Als Ltd. · ASX:ALQ
Als — Investor Day (December 2015)
60 slides from Als's investor day presentation, Dec 1, 2015
Slide 1: Investor Day – Perth, 1 December 2015
For personal use only Investor Day Greg Kilmister – ALS overview Raj Naran – Life Sciences Kristen Walsh - Industrial Brian Williams - Minerals Perth– Australia 1st December 2015 1 RIGHT SOLUTIONS · RIGHT PARTNER
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER For personal use only • 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 comp
Slide 3: ALS Limited – Investor Day presenters and divisions
ALS Limited – Investor Day (Perth 1st December 2015) For personal use only ALS Limited Greg Kilmister CEO Oil & Gas Business Life Sciences Division Greg Kilmister Raj Naran CEO Group General Manager Minerals Division Industrial Division Brian Williams Kristen Walsh Group General Manager Group Genera
Slide 4: Company Profile
Company Profile For personal use only geochemistry ALS Limited (ASX:ALQ) is an ASX 100 company that provides professional tribology metallurgy technical services to the global Mineral and Energy Resources (exploration, extraction, processing and trading), Life mineral Sciences (environmental, food a
Slide 5: Compliance and Sustainability
Compliance and Sustainability Core values of “Safety as a Priority” and “Honesty and Integrity” supported by For personal use only • long term compliance program. • Strong internal controls maintained by compliance portal which incorporates company policies, management sign-offs, environmental monit
Slide 6: Health Safety and Environment
Health Safety and Environment Performance at a glance: For personal use only Lost Time Injury Frequency Rate Total Recordable Incident Frequency Rate 12 10.9 10.8 10 8 ALS Group LTIFR ALS Group TRIFR 10 8 6 • Lowest LTIFR ever • Half the ASX top 100 ASX Top 100 ave. = 8.0 6 Historical low 8 4 achiev
Slide 7: Earnings and Debt Position
Earnings and Debt Position Post Mar- Sep-14 Capital For personal use only 15 Australian versus Off-shore Profits Raising c Funding statistics o v Australian Profits Off-shore Profits Gearing ratio Comfort 45% 35.5% 38.3% 26% d e Leverage (net debt / EBITDA Max 3.25 2.7 2.5 1.8 e 100% n b a EBITDA in
Slide 8: Debt Position – earning currencies a natural hedge
Debt Position – “earning currencies” a natural hedge Debt Denomination Invoice Currency For personal use only CZK Latin EUR SGD America African GBP Asian Currencies Currencies Currencies European AUD CAD Currencies GBP USD CAD USD 8 RIGHT SOLUTIONS · RIGHT PARTNER
Slide 9: Regional Diversification – H1FY16
Regional Diversification – H1FY16 For personal use only Revenue EBITDA 6% 3% 2% 5% 9% 7% 31% 25% 32% 29% 5% 3% 20% 23% Australia Asia South America North America Africa Europe Middle East 9 RIGHT SOLUTIONS · RIGHT PARTNER
Slide 10: H1FY16 – Revenue by Region by Division
H1FY16 – Revenue by Region by Division For personal use only Mineral Division Life Sciences Division Industrial Division Energy Division 10 RIGHT SOLUTIONS · RIGHT PARTNER
Slide 11: Strategic Goal
Strategic Goal in a nut shell…… For personal use only To be the market leader in any geography or market sector we operate - by creating an enduring competitive advantage. what does that look like…… • Technical leadership • Innovative services • Continually evolving services • Holistic full service
Slide 12: Group Strategy – geographies & markets
Group Strategy – geographies & markets H1FY16 For personal use only 7% H1FY11 revenue H1FY06 revenue $712mn revenue $419mn $97mn 20% 44% 32% 34 42 % % 34% 31% Australia Asia South America North America Africa Europe Middle East 36% 31 65 % 37% % 36% 19% Environmental Food/Pharma Consumer Products Ge
Slide 13: ALS Laboratory Revenue – strategic mix
ALS Laboratory Revenue – strategic mix Revenue by Quarter For personal use only 100% H1FY16 80% Cyclical Cyclical Non-Cyclical 60% Engineering 40% Inspection 20% Non-Cyclical Metallurgy 0% Sep-02 Sep-05 Sep-08 Sep-11 Sep-14 Mar-01 Mar-04 Mar-07 Mar-10 Mar-13 Jun-00 Jun-03 Jun-06 Jun-09 Jun-12 Jun-15
