Slide 1: Investor presentation H1 FY21 results
Investor presentation H1 FY21 results Raj Naran, Managing Director and CEO Luis Damasceno, Chief Financial Officer 18 November 2020 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 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: Safety is a priority — ALS COVID-19 response
Safety is a priority — ALS COVID-19 response COMMUNICATION SAFETY GUIDANCE RESTRICTIONS EQUIPMENT Regular communication to Handwashing and sanitation On the number of people per Additional sanitation products employees information common rooms and spaces and PPE Website and social media
Slide 4: Managing the COVID-19 pandemic — Group
Managing the COVID-19 pandemic — Group Cost Strengthening Cash Growth reduction Liquidity generation opportunities Cost base aligned to Increase of bank debt facilities Strong cash flow Investment in capacity growth client demand early in by $175m generation of 99% in several markets in Life
Slide 5: H1 FY21 results: Group performance
H1 FY21 results Group performance Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 6: H1 FY21 Statutory results summary
H1 FY21 Statutory results summary Statutory Results H1 FY21 ($m) H1 FY20 ($m) % change Revenue 838.8 921.0 (8.9)% EBITDA 189.7 257.6 (26.4)% Depreciation & amortisation (66.4) (62.8) 5.7% EBIT 123.3 194.8 (36.7)% Interest expense (21.2) (20.9) 1.2% Tax expense (30.9) (37.5) (17.5)% Non-controlling i
Slide 7: H1 FY21 underlying NPAT of $80.6 million, significant improvement in Q2
H1 FY21 underlying NPAT of $80.6 million, significant improvement in Q2 Underlying performance from continuing operations (excludes government subsidies and related direct costs, amortization of intangibles, restructuring costs and other items) • Organic revenue decline of -9.4% with a significant i
Slide 8: H1 FY21 underlying performance from continuing operations by division
H1 FY21 underlying performance from continuing operations by division H1 FY21 ($m) Life Sciences Commodities Industrial Other Total Group H1 FY21 VLY H1 FY21 VLY H1 FY21 VLY H1 FY21 VLY H1 FY21 VLY Revenue 452.1 (3.5)% 278.4 (13.0)% 108.3 (17.1)% - - 838.8 (8.7)% Organic growth (7.4)% (9.6)% (16.2)%
Slide 9: H1 FY21 revenue evolution
H1 FY21 revenue evolution in $m (86.8) +25.8 (19.3) 919.1 838.8 832.4 832.3 838.8 H1 FY20 Organic Scope FX H1 FY21 Revenue (9.4) % +2.8 % (2.1) % (8.7) % 9 Investor Presentation. Half Year Results FY 2021 Right Solutions • Right Partner
Slide 10: Organic revenue growth components – significant improvement in Q2
Organic revenue growth components – significant improvement in Q2 Organic growth % Q1 Q2 H1 Life Sciences (10.7)% (4.4)% (7.4)% Commodities (14.7)% (5.1)% (9.6)% Industrial (17.0)% (15.5)% (16.2)% Total Group (13.0)% (6.2)% (9.4)% 10 Investor Presentation. Half Year Results FY 2021 Right Solutions •
Slide 11: H1 FY21 underlying EBIT – strong performance of acquisitions
H1 FY21 underlying EBIT – strong performance of acquisitions in $m (19.3) +7.0 (11.0) 158.5 139.3 139.3 135.2 135.2 H1 FY20 Organic Scope FX H1 FY21 Margin 17.3% (56) bps +27 bps (85) bps 16.1% (29) bps @ constant currency 11 Investor Presentation. Half Year Results FY 2021 Right Solutions • Right P
Slide 12: Underlying EBIT evolution – resilient across the business
Underlying EBIT evolution – resilient across the business in $m 170.0 Other (3.4) 160.0 (2.2) 150.0 (13.7) +2.3 140.0 (4.0) 130.0 (5.7) 158.5 120.0 135.2 110.0 100.0 H1 FY20 Life Sciences Commodities Industrial Corporate FX H1 FY21 Margin 17.3% 16.4% 24.7% 11.4% 2.1% (0.3)% 16.1% PCP +10 bps (107) b
Slide 13: H1 FY21 underlying margin evolution – significant improvement in Q2
H1 FY21 underlying margin evolution – significant improvement in Q2 COVID-19 related Underlying EBIT margin VLY (in bps) subsidies (and related direct costs) fully Q1 Q2 H1 Q1 Q2 H1 excluded from H1 FY21 underlying results Life Sciences 15.5% 17.1% 16.4% 8 55 10 (initially included in AGM update o
