Sims (SGM) Investor Day 2025 summary

Strategic direction and business model

• Maintains a 50/50 joint venture structure with strong governance, leveraging complementary geographic footprints and a balanced US platform across southern, western, eastern, and central states.

• Pursues a hub-and-spoke model, evolving hubs from shredders to large non-ferrous plants, with a dense network of feeder yards and optimised direct scrap sourcing.

• Aggressively expands through bolt-on acquisitions, with 66 deals in 18 years and about one facility added per month, supporting rapid growth in a fragmented market.

• Focuses on decarbonisation, circularity, and cost leadership, with investments in technology and scalable network growth.

• Maintains strong relationships with steel mills, avoids direct competition with integrated players, and strategically places facilities for freight advantages.

Financial performance and guidance

• Achieved an average EBITDA of AUD 500 million (FY21–FY25 average $496M), EBIT of $352M, and operating cash flow of $353M, with only one loss year since 2007.

• Trading margins have remained consistent at around 30–31% over the past five years, supported by diversification and agile logistics.

• CapEx strategy balances replenishing depreciating assets, investing in non-ferrous processing and R&D, and opportunistic M&A, targeting a 15% ROI on acquisitions.

• Maintains a conservative financing approach with a 45% gearing ratio, $1.7b in total assets, and $450M undrawn capacity as of June 2025.

• Dividend policy aligns distributions with JV partner tax rates, with an additional 20% of SAR EBIT distributed.

Operational strengths and growth drivers

• Operates 148 facilities (soon to be 150), 24 shredders, 9 copper choppers, 1,700 rail cars, 750+ trucks, and 52 rail-access facilities.

• Sales mix has shifted to about 75% domestic ferrous sales, with a focus on unprepared scrap sourced directly and non-ferrous retail expansion.

• Investments in technology, such as the LIBS machine, enable direct mill sales of segregated aluminum and support downstream process improvements.

• Feeder yard managers are incentivized with monthly EBIT-based bonuses, fostering accountability and rapid inventory turnover.

• FY21–FY25 sales volume CAGR: +7% ferrous, +10% non-ferrous, with organic growth targeted through technology and process improvements.