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SIMS LIMITED Annual Report 2010

Aug 26, 2010

65780_rns_2010-08-26_1fb750bc-363c-42f5-9d6e-a32f193a73ab.pdf

Annual Report

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Financial results for the full year ended 30 June 2010 Sims Metal Management Limited ASX Code: SGM NYSE Code: SMS

Supplemental Information 27 August 2010

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/A, which we filed with the SEC on 14 April 2010.

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 2010 FY 2009 Change (%)
Sales Revenue ($m)
EBITDA ($m)
Depreciation ($m)
Amortisation ($m)
EBIT ($m)
NPAT ($m)
*EPS (cents)
Net cash (outflow)/inflow from operating activities ($m)
Capital Expenditures ($m)
Net (Cash) Debt ($m)
Net (Cash) Debt/[Net (Cash) Debt + Equity] (%)
Sales Tonnes (‘000)
Full Fiscal Year Dividend (cents per share)*		 7,452.6
352.9
109.1
34.8
208.1
126.7
64.5
(47.5)
120.9
(15.1)
(0.5)
12,896.6
33		 8,636.2
259.0
120.7
50.1
88.2
40.8
22.5
554.4
187.5
105.6
3.6
13,212.0
38		 (13.7)
36.3
(9.6)
(30.5)
135.9
210.5
186.7
(108.6)
(35.5)
114.3
-
(2.4)
(13.2)

FY2009 presented EBITDA, EBIT, NPAT and EPS excludes goodwill impairment of $191.1 million, which represented $1.05 per share. FY2010 presented EBITDA is before impairment of other intangibles of $0.9 million.

Sales Revenue by Region

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FY 2010
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FY 2009
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16.0% 16.4%
67.6%
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12.9% 13.4%
Australia
North America
Europe
73.7%
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$m FY 2010 FY 2009 Change
(%)
Australasia
North America
Europe		 1,221.3 1,158.6 5.4
5,040.0 6,368.5 (20.9)
1,191.3 1,109.1 7.4
Total $ 7,452.6 $ 8,636.2 (13.7)

Sales Revenue by Product

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FY 2010
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2.6%
8.8%
1.0%
19.5%
46.2%
17.2%
4.7%
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Ferrous Trading
Non Ferrous Shred Recovery
Ferrous Brokerage
Non Ferrous Trading
Non Ferrous Brokerage
Manufacturing/Other
Recycling Solutions
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FY 2009
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2.6%
6.7%
1.5%
12.3%
48.7%
25.0%
3.2%
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$m FY 2010 FY 2009 Change
(%)
Ferrous Trading
Non Ferrous Shred
Recovery
Ferrous Brokerage
Non Ferrous Trading
Non Ferrous Brokerage
Manufacturing/Other
Recycling Solutions		 $ 3,441.9
350.3
1,279.0
1,450.0
75.5
198.5
657.4		 $ 4,201.4
278.5
2,162.8
1,065.6
127.8
221.6
578.5		 (18.1)
25.8
(40.9)
36.1
(40.9)
(10.4)
13.6
Total $ 7,452.6 $ 8,636.2 (13.7)
  • Ferrous brokerage sales associated with SAR JV were A$0.7 billion and A$1.3 billion, in FY2010 and FY2009, respectively.

EBIT by Region

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$200
153.8
$150
113.3
81.2
$100
69.0
46.9
$50
FY2010
(20.6) (34.8)
$0
FY2009
-$50
(30.1) (32.3)
(50.1)
-$100
Australiasia North America Europe Corporate Amortisation of
intangibles
($'s in millions)
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$m FY 2010 FY 2009 Change
(%)
Australasia
North America
Europe		 81.2
113.3
69.0		 46.9
153.8
(30.1)		 73.1
(26.3)
329.2
EBIT by Region
Group Corporate Costs
Amortisation of intangibles*		 $ 263.5
(20.6)
(34.8)		 $ 170.6
(32.3)
(50.1)		 54.5
36.2
30.5
EBIT (pre-goodwill impairment) $ 208.1 $ 88.2 135.9
Non-cash goodwill impairment - (191.1) -
EBIT (post-goodwill impairment) $ 208.1 ($ 102.9) 302.2

*EBIT by Region excludes goodwill impairment (FY09), group corporate costs and amortisation of intangibles.

