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Metals Recycling 20 Retiring Electronic Devices 22 Sustainability 24 Board of Directors 28 Financial Review 30

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Metals Recycling 20 Retiring Electronic Devices 22 Sustainability 24 Board of Directors 28 Financial Review 30 Annual Report 2015 SIMS METAL MANAGEMENT LIMITED The Leader in Metals and Electronics Recycling Streamline Optimise Grow For personal use only OPTIMISE CORE DRIVERS OF PROFITABILITY EXIT NON-STRATEGIC BUSINESSES FIXED COST REDUCTIONS SIMS METAL MANAGEMENT LIMITED (ACN 114 838 630) Streamline Optimise For personal use only CORE MARKET SHARE GROWTH FINANCIAL HIGHLIGHTS 2 ADAPTIVE MARKET POSITIONING CHAIRMAN’S REVIEW 4 ENGAGE IN MARKET ADJACENCIES CEO’S REVIEW 6 OPERATIONAL & FINANCIAL REVIEW 8 Five-Year Strategic Plan 8 Global Operations 10 North America 12 Europe 14 Australia and New Zealand 16 Global E-Recycling 18 Metals Recycling 20 Retiring Electronic Devices 22 Sustainability 24 Board of Directors 28 Financial Review 30 CORPORATE GOVERNANCE STATEMENT 33 DIRECTORS’ REPORT 35 Remuneration Report 38 FINANCIAL STATEMENTS 63 Directors’ Declaration 120 1 Independent Auditor’s Report 121 SIMS METAL MANAGEMENT LIMITED MANAGEMENT METAL SIMS Auditor’s Independence Declaration 122 OTHER INFORMATION 123 Shareholder Information 123 Five Year Trend Summary 124 Corporate Directory 125 Optimising Grow Profitability Sims Metal Management Limited is the world’s leading metals and electronics recycler with over 240 facilities and 5,400 employees globally. Our mission is to be the best in class recycler in all markets we operate. Our industry leadership will be driven by the strengths of our partnership with For personal use only our suppliers, the excellence of our products and services to our customers, and the attractiveness of our returns to shareholders. Financial Highlights 2 SIMS METAL MANAGEMENT LIMITED MANAGEMENT METAL SIMS $263 m $142 m $102 m Underlying EBITDA 1 up 3.7% Underlying EBIT 1 up 4.5% Underlying NPAT 1 up 17.2% $314 m 49.2¢ 29.0¢ Net cash up 642.1% Underlying EPS 1 (Diluted) up 16.3% Full year dividend up 190.0% Year Ended 30 June FY 2015 FY 2014 Change (A$ million) (restated) (%) Sales Revenue 6,310.9 7,021.2 (10.1) Statutory EBITDA 265.6 222.4 19.4 Underlying EBITDA 1 262.5 253.1 3.7 Goodwill & Intangible Asset Impairment 0.0 (28.0) NMF Depreciation (106.1) (99.3) 6.8 Amortisation (14.7) (18.2) (19.2) Statutory EBIT 144.8 76.9 88.3 Underlying EBIT 1 141.7 135.6 4.5 Net Interest Expense (7.8 ) (14.2) (45.1) Income Tax Expense (27.2 ) (46.4) (41.4) Statutory NPAT 109.9 (88.9) NMF Underlying NPAT 1 101.5 86.6 17.2 Statutory EPS (cents per share) - Diluted 53.3 (43.5) NMF Underlying EPS (cents per share) - Diluted 1 49.2 42.3 16.3 Full Fiscal Year Dividend (cents per share) 29.0 10.0 190.0 Total Assets 2,881.8 2,649.4 8.8 Total Liabilities 769.0 815.5 (5.7) Net Assets 2,112.8 1,833.9 15.2 Net Cash 313.9 42.3 642.1 NetFor personal use only Tangible Assets 1,883.6 1,618.1 16.4 Net Tangible Assets per share (A$ per share) 9.19 7.91 16.2 Net Cash Inflow From Operating Activities 298.1 210.1 41.9 Capital Expenditures (95.3) (64.1) 48.7 Free Cash Flow After Capital Expenditures 202.8 146.0 38.9 Employees 5,429 6,011 (9.7) Intake Tonnes (‘000) 10,331 11,783 (12.3) Sales Tonnes (‘000) 10,481 11,815 (11.3) 1. Underlying earnings from continuing operations; excludes significant non-recurring items and earnings from discontinued businesses. FINANCIAL HIGHLIGHTS SALES REVENUE BY BUSINESS (A$M) 9 Other 795 Global E-Recycling 1,037 Europe Metals 3,417 North America Metals 1,053 SALES REVENUE Australia & BY PRODUCT (A$M) 106 Secondary processing New Zealand Metals and other services 3 795 LIMITED MANAGEMENT METAL SIMS Recycling solutions 1,342 Non-ferrous secondary recycling 4,068 Ferrous secondary recycling SALES REVENUE (A$M) UNDERLYING EBITDA (A$M) UNDERLYING EBIT (A$M) 9,036 8,847 283 414 6,311 7,193 7,022 263 142 253 253 136 For personal use only 123 190 67 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 Chairman’s Review Sims Metal Management “is undergoing significant positive cultural change. A higher standard of transparency and accountability is being 4 set and, increasingly, SIMS METAL MANAGEMENT LIMITED MANAGEMENT METAL SIMS these high standards are being exceeded. Geoff Brunsdon Chairman ” For personal use only CHAIRMAN CEO’S REVIEW & $142 m $103 m 29.0¢ Underlying EBIT has more than Gross margin and fixed Full year dividend Chairman’s doubled from FY13 to FY15 cost improvements for FY15 Dear Shareholders, Metals and a substantial earnings turnaround in the restructured Review Global E-Recycling business. The FY15 results represent a significant The 2015 financial year was a test for the resilience of the Company’s improvement since the start of the strategic review. Underlying strategic initiatives. Falling commodity prices, poor winter weather earnings per share of 49 cents in FY15, was nearly six-fold higher conditions in North America, and weaker end-market demand, created than in FY13. significant challenges across the global metals recycling industry. Notwithstanding these conditions, Sims Metal Management CAPITAL MANAGEMENT AND DIVIDEND managed to materially improve full year financial performance. Strong operational cash flows and prudent capital management Underlying net profit after tax (NPAT) of $102 million, increased helped improve the Company’s net cash position to $314 million 17% over the prior year. The strong earnings growth in difficult as of 30 June 2015. Capital expenditure in FY15 increased to conditions demonstrates that the Company’s strategic internal a sustainable $95 million, up from $64 million in the prior year. initiatives are adding considerable value. Through a disciplined These funds were directed towards a number of attractive value approach to aspects of the business which can be controlled, the accretive projects across the business, including the stage one Company has been able to more than offset external pressures. metal shredder expansion at Kwinana, Western Australia, and the 5 establishment of an e-recycling facility in Norway. While capital LIMITED MANAGEMENT METAL SIMS FIVE-YEAR STRATEGIC PLAN expenditure is expected to grow as new projects are initiated in FY15 marked the second year of the Company’s five-year strategic line with our strategic plan, a judicious and disciplined approach turnaround plan. The strategic roadmap to Streamline, Optimise, to capital allocation will continue. and Grow the business is progressing well. Over the first two years The Board has determined to pay a final dividend for FY15 of of the plan, underlying earnings before interest and tax (EBIT) has 13.0 cents per share, which will be fully franked, on 21 October more than doubled, from $67 million in FY13, to $142 million in FY15. 2015 to shareholders on the Company’s register at the record date The Company, meanwhile, remains on track to more than double of 7 October 2015. The Company’s dividend policy to distribute underlying EBIT again to $321 million, by the end of FY18. 45% to 55% of NPAT, subject to the discretion of the Board, Notably, the successes of the five-year plan have been delivered remains unchanged. in the most difficult industry conditions in decades. The decline in commodity prices has seen contraction in the generation and SUSTAINABILITY AND CORPORATE RESPONSIBILITY collection of secondary metals, with lower volumes creating Sims Metal Management understands, and strongly supports increased competition across metal recyclers for raw materials. measures to address, the social and environmental issues it faces, Tough market conditions have necessitated greater operational both locally and globally. In FY15, the Board signed a letter of discipline and an intensification of strategic initiatives. commitment to provide unconditional support to management to develop a world class platform for Safety, Health, Environment, During FY15, management completed a number of strategic Community and Sustainability (SHECS). We believe that excellence initiatives in order to lower the Group’s fixed cost base and in these areas is vital to the wellbeing of our people and essential to improve operating margin performance. This included the closure the sustainable growth of our global business. of underperforming e-recycling facilities in the UK and Canada, the roll-out of enhanced supply chain analytic systems, and As directors, we are committed to being respected and responsible investments in downstream non-ferrous recovery technology. corporate citizens, working constructively with our communities and other stakeholders in the honest and ethical conduct of our Internal initiatives led to $103 million in gross margin and fixed cost business. Through our personal actions and leadership, Sims improvements across the metals recycling operations. In addition, Metal Management is dedicated to being a company in which our a $44 million EBIT improvement across the global e-recycling employees are proud to work and shareholders can be proud to business was achieved. These actions have materially improved invest, as we create sustained growth and profitability. the Company’s ability to manage near-term challenging conditions, as well as improving our ability to take profitable advantage of future THANK YOU volume improvement. As the Company nears the midway point of its five-year strategic plan, Sims Metal Management is undergoing significant positive cultural the Board is encouraged by what has been accomplished thus far. change. A higher standard of transparency and accountability On behalf of the Board, I thank all Sims Metal Management’s employees for measurable results is being set and, increasingly, these high for their contribution to the improved results of the Company under the standards are being met or exceeded. This culture shift is moving leadership of Galdino Claro and his executive leadership team.
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