SIMS LIMITED — Investor Presentation 2014

Jul 22, 2014

Sims Metal Management Strategic Review

Galdino Claro, Group CEO 23 July 2014

Disclaimer

Cautionary Statements Regarding Forward-Looking Information

This presentation may contain forward-looking statements, including statements about Sims Metal Management’s financial condition, results of operations, earnings outlook and prospects. Forward-looking 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 16 October 2013.

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 presentation 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.

All references to currencies, unless otherwise stated, reflect measures in Australian dollars.

Agenda

• Strategy Overview

• Streamline

• Optimise

• Metals Recycling

• Electronics Recycling (SRS)

• Grow

• Summary

A clear five-year strategic plan

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Grow
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•
Organic market share growth and
feeder yard network expansion
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• Selective acquisitive growth

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•
Strengthen supplier relationships
•
Exploit local & global logistics
•
Share operational best practices
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• Return to growth in Global SRS with asset management and corporate services offerings

• • Lead on product quality and Exit non-strategic businesses services

• • Further cost reductions

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1-2 years
3-4 years
5 years
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Ambitious & realistic earnings growth pathway

EBIT Growth Pathway

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5 year plan to grow EBIT over 350% 350
A$m
through internal initiatives alone
300
Streamline
250
� Return to core strengths
Optimise
200
� Realign to core drivers of profitability
Grow 150
� Primary focus on organic growth
100
� Growth through acquisition not included in
the plan
50
Streamline Optimise Grow
0
FY13 Streamline Supplier Operational Product Grow Target
Underlying Relationships Excellence Quality
& Logistics & Service
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And initial results have been encouraging

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Initial results in test region
High
tripled margins during FY14
Optimise
� Wide disparities in profitability across global
Metals Recycling operations
� Exited businesses outside the long-term
interests of the Company
� Focusing on core drivers of profitability from
supplier relationships, logistics, processing
FY14 improvement in
efficiency, and product quality Gulf Region
test region
� Initial results have been very positive Low Streamline Optimise
Low EBIT margins High
� Optimisation strategies implemented in a
Metals Recycling
North American test region led to 3x higher Sub-Region
margins during FY14
Sales revenue
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Experienced team aligned for delivery

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Galdino Claro
Group CEO & Managing Director
North America North America North America
Australasia Europe Global
Metals Metals Metals
Metals Metals SRS
West Central East
Global
Trade
Steve Shinn Galdino Claro Joe Payesko Bill Schmiedel Darron McGree Bob Kelman Steve Skurnac
(interim)
Implementation Team
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Agenda

• Strategy Overview

• Streamline

• Optimise

• Metals Recycling

• Electronics Recycling (SRS)

• Grow

• Summary

Streamlining the Business

Business	Actions	Annual Benefit EBIT (A$m)
North America Metals	�Consolidating 7 operating regions to 3 (West, Central, and East) �North America Metals overhead cost reductions �Divested Utah based non-core facilities �Idled Mobile, AL based Gulf region facilities	$11
Global SRS	�Europe: Exit non-core UK-based loss making operations �North America: Exit from SRS Canada operations Consolidate facilities of Edison, NJ and Dallas, TX with other sites	$20
Corporate	�CFO relocation from Chicago to New York head office �Consolidate remainder of Chicago back office with West Chicago	$1
Total		$32

North America Metals: Lower overhead and increased operational focus

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West Region Central Region East Region
� 7 sub-regions consolidated into 3
� Reducing regional overhead costs
� Allocating capital to most profitable and NY
MI MA
sustainable operations CTRI
CA PA
NV OH NJ
IL IN
� Divesting non-core facilities where a MD
VA
competitive advantage through scale or
TN NC
AZ OK AR
alignment to global trading relationships
MS
cannot be achieved
LA
TX
� Sold Utah assets in May 2014
� Mobile, AL based facilities held for sale
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Shredder
Yard
Shredder (JV)
Yard (JV)
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North America Metals: Re-aligning to address unique regional conditions

• West Region Central Region East Region

• � 66 facilities � 27 facilities � 33 facilities � 8 shredders (including JV’s) � 3 shredders � 6 shredders � 4 deep water docks � 6 brown water docks � 7 deep water docks

• Regional Profile Regional Profile Regional Profile � Low cost container exports � Vertical integration of steel mills � Well placed deep sea export docks � Longer-term outlook in China � DRI consumption