Slide 14: ALS Strategic Assets
ALS Strategic Assets For personal use only Network Brand Systems Technology Culture ALS Strategic Assets • 400+ sites • quality • LIMS • state-of-the-art • people • 70+ countries • timeliness • MIS • innovators • training • 6 continents • service • standardisation • standardisation • focus • global
Slide 15: Life Sciences Division
Life Sciences Division For personal use only ALS Limited Greg Kilmister CEO Environmental Oil & Gas Business Life Sciences Division Food - Pharma Greg Kilmister Raj Naran CEO Group General Manager Electronics Consumer Products Minerals Division Industrial Division Brian Williams Kristen Walsh Group
Slide 16: Life Sciences Overview
Life Sciences Overview Overview For personal use only • Environmental − Grew revenue by 13% over H1 FY15 − Gains in all regions − Improved margin performance in Australia and South America − Assisted by new contract work and cost Underlying1 management results (AU$) H1 FY16 H1 FY15 Change • Food Rev
Slide 17: ALS Current Food and Environmental Market Share
ALS Current Food and Environmental Market Share For personal use only Canada Europe (Nordic Region, Eastern Europe, and Iberia) 11% 19% 20% 25% 5% 10% Asia UK 10% USA 35% 25% Latin America 60% 30% Note – Company estimates of ALS market share of commercially available work for the services ALS curren
Slide 18: Life Sciences historical growth 2007 to 2015
Life Sciences historical growth 2007 to 2015 2007 2015 For personal use only LOCATIONS REVENUE EBITDA EBITDA% LOCATIONS REVENUE EBITDA EBITDA % 34 AU$165mn AU$37mn 22% 145 AU$556mn AU$125mn 22% Revenue 16.4% CAGR over 8 years to FY15 18 RIGHT SOLUTIONS · RIGHT PARTNER
Slide 19: Environmental Growth
Environmental Growth For personal use only Environmental Revenue by Quarter 160 32% AU$ millions 140 28% EBIT margin (ave 12 mths) 120 24% 100 20% 80 16% 60 12% 40 8% 20 4% - 0% Environmental EBIT margin Note – EBIT margin inclusive of abnormals 19 RIGHT SOLUTIONS · RIGHT PARTNER
Slide 20: Environmental Business
Environmental Business For personal use only • Mature business • Global footprint: 71 laboratories in 32 countries Additional 50 sales offices to access broader geographical market • Largest provider of environmental analytical services in the world • World class USEPA compliant full service lab
Slide 21: Current Food Testing Market Size
Current Food Testing Market Size (in billion AU$) Global food safety testing market size (in AU$bn) and ALS presence For personal use only Europe 20 CAGR – 7.3% 15 AUD$ billion North America CAGR – 7.4% $4.2 10 $5.8 $1.6 5 $2.9 0 Rest of world Asia Pacific CAGR – 5.9% CAGR – 5.9% Rest of World Exist
Slide 22: Food strategy – building blocks in place
Food strategy – building blocks in place Achievements to date For personal use only • Multi-language LIMS built and being rolled out globally • Client portal built –version 3 (ALSolutions) released in October 2015 • MIS built and rolled out • Global instrument standards in place • Global methods sta
Slide 23: Historical – Food & Pharma growth 2007 to 2015
Historical – Food & Pharma growth 2007 to 2015 For personal use only 2007 2015 Existing ALS Food Operations Near-term target expansion New Pharmaceutical Laboratory under construction in Ely (United Kingdom) for ALS Food operations due to be commissioned January 2016 23 RIGHT SOLUTIONS · RIGHT PARTN
Slide 24: Rights funding flexibility to accelerate growth in Life Sciences
Rights funding flexibility to accelerate growth in Life Sciences For personal use only Overview of Life Sciences Opportunity Revenue (AU$mn) • Largest and fastest growing division of ALS 558 527 − 51% of group EBITDA in H1FY16 454 361 − Growth of 15% in H1FY16 over pcp 312 • Operates two business st
