Morgans Queensland Conference 2017 Brisbane 11 October 2017 Richard - - PowerPoint PPT Presentation

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Morgans Queensland Conference 2017 Brisbane 11 October 2017 Richard - - PowerPoint PPT Presentation

Morgans Queensland Conference 2017 Brisbane 11 October 2017 Richard Stephens Chief Financial Officer, ALS Limited Right Solutions Right Partner www.alsglobal.com | Right Solutions Right Partner IMPORTANT NOTICE AND DISCLAIMER This


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Right Solutions • Right Partner |

Right Solutions • Right Partner www.alsglobal.com

Morgans Queensland Conference 2017

Brisbane 11 October 2017 Richard Stephens – Chief Financial Officer, ALS Limited

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Right Solutions • Right Partner |

  • This presentation has been prepared by ALS Limited, (ALS or the Company). It contains general information about the Company’s

activities as at the date of the presentation. It is information given in summary form and does not purport to be complete. The distribution of this presentation in jurisdictions outside Australia may be restricted by law, and you should observe any such restrictions.

  • This presentation is not, and nothing in it should be construed as, an offer, invitation or recommendation in respect of securities, or an
  • ffer, invitation or recommendation to sell, or a solicitation of an offer to buy, securities in any jurisdiction. Neither this document nor

anything in it shall form the basis of any contract or commitment. This presentation is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor. All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment is appropriate.

  • The Company has prepared this presentation based on information available to it, including information derived from public sources

that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein.

  • This presentation includes forward-looking statements within the meaning of securities laws. Any forward-looking statements involve

known and unknown risks and uncertainties, many of which are outside the control of the Company and its representatives. Forward- looking statements may also be based on estimates and assumptions with respect to future business decisions, which are subject to

  • change. Any statements, assumptions, opinions or conclusions as to future matters may prove to be incorrect, and actual results,

performance or achievement may vary materially from any projections and forward-looking statements.

  • Due care and attention should be undertaken when considering and analysing the financial performance of the Company.
  • All references to dollars are to Australian currency unless otherwise stated.

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IMPORTANT NOTICE AND DISCLAIMER

2017 Morgans Conference

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Right Solutions • Right Partner |

Business streams

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Right Solutions • Right Partner |

Grow scalable businesses through organic and geographic expansion

Invest in New Core (Testing) Business Streams

Improve Current Performance

Divest or close all non-core (non-testing) Businesses

Business stream strategy

4 2017 Morgans Conference

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Right Solutions • Right Partner |

Vision 2022: Our Everest (excluding significant acquisitions)

5 2017 Morgans Conference Assumes no material adverse change in market conditions

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Right Solutions • Right Partner |

Strategic priorities

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Brand recognition Operational excellence Client focused Leverage services across business streams Target: non-resource business to be > 50%

  • f the company EBIT at

the top of the mineral cycle through:

Business service

Delivering infrastructure to support the business

Existing market share growth New business streams Geographic expansion Strategic business development Integrated business services across all business streams Technology and LIMS Talent and staff development Transparency and communication

Balanced portfolio One ALS

Strategic priorities Focus (Testing as our Core)

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Right Solutions • Right Partner |

Acquisitions completed during FY2018 to date

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Total investment

$30 m

FOOD TRIBOLOGY PHARMACEUTICAL

Marshfield (USA) Oilcheck (Brazil) Mikrolab / Toxicon (Sweden)*

* completed since end of September half-year

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Right Solutions • Right Partner |

Global operations map

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Right Solutions • Right Partner |

USD 86% CAD 14%

Debt Denomination

USD, 119 AUD, 62 EUR, 9 GBP, 11 Other, 48

Cash Holdings AUD$m

Debt Metrics – March 2017

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Mar-13 Mar-14 Mar-15 Mar-16 Mar-17

STATISTICS Gearing Ratio (comfort 45%) 29% 34% 38% 27% 29% Leverage (net debt/ EBITDA; max 3.00) 1.0 2.2 2.5 1.7 2.1 EBITDA interest cover (min 3.75) 21.0 12.2 9.1 7.7 8.5 BALANCE SHEET MEASURES Total Equity (AUD mn) 997 1419 1228 1186 1185 Net Debt (AUD mn) 400 722 762 438 485

17.2% 29.5% 23.6% 29.7%

50 100 150 200 250 300 350 2016 2017 2018 2019 2020 2021 2022

AUD$ million

DEBT MATURITY & CAPACITY PROFILE

as at 31 March 2017

Long Term Debt - USPP Notes Bank Debt - Undrawn Capacity % Total Debt Capacity

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Debt Facilities – September 2017 following bank debt re-financing

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5.0% 6.6% 31.2% 25.8% 31.4% 50 100 150 200 250 300 350 2016 2017 2018 2019 2020 2021 2022