EBIT by Product

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$300
258.3
$250
$200
133.2
$150
40.1 95.5 71.4 89.4
$100
21.4 29.3
$50 3.2 FY2010
$0
FY2009
($50)
(8.3) (7.3)
($100) (62.5)
($’s in millions)
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$m FY 2010 FY 2009 Change
(%)
Ferrous Trading (incl. NFSR)
Ferrous Brokerage
Non Ferrous Trading
Non Ferrous Brokerage
Manufacturing/JVs/Other
Recycling Solutions		 133.2
21.4
95.5
3.2
29.3
89.4		 258.3
40.1
(62.5)
(8.3)
71.4
(7.3)		 (48.4)
(46.6)
252.8
138.6
(59.0)
1,324.7
EBIT by Product
Group & Regional Corporate Costs
Amortisation of intangibles		 $ 372.0
(129.1)
(34.8)		 $ 291.7
(153.4)
(50.1)		 27.5
15.8
30.5
EBIT (pre-goodwill impairment) $ 208.1 $ 88.2 135.9

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

  • EBIT by Product does not reflect any allocation of the write-off of non-cash goodwill impairment in FY09 to the product categories.

EBIT Change by Region

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250
200 (40) 15
12
99
150
208
100 34
50 88
0
FY09 EBIT Australasia Europe (inc. UK) North America Corporate Intangibles FY10 EBIT
Costs
$ million
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Australasia $ 34m Europe (incl. UK) $ 99m North America ($ 40m) Group Corporate Costs $ 12m Amortisation of intangibles $ 15m

*FY09 EBIT is before non-cash goodwill impairment.

EBIT Change by Product

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250
200 15
(42)
24
97
150
100 208
50
88 170
(144)
0
(50)
FY09 EBIT Ferrous Non Ferrous Recycling Manufacturing/ Corporate Intangibles FY10 EBIT
(incl. NFSR) Solutions JVs/Other Costs
$ million
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Ferrous Trading & Brokerage (incl. NFSR) ($ 144m) Non Ferrous Trading & Brokerage $ 170m Recycling Solutions $ 97m Manufacturing/JVs/Other ($ 42m) Group and Regional Corporate Costs $ 24m Amortisation of Intangibles $ 15m

*FY09 EBIT is before non-cash goodwill impairment.

Intake Volumes

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FY 2010
FY 2009
4.6% 0.3% Ferrous Shredded (incl. 3.5% 0.4%
NFSR)
24.6% Other Processed
Ferrous 29.6% 33.6%
40.1%
Ferrous Brokerage
Non Ferrous
Trading/Brokerage
Other
30.4%
32.9%
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Total Tonnes (‘000’s) FY 2010 FY 2009 Change
(%)
Ferrous Shredded (inc. NFSR)
Other Processed Ferrous
Ferrous Brokerage
Non Ferrous Trading/Brokerage
Other		 5,346
4,057
3,271
608
41		 4,236
4,153
3,737
446
45		 26.2
(2.3)
(12.5)
36.3
(8.9)
Total 13,323 12,617 5.6
  • Ferrous brokerage tonnes associated with SAR JV were 1.9 million and 2.2 million tonnes for FY2010 and FY2009, respectively.

Sales Volumes

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FY 2010
FY 2009
1.0%
4.4% 0.3% Ferrous Shredded (inc. 3.5%
NFSR)
25.3% Other Processed
29.1% 32.8%
Ferrous
40.0%
Ferrous Brokerage
Non Ferrous
Trading/Brokerage
Other
30.0%
33.6%
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Total Tonnes (‘000’s) FY 2010 FY 2009 Change
(%)
Ferrous Shredded (inc. NFSR)
Other Processed Ferrous
Ferrous Brokerage
Non Ferrous Trading/Brokerage
Other		 5,164
3,866
3,264
565
38		 4,330
4,434
3,846
464
138		 19.3
(12.8)
(15.1)
21.8
(72.5)
Total 12,897 13,212 (2.4)

Ferrous brokerage tonnes associated with SAR JV were 1.9 million and 2.2 million tonnes for FY2010 and FY2009, respectively.

Sales by Destination

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FY 2010
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16%
37%
14%
3% 18%
1% 1% 10%
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Europe

FY 2009

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

$m FY 2010 FY 2009 Change ($) Change (%)
Sales Revenue
EBITDA
EBIT (pre-goodwill impairment)
Non-cash goodwill impairment
EBIT
Net Interest Expense
Tax Expense
Net Profit / (Loss) After Tax*		 $ 7,452.6
352.9
208.1
-
208.1
(13.6)
(67.8)
$ 126.7		 $ 8,636.2
259.0
88.2
191.1
$ (102.9)
(19.3)
(28.1)
$ (150.3)		 $ (1,183.6)
93.9
119.9
(191.1)
$ 311.0
5.7
(39.7)
$ 277.0		 (13.7)
36.3
135.9
(100%)
302.2
29.5
(141.3)
184.3

*FY2010 presented EBITDA is before impairment of other intangibles of $0.9 million.