Slide 25: Rights funding flexibility in Life Sciences (cont'd)
Rights funding flexibility to accelerate growth in Life Sciences (cont’d) Overview of Food Strategy For personal use only Food/Pharma revenue by quarter • In 2012, ALS developed a strategy to build a AU$200m pa 30 25% integrated food analytical business 25 20% • Significant achievements since 2012 i
Slide 26: Industrial Division
Industrial Division For personal use only ALS Limited Greg Kilmister CEO Oil & Gas Business Life Sciences Division Asset Care Greg Kilmister Raj Naran CEO Group General Manager Tribology Industrial Division Minerals Division Kristen Walsh Brian Williams Group General Manager Group General Manager 26
Slide 27: Industrial Division
Industrial Division For personal use only Underlying1 H1 FY16 H1 FY15 Change results (AU$) Overview Revenue $95mn $100mn -5% • Asset Care − Revenue down 11% compared with H1 FY15 EBITDA $16mn $20mn -16% − Decline in the capital expenditure-exposed major construction projects in the LNG and mining se
Slide 28: ALS Tribology Performance
ALS Tribology Performance For personal use only Tribology Revenue by Quarter 14 30% 12 25% AU$ millions 10 EBIT margin 20% 8 15% 6 Perth Tribology Laboratory 10% 4 5% 2 0 0% Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Dec-10
Slide 29: ALS Tribology Market Environment
ALS Tribology Market Environment For personal use only ALS Tribology Revenue by Market Sector Defence 6% Other 6% Lubricant Branded Mining Service 20% 24% On-highway Power Transport Generation 12% 4% Source: American Trucking Association Rail Oil & Gas 4% 10% Equipment Communications • Trucking serv
Slide 30: ALS Tribology – Global service offering
ALS Tribology – Global service offering For personal use only • New generation WebTrieve™ to facilitate global reliability programs • AU$ 400 million global market ~ market share growth opportunities in all regions 30 RIGHT SOLUTIONS · RIGHT PARTNER
Slide 31: ALS Tribology Strategy
ALS Tribology Strategy For personal use only • ‘Step ahead’ IT • Right partner – delivering reliability goals and global service provision • Leading technical capabilities 31 RIGHT SOLUTIONS · RIGHT PARTNER
Slide 32: ALS Asset Care Performance
For personal use only 32 ALS Asset Care Performance AU$ Millions 0 5 15 20 25 30 35 40 45 10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Asset Care Revenue by Quarter Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 RIGHT SOLUTIONS · RIGHT
Slide 33: ALS Asset Care Market Environment – Australia
ALS Asset Care Market Environment – Australia Mining Industry Capital Expenditure Resource and Energy Export Earnings - Australia For personal use only 30 25 AU$ Billions 20 15 10 5 0 Source: ABS • Client cost cutting impacting service industry margins. • Investment in new capacity delivering higher
Slide 34: ALS Asset Care Market Analysis
ALS Asset Care Market Analysis Revenue by Market Sector - Australia For personal use only Other Power Welding & 2% Generation Fabrication 14% 12% Revenue by Type of Spend Capital Expenditure 27% Oil & Gas 31% Operating Mining Expenditure 73% 41% • ALS Australian market share ~ 40-45%: Australian mar
Slide 35: ALS Asset Care Strategy
ALS Asset Care Strategy For personal use only • Right partner • Local market leadership • Competitive cost base • Targeted overseas growth 35 RIGHT SOLUTIONS · RIGHT PARTNER
Slide 36: Minerals Division
Minerals Division For personal use only ALS Limited Greg Kilmister CEO Geochemistry Oil & Gas Business Life Sciences Division Greg Kilmister Raj Naran Metallurgy CEO Group General Manager Inspection Minerals Division Mine Site Services Brian Williams Industrial Division Group General Manager Kristen
Slide 37: Minerals Division
Minerals Division For personal use only Underlying1 Overview H1 FY16 H1 FY15 Change results (AU$) • Geochemistry − Sample volumes remained flat Revenue $183mn $182mn +1% − Contribution margin maintained at 21% of revenue EBITDA $47mn $48mn - • Metallurgy − Revenue down 5% compared with H1 FY15 EBIT
