Sims Limited (SMSMY) Shareholder/Analyst Call Transcript

2025-11-20 22:53:24 ET

Sims Limited (SMSMY) Shareholder/Analyst Call November 20, 2025 5:00 PM EST

Company Participants

Philip Bainbridge
Stephen Mikkelsen - Group CEO, Director & MD
Victoria Binns

Conference Call Participants

Michelle Pole

Presentation

Philip Bainbridge ...

Good morning, ladies and gentlemen. My name is Phil Bainbridge, and I Chair Sims Limited. It's my real pleasure to welcome you to the 34th Annual General Meeting of your company.

Today, we are hosting a hybrid annual general meeting with the options of in-person and virtual attendance. I'm very pleased to be here, and I would like to thank you for showing your support and joining the meeting today. I'd like to begin by acknowledging the traditional custodians on the land of which we are today, the Gadigal people of the Eora Nation. We acknowledge the traditional custodians of the lands from which each of you is joining us online as well. We recognize and respect their deep connection and stewardship of the land and waters. We pay my respects to the elders past and present.

Just a very quick safety moment. If the alarm does go off today, there's no drill planned. So if it does go off, we're out of that door and either down on to Sussex Street or on to Kent Street. But if the alarm does go off, it is for real. Thank you.

Before going any further, let me introduce my colleagues who are with us today. From the Board, we have Vicky Binns; we have Shin Omachi; we have Russ Rinn; and our Group Managing Director, Stephen Mikkelsen. Also online, we have Grant Dempsey and Kathy Hirschfeld, who are attending virtually. I'd like to introduce Gretchen Johanns, our General Counsel and Company Secretary. And our moderator for today for questions, Michelle Pole, General Counsel and Company Secretary for ANZ Metals.

I'd also like to introduce Warrick Ranson, our CFO, who is online today. I would like to thank everyone attending, but also our friends from Mitsui, who joined us today from Tokyo. So thank you very much for coming today. And our joint venture partner, George Adams, who has been to, I think, every single AGM is not here today and will be attending virtually. The reason George is not here today is the Sims Board actually was in California last week, and we had a fantastic time, both socially and business with George, his family and his management team, and I'd like to thank George very much for his hospitality then.

I declare this Annual General Meeting open and confirm that a quorum is present. The Notice of Meeting was duly given, and I'll take the Notice of Meeting as read. One other person I'd like to welcome is Sam Vorwerg, who represents Deloitte, the company's auditors and he will be available to answer questions. So welcome, Sam, and thank you very much for everything you do with Sims, much appreciated.

I'd also like to advise that the minutes of the Annual General Meeting held on 13th of November 2024 are signed as a correct record of the proceedings of that meeting. The process for today, each resolution to be put to the meeting will be decided by a poll, and I will explain those procedures after I give just a short Chairman's address.

So with that, the Annual General Meeting is a really important event, allowing us to engage directly with you, our shareholders. We appreciate your time, feedback, support and we value the opportunity to update you on the group's business. Thank you for joining us in person and virtually.

Our company performed well during FY '25 despite a challenging environment. Sims executed on the strategic initiatives announced during the prior year for the metals business, including enhanced domestic sales optionality, a focus on higher margins for unpressed materials and disciplined cost control. The Sims Lifecycle Services, SLS business, continued to grow its operations and service offering to support increased demand from hyperscaler data centers for repurpose material.

The operational gains and strong underlying earnings in FY '25 demonstrate the strength of Sims strategy and business model. In terms of sustainability, it's at the core of Sims purpose, which is to create a world without waste to preserve our planet, and remains integral to our long-term value creation. What we do as a company is inherently good for the planet and our products lead to significant avoided emissions.

In addition to what we do, how we do it is also important. And in this context, FY '25 was a milestone year where we achieved our 2025 climate targets. We delivered a 49% reduction in Scope 1 and Scope 2 emissions against our FY '20 baseline, significantly exceeding our 23% reduction target, and we also achieved 100% renewable electricity across our operated business. Sims Lifecycle Services also reached carbon neutrality, making an important step in our decarbonization journey.

Although we have achieved significant reductions in our emissions and have tried many technologies and approaches to further reduce emissions in different jurisdictions, achieving our 2030 targets is going to be challenging. As part of our commitment to transparency and accountability, shareholders are today being asked to consider Resolution 6, an advisory Say on Climate vote on our climate strategy and our progress to date. While the vote is nonbinding, the Board welcomes this engagement, and we will use feedback to inform ongoing refinement of our climate strategy and reporting.

Our commitment to sustainability performance also guides our focus on people. The Board values diversity of background, gender, ethnicity and experience and firmly believes that a diverse workforce where everyone is included makes for a better company. We continue to work to improve diversity across all layers of the company. And on safety, we are proud of our performance, and Stephen will cover this more in his address.

Our capital management framework is focused on sustaining a strong balance sheet, funding strategic growth and returning value to shareholders. In line with this framework, the company declared a final dividend of $0.13 per share fully franked, resulting in a total full year dividend of $0.23 per share. We will continue to recycle capital from noncore assets to support strategic growth opportunities across our footprint.

During FY '25, we continue to refresh the Board's membership to ensure deep industry knowledge and strong strategic leadership. To that end, I'm really pleased to introduce Shin Omachi and Russ Rinn, who appointed to the Board since the last AGM and are up for reelection at this meeting. They have both added significant industry knowledge and executive experience to our Board. Please welcome -- please join me in welcoming them to the Board.

Use of recycled materials is key to supporting our customers' efforts in carbon reduction, circularity and supply chain resilience. Specifically, our metals business is well positioned in Australia and New Zealand and North America to capitalize on the anticipated growth in electric arc furnaces and the increasing need for secondary aluminum and copper.

Similarly, our Sims Lifecycle Services business is strategically placed to profit from the growth in artificial intelligence and rapidly expanding data centers in North America and other jurisdictions. Sims will continue to be the preferred supplier to our customers, providing the sustainable materials they need to support their growth. Thank you very much for your continued support as shareholders in this company.

And I'd now like to ask Stephen, our MD, to make his address.

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