SIMS LIMITED — Interim / Quarterly Report 2015

Feb 12, 2015

Financial ResultsHalf year ended 31 December 2014

Galdino Claro, Group CEOFred Knechtel, Group CFO13 February 2015

Significant increase in earnings and dividend

SlRaesevenue$3387m,	6%-	SlTaesonnes55Mt	10%-
1UdliEBITDAnerngy$149m	16%	StttEBITDAaoruy$145m	36%
1UdliEBITneryng$91m	%35	StttEBITauory$95m	%83
1UdliNPATneryng$64m	3%5	SNPATtttauory$75m	01%7
1(dilud)teUdliEPSneryng31.4c	%55	(diluted)StttEPSauory363c	0%77
ItiDiiddnermenv160c		NChteas$49m	16%

Strong bottom line performance despite lower sales volume

Strategic plan advancing as anticipated

	Stlireamne	Otiipmse	Grow
11H5Progress	Wididffitblnngownounproae•libiithe-recycngusnessesneUKdCdananaaRdifilhdteuconoregonaoverea•iNhAiMltttcossnormercaeas	EtblihdPjtsaseroec•MtOffi(PMO)tanagemenceodittilttirvesraegympemenaonEbddifilttmengoransacona•fibililttttproaymanagemenoosAittfGpponmenonewroup•CFOdPidtfNAanresenoCMtltlRieas,enraegon	Aiitiftllcqusonowosma•bihithiusnesses,oneeacwnNthAiMtldANZormercaeasanMtleasRfitttampuporecennvesmen•iNEldihihttnewnganwneNhAiMlbittormercaeasusness
2H1Obji5tecves	Widdflinownoe-recycng•biithUKdusnessesneanCdtbltdanaaoecompee	Nhddddewsreeranyar•iiWtAtliexpansonnesernusraaLibitteveragngespracces•lbllgoay	E-lithiirecycnggrownemergng•ktmaresCiiittttonnueonvesgae•illhittpoenavaueenancngddiihMlttttaonsoeeaRlibiecycngusnesses

Strategy is key to our success

Earnings growth tracking on target

On track to $321 million of EBIT

Capital Expenditure and Capital Management

StiisannguCapex	EipansonarxyCapex	CitlapaMtanagemen	Shhldlthtithhareoerweacreaonrougfthihtblbiergaanceousnessittditltnvesmenancapamanagemen
OinintengogmananceinhightotasusfointioperrmgoperansRl of obsleteenewao	IinictmtnvesenorgandisiivehttanacqugrowHY15ioexpansnaryinludethecapexcs	DividedfoHY15fnro16cillbehetps,whighet pt sinsaymenceFY11	ffItidiiddHY15160nermenorovffthllkdithcenspersareraneseuy,,hihtiFY11gessnce
tehnlodcoganyiptequmenRindimtaeanprovefetytadadst allsasnrafailitieourcsEt staininxpecusglsbecapexgoacanbydittumeexpenrest obelowtarcurrendeiatioprecn	hrddeinANZneserwMlstaeHY1isiiof5tacqunsotwllbuinosmasessesintheUSdANZanFtheiourr expansnarydincapexspengicipdhettet5anaovertratetoyear sgyOttimisatiosupporpndGthtatsanrorgew	Otimiselobal chpgastmanagemenDinhetettermemosfficiet citalenaptrututoduscrereceitalfudintscapngcos	ShfldhttrongcasosannecaswiiifhidtttposonspporeoencreaseuvHY15diiddtenpamenvy

Strong performance and net cash balance supports dividend

Segment & Financial Performance

Fred Knechtel, Group CFO

Stronger margins offset lower volumes

Underlying EBIT1 of $91m, up by 35%

• North America Metals EBIT increased $23m over HY14 due to higher gross margins and lower operating expenses, offsetting lower volumes
• ANZ Metals EBIT decreased $9m primarily due to lower sales volumes and challenging market dynamics
• Europe Metals EBIT increased $7m due to higher gross margins and lower operating expenses
• Global E-Recycling EBIT increased $12m due to improved results in Europe and reduced losses from non-core businesses wound down
• UnallocatedEBIT decreased $10m

Improvement in NA, Europe and Global E-Recycling offset ANZ decline

8

Sales Revenue & Underlying EBIT by Region

$SlR(A)aesevenuem	HY15	HY14	Ch%g
NhAiMlttormercaeas	1,913.3	2,08.65	1%-7
ANZMtleas	553.6	575.7	-38%
EMtlropeeasu	13.25	2057.	-26%
GlblE-Rlioaecycng	401.5	422.3	-49%
Ulltdnaocae	5.6	9.7	%-42.3
Tltoa	3,3827.	3,93.35	%5.7-

57%16%15%12% 0% NA MetalsANZ MetalsEurope MetalsGlobal E-RecyclingUnallocatedHY15 Sales Revenue

