SIMS LIMITED — Interim / Quarterly Report 2018

Feb 15, 2018

Financial Results Half year ended 31 December 2017

16 February 2018

ASX:SGM USOTC:SMSMY

Agenda

• Results Overview Alistair Field, Group CEO

• Financial Results Stephen Mikkelsen, Group CFO

• Strategic Priorities & Outlook Alistair Field, Group CEO

Torch cutting former Tappan Zee Bridge - Albany, New York

1H FY18 Highlights: Increased earnings, net cash and return on capital

Continued growth in earnings and return on capital

• Underlying EBIT of $124 million, up 60% over prior half year

• Underlying NPAT of $81 million, up 36% over prior half year

• Underlying Return on Capital[1] of 10.5%, on track to exceed full year target set in FY13

Lifting returns through internal initiatives

• $85 million in capex spent in 1H FY18, on budget with full year target

• 45% to 55% of total capex allocated to value-adding and high-return growth projects

• Internal initiatives expected to add $60 to $80 million to underlying EBIT by FY19[2]

Strong balance sheet and improved dividend

• $390 million in net cash as at 31 December 2017

• Interim dividend of 23 cents, 100% franked, up 15% over prior half year

Financial Summary: Material improvement across all key metrics

Sales Revenue $2,977 million 1H FY17 +25% $2,385 million Underlying[1] EBITDA $180 million 1H FY17 +35% $133 million

Sales Volumes 4.76 million tonnes 1H FY17 +9% 4.36 million

Net Cash $390 million 30 June 2017 +4% $373 million

Underlying[1] EBIT $124 million 1H FY17 +60% $77 million Underlying[1] NPAT $81 million 1H FY17 +36% $60 million

Underlying Return on Capital[1] 10.5% 1H FY17 +54% 6.8% Interim Dividend 23 cents (100% franked) 1H FY17 +15% 20 cents (100% franked)

Employee Health & Safety: Safety remains our first priority

Safety performance

• Safety remains our most important priority

• Total recordable injuries (TRIFR) down 8% from FY17 and 63% since FY13

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3.5 3.3
63% reduction in TRIFR
3.0 2.8 569 injuries prevented
2.5
2.2
2.0
1.5
1.5 1.3
1.2
1.0
0.5
0.0
1
Total Recordable Injury Frequency Rate (TRIFR)
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• Serious injuries resulting in lost time (LTIFR) have declined even further, down 40% from FY17, and 78% since FY13

• Improved safety practices have prevented the occurrence of 569 recordable injuries

• By 2020 the Company is targeting a further 30% reduction in TRIFR, with the ultimate goal of creating an incident free workplace

Performance by Quarter: Internal improvements driving increased earnings leverage

Underlying EBIT by Quarter[1]

• Internal improvements and operating discipline driving higher EBIT per tonne

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90 3.0
80
2.5
70
60 2.0
50
1.5
40
30 1.0
20
0.5
10
0 0.0
Underlying EBIT Sales tonnes (RHS)
million tonnes
Underlying EBIT
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• 1Q FY18 EBIT was circa $10 million higher than 1Q FY17 on similar sales volumes levels

• 2Q FY18 EBIT was the highest achieved since 2011

• Earnings growth was supported by:

• Steadily rising ferrous & non-ferrous prices leading to wider metal spreads

• Higher sales volumes with improving availability of intake material

• Completion of key internal projects

Performance by Business: North America and ANZ Metals leading earnings growth

North America Metals

Australia & New Zealand Metals

• Underlying EBIT of $65 million, up 112%

• Sales volume growth of 12% over the prior half-year, driven by strong export sales up 31%

• Intake volumes rising supported by higher prices and broader based economic activity in the US

• Rising volumes and higher metal prices supported wider metal margins across the supply chain

• Meaningfully improved contribution from JV partners with underlying EBIT of $27 million, up 137%

• Underlying EBIT of $44 million, up 71%

• Sales volume growth of 3%, despite high prior halfyear base

• Intake volumes rose a more meaningful 13%, due to continued robust economic activity and improved collection economics from rising metal prices

