Als Ltd. · ASX:ALQ

Als — Investor Presentation (May 2024)

44 slides from Als's investor presentation, May 21, 2024

Slide 1: Investor presentation FY24 Results
Investor presentation FY24 Results Malcolm Deane, CEO and Managing Director Stuart Hutton, Chief Financial Officer
Slide 2: Important notice and disclaimer
Important notice and disclaimer 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 o
Slide 3: Unwavering focus on safety
Unwavering focus on safety People • The health and safety of our team members, Total recordable their families and our local communities injury frequency1 remains our highest priority. A safety-first culture • ALS’ commitment to safety drives our critical risk management programs, emphasising the pr
Slide 4: Key sustainability achievements in FY24
Key sustainability achievements in FY24 People Planet Community Business practices • Further 5% reduction in Total • Maintained carbon neutrality for • Maintained science education • Over 95% of employees Recordable Injury Frequency scope 1 and 2 emissions. programs and ALS Cares completed annual tr
Slide 5: Solid financials
Solid financials Underlying Revenue1 Underlying ROCE2,4 • Total revenue growth supported by acquisitions and favourable currency movements. $2,586.0m 20.6% • Organic revenue growth supported by Environmental, +6.8% growth +10 bps improvement and offset by spending slowdown for mining exploration +2.
Slide 6: Business highlights
Business highlights Revenue Organic Operating contribution1 growth margin Commodities • Minerals: Slight revenue decline due to subdued conditions. Margins resilient above 32% due to strength and flexibility of Minerals (2.4)% operating model. Further market share growth reflecting 42% 29.3% client
Slide 7: Commodities remained resilient in a soft market
Commodities remained resilient in a soft market Overview Underlying results (A$m) FY24 FY23 Change Change in • Total revenue growth was flat due to the extended slowdown in mining CCY Revenue $1,086.6 m $1,087.1 m (0.0)% +0.7% exploration, a result of soft capital markets. EBITDA $383.9 m $390.3 m (
Slide 8: Life Sciences supported by Environmental and Food
Life Sciences supported by Environmental and Food Overview Underlying results (A$m) FY24 FY23 Change Change in • Total revenue growth of 12.4% driven by strong performance in CCY Revenue $1,499.4 m $1,334.1 m +12.4% +7.4% Environmental and Food businesses partially offset by lower Pharma EBITDA $330
Slide 9: Successful M&A execution
Successful M&A execution • Eight acquisitions executed for total consideration of $76 million, expected to generate an additional $152 million revenue per year1 • $36 million capital deployed to support Environmental portfolio • Acquisitions focused on global/regional expansion and/or new service of
Slide 10: Nuvisan integration underway
Nuvisan integration underway • Transformation program now commenced following ALS taking full control and ownership on 31 March 2024. • No changes to program initiatives, with cost reduction targets of ~€25 million p.a. (post-acquisition) expected to be delivered over 2-year period, associated cost
Slide 11: Integration of recent acquisitions
Integration of recent acquisitions York • Integration and transition of York to ALS Way progressing well. • Strong focus on harmonisation of ALS standardised methods and equipment across broader USA business – sharing best practice. • Corporate shared services actively working on systems integration
Slide 12: Delivering on FY24 objectives
Delivering on FY24 objectives Most business streams delivered on short-term objectives Minerals Industrial Materials Environmental Food Pharmaceutical ✓ Minerals: Market share ✓ Inspection & Coal: ✓ Mid to high single-digit ✓ Mid to high single-digit × Pharma (excluding growth across the total volum
Slide 14: FY24 financials
FY24 financials A$m, except where stated FY24 FY23 % change • Solid financial performance in mixed market Revenue 2,586.0 2,421.2 6.8% conditions. Underlying EBITDA 665.7 648.0 2.7% • Maintained underlying earnings, margins, cash generation and ROCE. Underlying EBIT 491.8 490.7 0.2% Margin (%) 19.0%
Slide 15: FY24 revenue growth of 6.8%
FY24 revenue growth of 6.8% Total revenue growth of 6.8% Underlying revenue growth composition (A$m) Organic growth of 2.2% a result of: 2.2% 2.2% 2.4% 6.8% ✓ Continued global demand for Environmental services. ✓ Further demand for value-added services and growth of mine site production testing in M
Slide 16: FY24 operating margins
FY24 operating margins Underlying Group EBIT margin composition (%) • Underlying Group margins1 contracted by 81 bps at CCY, reflecting underperformance of Pharmaceutical, expected dilution from some acquisitions, increased FY23 Organic Scope Corporate FX FY24 corporate costs and lower volumes in Mi
Slide 17: Solid cash generation
Solid cash generation • Net working capital proportionally increased with A$m, except where stated FY24 FY23 % change revenue growth. Underlying EBITDA (adjusted for ROU lease assets & Nuvisan) 571.1 569.2 0.3% • Increased capital expenditure reflecting growth focus, in line with value creation fram
Slide 18: Capital allocation discipline
Capital allocation discipline Framework 416 348 282 Growth and maintenance capital1 303 228 202 169 143 76 Majority of growth capital allocated to 65 98 108 Environmental and Minerals businesses 73 56 78 40 23 35 48 44 1 Maintenance Organic M&A Dividend: 50-60% payout ratio Maintained at top-end of
Slide 19: Balance sheet and overall liquidity remains strong
Balance sheet and overall liquidity remains strong Debt maturity profile as of March 2024: pre re-finance (A$m) • Commitment to reduce leverage to mid- point of target gearing range (1.7x to 2.3x). 20% 16% 16% 119 14% • Re-financed and upsized existing facilities 13% 12% by US$100 million, after yea
Slide 20: Corporate cost evolution
Corporate cost evolution Corporate costs (net of FX)1 (A$m) • Corporate cost increase reflects: - Increase in people costs (CPI, LTI and Total Corporate costs % of revenue development) - Additional functional support in key 2.1% 2.1% 2.3% 2.0% 2.1% areas, Finance, Strategy and Procurement 60.0 54.1
Slide 22: FY27 strategy on track
FY27 strategy on track Delivered solid revenue growth with additional opportunities for profit improvement identified Our innovative and data-driven approach continues Investing and shaping the to provide additional growth opportunity business for the future 1 2 3 4 5 Testing capabilities Global sys
