My name's Phil Bainbridge, and I chair Sims Limited and will chair this Annual General Meeting today. It's my great pleasure to welcome you to the 33rd Annual General Meeting of your company. Today we're hosting a hybrid meeting with the option of in-person or virtual attendance, and I would like to thank you all for joining us today. I'd like to begin by acknowledging the traditional custodians of the land we're on today, the Gadigal people of the Eora Nation. I pay my respects to the elders past and present. I'd like to introduce my colleagues who are with us today: our directors, Vicky Binns, Grant Dempsey, Tom Gorman, Kathy Hirschfeld, Hiro Kato, Deborah O'Toole, and our CEO, MD Stephen Mikkelsen.
I'd like to introduce our management team: Warrick Ranson, our CFO, John Glyde, who heads up metals in ANZ, Rob Thompson, who heads up metals in North America, Ingrid, who heads up SLS, we've got Brad Baker, who heads up HR, and Gretchen, Company Secretary, Chief Legal, and so a very warm welcome to you all. I'd also like to welcome George Adams, our very valued partner from Sims Adams Recycling, and I'd also like to welcome all of the shareholders who are here today in person and online. Thank you for attending. In declaring this Annual General Meeting open, I can confirm that we have a quorum present. The notice of meeting was duly given, and I will take the notice as being read. One more introduction I'd like to add is Sam Vorwerg, our Audit Partner from Deloitte, the company auditors.
He will be available to answer questions, and on behalf of the board, I would like to thank Sam and his team for their contribution to the company. For the record, I would like to advise that the minutes of the Annual General Meeting held on the 1st of November 2023 are signed as a correct record of the proceedings of that meeting, and I also advise that the company has received proxies covering approximately 165 million shares. Each resolution to be put to the meeting will be decided by a poll, and I will explain the procedures later. In the interest of good corporate governance, I will advise you of the proxy situation in respect of each resolution following a discussion on that resolution. I declare the poll on each resolution open. Now, if you'll allow me just to make a few opening words.
Our Annual General Meeting is a really important event, allowing us to engage directly with you, our shareholders. We appreciate your time, feedback, and support, and we value the opportunity to update you on the company's business. Thank you for joining us either in person or at our office in Mascot today, or virtually. Fiscal year 2024 presented challenging industry conditions, primarily due to a tight supply of ferrous materials, declining demand for sales of ferrous materials in some geographies, and ongoing inflationary pressures. I'm proud of the agility our company demonstrated in this difficult environment, but myself and the board and the company are not satisfied with our performance. During the year, we redefined our strategic priorities, repositioned our footprint with the sale of the U.K. metals business, and implemented commercial and operating changes.
I am confident that we're heading in the right direction, but we're at the start of a journey that will drive long-term growth and value for our shareholders. In terms of safety, our first priority has always been and will continue to be the safety of our employees and our contractors. I am pleased to report that our company had another exceptional safety performance in FY 2024, achieving a new low Total Recordable Injury Frequency Rate of one. With a focus now on leading indicators, critical risks, and our Commit to Care program, we have created a best-in-class safety culture. In terms of our purpose, we continue to believe that our purpose, create a world without waste to preserve our planet, stands the test of time.
In a rapidly decarbonizing world, the materials we recycle are increasingly critical feedstock for our customers who need high-quality, low-carbon metal to drive the transition to a sustainable future. Fittingly and very pleasingly, we were recognized by Corporate Knights in FY 2024 as the world's most sustainable company. While our purpose has not changed, we focused our metals recycling footprint to our high-potential geographies: Australia, New Zealand, and North America. In North America, we made adjustments to better focus on margin, buying more unprocessed materials, and increasing the utilization of our shredders, deriving greater value from the recycled material. Additionally, we implemented a cost-out program that realized significant savings during the year, and this will continue to be a priority. Our Sims Lifecycle Services SLS business had an impressive performance in FY 2024, with our EBIT increasing by over 100% year- on- year.