• Improved metal margins assisted by a positive sales mix towards non-ferrous volumes

Europe Metals

• Underlying EBIT of $13 million, down 20%

• Sales volume growth of 6%, supported by new deepsea port facility in Southeast UK, opened in 1H FY18

• Stronger sales volumes were more than offset by lower metal margins

• 1H FY18 also included a small adverse impact from two ferrous cargo sales pushed into 2H FY18

Global E-Recycling

• Underlying EBIT of $7 million, down 41%

• Better performance in the US, boosted by cost reductions and benefits from recent operational restructure

• More than offset by negative margin pressure in Continental Europe

Joint Venture Performance: Leveraging the strengths of our joint venture partnerships

• North America Metals JV’s:

• SA Recycling: 74 facilities

• Richmond Steel Recycling: 4 facilities

• Rondout Iron & Metal: 1 facility

• Partnerships create national coverage across 18 US states and the west coast of Canada

NAM shredders NAM facilities Joint venture shredders Joint venture facilities

Joint Ventures (NA Metals)	1H FY17	1H FY18	Chg %
Sales volumes (‘000 tonnes)	1,288	1,607	24.8
Equity accounted income (EBIT)	11.4	27.2	137.3

• Active strategy to combine the global marketing, operational, and financial strength of Sims Metal Management with the commercial, operational, and local relationship capabilities of our JV partners

• Synergies created through joint knowledge sharing and asset combinations

• JV’s equity accounted income improved 137% over the prior half-year due to a significant increase in sales volumes and disciplined operational management

Positioned for Tomorrow

Financial Results Stephen Mikkelsen, Group CFO

Group Financial Performance: Earnings leverage driving significantly improved earnings

A$m	1H FY17	1H FY18	% Chg
Sales revenue	2,384.7	2,977.0	24.8%
Statutory EBITDA	153.3	178.6	16.5%
Underlying EBITDA	132.9	179.7	35.2%
Statutory EBIT	97.4	122.4	25.7%
Underlying EBIT	77.0	123.5	60.4%
Statutory NPAT	80.0	91.5	14.4%
Significant items	20.0	(10.2)	NMF
Underlying NPAT	60.0	81.3	35.5%
Statutory EPS (dilutive)	40.2	44.8	11.4%
Underlying EPS (dilutive)	30.1	39.8	32.2%
Dividend per share (cents)	20.0	23.0	15.0%
Total Invested Capital	1,583.7	1,640.4	3.6%
Underlying ROC1	6.8%	10.5%	54.4%

• Sales revenue increased 25% due to stronger sales volumes and higher commodity prices

• Underlying EBITDA increased 35%, driven by increased sales volumes and disciplined cost management

• Underlying EBIT of $124 million improved 60% over the prior half-year

• Actual 1H FY18 underlying tax rate of 31%

• Pro-forma 1H FY18 underlying tax rate of 25%, based on recent US tax reform

• Underlying NPAT of $81 million, up 36%

• Underlying EPS of 40 cents, up 32%

• Significant items related primarily to a positive benefit from recent US tax reform legislation

• Dividend of 23 cents, up 15% and 100% franked

• Underlying ROC of 10.5%, on track to exceed full year target set in FY13

Business Segment EBIT and Volumes: Improvement across both sales and intake volumes

Underlying EBIT (A$m)	1H FY17	1H FY18	Chg %
North America Metals	30.7	65.0	111.7
ANZ Metals	25.9	44.2	70.7
Europe Metals	15.8	12.6	(20.3)
Global E-Recycling	11.1	6.5	(41.4)
Corporate & Unallocated	(6.5)	(4.8)	26.2
Underlying EBIT	77.0	123.5	60.4
Sales volumes(‘000 tonnes)	1H FY17	1H FY18	Chg %
North America Metals	2,735	3,059	11.8
ANZ Metals	862	891	3.4
Europe Metals	763	811	6.3
Sales volumes	4,360	4,761	9.2
Intake volumes(‘000 tonnes)	1H FY17	1H FY18	Chg %
North America Metals	2,614	3,184	21.8
ANZ Metals	781	883	13.1
Europe Metals	730	826	13.2
Intake volumes	4,125	4,893	18.6