Slide 23: ...and building upon the framework
…and building upon the framework with a new executive team, operating model and improved M&A process Increased focus with strategic additions to existing framework following review Updated capital 6 New team executive M&A integration process Enhanced operating model Standardised client approach Scal
Slide 24: Updated value creation framework
Updated value creation framework Prioritising risk weighted capital to protect, extend and expand the portfolio Re-focused growth 1 aligned to strategic pillars and capital Organic and + innovation led growth + Operational improvements + Cash generation + Selective and opportunistic M&A framework Ne
Slide 25: Perspectives for FY25
Perspectives for FY25 Business remains well positioned to capture positive long-term industry megatrends, with strong confidence to execute on near-term growth ambitions and operational improvements 1 2 3 Organic revenue growth Operating leverage Capital allocation • Targeting mid-single-digit organ
Slide 26: Investment proposition
Investment proposition Global business with diverse end markets, services and customers underpinned by industry megatrends and strong market positions. • Strategically positioned to capture growth opportunities from industry megatrends. • Leading hub-and-spoke model driving market share and margins
Slide 29: Reduced cyclicality to exploration through downstream growth
Reduced cyclicality to exploration through downstream growth and increased uptake of new service offerings 1 5 yr. CAGR: 14% 2 3 yr. CAGR: 28% 3 Infancy stage 4 5 yr. CAGR: 15% 5 3 yr. CAGR: 21% Exploration High-performance Consulting and Metallurgy Mine-site testing methods data analytics • World l
Slide 30: Growth and resilience of Minerals margins through the cycle
Growth and resilience of Minerals margins through the cycle Minerals Underlying EBIT margin evolution (%) Minerals EBIT margin continued to expand through the cycle 34% 32% 33% • Margin improvement and/or resilience since FY20. 29% 27% • Maintained margins above 30% since FY22 despite declining samp
Slide 31: Further growth and innovation in high-performance methods
Further growth and innovation in high-performance methods • Continuously developing new innovative testing methods to meet evolving client requirements, Case maintaining industry leading position. Study • Deliver best scientific analysis available at a commercial price. • Exploration clients are req
Slide 32: FY24 divisional evolution
FY24 divisional evolution (underlying continuing business) in A$m FY23 Organic Scope Corporate FX FY24 Revenue 2,421.2 52.3 53.7 - 58.8 2,586.0 Revenue Life Sciences 1,334.1 48.6 49.7 - 67.1 1,499.4 Commodities 1,087.1 3.7 4.0 - (8.3) 1,086.6 in A$m FY23 Organic Scope Corporate FX FY24 Group EBIT 49
Slide 33: Reconciliation of underlying to statutory NPAT
Reconciliation of underlying to statutory NPAT FY23 ($m) FY24 ($m) = (a) + (b) + (c) + (a) (b) (c) (d) (e) (d) + (e) Full Year Underlying Underlying continuing operations Nuvisan Nuvisan equity Restructuring Amortisation Statutory continuing (including Nuvisan underlying share of profit incl. and ot
Slide 34: FY24 restructuring and other items
FY24 restructuring and other items Nuvisan Other non- Acquisition / SaaS system Total non-recurring in $m Start-up Restructuring impairment and operational Divestment development costs restructuring items Commodities - 3.8 0.3 4.1 Life Sciences 4.3 8.4 248.8 4.7 266.1 Corporate - 1.8 0.3 18.8 (0.5)
Slide 35: Underlying effective tax rate movement
Underlying effective tax rate movement Change $m FY24 FY23 YoY Underlying Profit before Tax (from continuing operations) 438.1 446.9 (2.0)% Tax 119.5 125.0 (4.4)% Effective Tax Rate (ETR) 27.3% 28.0% (69) bps FY25 outlook: ETR expected to be ~28% on an underlying basis right solutions. right partner
Slide 36: FY24 net debt evolution
FY24 net debt evolution Leverage ratio Leverage ratio 1.8 x 2.0 x 190 173 1,175 (336) 1,023 6 25 94 Net debt Cash flow Acquisitions net of Treasury shares bought FX Interest and tax Dividends paid Net debt 31 March 2023 net of capex divestments on-market 31 March 2024 right solutions. right partner.
Slide 38: PFAS, PFAS everywhere
PFAS, PFAS everywhere A large global market and milestone year for PFAS regulation Regulatory tailwinds • Prevalence and health risks associated with PFAS supporting increased regulation and enforcement. US EPA • PFAS accumulate in food, water, soil and air and within animals and humans National Sta
Slide 39: Copper deficit and grade quality looms large
Copper deficit and grade quality looms large, supporting need for more exploration Demand growth supported by: Constrained supply due to: • Electrification tailwinds – copper is the single most • Insufficient number of new mines planned over next 10 years. important critical metal to execute on ener
Slide 40: Gold and copper still represent largest proportion of global exploration budgets
Gold and copper still represent largest proportion of global exploration budgets Global Exploration Spend by Commodity (%): 20231 • Green metals (copper, nickel and lithium) posted strong budget growth, representing ~36% of total exploration, supported by major miners’ budget increases, notably BHP,
Slide 41: Majors and mine-site exploration continuing to expand
Majors and mine-site exploration continuing to expand • Grassroots exploration spend declined YoY. • Majors have continued to expand exploration spend. • Late stage exploration and feasibility work increased in 2023, representing largest global budget (in dollar terms and % share). • Intermediate an
Slide 42: Sample flow performance reflects further market share growth
Sample flow performance reflects further market share growth • Steady improvement in sample ALS mineral sample volume (trailing 52-week running average), flows towards end of the period, 450,000 S&P Global Exploration Spend and ALS Geochemistry Revenue in US$1 27.00 with (3.9)% decline in sample flo
Slide 43: Acronyms and definitions
Acronyms and definitions bps Base points CCY Constant currency DSO Days sales outstanding EPS Earnings per share. Basic EPS calculated as: Underlying NPAT / Weighted Average Number of Shares FCF Free cash flow FX Foreign exchange Industrial Materials Includes Inspection, Coal, Oil & Lubricants (form

