Sims Lifecycle Services: Strong growth fueled by hyperscaler demand

Sims Lifecycle Services projects data center spending to exceed $1 trillion by 2029, with AI infrastructure requiring $7 trillion by 2030, positioning SLS to capture aggressive growth. The company’s revenue growth lags data center investment by approximately four years, indicating future opportunity. SLS reports a strong competitive landscape, with over 95% of competitors being independently owned local proprietors and less than 5% operating at a comparable scale, leaving SLS as a strategically positioned leader.

For FY25, SLS reported sales revenue of A$427m, an increase from A$350m in FY24, with underlying EBIT growing to A$32m from A$18m in the previous year. This growth was significantly influenced by hyperscaler demand, which contributed A$200m to FY25 revenue, demonstrating a 40.7% CAGR for hyperscaler revenue. Overall, revenue grew 40.5% with an ROIC of 152%, showcasing the company’s ability to scale profitably.

The company's key profit drivers include a 78% increase in underlying EBIT to A$32m in FY25, outpacing revenue growth due to operating leverage and cost control. Robust revenue expansion is marked by 31% growth in FY25, contributing to a 15% three-year CAGR. Hyperscaler revenue specifically increased by A$200m in FY25, driving a 40.7% three-year CAGR.