• Regional Strategy Regional Strategy Regional Strategy � Maximise bulk cargo utilisation and � Break the industry’s traditional � Maximise competitive advantage of container loading optionality adversarial relationship with current well positioned operations

• � Explore opportunities for offshore domestic steel mills and build � Reinforce feeder yards network and processing of scrap in end-markets meaningful partnerships supplier partnerships � Develop products and services to suit requirements of domestic mills

Electronics Recycling (SRS): Footprint streamlined to core profitable operations

• Exited non-strategic and loss making facilities in FY14 and consolidated sites

• Remaining portfolio of businesses achieve higher margins with greater competitive advantages

• No significant additional restructuring charges anticipated after FY14

• Europe:

• Exited loss making UK-based operations

• North America:

• Exited loss making Canada SRS operations

• Exited small scale feeder yards in Edison,

NJ and Dallas, TX

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High
Other APAC
Other Europe
Germany
Scandinavia
Benelux
Australia &
United States
New Zealand
Canada SRS
Edison & Dallas
UK SRS
Low
Low Near-term profitability High
North America
Australasia
Europe
~$25m revenue
Long-term strategic attractiveness
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Electronics Recycling (SRS): Portfolio streamlined into two primary business lines

Asset Management

• B2B focused business with global footprint and best in class operating certifications

• Services include managing the reuse or final disposition of retired company IT assets

WEEE Recycling

• Working with municipalities, compliance schemes, and equipment producers to ensure the efficient and ethical disposal of end of life electronics and small domestic appliances

	Asset Management	WEEE Recycling	Other
North America
United States	✓	✓	✓
Canada	�	�	�
Australasia
Australia	✓	✓
New Zealand	✓	✓
India	✓	✓
Singapore	✓	✓
Dubai	✓	✓
South Africa	✓	✓
Europe
United Kingdom	✓	�	�
Belgium	✓	✓
The Netherlands	✓	✓
Germany	✓	✓
Sweden	✓	✓
Austria	✓	✓
Poland	✓
Czech Republic	✓

� Exited in FY14 ✓ Strategic Business

Agenda

• Strategy Overview

• Streamline

• Optimise

• Metals Recycling

• Electronics Recycling (SRS)

• Grow

• Summary

Metals Recycling: Optimising the core drivers of profitability

• �� Buy the right quality for the right price � Reinforce feeder yard networks � Strengthen supplier relationships

• Supplier �� Reinforce feeder yard networks Relationships � Strengthen supplier relationships � Optimise transport capabilities

• Logistics � Minimise freight & handling cost � Leverage export capacity � Increase processing yields �

• Operational Drive continuous improvement Excellence � Focus on talent development � Share best practices

• � Develop value added products and

• Product Quality services & Service � Lead on product quality � Leverage global network to reach new markets

Supplier Relationships: Buying the right quality for the right price

Case Study: Profitability reporting by supplier introduced in test region achieved impressive results�

Test Region: Top 25 Suppliers July 2013

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High
$0/t
New reports analyse every
tonne purchased by
profitability and deliver key
feedback to buyers
Low
EBIT/t
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Test Region: Top 25 Suppliers
May 2014
High
Over test period, unprofitable
tonnes were reduced, and
relationships with profitable
suppliers were expanded
Low
Higher EBIT/t without sacrificing volumes
EBIT/t
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Logistics: Maximising transport capabilities

Case Study: New York / New Jersey Metro Area

• BRONX

• MANHATTAN QUEENS

• NEWARK JERSEY CITY BROOKLYN

• Shredder • Large scale Jersey City facility supported Yard by network of 9 feeder yards • Strategically located yards with barge or

• Deep Water Dock rail access to facilitate low cost transport

• Barge Access • 2 deep water docks provide sales flexibility Rail Access

• Strategically located yards with barge or rail access to facilitate low cost transport

• • 2 deep water docks provide sales flexibility

• Well engineered network of suppliers and feederyards required to ensure the natural flow of material is steered towards our facilities

• Having both export and domestic market flexibility is increasingly important, making both deep water docks, as well as domestic facing rail, truck, and barge capabilities, critical

• Efficient logistics:

• Lower inbound transport costs

• Increase supplier accessibility appeal

• Lower waste disposal costs

• Increase inventory turnover via faster loading and processing speeds

Logistics: Leveraging new reporting tools to lower freight costs

Freight expenses for the Group was A$560 million in FY13, equal to 8% of total sales revenue

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North America Metals inbound trucking costs
50 100
US$/t
45 90
40 80
35 70
30 60
25 50
20 40
15 30
10 20
5 10
0 0
Internal tonnes trucked (RHS) Internal trucking costs, US$/t
Gross Internal Tonnes Trucked
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Case Study: North America Metals, trucking costs

• Efficient management of inbound transport is critical to lower costs and ensure profitable acquisition of raw material feedstock

• North America Metals is currently implementing new reporting tools to drive greater transparency and accountability into logistics cost management

• Improvements beginning to be realised through better utlisation of assets, greater load densification, and increased backhaul transport

Operational Excellence: Driving continuous improvement & lifting yields

We are focused on bringing best practices to all our 250 facilities around the world

Case Study: Kwinana, Western Australia

• Kwinana is the final stage of our shredder replacement program and off-line downstream plant installations in Australia

• All States have now expanded processing capacity with the most up to date metals recovery

technology available

• Optimising downstream non-ferrous separation technologies is an essential and significant margin contributor

• Ensuring processing capacity is optimised both raises margins and lifts competitive advantages

• Kwinana will be our largest operation in Australasia

• Replaces current footprint constrained operations running outdated equipment

• Shredder expected to be operational during 2H FY15

Operational Excellence: Focused on talent development and retention

Case Study: Australasia cadet / graduate program

People & Culture

• Attracting, developing, and retaining talented staff is critical for long-term success

• Talent development, from cadets to managers, is our most sustainable competitive differentiation

• Of current Middle/Senior Management ranks, 13 came from the cadet/graduate program

• The current program has 14 participants across Australasia

Product Quality & Service: Developing new value added products

Industry specifications need to adapt to customer needs

• Ferrous scrap product specifications have not materially changed for over 60 years

• Steel making industry had evolved requiring new targeted products

• Each steel mill has specific ferrous scrap

• requirements

• Sims is uniquely positioned to bring change to the industry, and cultivate our relationships with our customers to provide the products they need

Product Quality & Service: Taking the lead on product quality

Ferrous Scrap Types

Heavy Melt Steel (HMS)

Shredded

Busheling

Plate & Structural

Product Quality & Service: Our scale provides flexibility to service all customers

Both bulk shipping needs�

�or containerised

Product Quality & Service: Leveraging global network to reach new markets

Global supply and customer network

Sims Metal Management Metals Recycling Operations Key Export Market Global Trade Office

Agenda

• Strategy Overview

• Streamline

• Optimise

• Metals Recycling

• Electronics Recycling (SRS)

• Grow

• Summary

Electronics Recycling (SRS): Reset to address changed competitive landscape

Industry Timeline	SRS Streamline
1990-2000
�B2B focused industry with metal	�Mega-plant strategy is over	�Integrate global network of
rich material & healthy margins		acquired operations with
2002	�Non-strategic technologies	standardised production systems
�WEEE1 Directive in EU stimulates	exited	and customer service work flows
more volumes, but lower quality
2002-2010	�Underperforming businesses in	�Grow Asset Management
�‘Producer Compliance Schemes’	hypercompetitive regions exited	business servicing used
form, which stimulate higher		equipment recovery for global
competition and lower margins	�Remaining operations are	corporate clients and equipment
2005-2010	profitable and in supportive	refurbishment and resale
�High volume expectations led to	legislative environments
WEEE processing overcapacity
2008-2012	�WEEE processing footprint has
�SRS invests in emerging	been right-sized for market
technologies including CRT	conditions
processing and plastics recovery

1 “Waste Electrical and Electronic Equipment”

Electronics Recycling (SRS): A clear plan for earnings recovery and growth

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Substantially Complete Primary Focus Ongoing
Decision made to exit non- * Improve supply control and * Continued growth in asset
strategic and loss making purchasing management, and management initiatives such
facilities in FY14 reduce exposure to lower as mobile devices, software
margin volume sources and re-sale capabilities
Remaining portfolio of
businesses achieve higher * Implement software to reduce * Grow emerging markets
margins with greater unit costs and understand Dubai, South Africa and SE
competitive advantages margin opportunities from each Asia through Singapore
material stream
No significant additional * New business and services
restructuring charges are * Standardise global work development
anticipated after FY14 orders and customer service
systems
Substantially Complete
3-4 years
5 years
Grow
Optimise
Streamline
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Electronics Recycling (SRS): Leveraging customer relationships

