Sims Limited: SA Recycling drives decarbonization, circularity in US scrap market

Sims Limited outlined the strategic importance of SA Recycling (SAR) within its North American portfolio, emphasizing SAR's extensive footprint across southern and western US states, complementing NAM's presence in eastern and central regions. SAR's operations include 148 facilities and 22 shredders across 15 states, employing over 3,650 people. The company reported a rapidly growing business with FY21-FY25 sales volume CAGR of +7.5% and organic growth opportunities in non-ferrous, with a +10% CAGR in non-ferrous sales volumes for FY21-FY25.

The presentation detailed SAR's robust logistics, leveraging 1,700 rail cars, over 750 trucks, and 52 facilities with active rail access, alongside 11 facilities with barge loading capabilities. This infrastructure supports efficient scrap sourcing and distribution, particularly serving EAFs. SAR's acquisition strategy has involved approximately 66 acquisitions totaling approximately $1.5bn in enterprise value over the last 18 years.

Financially, SAR reported an average EBITDA of A$496m and average EBIT of A$352m from FY21-FY25. The dividend policy aligns with the highest JV partner's tax rate, with an additional distribution of 20% of SAR EBIT. SAR's capital expenditure strategy includes a disciplined and flexible approach, with $165m in FY24 and an estimated $211m for FY25, allocated across acquisitions, replenishment, and growth. The company maintains a resilient balance sheet with a 45% gearing ratio and $1.7bn in total assets.