Slide 14: H1 FY21 financial summary – reconciliation of underlying to statutory
H1 FY21 financial summary – reconciliation of underlying to statutory H1 FY20 ($m) H1 FY21 ($m) Half year COVID-19 Subsidies & Restructuring & other Amortization Statutory Underlying * Underlying * Grants net of Direct items of intangibles results Costs Revenue 919.1 838.8 838.8 EBITDA 218.2 197.9 (
Slide 15: H1 FY21 restructuring & other items - COVID-19 subsidies net of direct costs
H1 FY21 restructuring & other items - COVID-19 subsidies net of direct costs Total non- COVID-19 Total Other non- in $m Start-up Restructure Acquisition recurring subsidies net of non- operational items costs direct costs recurring Commodities - 2.6 0.0 2.6 (4.2) (1.6) Life Sciences 1.4 3.9 5.3 (5.8
Slide 16: H1 FY21 cash flow – strong cash conversion
H1 FY21 cash flow – strong cash conversion Half year ($m) H1 FY20 H1 FY21 Underlying operating EBIT 157.4 135.2 Depreciation & amortization 60.2 62.7 CASH FROM Amortization on ROU (21.0) (22.7) 29 OPERATIONS Interest on ROU (3.7) (3.7) million (BEFORE CAPEX) EBITDA (Adjusted for ROU lease assets) 19
Slide 17: CAPEX by business – targeted spending on key growth opportunities
CAPEX by business – targeted spending on key growth opportunities $m CAPEX as % of revenue Growth Maintenance H1 FY21 H1 FY20 Life Sciences 2.9% 1.6% 4.5% 6.4% 21 Commodities 2.7% 0.6% 3.3% 4.4% Industrial 1.7% 1.0% 2.7% 5.2% 36 9 Group infrastructure 0.4% - 0.4% - Total Group 2.9% 1.4% 4.3% 5.6% 3
Slide 18: Debt metrics – strong balance sheet
Debt metrics – strong balance sheet Mar-17 Mar-18 Mar-19 Mar-20 Sep-20 STATISTICS Gearing Ratio (target <45%) 29% 31% 37% 42% 39% Leverage (net debt/ EBITDA) 1.9 1.7 1.8 2.1 1.9 (max 3.25; temporarily increased to 4.0 until Mar 2021) EBITDA interest cover (min 3.75) 9.2 11.3 10.5 11.0 10.4 BALANCE S
Slide 19: Solid execution of capital management strategy
Solid execution of capital management strategy Cash flow from operations Dividend Strong underlying EBITDA cash conversion of 99% (H1 FY20: 73%), driven by Interim dividend of 8.5 cps (100% franked), with H1 FY21 payout ratio of 51% reduction of days of sales outstanding (DSO) and close manageme
Slide 20: Strong Liquidity and improved debt profile
Strong Liquidity and improved debt profile BANK FACILITIES US Private Placement (USPP) Increase of bank debt facilities by $175m Completion of $281m placement of USPP Liquidity Total bank facility of $600m debt at cost of 2.65%, to be funded in Nov to be refinanced at 2020. Precautionary dra
Slide 21: H1 FY21 results: Review by business stream
H1 FY21 results Review by business stream Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 22: Managing the COVID-19 pandemic – Life Sciences division
Managing the COVID-19 pandemic – Life Sciences division Essential businesses COVID-19 testing opportunities – early stages All Life Sciences laboratories are 1. COVID-19 testing in humans (short-term opportunity) currently operating with the • ~2,500 tests per week carried out across the global ne
Slide 23: Life Sciences overview – organic and acquisition growth
Life Sciences overview – organic and acquisition growth Life Sciences operates a part of key supply chains Significant improvement in organic revenue USA business impacted by economic and was least impacted by the COVID-19 pandemic growth in the second quarter (Q1: -10.7%, shutdown in Q1, volu
Slide 24: Leveraging ‘hub & spoke’ model
Managing the COVID-19 pandemic – Commodities division ‘Hub and spoke’ model allowed cost base to be quickly aligned to Leveraging client demand early in the pandemic ‘hub & spoke’ Geochemistry capability maintained and market share preserved model during H1 with ability to leverage capacity Investme
Slide 25: Commodities overview – organic growth despite Geochemistry sample flow decline