36%

1% NA Metals

HY15 Underlying EBIT1

**Total 90.9 67.6 34.5%**33%

16%

14%

ANZ Metals

Unallocated

Europe Metals

Global E-Recycling

Sales Revenue & Volume by Product

SlVl('0)00toaesomesunnes	1HY5	14HY	C%hg	HY15SlVlaesoumes
FTdierrosrangu	3,936	4,327	-90%	5%
FBkerrousroerage	1,291	1,519	%-15.0	23%FTdierrosrangu
FMtlTtlerrouseasoa	225,7	8465,	-10.6%	FBkerrosroerageu
NFMltonerrouseas	273	278	-18%	NFMtlonerroseasu
Ttloa	005,5	6,124	10.2%-	2%7

Improvement in Non Ferrous Metals providing positive mix contribution

North America Metals

$Am	HY15	HY14	C%hg
SlRaesevenue	1,913.3	2,058.6	%-71
SEBITDAtttauory	695.	32.7	101.%5
UdliEBITDAneryng	65.3	40.6	60.8%
Ditieprecaon	25.9	22.8	%13.6
Aiittmorsaon	6.4	7.6	-15.8%
StttEBITauory	33.6	2.3	%1,360.9
UdliEBITneryng	33.0	10.2	223.%5
Atsses	1,368.0	1,387.2	-14%
()ItkVl000'snaeomesu	3,802	4,364	%-12.9
SlVl(000's)aesoumes	3,818	4,342	-12.1%
Elmpoyees	2,270	2,253	%0.8

Performance

• Improved earnings driven by stronger gross margins and a disciplined approach on lowering operating costs and increasing metallic yields
• Sales volumes declined over the prior corresponding period due to lower secondary metal generation and collection rates in the US market
• Ramp up of recently completed New England expansion and New York Municipal Recycling Plant in Brooklyn

Strategic Progress

• Full rollout of transactional profitability management tools across the North America Metals platform
• Appointment of Tobin Pospisil as President of NA Metals, Central Region
• Acquisition of a feeder yard to support intake flows in the North America Metals Central Region

Improvements in North America driving Group performance

Australia & New Zealand Metals

$Am	HY15	HY14	Ch%g
SlRaesevenue	553.6	575.7	-38%
StttEBITDAaoruy	43.6	53.7	%-18.8
UdliEBITDAneryng	43.6	53.0	-17.7%
Ditieprecaon	13.2	13.3	-08%
Aiittmorsaon	0.5	0.5	0.0%
StttEBITauory	29.9	39.9	-25.1%
UdliEBITnerngy	29.9	39.2	%-23.7
Atsses	447.0	472.4	-54%
ItkVl(000's)naeoumes	992	1,015	-23%
SlVl(000's)aesoumes	944	975	-32%
Elmpoyees	846	842	0.5%

Performance

First half profitability impacted by difficult tradingconditions, falling commodity prices, and lower volumes

Strategic Progress

• Acquisition of a small feeder yard facility to support intake flows
• Construction of the new shredder and yard expansion in Western Australia progressing well, with the shredder expected to be operational by mid-2015

Market dynamics impacting performance

Europe Metals

$Am	HY15	HY14	Ch%g
SlRaeseenevu	13.25	2057.	-26%
SEBITDAtttauory	22.7	14.1	61.0%
UdliEBITDAneryng	21.1	14.1	%49.6
Diiteprecaon	6.2	6.2	0.0%
Atitimorsaon	0.0	0.0	N/M
StttEBITaoruy	16.5	97.	108.9%
UdliEBITneryng	14.9	7.9	88.6%
Atsses	263.1	309.9	%-15.1
IkVl(000's)tnaeoumes	832	842	-12%
SlVl(000's)aesoumes	738	807	-86%
Elmpoeesy	077	629	12.%4

Performance

• Considerable lift in underlying earnings due to higher gross margins and lower operating expenses
• Gross margins boosted by improved metallic yields across the region's three shredders
• Improved operational performance more than offset lower sales volumes

Strategic Progress

• Europe Metals benefiting from past restructuring actions and the ready adoption of the best practices now being shared across the Group's global operating footprint
• Rolling out transactional profitability management tools, originally developed and successfully tested within North America Metals

Improvement in Europe driven by an improved business model

Global E-Recycling

$Am	HY15	HY14	Ch%g
SlRaesevenue	401.5	422.3	-49%
StttEBITDAauory	18.4	2.5	636.0%
UdliEBITDAnerngy	18.4	10.2	%80.4
Diiteprecaon	65.	8.4	-33.3%
Atitimorsaon	0.3	1.8	-83.3%
SEBITtttauory	12.5	-77	-262.3%
UdliEBITneryng	12.5	0.0	N/M
Atsses	442.3	539.1	%-18.0
Elmpoyees	1,842	2,322	-20.7%

Performance

• Material recovery in underlying earnings to the highest level in two years
• Stronger earnings were due to better performance from Continental Europe as well as reduced losses from the recently exited operations
• The business continued to incur operating losses in the UK and Canada as the rationalised facilities were wound down

Strategic Progress

Further gains from streamlining expected in 2H FY15 as the relevant UK and all three Canadian sites are anticipated to be substantially wound down by the end of FY15

Restructured business yielding improved margins

Cash Flows

Cash Flow Bridge (A$m)