North America Metals underlying EBIT of $65 million, up 112%

• 12% higher sales volumes and improved metal spreads assisted by rising metal prices

• ANZ Metals underlying EBIT of $44 million, up 71%

• 3% improvement in sales volumes included a positive mix towards non-ferrous volumes

• Europe Metals underlying EBIT of $13 million, declined 20%

• 6% lift in sales volumes more than offset by lower metal margins

• E-Recycling underlying EBIT of $7 million, declined 41%

• Negatively impacted by margin pressure in Europe, partially offset by higher US earnings

• Sales and intake volumes improved 9% and 19% respectively

• Intake outpaced sales volumes in 1H FY18 by 132kt; surplus volume to be sold in 2H FY18

Product Segment Sales Volumes & Revenue: Strong growth in ferrous metals

Sales volumes(‘000 tonnes)	1H FY17	1H FY18	Chg %
Ferrous Trading	3,505	3,749	7.0
Ferrous Brokerage	628	786	25.2
Non Ferrous Trading	227	226	(0.4)
Sales volumes	4,360	4,761	9.2
Sales revenue(A$ million)	1H FY17	1H FY18	Chg %
Ferrous Trading	1,266	1,634	29.1
Ferrous Brokerage	196	328	67.3
Non Ferrous Trading	525	603	14.9
Other1	398	412	3.5
Sales revenue	2,385	2,977	24.8

Sales by Product

• Ferrous Trading and Brokerage volumes both significantly improved over the prior half year

• Demand and supply of ferrous scrap metal has significantly improved

• Declining steel exports from China has opened up demand from global EAF steelmakers

• Increased attractiveness of ferrous scrap as a raw material relative to iron ore

• Rising commodity prices stimulating collection of end-of-life, unprocessed raw material supply

• Non-ferrous sales volumes were flat over the prior year

• Includes an 18kt impact of exiting the stainless steel business in FY17

• Excluding this impact, non-ferrous volumes improved 11%

• Export sales represented 77% of total sales volumes in 1H FY18, up from 70% in 1H FY17

Cash Flow Statement: Strong operating cash flow driving positive free cash flow

A$m	1H FY17	1H FY18	 Operating cash flow of $131 million, up 15% - Meaningfully improved operating cash flow driven by higher underlying EBITDA - Increase in net operating cash flow notwithstanding increases in taxes paid and working capital  Capex of $85 million, up 25% - Higher spending on strategic growth oriented internal initiatives over the prior half-year - Key projects include large-scale non-ferrous metal recovery plants in New Jersey and Chicago, as well as new zorba separation and copper upgrading technology in the US  Free cash flow of $53 million - Free cash flow remained strong despite higher expansionary capex - Prior comparable half-year included one-time gain from sale of land and other non-core asse  $60 million in dividends paid during 1H FY18
Underlying EBITDA	132.9	179.7
Change in working capital	23.2	(11.1)
Interest and tax	(17.4)	(30.9)
Equity result net of dividends received	(9.8)	(20.1)
Other non-cash items	(14.9)	13.6
Operating cash flow	114.0	131.2
Capital expenditure	(67.9)	(84.7)
Payments for acquisitions	-	(1.4)
Proceeds from asset sales	55.5	8.6
Other cash flow from investing	0.1	(0.9)
Free cash flow	101.7	52.8
Dividends paid	(23.7)	(60.3)
Share buy-back	(13.4)	-
Other cash flow from financing	4.1	23.1
Cash flow	68.7	15.6

• Key projects include large-scale non-ferrous metal recovery plants in New Jersey and Chicago, as well as new zorba separation and copper upgrading technology in the US