Als — Investor Presentation (May 2024) on 6ix

Als — Investor Presentation (May 2024)

Slide 1: Investor presentation FY24 Results

Slide 2: Important notice and disclaimer

Slide 3: Unwavering focus on safety

Slide 4: Key sustainability achievements in FY24

Slide 5: Solid financials

Slide 6: Business highlights

Slide 7: Commodities remained resilient in a soft market

Slide 8: Life Sciences supported by Environmental and Food

Slide 9: Successful M&A execution

Slide 10: Nuvisan integration underway

Slide 11: Integration of recent acquisitions

Slide 12: Delivering on FY24 objectives

Slide 13: Financial review

Slide 14: FY24 financials

Slide 15: FY24 revenue growth of 6.8%

Slide 16: FY24 operating margins

Slide 17: Solid cash generation

Slide 18: Capital allocation discipline

Slide 19: Balance sheet and overall liquidity remains strong

Slide 20: Corporate cost evolution

Slide 21: Strategy and FY25 perspectives

Slide 22: FY27 strategy on track

Slide 23: ...and building upon the framework

Slide 24: Updated value creation framework

Slide 25: Perspectives for FY25

Slide 26: Investment proposition

Slide 27: Questions

Slide 28: Appendix

Slide 29: Reduced cyclicality to exploration through downstream growth

Slide 30: Growth and resilience of Minerals margins through the cycle

Slide 31: Further growth and innovation in high-performance methods

Slide 32: FY24 divisional evolution

Slide 33: Reconciliation of underlying to statutory NPAT

Slide 34: FY24 restructuring and other items

Slide 35: Underlying effective tax rate movement

Slide 36: FY24 net debt evolution

Slide 37: Market insights

Slide 38: PFAS, PFAS everywhere

Slide 39: Copper deficit and grade quality looms large

Slide 40: Gold and copper still represent largest proportion of global exploration budgets

Slide 41: Majors and mine-site exploration continuing to expand

Slide 42: Sample flow performance reflects further market share growth

Slide 43: Acronyms and definitions

Slide 44: right solutions. right partner.