AUD$ million

DEBT MATURITY & CAPACITY PROFILE

as at 30 September 2017

Long Term Debt - USPP Notes Bank Debt - Undrawn Capacity % Total Debt Capacity USD 86% CAD 14%

Debt Denomination:

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Right Solutions • Right Partner |

Cash flow FY17

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Full year FY16 AUD mn FY17 AUD mn Underlying operating profit (EBIT) 177.9 171.6 Depreciation & Amortisation 86.4 78.8 Working capital (6.3) 13.8 CAPEX (73.7) (58.7) Other 5.1 3.5 Free cash flow 189.4 209.0 Acquisitions (22.8) (106.4) Dividends paid (72.0) (58.0) Borrowings - movement (183.2)

  • Equity Issued

317.0

  • Interest and Tax

(73.5) (68.3) Restructuring costs (13.9) (19.1) Net increase/(decrease) in cash 141.0 (42.8) Opening net cash 163.0 297.9 Effect of FX on cash held (6.1) (6.2) Closing net cash 297.9 248.9 Analysis includes both continuing and discontinuing operations

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Full Year FY17 Financial summary

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Full Year FY16 ($mn) Full Year FY17 ($mn)

Underlying* Underlying* Discontinued Operations Impairment Charges Restructuring &

  • ther one off items

Amortisation of Intangibles Statutory Results

Revenue 1,239.0 1,272.3 93.3

  • 1,365.6

EBITDA 258.0 253.1 (2.7)

  • (19.1)
  • 231.3

Depreciation & amortisation (69.1) (67.0) (11.8)

  • (1.5)

(80.3) EBIT 188.9 186.1 (14.5)

  • (19.1)

(1.5) 151.0 Interest expense (34.5) (27.3)

  • (27.3)

Tax expense (45.0) (44.9) 0.2

  • 3.8
  • (40.9)

Non-controlling interests (1.0) (1.2)

  • (1.2)

NPAT 108.4 112.7 (14.3)

  • (15.3)

(1.5) 81.6 EPS (basic – cents per share) 23.7 22.4 16.2 Dividend (cents per share) 13.5 13.5

* continuing operations

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Right Solutions • Right Partner | 13

Geochemical markets – strong recovery maintaining momentum

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3 6 9 12 15 18 21 24

Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17

Global Exploration Spend US$bn Relative Gold Price in USD

Average Weekly Sample Flow

Week

ALS Global Mineral Sample Flow

(twelve month running average)

2014 2009 2006 2007 2010 2008 2011 2012 2013 2015 2016 2017

Q1FY18

Samples

+39%

pcp Revenue

+33%

pcp EBIT

+69%

pcp

  • 50%
  • 40%
  • 30%
  • 20%
  • 10%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 DELTA (last 2 weeks sample flow Versus same 2 weeks last year) Week

2014 2009 2006 2007 2010 2008 2011 2012 2013 2015 2016 2017

ALS Global Mineral Sample Flow

(two week growth trend)

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Geochemical markets – junior / intermediate capital raisings, gold drilling

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Gold Exploration Drilling Activity distribution by region

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Margin Strong at the Bottom of the Commodities Cycle

EBITDA Margin for Core Labs, SGS, Intertek, Bureau Veritas, Eurofins, Applus, & Exova is for previous Calendar Year and Mistras year ending May previous year. ALS EBITDA includes all Oil & Gas operations. EBITDA is underlying EBITDA for all companies.

6% 12% 18% 24% 30% 36% 300 600 900 1,200 1,500 2014 2015 2016 2017 EBITDA Margin

ALS Revenue AUD$ million

ALS Financial Year Ending March

ALS

Core Labs SGS Bureau Veritas Intertek Eurofins Mistras Applus Exova

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Right Solutions • Right Partner | 12 8 6 4 2.4 2.8 3 2.3 1.8 2.1 1.2

1.1

5 10 15 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Group LTIFR

(as at March 31)

Safety Performance

Key Performance Indicators

  • ALS Group LTIFR of 1.1 is a historical all time low.
  • Overall score of 90% for PPI Scorecard
  • 97% close out of incident report corrective actions

across all divisions

  • 100% of all employee safety training completed

Historical Record Low Injury Rates

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Right Solutions • Right Partner |

Sustainability Program

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Right Solutions • Right Partner |

Final H2FY17 Dividend

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9 13 19 21 19 11 7.5 5.5

11 15 26 27 20 10 6 8

10 20 30 40 50 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 AUD cents

Interim Dividend Final Dividend

H2FY17 Dividend

  • 8.0 cps
  • Payout ratio 60% (full year)
  • Franked to 40%
  • Paid on 3 July 2017
  • Dividend Reinvestment

Plan

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Full Year Revenue FY17 ALS Segments and Business Streams

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Environmental Food Pharmaceutical Consumer Products

LIFE SCIENCES

Asset Care Tribology

INDUSTRIAL COMMODITIES

Geochemistry Trade Inspection Metallurgy Coal Oil & Gas (Laboratories)