Als Ltd. · ASX:ALQ
Als — Australian Investment Conference – New York 2019
35 slides from Als's conference presentation, Sep 5, 2019
Slide 1: Investor Presentation – Australian Investment Conference – New York
For personal use only Investor Presentation Australian Investment Conference – New York Raj Naran, Managing Director and CEO, ALS Limited September 2019 Right Solutions • Right Partner www.alsglobal.com 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 For personal use only activities as at the date of the presentation. It is information given in summary form and does not purport to be comp
Slide 3: Business overview
For personal use only Business overview Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 4: ALS Segments and Business Streams Revenue Split
ALS Segments and Business Streams Revenue Split For personal use only COMMODITIES & LIFE SCIENCES INDUSTRIAL Environmental Geochemistry Food Metallurgy Pharmaceutical Trade Inspection Consumer Products Coal Asset Care Tribology 4 Investor Presentation – September 2019 Right Solutions • Right Partner
Slide 5: Global Operations by Revenue
Global Operations by Revenue For personal use only EMENA $398m 4,200 staff APAC 4,400 staff AMERICAS 4,900 staff $598m $622m AFRICA $54m 1,000 staff 65+ 350+ 40+ 15,000+ 40+ million $1.6+ billion Countries Locations Years of strong Staff worldwide Processed samples Global revenue performance per yea
Slide 6: Summary of FY19 financial results
For personal use only Summary of FY19 financial results Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 7: Full Year FY19 Financial Summary
Full Year FY19 Financial Summary Underlying performance from continuing operations For personal use only NPAT Guidance exceeded $181.0m NPAT growth 27.3% EBITDA growth 22.0% Revenue growth 15.1% EPS growth 30.6% Final dividend growth 27.8% Share buyback progress $131.4m 7 Investor Presentation – Sep
Slide 8: Revenue Growth FY19 vs FY18 – Continued Operations
Revenue Growth FY19 vs FY18 – Continued Operations For personal use only in AUD m Organic Growth +12.7% +1.5% +0.9% +8.0% +7.9% 20 13 +21.7% 16 58 112 1,665 1,447 2018* Commodities Life Sciences Industrial Acquisition Fx 2019* * Continued Operations 8 Investor Presentation – September 2019 Right Sol
Slide 9: Underlying EBIT – Continuing Operations
Underlying EBIT – Continuing Operations For personal use only In AUD m +22 +44 (5) (2) 280 221 2018 Commodities Life Sciences Industrial Others* 2019 Margin 15.3% 27.0% 15.0% 10.0% 16.9% PCP +320 bps +110 bps (350) bps +160 bps * Corporate costs + FX 9 Investor Presentation – September 2019 Right So
Slide 10: Strong Margin Relative to Peers
Strong Margin Relative to Peers For personal use only ALS Revenue AUD m Underlying ALS EBITDA Margin Intertek 1,800 SGS 30% Eurofins 1,500 Bureau Veritas 24% Applus 20.9% Mistras 1,200 18% Bottom of Underlying EBITDA Margin 900 the cycle for SGS, Intertek, Bureau Veritas, Eurofins, Applus & 12% Mist
Slide 11: Life Sciences. Overview
Life Sciences. Overview Organic revenue growth at +7.9%, with strong contribution throughout all regions For personal use only Ongoing cost reduction and rationalisation initiatives leading to EBIT margin improvement in all regions, with total improvement of +110 bps, exceeding guidance Environm
Slide 12: Life Sciences. Evolution
Life Sciences. Evolution in AUD m For personal use only 900 Environmental Total Revenue 24% Food / Pharmaceutical CAGR +10.5% Consumer / Electronics 22% Underlying EBIT Margin 20% 600 18% 16% 14% 300 12% 10% 0 8% 2015 2016 2017 2018 2019 12 Investor Presentation – September 2019 Right Solutions • Ri
Slide 13: Current ALS Pharmaceutical Footprint
Current ALS Pharmaceutical Footprint For personal use only Global Pharmaceutical Estimated Global Available Market Size: Over $20 billion 13 Investor Presentation – September 2019 Right Solutions • Right Partner
Slide 14: Current ALS Food Footprint
Current ALS Food Footprint For personal use only Global Food Estimated Global Available Market Size: Over $3 billion 14 Investor Presentation – September 2019 Right Solutions • Right Partner
Slide 15: Life Sciences. Outlook
Life Sciences. Outlook For personal use only Life Sciences strategy will continue expansion via targeted acquisitions and investment in selected organic growth projects (start-ups and in expansion of existing capabilities) M&A activity expected to accelerate in FY2020 and FY2021 Focus on cost ma
Slide 16: Commodities. Overview
Commodities. Overview For personal use only Geochemistry Metallurgy Inspection Coal FY19 Sample volumes Strong total revenue Revenue up 14% pcp Revenue up 11% pcp up 7% pcp, H2 FY19 growth at 40% pcp flat Contribution margin Contribution margin Significant up 590 bps 16.4% versus 14.5%
Slide 17: Geochemistry Sample Flows
50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 0 Jan-06 For personal use only 17 -50% -40% -30% 0% 100% -20% -10% 20% 30% 40% 50% 60% 70% 80% 90% 10% Apr-06 Jan-06 Jul-06 2006 Apr-06 Oct-06 Jul-06 2006 Jan-07 Oct-06 Apr-07 Jan-07 Jul-07 2007 Apr-07 Oct-07 Jul-07 Relative Gold Price i
