Slide 1: 2014 – 15 Full Year Result
2014 – 15 Full Year Result Investor Presentation May 2015 Greg Kilmister - CEO 1 RIGHT SOLUTIONS · RIGHT PARTNER
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
Slide 3: Company Profile
Company Profile geochemistry ALS Limited (ASX:ALQ) is an ASX 100 company that provides tribology metallurgy professional technical services to the global Mineral and Energy Resources (exploration, extraction, processing and trading), Life mineral Sciences (environmental, food and asset care inspecti
Slide 4: FY2015 Financial Summary
FY2015 Financial Summary FY14 ($mn) Full Year FY15 ($mn) Continuing Continuing Discontinued Impairment Restructuring & Amortisation of Statutory Full year Operations (1) Charges Acquisition Intangibles Results Underlying Underlying Costs Revenue 1384.0 1422.2 70.5 - 1492.7 EBITDA 335.7 305.4 1.6 (29
Slide 5: Health Safety and Environment
Health Safety and Environment Performance at a glance: LTIFR better than ASX TRIFR 50% reduction Decreasing All divisions meeting Top 100 average*. over 4 years. severity rate. target PPI score. ASX Top 100 ave. = 3.3 Group LTIFR Group TRIFR Duration Rate (Ave. Days Lost) PPI Scorecard Client Recogn
Slide 6: Compliance and Sustainability
Compliance and Sustainability • Core values of “Safety as a Priority” and “Honesty and Integrity” supported by long term compliance program. • Strong internal controls maintained by compliance portal which incorporates company policies, management sign- offs, environmental monitoring programs, train
Slide 7: Cash Flow
Cash Flow FY14 FY15 Full year $mn $mn • Cash Flow Underlying operating profit (EBIT) 262.8 223.3 • Free cash flow down $ 24.5mn Depreciation & Amortisation 76.2 83.7 • Cash conversion 101.7% Working capital 15.9 2.7 • CAPEX $ 76.5mn – 5% of revenue CAPEX (82.6) (76.5) • 4 acquisitions - $ 30.2mn Oth
Slide 8: Funding
Funding Mar-14 Sept-14 Mar-15 Funding statistics Gearing ratio Comfort 45% 33.9% 35.5% 38.3% Leverage (net debt / EBITDA) Max 3.25 2.2 2.7 2.5 debt EBITDA interest cover Min 3.75 12.2 8.8 9.1 covenants AUD$mn Debt Maturity 400 30% 24% 350 24% 300 22% 250 200 150 100 50 0 2014 2015 2016 2017 2018 201
Slide 9: Foreign Currency Revenues
Foreign Currency Revenues Asia ZAR 5% Krona 2% Average Exchange Rate 6% FY2015 FY2014 Change GBP 2%4% 8% 5% USD 0.8675 0.9235 -6.1% 7% AUD EURO 34% CAD 0.9902 0.9776 +1.3% 4% 4% 42% FY2015 revenue EURO 0.6909 0.6880 0.0% AUD $1.42 billion 14% GBP 0.5389 0.5796 -7.0% CAD SEK 6.3838 6.0287 +5.9% 12% 2
Slide 10: Historical Trend – Ten Year Journey
Historical Trend – Ten Year Journey AUD $m 1,600 1,503 1,493 1,406 1,456 1,400 1,200 1,108 1,000 920 826 Revenue 800 663 772 600 523 436 400 200 0 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 AUD $m 600 496 500 461 Underlying 400 339 290 307 EBITDA 300 247 179 188 200 145 75 91 100 0 FY05
Slide 11: FY15 – Revenue by Region by Division
FY15 – Revenue by Region by Division Europe North America Middle east Asia Africa South America Australasia 11 RIGHT SOLUTIONS · RIGHT PARTNER
Slide 12: Global Location Map – genuine global footprint
Global Location Map – genuine global footprint 12 RIGHT SOLUTIONS · RIGHT PARTNER
Slide 13: ALS Revenue History
ALS Revenue History Reservoir Group acquired-- 1,400 105 248 307 1,200 88 169 AUD$ millions 153 183 190 1,000 73 454 800 GFC 361 143 527 558 600 59 26 PearlStreet Ltd acquired-- 62 50 312 24 6 236 400 6- 189 248 591 608 162 200 4- 426 367 4- 77 318 335 3- 4- 46 50 252 206 3- 43 41 131 178 3- 16 69 7
Slide 14: Laboratory revenue - journey over the last decade
Laboratory revenue - journey over the last decade? FY2015 Revenue has approximately tripled every five years revenue with significant diversification of market sectors $1422mn FY2010 revenue $565mn FY2005 revenue $156mn 34% environmental 30% 43% 66% 36% 19% geochemistry Environmental Food/Pharma Con