• Free cash flow remained strong despite higher expansionary capex

• Prior comparable half-year included one-time gain from sale of land and other non-core assets

Capital Expenditure: Directing capital spending to internal growth initiatives

Capital Expenditure

• Net cash balance of $390 million as of 31 December 2017 to support healthy pipeline of internal initiatives

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250
200
150
100
50
0
A$ million
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• 1H FY18 capex of $85 million expected to accelerate in 2H FY18

• Forecast total capex of $180 million to $200 million in FY18

• Growth capex expected to be between 45% to 55% of total capex in FY18

• Capital spending focused on internal projects, with well understood risk and delivery parameters, and attractive expected returns greater than cost of capital

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Sustaining Capex Growth Capex Forecast Range
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Dividend & Shareholder Returns: Dedicated to improving shareholder capital returns

Near-Term:

Strong balance sheet supports higher dividend

Long-Term: Sustainable capital management strategy

• Interim dividend of 23 cents per share declared

• 100% franked, record date of 14 March 2018, with a payment date of 28 March 2018

  • Establish budget for medium-term capital requirements to sustain and grow the business

• Interim dividend at 58% payout ratio

• Slightly above typical guidance range of 45% to 55% (of underlying EPS)

2) Long-term Funding Structure

• Higher payout ratio reflects the Company’s strong balance sheet and improving operating performance

• Determine the appropriate balance sheet requirements for cash or debt, which sustains the business and prudently manages risk through commodity cycles

3) Sustainable Capital Distribution Strategy

• Determine the most efficient strategy to return excess capital to shareholders, through a mix of dividends and share buy-backs

Positioned for Tomorrow

Strategic Priorities & Outlook Alistair Field, Group CEO

Strategic Priorities: Investment in technology, processes, and people

• Prioritisation of metallic yield enhancing and customer focused projects

• Zorba separation plant in New Jersey complete, with other major projects on schedule and budget

• Standardisation of processes for efficiency, robustness, and risk mitigation

• Standardisation of  Leadership team processes for efficiency, strengthened with key robustness, and risk hires across the group in mitigation finance, operations, human resources, and

• Greater formalisation of technology

• roles and responsibilities increasing ownership and  Training & development accountability programs upgraded

• Embed continuous  Improve & grow in metals improvement methodology recycling and investigate and enhance internal opportunities to expand systems & practices that municipal recycling, will support the ability to renewable energy, and grow other related areas

• Re-investing capital into metals recycling businesses and complementary bolt-on acquisitions

Internal Investments & Capital Projects: Prioritising and accelerating internal investments

• Non-ferrous material recovery plant (MRP) upgrades in Jersey City and Chicago

• • Installation of multiple copper wire chopping plants across the US, UK, and Australia

• Opened new deep-sea port at Sheerness in the Southeast UK market Initiatives expected to deliver an additional $60 million to $80

• • Advanced material upgrading systems for million in EBIT by FY19[1]

• zorba, designed and installed in Jersey City

• • Investing in internal information systems to better manage and utilise available data

• • Financial shared services and back office efficiency improvements

• • Maximisation of central procurement opportunities

Summary: Outlook positive; internal investment & external market growth

1H FY18 Highlights

• Underlying EBIT of $124 million, significantly higher than $77 million in the prior half-year

• Underlying Return on Capital of 10.5%, exceeding the five-year target set in FY13

• Interim dividend of 23 cents, 100% franked

Near-term strategic priorities for internal investment

• Accelerating the delivery of value accretive internal projects

• Strengthening internal functions and processes

• Investigate options for disciplined growth in metals recycling and complementary businesses

Outlook is positive on near-term prices and long-term structural market change

1. Long-term: China’s commitment to reduce pollution is expected be a significant structural benefit

2. Near-term: Higher demand for secondary metal is already driving higher volumes and margins

3. Significant room for volume growth in North America; collection rates still >20% below mid-cycle

Based on current market conditions and internal initiatives, full year FY18 underlying return on capital is expected to remain above 10%