Slide 18: Global Mining Capital Expenditure Outlook
Global Mining Capital Expenditure Outlook For personal use only Strength in global capital expenditure on metals and mining projects expected to continue Growth in Global Mining Capital Expenditure Greenfield Capital Expenditure at Low Levels but Expected to Continue Expected to Grow as Commodity Pr
Slide 19: Junior and Intermediate Financings, March 2017 – April 2019
Junior and Intermediate Financings, March 2017 – April 2019 For personal use only Data as of May 7, 2019. Source: S&P Global Market Intelligence 19 Investor Presentation – September 2019 Right Solutions • Right Partner
Slide 20: Commodity Cycle and Trends
Commodity Cycle and Trends For personal use only Global economic fundamentals remain strong in the absence of trade uncertainty Demand is still high and inventory/stockpiles are low (<2 years) Currently the cycle appears to have a short-term moderation due to geopolitical activity Major miners
Slide 21: Commodities. Outlook
Commodities. Outlook For personal use only Geochemistry market share gains globally. Cost-base management to maintain existing margins Sample flows in Geochemistry from major clients still increasing Demand for coal services remains. Business is expected to continue to grow based on focused cl
Slide 22: Industrial. Overview
Industrial. Overview Tribology For personal use only Asset Care • Total revenue growth of 11.5%, with strong growth • Total revenue growth of 7%, with good in the USA as result of investments in FY19 performance in the main geographies (Australia, North America and Brazil) • Margin reduction driven
Slide 23: Industrial. Outlook
Industrial. Outlook For personal use only Despite headwinds, continue to be well positioned to support mining, O&G, and power generation maintenance programs in Australia. Market to remain highly price sensitive Continue to invest in the expansion of Asset Care and Tribology businesses Lab autom
Slide 24: Capital management
For personal use only Capital management Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 25: Capital Management
Capital Management Capex Dividend For personal use only $35.5 m increase in Capex mainly Final dividend 11.5 cents per share, up 27.8% focused on growth projects in Life Sciences Full Year underlying payout ratio 60.4% (equipment for new methods, green fields, etc.), and in commodities to supp
Slide 26: CAPEX by Business
CAPEX by Business For personal use only in AUD m CAPEX as % of Revenue FY19 FY18 Life Sciences 8.3% 6.5% 70 Commodities 5.0% 4.0% Industrial 4.0% 2.9% TOTAL 6.5% 5.0% 109 31 ▪ Life Sciences : Green field and growth projects 8 ▪ Commodities: Maintenance and capacity increase ▪ Industrial: Automation,
Slide 27: Key priorities and 1H20 guidance
For personal use only Key priorities and 1H20 guidance Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 28: Strategic Roadmap
Strategic Roadmap For personal use only 28 Investor Presentation – September 2019 Right Solutions • Right Partner
Slide 29: Key Priorities
Key Priorities For personal use only Priority Progress 4 Strong Cash flow conversion 4 Cash conversion at 93.7% Finance 4 Improve EPS 4 EPS growth +30.6% Standardisation of systems and 4 4 Implementation of global systems & processes underway processes 4 Organic growth projects 4 Acceleration of gre
Slide 30: Continued Innovation and Technology Investment
Continued Innovation and Technology Investment For personal use only Strategic partnerships with new generation technology companies Beta test projects in artificial intelligence across all divisions Robotics and automation Data analytics Internet of Things (IoT) Global software platform
Slide 31: First Half FY20 guidance
First Half FY20 guidance For personal use only NPAT (AUD m) 100 H1 FY20 Guidance $90-95 m 80 60 40 20 0 H1 FY17 H2 FY17 H1 FY18 H2 FY18 H1 FY19 H2 FY19 H1 FY20 ALS expects that underlying NPAT from continuing operations for the half year ending 30 September 2019 will be in the range of AUD $90 milli
Slide 32: Appendix
For personal use only Appendix Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 33: Group FY19 Financial Summary
Group FY19 Financial Summary For personal use only FY18** Full Year FY19 ($m) ($m) Full Year Divestment & Restructuring Discontinued Amortisation Statutory Underlying* Underlying* Impairment & other one Operations of Intangibles Results Charges off items Revenue 1,446.9 1,664.8 7.7 – – – 1,672.5 EBI
Slide 34: Cash Flow
Cash Flow Full year FY18 FY19 AUD m AUD m Underlying operating profit (EBIT) 216.7 275.5 For personal use only 35.2 Depreciation & Amortisation 72.9 73.3 million EBITDA 289.6 348.8 Cash flow (pre CAPEX) Working capital (16.1) (35.4) Other 7.6 2.9 Cash flow (before CAPEX) 281.1 316.3 CAPEX = CAPEX (7
Slide 35: For personal use only
For personal use only Right Solutions • Right Partner alsglobal.com Right Solutions • Right Partner
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