13,000+ staff, 350 locations, in 55 countries, on six continents 2 - - PowerPoint PPT Presentation

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13,000+ staff, 350 locations, in 55 countries, on six continents 2 - - PowerPoint PPT Presentation

Mar 11, 2024 141 likes •361 views

RBS Morgans Institutional Conference Brisbane Paul McPhee Group General Manager, Energy Division 11 October 2012 13,000+ staff, 350 locations, in 55 countries, on six continents 2 Commodity Price Cycles are inevitable. Corrections bring

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RBS Morgans Institutional Conference – Brisbane

Paul McPhee Group General Manager, Energy Division 11 October 2012

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13,000+ staff, 350 locations, in 55 countries, on six continents

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Commodity Price Cycles are inevitable. Corrections bring opportunities and create stronger industries. ALS is better positioned than ever to respond Superior client portfolios and broadening service streams underpin ALS’ long term growth

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100 200 300 400 500 600 700 800 900

Price Indices (basis USD)

Mineral and Metal Price Indices

COAL_AUS COPPER GOLD IRON_ORE_SPOT Average Index price for Major Minerals

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81.4% of Australia's current Mineral Exploration Expenditure

Sources: World Bank Commodity Price Indices & Australian Bureau of Statistics

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Source: World Bank Commodity Price Indices

100 200 300 400 500 600 700 800 900

Price Indices (basis USD)

Mineral and Metal Price Indices

Average Index price for Major Minerals Recent price falls are relatively modest in comparison

46% decline GFC 22% decline 2012 93% post-GFC Rise

Still 33% above long term average

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5,000 10,000 15,000 20,000 25,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

World Minerals Exploration Expenditure (MEGS)

USDm

Source: Mineral Economics Group Services (MEGS)

Current (unrevised) forecast Price impact on exploration expenditure uncertain but should be subdued

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500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Australian Minerals Exploration Expenditure

Australian Financial Years AUDm

Others Uranium Other Base Metals Copper Gold Iron Ore Coal

81% aimed at just 4 major commodities and 69% of total spend is targeting brownfield deposits

Source: Australian Bureau of Statistics (ABS)

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  • 5,000

10,000 15,000 20,000 25,000 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Minerals Exploration Expenditure

Australian Exploration Expenditure Global Exploration Expenditure Australia tends to be more resilient throughout the price cycle

Source: ABS & MEGS

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So too has ALS’ Australian financial performances

100 200 300 400 500 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Australian Minerals Exploration Expenditure

Australian Financial Years AUDm

Others Uranium Other Base Metals Copper Gold Iron Ore Coal ALS Australia Revenue

Source: ABS

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200 400 600 800 1000 1200 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Australian Minerals Exploration Expenditure

Australian Financial Years AUDm

Others Uranium Other Base Metals Copper Gold Iron Ore Coal ALS Global Revenue

Source: ABS

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20 40 60 80 100 120 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Australian Minerals Exploration Expenditure

Australian Financial Years AUDm

Others Uranium Other Base Metals Copper Gold Iron Ore Coal ALS Australia EBIT

Source: ABS

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50 100 150 200 250 300 350 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Australian Minerals Exploration Expenditure

Australian Financial Years AUDm

Others Uranium Other Base Metals Copper Gold Iron Ore Coal ALS Global EBIT

Source: ABS

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200 400 600 800 1,000 1,200 1,400 5,000 10,000 15,000 20,000 25,000 30,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

World Minerals Exploration Expenditure (MEGS)

ALS Limited Financial Years USDm

Global Exploration Expenditure ALS Global Revenue

ALS has evolved beyond a mineral services company

Source: MEGS

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50 100 150 200 250 300 350 5,000 10,000 15,000 20,000 25,000 30,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

World Minerals Exploration Expenditure (MEGS)

ALS Limited Financial Years USDm

Global Exploration Expenditure ALS Global EBIT

The business has less volatile and more diversified earnings

Source: ABS

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Life Sciences 31% Minerals 49% Energy 7% Industrial 13% Life Sciences 32% Minerals 66% Energy 0% Industrial 2%

Despite strong global mineral exploration expenditure, ALS’s spectacular growth has relied less and less on minerals

USDm

Life Sciences 40% Minerals 54% Energy 5% Industrial 1%

200 400 600 800 1,000 1,200 5,000 10,000 15,000 20,000 25,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

ALS Global Revenue ALS Global EBIT Global Exploration Expenditure

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2005 2008 2012

Revenue by Region

Sth America Nth America Europe Australasia Asia Africa

  • 10%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110%

2005 2008 2012

EBIT by Region

Similarly, ALS’ evolving geographic spread has made the Company less exposed to economic volatility and exchange rate movements

200 400 600 800 1,000 1,200 5,000 10,000 15,000 20,000 25,000

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

ALS Global Revenue ALS Global EBIT Global Exploration Expenditure

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  • 200

400 600 800 1,000 1,200 1,400 FY06 FY07 FY08 FY09 FY10 FY11 FY12

AUD$ millions

  • 50

100 150 200 250 300 350 400 FY06 FY07 FY08 FY09 FY10 FY11 FY12

AUD$ millions

Non-Mineral EBITDA margin 21% 21% 24% 20% 24% 23% 25%

GROWTH OF NON-MINERALS DIVISIONS

Life Sciences Energy Industrial Minerals Revenue EBITDA (incl ALS overheads)

The non-Minerals revenue of ALS is now larger than ALS’ entire revenue only two years ago and the Minerals Division has been transformed from a geochemical only business in 2009 to a geochemical, metallurgical and inspection business in 2012.

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ALS Market Capital Price Index All Minerals Price Index Major Minerals ALS Dividend Per Share

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

ALS has strong credentials in navigating through the tougher times and consistently delivering shareholder value

Global Exploration Expenditure ALS Global Revenue

Sources: World Bank Commodity Price Indices, MEGS, RBS Morgans

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  • 100%

0% 100% 200% 300% 400% 500% 600% 700% Coffey Servcorp Transfield Services SGS Ausenco Worley Parsons Clough Eurofins Orica MacMahon Bureau Veritas Intertek Cardno Monadelphous Core Laboratories Boart Longyear ALS Limited Total Shareholder Return (1st April 2009 to 31st March 2012)

TOTAL SHAREHOLDER RETURN

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Source- Ernst & Young

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  • Price cycles happen and, yes, exploration expenditure is price sensitive
  • Corrections are healthy for these industries and ALS is well positioned to continue

servicing the sector

  • Current prices for major minerals remain way above long-term averages

ALS’ financial performances demonstrate

  • ALS has limited exposure to the more price sensitive commodities
  • ALS has lowered its dependency on minerals exploration expenditure and geochemistry

services and this strategy will continue to be pursued

  • ALS has less exposure to any single region and has less currency risk
  • Our Australian businesses provide high performance and portfolio balance
  • ALS’ returns to shareholders have been consistently above peers and have not regressed
  • ver the past 10 years
  • ALS remains poised to pursue further growth opportunities and income diversity
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