Appendix

Declining steel exports from China, lifting ferrous scrap demand & prices

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China Steel Exports
vs Ferrous Scrap Price
140 500
450
120
400
100
350
80
300
60
250
40
200
20
150
0 100
China steel exports Heavy melt scrap (RHS)
HMS US$ / tonne
Million tonnes (rolling 12 months)
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• China’s exports of steel have been declining since mid-2016

  • China’s annual steel exports have fallen ~40% since July 2016

  • Lower exports are supporting higher steel production outside China, and increased demand and prices for ferrous scrap

• China announced steelmaking capacity reduction target of 150 million tonnes over 2015 by 2020

• Total implied capacity reduction of ~10% to 15%

• 115 million tonnes of steel making capacity already closed in 2016 and 2017

• Further 35 million tonnes of capacity expected to be closed over 2018-2020

Pollution control in China is driving higher demand for ferrous scrap

• Desire to reduce carbon emissions is driving premiums for high grade iron ore and greater use of ferrous scrap

Premium for 62% vs 58% iron ore

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Premium for ‘high-grade’
use of ferrous scrap $35 raw materials expanding 70%
$30 60%
 China Association of Metal Scrap Utilisation $25 50%
expect ferrous scrap used in steel production $20 40%
$15 30%
could rise from 11% to 20% in BOFs and $10 20%
from 50% to 80% in EAFs $5 10%
$0 0%

Wood MacKenzie and McKinsey have
indicated potential significant shift from BOF
to EAF steel production in China Premium US$/t Premium % (RHS)
Announced Chinese steel capacity swap China EAF vs BOF Production
plans approved in 2017
140 Old BOF production 900 Significant growth in EAF 33% 35%
800
120 swapped for new EAF production forecasted 30%
700
100 25%
600
22%
80 98 75 500 20%
60 400 755 700 555 450 15%
300
40 10%
9%
200
20 34 42 100 6% 225 5%
155
0 0 49 70 0%
Outdated steel capacity New steel capacity 2015 2020F 2025F 2030F
EAF BOF EAF BOF % EAF (RHS)
US$/t
Crude steel production (Mt) Crude steel production (Mt)
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Significant room for higher scrap collection in the US

• US ferrous collection rates remains 20% below long-term averages, highlighting significant room for further growth

• Australia’s collection rates remain below other developed country peers, suggesting potential longer-term structural growth

• UK collection rates currently in line with longer-term averages

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Australia
Ferrous Scrap Collection (per capita)
250
Collection rates below
developed country peers
200
150
131
100
Collection (kg per capita) 50
1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017
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United States
Ferrous Scrap Collection (per capita)
250
200 201
150
US collection >20%
100
below long-term avg
50
United Kingdom
Ferrous Scrap Collection (per capita)
250
Current collection in line
with long-term avg
200
150 155
100
50
Collection (kg per capita)
1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017
Collection (kg per capita)
1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017
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Group Profit & Loss

A$m	1H FY17	1H FY18	Chg %
Sales revenue	2,384.7	2,977.0	24.8
Statutory EBITDA	153.3	178.6	16.5
Underlying EBITDA	132.9	179.7	35.2
Statutory EBIT	97.4	122.4	25.7
Underlying EBIT	77.0	123.5	60.4
Net Interest expense	(5.0)	(4.4)	(12.0)
Statutory tax expense	(12.4)	(26.5)	113.7
Underlying tax expense	(12.0)	(37.8)	215.0
Statutory NPAT	80.0	91.5	14.4
Significant items	(20.0)	(10.2)	49.0
Underlying NPAT	60.0	81.3	35.5
Statutory EPS (dilutive)	40.2	44.8	11.4
Underlying EPS (dilutive)	30.1	39.8	32.2
Dividend per share (cents)	20.0	23.0	15.0

