 (7.3)	511.9 31.4 66.9 22.6 94.5 89.6	(49.5) 27.7 (193.4) (136.7) (24.4) (108.2)
EBIT by Product Group & Regional Corporate Costs Amortisation of intangibles	$ 291.7 (153.4) (50.1)	$ 816.9 (92.2) (29.3)	(64.3) 66.4 71.0
EBIT (pre-goodwill impairment)	$ 88.2	$ 695.4	(87.3)

• EBIT by product is presented pre-corporate costs (including group head office costs) and amortisation of intangibles.

• Corporate costs (which include regional administrative costs) increased in FY 2009 due to merger with MMI and in part due to atypical items.

• EBIT by Product is before other atypical items and does not reflect any allocation of the write-off of non-cash goodwill impairment to the product categories.

EBIT Change by Region*

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800
700
600 -163
500
-128
400
695
300
-287
200
-8
100
-21
88
0
FY08 EBIT Australasia Europe (inc. UK) North America Corporate Intangibles FY09 EBIT
Costs
$ million
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Australasia ($ 163m) Europe (incl. UK) ($ 128m) North America ($ 287m) Group Corporate Costs ($ 8m) Amortisation of intangibles ($ 21m)

*EBIT Change by Region is before non-cash goodwill impairment and add back of atypical items.

EBIT Change by Product*

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800
700
600
-245
500
400
-160
695
300
-97
200
-23
100 -61
-21
88
0
FY08 EBIT Ferrous Non Ferrous Recycling Manufacturing/ Corporate Intangibles FY09 EBIT
(incl. NFSR) Solutions JVs/Other Costs
$ million
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Ferrous Trading & Brokerage (incl. NFSR) Non Ferrous Trading & Brokerage Recycling Solutions Manufacturing/JVs/Other Group and Regional Corporate Costs Amortisation of Intangibles

($ 245m) ($ 160m) ($ 97m) ($ 23m) ($ 61m) ($ 21m)

*EBIT Change by Product is before non-cash goodwill impairment and add back of atypical items.

Intake Volumes

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FY 2009
FY 2008
3.5% 0.4% Ferrous Shredded (incl. 4.0% 0.5%
NFSR)
Other Processed
29.6%
33.6% Ferrous 27.6%
34.1%
Ferrous Brokerage
Non Ferrous
Trading/Brokerage
Other
32.9%
33.8%
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Total Tonnes (‘000’s)	FY 2009	FY 2008	Change (%)
Ferrous Shredded (inc. NFSR) Other Processed Ferrous Ferrous Brokerage Non Ferrous Trading/Brokerage Other	4,236 4,153 3,737 446 45	4,000 3,961 3,237 468 62	5.9 4.8 15.4 (4.7) (27.4)
Total	12,617	11,728	7.6

• FY2008 includes MMI for only three months.

• Ferrous brokerage tonnes associated with SAR JV were 2.2 million and 1.1 million tonnes for FY2009 and FY2008, respectively.

Sales Volumes

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FY 2009 FY 2008 1.5%
3.5% 1.0% Ferrous Shredded (incl. 3.9%
NFSR)
Other Processed
29.1% 32.8% Ferrous 28.1% 34.3%
Ferrous Brokerage
Non Ferrous
Trading/Brokerage
Other
33.6% 32.2%
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Total Tonnes (‘000’s)	FY 2009	FY 2008	Change (%)
Ferrous Shredded (inc. NFSR) Other Processed Ferrous Ferrous Brokerage Non Ferrous Trading/Brokerage Other	4,330 4,434 3,846 464 138	3,992 3,757 3,277 453 178	8.5 18.0 17.4 2.4 (22.5)
Total	13,212	11,657	13.3

• FY2008 includes MMI for only three months.

Ferrous brokerage tonnes associated with SAR JV were 2.2 million and 1.1 million tonnes for FY2009 and FY2008, respectively.