Strong cash flow supports internal investments and returns to shareholders

Summary & Outlook

Galdino Claro, Group CEO

Summary & Outlook

• Competition for intake material remains high, however industry structure for metals recycling in North America appears to be becoming more rational
• Significant near-term downward pressure on ferrous scrap demand, as prices have fallen sharply since the start of 2H FY15
• Lower ferrous prices will negatively impact both demand and supply for ferrous scrap, as well as elevating competition in the short-term
• As the ferrous scrap price relationship to iron ore normalises, demand from consumers and attractiveness of exports is anticipated to improve
• Gains expected from strategic initiatives in 2H FY15 should assist in mitigating near-term commodity market headwinds

Appendix

Summary of financial items by Region

Sales Revenue

$Am	HY15	HY14	Chg%
NohAmicaMelsttarer	1,913.3	2,08.65	1%-7
ANZMelsta	3.655	575.7	-38%
EuMelstarope	13.25	2057.	-26%
GlobalE-Relingcyc	401.5	422.3	%-49
Unlloctedaa	65.	9.7	2.3%-4
Total	3,387.2	3,593.3	-57%

Sales Volumes

Thodtousannnes	HY15	HY14	C%hg
NothAmicaMetalsrer	3,818	4,342	-12.1%
ANZMetals	944	975	-32%
EuMetalsrope	738	807	-86%
Total	5,500	6,124	-10.2%

Underlying EBITDA

$Am	HY15	HY14	Chg%
NothAmicaMetalsrer	635.	40.6	60.8%
ANZMetals	43.6	3.05	-1%7.7
EuMetalsrope	21.1	14.1	49.6%
GlobalE-Relingcyc	18.4	10.2	80.%4
Unllocdteaa	0.9	10.6	-91.5%
Total	149.3	128.5	16.2%

Underlying EBIT

$Am	HY15	HY14	Chg%
NohAmicaMelsttarer	33.0	10.2	223.5%
ANZMetals	29.9	39.2	-23.7%
EuMetalsrope	14.9	7.9	88.6%
GlobalE-Relingcyc	12.5	0.0	N/M
Unllocdteaa	0.6	10.3	-94.2%
Total	90.9	667.	34.%5

Significant items by region – HY15

$HY15(A)m	NAMlteas	ANZMlteas	Ee Muroplteas	GlbloaE-Rlieccngy	Ulltdnaocae	PTre-axTltoa	fAtTx Ter-altoa
Rel of aimirmt ofloaversanpaennivablerece	-06	-	-	-	-	-06	-06
Netimtfroinvtmtsinpacmeseniateassocs	-	-	-	-	-20	-20	-20
Net(l)/elatingtoreversaxpensere/dlosdilapidationarcuresy	-	-	-16	-	-	-16	-16
Taimirm/(l)ttx assepaenreversa	-	-	-	-	-	0.0	9-5
TotalSigifictItefoHY2015nanmsr	-$0.6	$0.0	-$1.6	$0.0	-$2.0	-$4.2	-$10.1

Significant items by region – HY14

$HY14(A)m	NAMlteas	ANZMlteas	Ee Mropulteas	GlbloaE-Rliecycng	Ulltdnaocae	PTre-axTltoa	fAtTer-ax Tltoa
FixedAstImirmtsepaen	-	-	-	2.3	-	2.3	2.3
Insiesf wit oteurancerecovernerffso	-33	-	-	-	-	-33	-33
/oLettlemtsleaaseseennerousses	0.1	-	-	4.2	-	4.3	4.3
Redudaiesnnc	2.6	-	-	0.2	0.3	3.1	2.8
Settlemt ofdispteiththirdenus wtiespar	0.4	-	-	-	-	0.4	0.4
/()Exllatingtopensesreversaredlos/dilapidaiontyarcures	0.6	-07	-	1.0	-	0.9	1.0
Cr/dit pisionloserovsses	0.9	-	-	-	-	0.9	0.9
Lolefbuinedivisionsson saossss	6.6	-	-	-	-	6.6	6.6
Trtiondthelegl ctsansacanoraos	-	-	-	-	0.3	0.3	0.2
Taimirm/(l)ttx assepaenreversa	-	-	-	-	-	0.0	167.
TotalSigifictItefoHY2014nanmsr	$7.9	-$0.7	$0.0	$7.7	$0.6	$15.5	$32.8

HY15 income tax expense considerations

$HY15(A)m	PfiBfTtroeoreax	ITncomeax	EffiT%tecveax
StatutoReltrysu	91.3	16.8	18.4%
Reilingiteconcms:
Imt of sigificatitepacnnms	-42	0.0
Utilisationf pioulyisedtalosorevsunrecognxses	0.0	8.5
Undelyinglosbefidttatersesnonex	0.0	-06
UndelyinReltsrgsu	$87.1	$24.7	28.4%

Disclaimer

The material contained in this document is a presentation of information about the Group's activities current at the date of the presentation, 13 February 2015. It is provided in summary form and does not purport to be complete. It should be read in conjunction with the Group's periodic reporting and other announcementslodged with the Australian Securities Exchange (ASX).

To the extent that this document may contain forward-looking statements, such statements are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this release.

This document is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor.