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Sims Metal Management Limited (SMS)
H1 2013 Earnings Call
February 21, 2013 5:00 pm ET
Previous Statements by SMS
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Robert C. Larry - Chief Financial Officer
Michael Slifirski - Crédit Suisse AG, Research Division
Scott Hudson - CLSA Asia-Pacific Markets, Research Division
Brent Thielman - D.A. Davidson & Co., Research Division
Mike Harrowell - BBY Limited, Research Division
Emily Behncke - Deutsche Bank AG, Research Division
Ben Chan - BofA Merrill Lynch, Research Division
Andrew Gibson - Goldman Sachs Group Inc., Research Division
Liam Farlow - Macquarie Research
Good morning, ladies and gentlemen, and welcome to the Fiscal Year 2013 Half Year Results Conference Call for Sims Metal Management Limited. [Operator Instructions] I must advise you that this conference is being recorded today, Thursday, the 21st of February, 2013 in United States and Europe; and Friday, 22nd of February, 2013, in Australia and Asia.
Today's presentation may contain forward-looking statements, including statements about the financial condition, results of operations, earnings outlook and prospects of Sims Metal Management Limited. Because 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.simsmm.com.
Investors are encouraged to review the filings made by Sims Metal Management Limited with the Securities and Exchange Commission, including its Form 20-F, which we filed with the SEC on October 12, 2012, which describes some of the factors that may cause actual results to differ from these forward-looking statements.
As a reminder, Sims Metal Management is domiciled in Australia and all references to currency are in Australian dollars unless otherwise noted.
I would now like you hand the conference over to your speaker today, Mr. Dan Dienst, Sims Metal Management Group Chief Executive Officer. Please go ahead, sir.
Daniel W. Dienst
Thank you, Kay. Good morning, good evening and welcome, everyone, to today's call. On behalf of myself and all of Sims Metal Management employees, I want to thank you for joining us for this review of our results for the half year ended December 31, 2012.
Our call this morning, for most of you who know us, will follow the usual format that we've used in the past. First, I'll provide some initial thoughts before turning the call over to Rob Larry, our group Chief Financial Officer, who will take you through the details on the financial results. Then he'll -- Rob will hand it back to me. I'll make some closing remarks on market conditions, before we take a few questions as time permits.
You should notice, when you have the chance and the time, our slides posted to our website this morning and filed with the ASX, offers a fair amount more detail than we have in the past and I probably won't have a lot of time to do -- go through those slides with you today, but I urge you to take some time after the call to go through them.
In those slides that I just referenced, we're building upon what we have started at the end of fiscal '12, explaining a little bit more about our strategy and how we will maintain a focus on various aspects of the business. There, we go into a more comprehensive look at some of our segment details, cost reductions, asset optimization, growth opportunities for our e-business and our entry into emerging markets, as well as a thesis and analytics relating to historical post-recession scrap generation recoveries. However, we're happy to take questions on any areas of interest, as always, during our Q&A session.
So let me get into the presentation. As always, we'd like to start by welcoming the best and the brightest in the metals and electronics recycling industry, all of the men and women of Sims Metal Management and partners at our joint ventures across the world, many of whom are listening to the call or the webcast today.
We'd like to thank our employees for their efforts in what can only be described as extraordinary conditions over the past 6 months. From Hurricane Sandy, or what is now referred to as Superstorm Sandy, in the U.S., snow in the United Kingdom and flooding and wildfires in Australia, our 6,600 strong men and women have shown incredible resilience and preparedness in the face of adversity. Our people have done an incredible job preparing our sites, securing our equipment, and most critically, keeping our people safe.
On the safety front, we achieved a promising reduction in our lost time incident frequency rate in the first half of fiscal '13 and are getting back on track with our journey, as we call it, to becoming the safest manufacturing company in the world. Also encouraging, our overall rates of incidents, lost time, medically treated incidents, minor incidents, all decreased. Improving safety performance also translates into improved efficiency and production, apart from the moral imperative. To our employees that may be listening, the trend is your friend. Keep up the good work on the safety front.
Further, we are proud to say that for the fifth year running, we've been named in the Global 100 Most Sustainable Corporations list presented at the World Economic Forum in Davos, Switzerland by Corporate Knights. Our #15 ranking among the truly exclusive global group of companies is an accomplishment that we are proud of, and one that highlights our mission, as you've heard us say before, of doing well by doing good. This is a recognition that takes into account a company's environmental record, human rights record, transparency, commercial integrity and many other factors just beyond the installation of solar panels and carbon tracking. The fact is, sustainability has real returns, both in terms of dollars and efficiencies for our shareholders, and in the form of a cleaner environment for the communities in which we live and work.
Before I turn the call over to Rob to go over the financials, allow me to make a few observations about the first half and then share some perspective on what we were seeing out there in the early stages of our second half. I'll also touch on 1 or 2 other matters of importance.
Despite emerging signals and improving economic activity in our key scrap generating market in the United States, the translation into stronger scrap volumes remains currently challenged, as scrap generation, as you may have heard me say before, typically lags the fundamentals. Subdued scrap generation, particularly within the consumer segment, negatively impacted sales and margins in the first half, which was compounded by weaker commodity prices and tepid ferrous demand.