The SLS business has a strong growth trajectory driven by the surge in demand for artificial intelligence and the related expansion of the hyperscale data center activity. We'll continue to capitalize on this opportunity with our innovative service and customer-centric approach. In terms of capital management and shareholder returns, we continue to evaluate our capital management strategy to ensure we balance financial flexibility with the need to invest in growth and deliver shareholder returns. With the improved performance in the second half of FY 2024, the company declared a final dividend of AUD 0.10 per share, fully franked, which was paid on the 16th of October 2024. Looking ahead from the board perspective, I'm pleased to introduce Grant Dempsey, who was appointed to the board in April and is up for re-election at this meeting. Grant brings experience in investment banking and is Chief Financial Officer.
We will continue to work to ensure that the board has the right mix of skills and experience to lead this company to the future. And with that, I'd like to thank you for your continuing support and invite Stephen, our MD, to make a few remarks.
Thank you, Phil.
Thank you for joining us today. I would like to begin by saying that I'm very proud of what the team has accomplished this year. On the safety front, our commitment remains strong as we integrated 17 new sites for the Baltimore acquisition and achieved a Total Recordable Injury Frequency Rate below one. I think that's a true testament to our proactive approach and solid safety culture. FY 2024 was a year of two halves, and it certainly brought its challenges. Tight scrap availability, softer global steel demand driven by weak manufacturing activity and inflationary pressures led to margin compression. Additionally, weak steel fundamentals in Asia, exacerbated by high levels of Chinese exports, further pressured scrap metal markets. Despite this, we've made real strides, particularly in the second half in our metal business, where our strategic decisions and operational adjustments gained traction.
Despite the pressures in the metal markets, our focus on margin discipline, cost control, and operational efficiency led to improved performance, with underlying EBIT increasing by AUD 29.5 million in the second half. We also saw improved results from our commercial operations in North America, with higher unprocessed material intake and better shredder utilization, contributing to a significant margin improvement by the fourth quarter. In Australia, we strengthened our position, benefiting from a well-balanced portfolio and robust regional and mining volume purchases, adding resilience to our business. Our investment in SA Recycling continued to yield solid results, benefiting from its sound market position. Lifecycle Services had an exceptional year, with EBIT increasing by over 100% year- on- year, driven by successful execution of our strategy to capitalize on growth opportunities and hyperscale data center services and the expansion of artificial intelligence.
This year, we took important steps to streamline and simplify, divesting non-core assets, reducing our executive team, and achieving AUD 46 million in annualized cost savings, which has positioned us well in high-potential markets in the U.S., Australia, and New Zealand. We issued a final dividend of AUD 0.10 per share, maintaining a strong balance sheet. The recent divestitures have further strengthened our financial position, allowing us to reduce debt and focus on future growth. We currently expect EBIT for the metal businesses in the second quarter of fiscal year 2025 to be broadly in line with the first quarter. Trading across the metal businesses has remained strong despite the persistent market challenges, which have particularly affected the Australian and New Zealand markets. North America Metal, however, continues to demonstrate a steady recovery and is expected to maintain its trading margin percentage performance evident in the first quarter.
Looking at the year ahead, we remain committed to driving growth through our global footprint, operational excellence, and our dedication to sustainability. The demand for recycled metals, essential for decarbonization, continues to rise as industries worldwide strive to reduce carbon emissions. With circular economies evolving and becoming a central component of competitive strategies, we are prepared to meet this increasing demand, supporting governments and our customers' ambitions and contributing to a greener, more sustainable future. In closing, I want to thank our employees for their resilience, our board for their guidance in my first year as CEO, and our shareholders for their continued support. Together, we are creating a world without waste to preserve our planet and positioning Sims for future sustainable growth. Thanks, Phil.
Thank you, Stephen. And now if we move on to the formal proceedings of the meeting, before we go to the resolutions that we're going to consider today, I'd just like to run through the voting procedures and the questioning procedures, if that's all right. So for those who are attending in person and eligible to vote and speak at the meeting, you should have already been issued with a yellow voting card when you registered earlier. If you're holding a blue card, you're entitled to vote. You're not entitled to vote but may speak at the meeting. If you hold a red card, you're a visitor and not eligible to vote or speak at the meeting.