North America Metals

A$m	1H FY17	1H FY18	Chg %
Sales Revenue	1,111.0	1,515.7	36.4
Statutory EBITDA	81.4	95.7	17.6
Underlying EBITDA	61.7	96.0	55.6
Depreciation	26.6	27.1	1.9
Amortisation	4.4	3.9	(11.4)
Statutory EBIT	50.4	64.7	28.4
Underlying EBIT	30.7	65.0	111.7
Assets	1,202.8	1,177.5	(2.1)
Intake Volumes (000's)	2,614	3,184	21.8
Sales Volumes (000's)	2,735	3,059	11.8
Employees	1,683	1,826	8.5

Australia & New Zealand Metals

A$m	1H FY17	1H FY18	Chg %
Sales Revenue	491.6	529.0	7.6
Statutory EBITDA	39.5	57.5	45.6
Underlying EBITDA	39.9	58.9	47.6
Depreciation	13.8	14.6	5.8
Amortisation	0.2	0.1	(50.0)
Statutory EBIT	25.5	42.8	67.8
Underlying EBIT	25.9	44.2	70.7
Assets	534.1	545.9	2.2
Intake Volumes (000's)	781	883	13.1
Sales Volumes (000's)	862	891	3.4
Employees	701	714	1.9

Europe Metals

A$m	1H FY17	1H FY18	Chg %
Sales Revenue	414.9	542.0	30.6
Statutory EBITDA	22.1	22.8	3.2
Underlying EBITDA	22.1	18.8	(14.9)
Depreciation	6.3	6.2	(1.6)
Amortisation	0.0	0.0	-
Statutory EBIT	15.8	16.6	5.1
Underlying EBIT	15.8	12.6	(20.3)
Assets	256.0	338.1	32.1
Intake Volumes (000's)	730	826	13.2
Sales Volumes (000's)	763	811	6.3
Employees	642	674	5.0

Global E-Recycling

A$m	1H FY17	1H FY18	Chg %
Sales Revenue	353.9	365.0	3.1
Statutory EBITDA	17.0	11.6	(31.8)
Underlying EBITDA	15.4	10.6	(31.2)
Depreciation	4.3	4.1	(4.7)
Amortisation	0.0	0.0	-
Statutory EBIT	12.7	7.5	(40.9)
Underlying EBIT	11.1	6.5	(41.4)
Assets	392.5	402.5	2.5
Employees	1,428	1,451	1.6

Corporate & Unallocated

A$m	1H FY17	1H FY18	Chg %
Sales Revenue	13.3	25.3	90.2
Statutory EBITDA	(6.7)	(9.0)	(34.3)
Underlying EBITDA	(6.2)	(4.6)	25.8
Depreciation	0.3	0.2	(33.3)
Amortisation	0.0	0.0	-
Statutory EBIT	(7.0)	(9.2)	(31.4)
Underlying EBIT	(6.5)	(4.8)	26.2
Assets	270.7	356.2	31.6
Employees	85	97	14.1

1H FY18 income tax expense considerations

A$m	Profit Before Tax	Income Tax Expense	Effective Tax %
Statutory Result	118.0	26.5	22.5
Reconciling items:
Impact from US Tax Reform		9.8
Underlying Results		36.3	30.8

Significant items by region – 1H FY18

1H FY18 (A$m)	NA Metals	ANZ Metals	Europe Metals	Global **E-Recycling **	Unallocated	Pre-Tax Total	After-Tax Total
Reversal of fixed asset impairment	-	-	-	(0.6)	-	(0.6)	(0.6)
Net benefit relating to lease settlements / onerous leases	-	-	(4.0)	(0.4)	-	(4.4)	(3.7)
Yard closure costs and dilapidation provisions, net	-	0.8	-	(0.1)	-	0.7	0.5
Redundancies	0.3	0.6	-	0.1	4.4	5.4	3.4
Impact from US tax reform	-	-	-	-	-	-	(9.8)
Significant Items for 1H FY18	0.3	1.4	(4.0)	(1.0)	4.4	1.1	(10.2)