Group Balance Sheet

$m FY 2010 FY 2009 **Change ($) ** Change (%)
Current Assets
Non-current Assets
Total Assets
Current Liabilities
Non-current Borrowings
Other Non-current Liabilities
Total Liabilities
Net Assets/Equity
Net (Cash) Debt/[Net (Cash) Debt +Equity] (%)		 1,494.1
2,745.6
4,239.7
674.1
116.6
170.2
960.9
3,278.8
(0.5)%		 985.9
2,822.7
3,808.6
577.0
174.3
198.3
949.6
2,859.0
3.6%		 508.2
(77.1)
431.1
97.1
(57.7)
(28.1)
11.3
419.8
-		 51.6
(2.7)
11.3
16.8
(33.1)
(14.2)
1.2
14.7
-

Group Cash Flow

$m FY 2010 FY 2009 Change ($)
Profit / (Loss) for the year
Adjustments for non-cash items
Depreciation and amortisation
Impairment of goodwill
Share-based payment
Equity accounted profits net of dividends received
Other
Change in operating assets and liabilities
Net cash (outflow) / inflow from operating activities
Payments for PP&E
Payments on acquisitions of subsidiaries, net of cash acquired
Payments for other financial assets
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 (outflows) / inflows from operating & investing activities		 126.7
143.9
-
16.9
5.2
1.1
(341.3)
$ (47.5)
(120.9)
(113.4)
(22.8)
8.1
-
0.4
$ (248.6)
$ (296.1)		 (150.3)
170.8
191.1
9.3
(16.7)
24.2
326.0
$ 554.4
(187.5)
(76.0)
-
5.5
39.7
3.6
$ (214.7)
$ 339.7		 277.0
(26.9)
(191.1)
7.6
21.9
(23.1)
(667.3)
$ (601.9)
66.6
(37.4)
(22.8)
2.6
(39.7)
(3.2)
$ (33.9)
$ (635.8)

North America Regional Results

FY 2010 FY 2009 Change (%)
Sales Revenue ($m)
EBITDA ($m)
Depreciation
EBITA ($m)
Amortisation of intangibles
EBIT ($m)
*Assets ($m)
Employees
Sales Margin (%)		 $ 5,040.0
$ 178.6
(64.4)
$ 114.2
(32.3)
$ 81.9
$ 3,032.3
3,338
15.7%		 $ 6,368.5
$ 228.1
(74.3)
$ 153.8
(47.1)
$ 106.7
$ 2,770.0
3,221
14.9%		 (20.9)
(21.7)
13.3
(25.8)
31.4
(23.2)
9.5
3.6
-

*Pre-goodwill impairment (FY09), impairment of other intangibles (FY10) and group corporate costs.

Australasia Regional Results

FY 2010 FY 2009 Change (%)
Sales Revenue ($m)
EBITDA ($m)
Depreciation ($m)
EBITA ($m)
Amortisation of intangibles ($m)
EBIT ($m)
*Assets ($m)
Employees
Sales Margin (%)		 $ 1,221.3
$ 102.2
(21.0)
$ 81.2
(0.1)
$ 81.1
$ 562.8
841
22.1%		 $ 1,158.6
$ 67.5
(20.6)
$ 46.9
(0.1)
$ 46.8
$ 485.5
900
19.5%		 5.4
51.4
(1.9)
73.1
-
73.3
15.9
(6.6)
-

*Pre-group corporate costs.

Europe Regional Results

FY 2010 FY 2009 Change (%)
Sales Revenue ($m)
EBITDA ($m)
Depreciation ($m)
EBITA ($m)
Amortisation of intangibles ($m)
EBIT ($m)
Assets ($m)
Employees
Sales Margin (%)		 $ 1,191.3
$ 91.9
(22.9)
$ 69.0
(2.4)
$ 66.6
$ 644.6
1,307
27.6%		 $ 1,109.1
$ (6.3)
(23.8)
$ (30.1)
(2.9)
$ (33.0)
$ 553.1
1,340
24.0%		 7.4
1,558.7
3.8
329.2
17.2
301.8
16.5
(2.5)
-

Right. Now.

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