If there are any shareholders who are eligible to vote at the meeting who have not received the correct voting cards, please see a representative from the share registry Link Market Services at the registration desk. For those who are attending virtually, in order to vote or ask a question during the meeting, you will have to register. You may vote by clicking on the Get a Voting Card box at the bottom of the site. You will need to enter your shareholder number and postcode or proxy number. Please note that only shareholders, proxy holders, or shareholder company representatives may vote. Eligible shareholders will be able to cast their vote for, against, or abstain for each resolution during the meeting. Once you have finished voting on all resolutions, you must submit your vote by clicking the Cast Vote or Cast Partial Vote button at the bottom of the page.
You'll be able to edit your votes by clicking the Edit card until voting is closed at the end of the meeting. You'll be given five minutes at the end of the meeting to finalize your voting, and a countdown timer will appear at the top of the page so you know how much time is left to cast your vote. Once you have registered, you'll be able to ask a question during the meeting through the Ask a Question box at the top and bottom of the page. You may submit a written question or ask a question over the web phone available by the platform. You must select the Submit Question box to lodge your written question or press the green Call button for an audio question. If you are asking multiple questions, please submit each question separately.
I encourage shareholders who have written questions to send their questions through as soon as possible. If we answer your written question during the meeting and you want to reply, please do so by asking a new question. As we go through the meeting, we will attempt to answer all questions raised during the meeting, but if the same or similar question is received multiple times, we will only answer the question once. We will now pause for a few minutes to allow shareholder time to submit questions, and then we'll address general questions after the pause, and any specific questions for specific resolutions will be considered at the time of the resolution. So any general questions?
Brian, also a shareholder. I purchased my shares in 2005, so that's coming up on 20 years that I've had them.
Over that time, there's been a lot of.
Over that time, there's been a lot of ups and downs in the company and that sort of thing. But what's disappointing, I guess, is that although there's a lot of talk, this general market about sustainability doesn't seem to have grown that much. Just like your comments on the general market and bearing in mind I probably don't have another 20 years, where you think that the sustainability might actually result in a larger market.
I think the issue around sustainability is very alive, very real, and with us today, and it's something that is very focused, is focusing our attention. What we do as a business is inherently sustainable for the planet through recycling. What we're also doing is taking strides to not only do the sustainable work, but do it in a sustainable way. But we have to be very conscious of the fact that we are running a business and a margin business, and we have to be very careful with capital allocation around what we put into those initiatives. So a lot of thought goes in on trying to get that balance right. So it is an issue. It's there. It's live.
We live it and breathe it every day, but we've got to have a very strong commercial overlay on that as well so we actually deliver returns to shareholders at the same time.
Thank you.
Any other questions in the room? Anna, any written questions?
Thank you. No written questions.
No written questions. Any phone questions? Okay. Okay. Thank you. Let's move on to the accounts and reports. And the first item of business on the agenda is to receive and consider the financial statements of the company and its controlled entities for the year ending 30th of June 2024 and the related director's report, director's declaration, and auditor's report. I'm very happy to take questions on the accounts. Maybe from the room first. Written questions?
There are no written questions.
Phone questions?
There are no phone questions.
No phone questions. Thank you. As there was no discussion, we would like to ask that the minutes record that the accounts and reports were received and considered. Moving on to resolution one is the re-election of Ms. Victoria Binns. I'd just like to relay the board's views on Vicky for your consideration. Vicky has more than 35 years of experience in the global resources and financial services sector. Her experience in safety and risk management, finance, strategy, culture, and value creation significantly benefits the company and its shareholders. Vicky's recently taken over as chair of the People and Culture Committee and is doing a great job.
So the resolution that we're putting to you is that Ms. Binns, who retires by rotation at the Annual General Meeting, in accordance with the company's constitution and the ASX listing rules, and having offered herself for re-election and being eligible, be re-elected as a director of the company. We'll pause to take questions. So any questions from the room?
There are no written questions, Chair.
No written questions, and phone questions?
There are no phone questions.
Okay. As there are no discussions, the proxy situation is shown on the attached slide. There were 98% of votes for the resolution, and for other people voting, please now record your vote by selecting For, Against, or Abstain box against resolution one on your voting card. Resolution number two is the re-election of Mr. Grant Dempsey. Again, I'd like to offer the view that Grant joined us on the board earlier this year, and Grant's background is both in investment banking and as a CFO and brings insights to the board on strategic transformation, simplification, capital allocation, and growth projects, and has put a lot of effort in his early time of actually visiting sites and getting to know the business and is contributing already into the board's discussion. Grant was selected after a global search process, and we're delighted to have him join the board.
