2024-02-19 22:10:19 ET
Sims Limited (SMSMY)
Q2 2024 Earnings Conference Call
February 20, 2024 05:30 PM ET
Company Participants
Stephen Mikkelsen - Group CEO and Managing Director
Warrick Ranson - Group CFO
John Glyde - Global Chief Operating Officer, Sims Metal
Conference Call Participants
Peter Steyn - Macquarie
Lee Power - UBS
Owen Birrell - RBC Capital Markets
Scott Ryall - Rimor Equity Research
Rohan Gallagher - Jarden Group
Lyndon Fagan - JPMorgan
Simon Thackray - Jefferies
Presentation
Operator
Thank you for standing by, and welcome to the Sims Limited HY '24 Results Briefing. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions]
Today's presentation may contain forward-looking statements, including statements about financial conditions, results of operations, earnings outlook and prospects for Sims Limited. These forward-looking statements are subject to assumptions and uncertainties.
Actual results may differ materially from those experienced or implied by these forward-looking statements. Those risk factors can also be found on the company's website, www.simsltd.gov.com. As a reminder, Sims Limited is domiciled in Australia and all references to currency are in Australian dollars, unless otherwise noted.
I would now like to hand the conference over Stephen Mikkelsen, Group CEO and Managing Director of Sims Limited. Please go ahead.
Stephen Mikkelsen
Thank you, and good morning, good afternoon or good evening, depending on where you're dialing in from. Today, we're here to present the half year results for FY '24. I apologize in advance if my voice fades a bit. I had a scratchy throat for the last few weeks. Presenting with me today is our new Group Chief Financial Officer, Warrick Ranson. John Glyde, our Global Chief Operating Officer, is also here with me and Warrick.
The presentation has been lodged with the ASX, along with the results release. First up, I will run through an overview of the results and discuss our strategic progress. Warrick will then take us through the financial results. At the end, I will return to talk about the outlook, after which we will have Q&A.
I'll turn straight to Slide 5, which covers an overview of the results. It was certainly a challenging and disappointing half year for significant parts of the group. At a high level, the modest EBIT result was driven by compressed trading margin, down 2.6%, but more tellingly, down 5.4% at constant currency. This deterioration in trading margin was not across the board, both ANZ and SA Recycling improved while NAM and the U.K. went backwards.
There are a number of reasons for this, which we are addressing, and there are subsequent slides providing further explanation. It was pleasing to see SLS grow its EBIT, particularly in the second quarter of the half. Inflationary pressures while showing good signs of easing did persist. Costs for the group were up 8.5%, which was 5.7% on a constant currency basis. There are several up and downs in here, and Warrick has an excellent slide explaining this later in the presentation....
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Sims Limited (SMSMY) Q2 2024 Earnings Call Transcript