Sales by Destination

FY 2009

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21%
33%
11%
3%
1% 16%
2%
13%
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Europe

FY 2008

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21%
32%
11%
4%
1% 9%
3%
19%
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• 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

Group Income Statement

$m	FY 2009	FY 2008	Change ($)	Change (%)
Sales Revenue EBITDA EBIT (pre-goodwill impairment) Non-cash goodwill impairment EBIT Net Interest Expense Tax Expense Net (Loss) / Profit After Tax	$ 8,636.2 259.0 88.2 191.1 $ (102.9) (19.2) (28.1) $ (150.3)	$ 7,665.6 790.5 695.4 3.3 $ 692.1 (31.5) (220.5) $ 440.1	970.6 (531.5) (607.2) 187.8 $ (795.0) 12.3 192.4 $ (590.4)	12.7 (67.1) (87.3) - (114.9) (38.7) (87.3) (134.1)

Group Balance Sheet

$m	FY 2009	FY 2008	Change ($)	Change (%)
Current Assets Non-current Assets Total Assets Current Liabilities Non-current Borrowings Other Non-current Liabilities Total Liabilities Net Assets/Equity Net Debt/(Net Debt +Equity) (%)	985.9 2,822.7 3,808.6 577.0 174.3 198.2 949.5 2,859.1 3.6%	2,014.4 2,632.0 4,646.4 1,225.0 397.5 190.0 1,812.5 2,833.9 8.5%	(1,028.5) 190.7 (837.8) (648.0) (223.2) 8.2 (863.0) 25.2 -	(51.1) 7.3 (18.0) (52.9) (56.2) 4.3 (47.6) 0.9 -

Group Cash Flow

$m	FY 2009	FY 2008	Change ($)
(Loss)/profit for the year Adjustments for non-cash items Depreciation and amortisation Impairment of goodwill Net gain on contribution of assets to SA Recycling LLC Share-based payment Equity accounted profits net of dividends received Other Change in operating assets and liabilities Net cash inflow from operating activities Payments for PP&E Payments on acquisitions of subsidiaries, net of cash acquired Proceeds from sale of PP&E Proceeds from the sale of subsidiaries Return of capital from jointly controlled entities Net cash outflow from investing activities Net cash inflows from operating & investing activities	(150.3) 170.8 191.1 - 9.3 (16.8) 24.5 325.9 $ 554.5 (187.5) (76.0) 5.5 39.7 3.6 $ (214.7) $ 339.8	440.1 95.1 3.3 (38.8) 13.4 (55.3) (1.2) (209.1) $ 247.5 (129.7) (58.5) 2.0 - 48.5 $ (137.7) $ 109.8	(590.4) 75.7 187.8 38.8 (4.1) 38.5 25.7 535.0 $ 307.0 (57.8) (17.5) 3.5 39.7 (44.9) $ (77.0) $ 230.0

North America Regional Results

	FY 2009	FY 2008	Change (%)
Sales Revenue ($m) EBITDA ($m) Depreciation EBITA ($m) Amortisation of intangibles EBIT ($m) *Assets ($m) Employees Sales Margin (%)	$ 6,368.5 $ 228.1 (74.3) $ 153.8 (47.1) $ 106.7 $ 2,770.0 3,221 14.9%	$ 4,607.9 $ 471.0 (29.9) $ 441.1 (24.2) $ 416.9 $ 3,372.1 3,537 17.2%	38.2 (51.6) 148.5 (65.1) (94.6) (74.4) (17.9) (8.9) -

*Pre-goodwill impairment and group corporate costs.

Australasia Regional Results

	FY 2009	FY 2008	Change (%)
Sales Revenue ($m) EBITDA ($m) Depreciation ($m) EBITA ($m) Amortisation of intangibles ($m) EBIT ($m) *Assets ($m) Employees Sales Margin (%)	$ 1,158.6 $ 67.5 (20.6) $ 46.9 (0.1) $ 46.8 $ 485.5 900 19.5%	$ 1,745.1 $ 226.3 (16.9) $ 209.4 (0.1) $ 209.3 $ 597.2 978 22.8%	(33.6) (70.2) 21.9 (77.6) - (77.6) (18.7) (8.0) -

*Pre-goodwill impairment and group corporate costs.

Europe Regional Results

	FY 2009	FY 2008	Change (%)
Sales Revenue ($m) EBITDA ($m) Depreciation ($m) EBITA ($m) Amortisation of intangibles ($m) EBIT ($m) Assets ($m) Employees Sales Margin (%)	$ 1,109.1 $ (6.3) (23.8) $ (30.1) (2.9) $ (33.0) $ 553.1 1,340 24.0%	$ 1,312.6 $ 116.8 (18.9) $ 97.9 (3.9) $ 94.0 $ 677.2 1,361 27.7%	(15.5) (105.4) 25.9 (130.8) (25.6) (135.1) (18.3) (1.5) -

Right. Now.

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