Commodities overview – organic growth despite Geochemistry sample flow decline Geochemistry Metallurgy Inspection Coal Sample volumes -13% vs pcp due to COVID-19 impact. Organic revenue -15.7% Revenue decline of -11.6% Revenue and margin Significant improvement in second quarter (Q1: -23%, v
Slide 26: Geochemistry – supportive gold price
Geochemistry – supportive gold price ALS Global mineral sample flow (trailing 52 week running average) and global exploration spend Average Weekly Sample Flow Global Exploration Spend USD bn Relative Gold Price in USD 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Oct-06
Slide 27: Geochemistry – positive sample flow growth in Sept and early Q3 vs. pcp
Geochemistry – positive sample flow growth in Sept and early Q3 vs. pcp ALS Global mineral sample flow (two week growth trend) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 Oct-19
Slide 28: Junior and intermediate fund raisings and pipeline activity showing strong improvement
Junior and intermediate fund raisings and pipeline activity showing strong improvement Junior and intermediate financings, Aug 2018 – Sept 2020 Project drilling activity by commodity, Aug 2018 – Sept 2020 Amount Gold financings Number of Number of distinct Copper Gold Number of raised ($M) Base/othe
Slide 29: Cost base management and focus on value
Managing the COVID-19 pandemic – Industrial division Reduction of cost base in Asset Care and Tribology to align with client demand Cost base management and Shutdown of underperforming businesses in Asset Care due to performance focus on value during COVID-19 pandemic and limited prospects for recov
Slide 30: Industrial overview – margin resilience and focus on value proposition
Industrial overview – margin resilience and focus on value proposition Asset Care Tribology Total organic revenue decline of -20.3% Total revenue decline of -8.1%, organic revenue growth of -4.7%. USA remains challenging with non-performing business Strong improvement in revenue trends and m
Slide 31: H1 FY21 results: Summary and current trading
H1 FY21 results Summary and current trading Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 32: H1 FY21 results – summary
H1 FY21 results – summary Organic revenue decline of -9.4% due to impact of COVID-19 pandemic with significant improvement in second quarter Scope growth of 2.8% and strong margin performance by ARJ and Aquimisa Group EBITA margin growth across all divisions Cash conversion rate of 99% Str
Slide 33: Current trading
Current trading Group Diversified portfolio of businesses and geographies proving resilient Life Sciences Commodities Industrial during COVID-19 pandemic with ‘hub and spoke’ model leveraged Resilient while global Strong increase in Geochemistry Cost base adjusted in to align cost base with
Slide 34: H1 FY21 results: Financial appendix
H1 FY21 results Financial appendix Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 35: Underlying effective tax rate movement
Underlying effective tax rate movement Change $m H1 FY21 H1 FY20 YoY Underlying Profit before Tax (from continuing operations) 113.2 137.5 (17.7)% Tax (32.5) (39.3) (17.2)% Effective Tax Rate (ETR) 28.7% 28.6% 17 bps FY21 outlook: ETR expected to be ~29% on an underlying basis 35 Investor Presentati
Slide 36: Corporate cost evolution - reduced in-line with revenue
Corporate cost evolution - reduced in-line with revenue H1 FY18 H2 FY18 H1 FY19 H2 FY19 H1 FY20 H2 FY20 H1 FY20 Corporate costs* 12.4 14.1 18.2 18.8 19.7 19.4 17.5 Revenue 721.6 725.3 826.1 838.7 919.1 912.8 838.8 Corporate costs as % of revenue 1.7% 1.9% 2.2% 2.2% 2.1% 2.1% 2.1% * exclude net forei
Slide 37: Net debt evolution
Net debt evolution 800 (133) 3 700 10 2 30 (78) (12) 53 600 800 674 500 400 31 March 2020 Cash Flow Acquisitions Dividends Treasury FX Interest Restructuring Net COVID 30 September net debt from paid shares bought and tax costs subsidies 2020 operations on-market received net debt (after CAPEX) 37 I
Slide 38: alsglobal.com
Right Solutions • Right Partner alsglobal.com Right Solutions • Right Partner