Significant items by region – 1H FY17

1H FY17 (A$m)	NA Metals	ANZ Metals	Europe Metals	Global **E-Recycling **	Unallocated	Pre-Tax Total	After-Tax Total
Reversal of fixed asset impairment	(0.9)	-	-	(1.4)	-	(2.3)	(1.8)
Gain on sale of property	(24.3)	-	-	-	-	(24.3)	(24.3)
Yard closure costs and dilapidation provisions	1.8	0.2	-	-	-	2.0	2.0
Redundancies	2.5	0.1	-	0.1	0.5	3.2	3.1
Net expenses relating to lease settlements / onerous leases	0.2	0.1	-	(0.3)	-	-	-
Other	1.0	-	-	-	-	1.0	1.0
Significant Items for 1H FY17	(19.7)	0.4	-	(1.6)	0.5	(20.4)	(20.0)

Financial summary – Group

A$m	FY10	FY11	FY12	FY13	FY14	FY15	FY16	FY17		1H FY17	1H FY18
Group Results
Sales Revenue	7,453	8,847	9,036	7,193	7,129	6,311	4,652	5,079		2,385	2,977
Underlying EBITDA	379	414	253	190	242	263	184	295		133	180
Underlying EBIT	235	283	123	67	119	142	58	182		77	124
Underlying NPAT	127	182	74	17	69	102	38	120		60	81
Underlying EPS (cents)	65	88	36	8	34	49	19	60		30	40
Dividend (cents)	33	47	20	0	10	29	22	50		20	23
Balance Sheet
Total Assets	4,233	4,167	3,509	2,917	2,649	2,882	2,571	2,743		2,656	2,820
Total Liabilities	959	1,256	1,225	988	816	769	738	775		762	790
Total Equity	3,274	2,912	2,284	1,929	1,834	2,113	1,833	1,968		1,894	2,030
Net Cash (Net Debt)	15	-126	-292	-154	42	314	242	373		311	390
Cash Flows
Operating Cash Flow	-48	159	290	297	210	298	131	266		114	131
Capital Expenditure	-121	-143	-161	-149	-64	-95	-109	-127		-68	-85
Free Cash Flow1	-168	16	129	148	146	203	22	139		46	53
NOPAT	165	198	86	47	83	99	41	128		54	86
Total Capital	3,259	3,038	2,576	2,083	1,792	1,799	1,590	1,595		1,583	1,640
ROC2 (%)	5.0%	6.5%	3.3%	2.3%	4.6%	5.5%	2.6%	8.0%		6.8%	10.5%

Financial summary – Segment

A$m	FY10	FY11	FY12	FY13	FY14	FY15	FY16	FY17		1H FY17	1H FY18
Sales Revenue
North America Metals	4,834	5,782	5,773	4,256	3,996	3,417	2,353	2,418		1,111	1,516
ANZ Metals	1,126	1,300	1,190	1,047	1,188	1,053	744	981		492	529
Europe Metals	783	954	1,056	935	1,063	1,037	759	924		415	542
Global E-Recycling	622	750	982	937	868	795	793	727		354	365
Unallocated	88	61	35	18	14	9	3	29		13	25
Total	7,453	8,847	9,036	7,193	7,129	6,311	4,652	5,079		2,385	2,977
Underlying EBITDA
North America Metals	182	175	51	94	75	81	76	136		62	96
ANZ Metals	83	107	80	72	107	87	67	91		40	59
Europe Metals	25	28	15	-2	29	37	32	48		22	19
Global E-Recycling	87	112	92	24	20	55	19	28		15	11
Unallocated	2	-8	15	2	11	3	-10	-8		-6	-5
Total	379	414	253	190	242	263	184	295		133	180
Underlying EBITDA Margin (%)
North America Metals	3.8%	3.0%	0.9%	2.2%	1.9%	2.4%	3.2%	5.6%		5.6%	6.3%
ANZ Metals	7.4%	8.2%	6.7%	6.9%	9.0%	8.3%	9.0%	9.3%		8.1%	11.2%
Europe Metals	3.2%	2.9%	1.4%	-0.2%	2.7%	3.6%	4.3%	5.2%		5.3%	3.5%
Global E-Recycling	14.0%	14.9%	9.4%	2.6%	2.3%	6.9%	2.4%	3.9%		4.2%	3.0%
Total	5.1%	4.7%	2.8%	2.7%	3.4%	4.2%	4.2%	5.8%		5.6%	6.0%

Financial summary – Segment (cont.)