The resolution that I put is that Mr. Grant Dempsey, who retires by rotation at the Annual General Meeting, in accordance with the company's constitution and the ASX listing rules, and having offered himself for election and being eligible, be re-elected as a director of the company. Any questions from the room? Online?
There are no written questions.
No written questions. Phone questions?
There are no phone questions.
Thank you. We'll put the proxy situation up on the slide where you can see that the vote was 99.68%. Those still to vote are asked to record their vote on their voting card of For, Against, or Abstain against resolution number two. Excuse me. Resolution number three is a remuneration report. This is a non-binding ordinary resolution in respect to the adoption of the remuneration report for the year ending 30th of June 2024 as set out in the directors' report. I note that the company will disregard any votes cast on this resolution by the key management personnel of the company and any of their closely related parties, and otherwise in accordance with the voting exclusion statement contained in the notice of meeting. The resolution is that the remuneration report for the year ending 30th of June 2024 as set out in the directors' report is adopted.
Any questions on the remuneration report from the room? Written questions?
There are no written questions, Chair.
Any phone questions?
There are no phone questions, Chair.
As there was no discussion, the proxy situation for our remuneration report is shown on the slide, and there was an 89% vote for the resolution. For those still to vote, please vote by selecting For, Against, or Abstain against resolution three on the voting card. Resolution number four is a participation in the Sims Limited long-term incentive plan by Mr. Mikkelsen. Now in its 17th year, the LTI plan provides, among other things, for the grant of performance rights. If approved today, Mr.
Mikkelsen will receive a grant of performance rights with a relative Total Shareholder Return performance hurdle compared to a peer group of ASX-listed companies in the ASX 200 metals and energy sector, a grant based on a scorecard of productivity and margin improvements, and a grant with vesting based on the company's performance against a Return on Invested Capital metric, with all vesting conditioned based on continued service. Details of how the plan will operate in respect to the proposed issue of 202,311 performance rights to Mr. Mikkelsen are fully described in the explanatory memorandum in the notice of the meeting. The board believes it is appropriate that Mr. Mikkelsen is entitled to this issue, subject to the criteria described in the plan.
I note that the company will discard any votes on this resolution by a director of the company and any of their closely related parties, and otherwise in accordance with the voting exclusion statements contained in the notice of meeting, so the resolution number four is that the approval is given for the company to issue Mr. Stephen Mikkelsen, the Chief Executive Officer and Managing Director of the company, 202,311 performance rights under the terms of the company's Long-Term Incentive Plan as described in the explanatory memorandum accompanying the notice of meeting. With that, could I take any questions from the room? Written questions?
There are no written questions.
Phone questions?
Chair, there are no phone questions.
Thank you. So no discussion. The proxy situation is shown on the slide, and there's a vote of 89% in favor of the resolution. For those yet to vote, please now record your vote by selecting For, Against, or Abstain on your voting card against resolution number four. We'll now conduct a formal poll on all the motions put forward today. For the people attending in person, if there are any persons present who believe he or she is entitled to vote but is not registered to vote, would you please raise your hand now, and we'll offer assistance to correct that. Everybody okay? Persons entitled to vote on this are all the shareholders, representatives, and attorneys of shareholders and proxy holders who hold yellow admission cards. I will now go through the procedures for filling in the voting papers.
Shareholders, proxy holders, and corporate representatives with a yellow voting card need to mark a box beside the motion to indicate how they wish to cast their vote. When you have finished filling in the voting paper, please lodge it in a ballot box to ensure your votes are counted. Shareholders also need to mark a box beside the motion to indicate how they wish to cast their vote. If you require any assistance, please let us know, but the ballot box is coming round, and so if people are ready to put their yellow cards in the ballot box, we'll complete that.
Thank you.
Thank you. Is everybody in the room that's voting had time to vote and has voted, or does anybody need more time?
And just a reminder that those that are online, they can submit their vote online until five minutes after the close of the meeting. And for everyone's information, the results of the poll will be announced to the ASX later today. So with that, that concludes the business of the meeting, and on behalf of the board, I would like to thank you all very much for your support and for your attendance and participation in this meeting. Thank you.