Slide 15: ALS (laboratories) Revenue Growth
Revenue Growth - laboratories 1500 ALS (laboratories) Revenue Growth 1250 Revenue (AUD$mn) 1000 • Organic Growth - 6.1% 750 500 • Acquired Growth +7.7% 250 • Currency Impact +1.1% 0 Reported Growth 2.7% Revenue Growth YoY Industrial Energy Life Sciences Minerals -20% -10% 0% 10% 20% 30% 40% Organic
Slide 16: Dividend
Dividend Full Year Dividend per Share AUD cents FY15 – 2nd Half Dividend 50 • Payout ratio 62% • Franked to 25% 40 • Dividend Reinvestment Plan 27 26 retained at 0% discount 30 20 • DRP shares purchased on market – no new equity issued 20 15 10 10 11 10 19 21 19 13 11 10 9 0 FY09 FY10 FY11 FY12 FY13
Slide 17: CAPEX (excluding land & building purchases) and Depreciation
CAPEX (excluding land & building purchases) and Depreciation 25 CAPEX as a % of D&A $ million • Capacity CAPEX remains subdued- in 90% 62% 60% 53% 66% 75% 66% 54% line with market conditions • Replacement CAPEX (~$20mn) being 20 maintained for inevitable market upswing • Research and Development CAP
Slide 18: Employee Numbers - total head count
Employee Numbers - total head count • ALStar online training platform launched in 25 14,000 languages – delivering 3400 training sessions per month 12,000 • Agility in managing our manpower costs and a highly engaged workforce has allowed for a step change improvement in productivity 10,000 ultimate
Slide 19: Margin – peer comparison
Margin – peer comparison 35% 34.2% 31.7% 30% 25% 21.4% 21.8% 20.8% 20.8% 20% 19.1% 16.6% 16.8% 15.5% 16.0% 15.5% 15.7% 15% 12.7% 10.7% 9.8% 10% 6.2% 5% 3.6% 0% ALS SGS B.V. Intertek Eurofins Applus+ Exova Mistras Core Labs EBIT EBITDA Note: FY Dec 14 for all companies excluding ALS (FY Mar 15) and M
Slide 20: Growth of non-Minerals Divisions
Growth of non-Minerals Divisions Lab Services Revenue Lab Services EBITDA Non-Mineral EBITDA margin 1,400 450 21% 24% 20% 24% 23% 25% 25% 24% 21% 400 1,200 350 1,000 AUD$ millions AUD$ millions 300 800 250 600 200 150 400 100 200 50 - - FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY07 FY08 FY09 FY1
Slide 21: Life Sciences Division
Life Sciences Division Overview • Strong Environmental revenue growth in South America (+22%), Europe (+11%) and Asia (+10%). Australia down slightly in a very competitive market but no loss of market share. 2015 2014 Change • New Environmental LIMS progressively deployed in Australia – highly succe
Slide 22: Industrial Division
Industrial Division Overview • Solid organic tribology growth across all regions • OilCheck and AIT acquisitions in line with expectations for first full year of ownership • LNG construction revenue peaked with three projects in 2015 2014 Change Queensland and Wheatstone in Western Australia • Signi
Slide 23: Minerals Division
Minerals Division Overview • Metallurgy market contraction – margins under pressure • Geochemistry full year EBIT margin >22% • Geochemistry market share growth • Six new mine site contract wins 2015 2014 Change • Inspection EBIT margin 26% - lower cost base and revenue growth in H2 Revenue $367mn $
Slide 24: Energy Division
Energy Division Overview – Oil & Gas • Significant inroads in the Gulf of Mexico deep-water markets. Coring, Drilling Services, Surface Logging & Reservoir Laboratories all expanded their footprint in this premium market segment • Cedar Turbine redesigned and successfully trialed in Brazil and Afric
Slide 25: Oil & Gas Overview
Oil & Gas Overview Exploration Production 2015 2014(1) Change Formation Down Hole Tools Revenue $245mn $249mn -2% Evaluation Coring EBITDA $45mn $59mn -23% EBIT $27mn $40mn -33% Reservoir Surface Logging EBIT Margin 11.0% 16.1% -510bps Characterisation Laboratory Services (1) full 12 months although