A$m	FY10	FY11	FY12	FY13	FY14	FY15	FY16	FY17		1H FY17	1H FY18
Sales tonnes (‘000)
North America Metals	9,906	10,964	11,080	9,377	8,152	7,018	5,772	5,454		2,735	3,059
ANZ Metals	1,578	1,764	1,765	1,764	2,054	1,874	1,418	1,656		862	891
Europe Metals	1,394	1,466	1,651	1,645	1,609	1,589	1,361	1,590		763	811
Total	12,878	14,194	14,496	12,786	11,815	10,481	8,551	8,700		4,360	4,761
Underlying EBIT
North America Metals	92.7	99.6	(18.7)	32.8	11.7	11.8	2.3	72.4		30.7	65.0
ANZ Metals	62.4	86.1	56.3	46.9	79.2	59.2	39.7	62.7		25.9	44.2
Europe Metals	15.8	18.8	4.1	(14.0)	16.5	24.6	18.6	35.4		15.8	12.6
Global E-Recycling	62.9	87.7	67.8	(1.0)	-	44.0	7.6	20.0		11.1	6.5
Unallocated	1.2	(8.8)	13.3	2.2	11.1	2.1	(10.2)	(8.1)		(6.5)	(4.8)
Total	235.0	283.4	122.8	66.9	118.5	141.7	58.0	182.4		77.0	123.5
EBIT / tonne (A$/t)
North America Metals	9.36	9.08	-1.69	3.50	1.44	1.68	0.40	13.27		11.22	21.25
ANZ Metals	39.54	48.81	31.90	26.59	38.56	31.59	27.93	37.86		30.05	49.61
Europe Metals	11.33	12.82	2.48	(8.51)	10.25	15.48	13.74	22.26		20.71	15.54
Total	13.27	14.41	2.88	5.14	9.09	9.12	7.09	19.60		16.61	25.94

Financial summary – Segment (cont.)

A$m	FY10	FY11	FY12	FY13	FY14	FY15	FY16	FY17		1H FY17	1H FY18
Sales tonnes (‘000)
Ferrous Trading	9,068	10,115	10,320	9,396	9,331	8,325	6,768	7,009		3,505	3,749
Ferrous Brokerage	3,264	3,518	3,597	2,840	1,918	1,617	1,307	1,237		628	786
Non Ferrous	565	571	586	550	566	539	476	454		227	226
Total	12,897	14,204	14,503	12,786	11,815	10,481	8,551	8,700		4,360	4,761
Sales Revenue
Ferrous Metals	5,071	6,144	6,259	4,817	4,801	4,068	2,703	3,136		1,462	1,962
Non Ferrous Metals	1,526	1,724	1,657	1,353	1,361	1,342	1,055	1,124		525	603
Global E-Recycling	622	750	982	937	868	795	793	727		354	365
Secondary processing & other	234	229	138	86	99	106	101	92		44	47
Total	7,453	8,847	9,036	7,193	7,129	6,311	4,652	5,079		2,385	2,997

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Metals Recycling global footprint
Europe Metals
North America Metals UK
United States & Canada
Australia & New Zealand Metals
Australia
New Zealand
Metal Shredder (100% owned)
Metal Shredder (50% JV owned)
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Electronics Recycling global footprint
Europe, Africa, and Middle East
UAE
Europe
North America
South Africa
United States
Asia Pacific
India
Singapore
Australia
New Zealand
Electronics Recycling facility
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Disclaimer

The material contained in this document is a presentation of information about the Group’s activities current at the date of the presentation, 16 February 2018. 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 announcements lodged 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.