Slide 38: ALS Minerals Division by Service Offering
ALS Minerals Division by Service Offering For personal use only Geochemistry Inspection Metallurgy Trade Services Upstream Downstream ALS Minerals Revenue 70% 30% 3200 FTE EBIT 75% 25% Margin Range 20-30% 5-30% FTE 71% 29% Mine Site Engineering Locations 69 36 Services Services Continents 6 6 Market
Slide 39: ALS Minerals Locations / Exploration Expenditure by Region
ALS Minerals Locations / Non Ferrous Exploration Expenditure by Region For personal use only 1% 5% 14% 1% 1% 8% 1% Percentage 6% of global 6% exploration 1% 1% expenditure 3% 1% CY2015 2% 1% 3% 1% 8% 5% 12% 1% 1% 7% Source: SNL 2015 39 RIGHT SOLUTIONS · RIGHT PARTNER
Slide 40: The Market – Global Exploration Expenditure
The Market – Global Exploration Expenditure Global (Non Ferrous) Exploration Expenditure YoY Change For personal use only 60% 25 Global Exploration Budgets (US$ billion) 36% 20 2012 -57% YOY Change 12% 15 2015 -12% 10 -36% 5 2015 YoY -19% -60% 0 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011
Slide 41: The Market - Mineral Cycles
The Market - Mineral Cycles (Australia as a proxy) For personal use only Australian Mineral Exploration Spend (excluding iron ore & coal) 700 in March 2015 AUD$ equivalent 58% 37% decrease decrease 600 AUD $million (Mar-15 equivalent) 500 54% 44% decrease decrease 54% decrease 400 300 200 100 GFC In
Slide 42: The Market - Commodity Prices / Reserves / Currency / Stock Levels
The Market - Commodity Prices /Reserves /Currency / Stock Levels Commodity Prices Currency For personal use only Reserves Stocks 42 RIGHT SOLUTIONS · RIGHT PARTNER
Slide 43: Strategic Imperatives
Strategic Imperatives For personal use only Down Cycle Strategic Focus (unchanged) • Cost Base Management • Service Optimization • Targeted Business Development in pursuit of Market Share Growth ……..Without compromising Market Proposition Sustaining Strategic Focus • Pursue Technical Leadership/Serv
Slide 44: The Hub and Spoke Model in Action
The Hub and Spoke Model in Action • global operating control For personal use only • continental scope • scalable spokes • capable hubs • reduced quality risk • focused capabilities Hub laboratory Analytical laboratory Preparation laboratory On-site laboratory 44 RIGHT SOLUTIONS · RIGHT PARTNER
Slide 45: Cost Base Management - Hub & Spoke Tuning
Cost Base Management - Hub & Spoke Tuning For personal use only • Consolidation of Expertise Up Cycle Advantages • Economies of Scale • Load Balancing Mothballed or Closed (12) Restricted Scope (10) Expand or New (5) Anchorage Bucaramanga Santiago La Serena 2 x Sub Sahara Darwin Bana Johannesburg Re
Slide 46: Cost Base Management – Commitment to Training & Development
Cost Base Management – Commitment to Training & Development For personal use only Our Differentiators: Total Courses Available (Produced in-house by ALS) • Global LMS available in 31 Languages 200 59% increase at no additional cost • Courses developed in-house; customised for ALS 180 160 • Blended l
Slide 47: Cost Base Management – A Culture of Continuous Improvement
Cost Base Management – A Culture of Continuous Improvement For personal use only 47 RIGHT SOLUTIONS · RIGHT PARTNER
Slide 48: Service Optimization - Technical Leadership / Agility
Service Optimization - Technical Leadership / Agility For personal use only • Super Ultra Trace Analysis for Soils and Sediments • Ionic LeachTM • Clay Fractionation • Low Cost Lead Isotopic Analysis • Low Cost Carbon and Oxygen Isotopes in Carbonates • Hyperspectral Mineralogy • Rapid Portable XRF
Slide 49: Service Optimization - Metallurgy Piloting Focus
Service Optimization - Metallurgy Piloting Focus For personal use only Pilot Revenue - Distribution By Type 2010-15 1% 7% 9% 25% 18% 2% 0.4% 38% Beneficiation Bulk HPGR Flotation HPAL and Crip Plant Hydro Pilot Jigging/Alflux Magnetic Separation SAG Mill 49 RIGHT SOLUTIONS · RIGHT PARTNER