Case Study: Using mobile data destruction to grow revenues with less capital intensity

• We expect value-added services to become a significant component of future revenue and EBIT

• Data security is an increasing priority of our large and small corporate clients

• Our fleet of vehicles in the US and UK are fitted with hard drive and other data storage destruction capabilities, under client supervision

• Client peace of mind that data is being destroyed and the materials are being recycled responsibly

• Service fee, plus materials recovery revenue

• Leverages client base to create additional opportunities to provide new services

Agenda

• Strategy Overview

• Streamline

• Optimise

• Metals Recycling

• Electronics Recycling (SRS)

• Grow

• Summary

Attractive opportunities for growth: Metals Recycling

Organic growth in existing core markets

• Strategic feeder yard expansion to secure volumes and improve source control

• Strengthen supplier relationships to lift regional market share

Operational footprint enhancements

• Investigate asset swaps and joint ventures where commercial opportunities are available and attractive

New market development

• Asia: Retain longer-term options for a physical presence in China and East Asia

• Europe: Explore potential to better service Continental European market

Attractive opportunities for growth: Electronics Recycling (SRS)

Continue growth in Asset Management

• Leverage global footprint with international client base

• Grow services and revenue sharing as a portion of total SRS revenues

• Expand mobile device repair, re-use, and re-sale

Grow emerging markets Dubai, South Africa and SE Asia through Singapore

• Strong demand for e-recycling services from Western firms in emerging market economies

New business and services development

• Secure data destruction for server farms and data storage firms

• Mobile data destruction services

• On-site asset management capabilities

Agenda

• Strategy Overview

• Streamline

• Optimise

• Metals Recycling

• Electronics Recycling (SRS)

• Grow

• Summary

A clear five-year strategic plan

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Grow
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•
Organic market share growth and
feeder yard network expansion
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• Selective acquisitive growth

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•
Strengthen supplier relationships
•
Exploit local & global logistics
•
Share operational best practices
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• Return to growth in Global SRS with asset management and corporate services offerings

• • Lead on product quality and Exit non-strategic businesses services

• • Further cost reductions

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1-2 years
3-4 years
5 years
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Strategic Review Appendix

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July 23, 2014
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Restructuring Charges[1]

�	Strategic review has identified a number of			Region Actions		Estimated Impairment
	non-core and under-performing operations					($Am)
	outside the Company’s strategic long-term			North America Metals Recycling
	interests			�Write-down of Gulf Region
				Sims Recycling Solutions
�	Impairments and restructuring costs from			�Exit of loss making Canada SRS operations		$24-27
	these actions result in total pre-tax significant			�Site closures at Edison, NJ and
	items of $80 to $85 million to be realised in			Dallas, TX
	FY14			Europe Sims Recycling Solutions
				�Exit of loss making UK-based		$56-58
�	The non-cash portion is circa $35 million and			operations
	relates primarily to fixed asset impairment			FY14 Pre-Tax Total		$80-85
				FY14 After-Tax Total		$80-85

1 These restructuring charges were originally announced on 24 June 2014 to the ASX. This announcement included an anticipated goodwill impairment of $20 to $30 million in FY14, in addition to the $80 to $85 million in restructuring charges

Global Recycling Operations

Europe

Sales tonnes: 1.6Mt (FY13)

Metals Recycling: ~35 facilities, 3 shredders, & 3 deep water export docks Electronics Recycling: 12 facilities**

North America

Sales tonnes: 9.4Mt (FY13)

Metals Recycling:

~70 facilities, 10 shredders, & 14 deep water docks ~60 JV facilities & 8 shredders

Electronics Recycling: 9 facilities

Australasia

Sales tonnes: 1.8Mt (FY13)

Metals Recycling: ~50 facilities & 5 shredders

~9 JV facilities & 2 shredders

Metals Recycling E-Recycling (SRS)*

Electronics Recycling: 11 facilities

• Metals Recycling geographies include SRS

** Number of facilities post UK & Canada SRS restructure