Slide 50: Service Optimization – Capability Alignment
Service Optimization – Capability Alignment For personal use only Resource Geochem Met Global Worldwide Exploration Budgets by Target, 2015 Revenue Revenue Exploration Spend Gold 43% 42% 45% 1% 13% Copper 18% 33% 24% 4% Lead/Zinc 4% 11% 2% 5% 45% 4% Uranium 0.1% 1% 4% 5% Nickel 10% 1.6% 4% Diamonds
Slide 51: Service Optimization – Mine related Exploration and Grade Control
Service Optimization – Mine related Exploration and Grade Control For personal use only Geochemistry Revenue Split 100% 90% 80% 44% 48% 46% 70% 54% 48% 55% 55% 50% YoY Mine Site Rev +67% 60% 15 Active Sites 50% V 40% 10 Last Year 30% 56% 52% 52% 50% 54% 20% 46% 45% 45% Strong Project Pipeline 10% 0%
Slide 52: Market Share – Geochemistry Sample Flow
Market Share – Geochemistry Sample Flow For personal use only Global ALS Exploration Geochemistry Expenditure Sample Flow in USD Down Down 1% YoY 19% YoY 52 RIGHT SOLUTIONS · RIGHT PARTNER
Slide 53: Geochemistry – Market share leveraged to upturn
Geochemistry – Market share leveraged to upturn For personal use only Laboratory Service Provider used for SNL Top Ranked Assay Drill Intersection Announcements 62% 38% Sep15 31 19 Quarter 50% 50% Jun15 25 25 56% 44% Mar15 28 22 0 20 40 60 ALS Other Source: SNL Top 10 Ranked Assay Targets for Copper
Slide 54: Oil & Gas Business Stream
Oil & Gas Business Stream For personal use only ALS Limited Greg Kilmister CEO Reservoir Characterisation Life Sciences Division Oil & Gas Business Raj Naran Greg Kilmister Group General Manager Drilling Services CEO Production Solutions Minerals Division Industrial Division Brian Williams Kristen W
Slide 55: Oil & Gas
Oil & Gas Exploration Production For personal use only Source: Halliburton Presentation September 2015 Drilling Down Hole Tools Services Coring Surface Logging Reservoir Laboratory Services Characterisation Well Site Services Palaeontology Well Intervention Services ALS Revenue Stream YTD Production
Slide 56: Reservoir Laboratories Overview
Reservoir Laboratories Overview For personal use only • The upstream oil & gas laboratory market is split into two tiers: three global oilfield specialists many technical niche and geographically limited labs • The industry is not totally satisfied with these options due to TAT, pricing, & trans
Slide 57: Reservoir Laboratories Strategy
Reservoir Laboratories Strategy Leverage unique opportunities Provide a distinctive value Demonstrate operational For personal use only to take possession of samples proposition through key excellence and service technical differentiators quality Core Fresh core from ALS O&G Coring or direct engagem
Slide 58: Oil & Gas Laboratory – Houston strategic asset
Oil & Gas Laboratory – Houston strategic asset For personal use only Houston Oil & Gas Laboratory officially opened November 2015 – USD$13 million dollar investment Comments received from +170 potential clients at opening: Great facility and very good presentations Congratulations! I think you h
Slide 59: Pipeline Monitoring – The costs of pipeline incidents in USA
Pipeline Monitoring – The costs of pipeline incidents in USA For personal use only • $243m property damage in 2015 • $7bn property damage in 20yrs • Around 280 incidents/yr • 20 fatalities in 2014 (average 13) Data Source: US DOT Pipeline and Hazardous Materials Safety Administration – 29th Oct 2015
Slide 60: Pipeline Monitoring – Omega Pipeline Monitoring Services
Pipeline Monitoring – The costs of pipeline incidents in USA For personal use only Omega Pipeline Monitoring Services • 33% Sales Revenue growth in 2015 • 41% growth in number of projects • A swiftly growing ALS Production Solutions service • Few ‘service’ competitors Data Source: US DOT Pipeline an