Als Ltd. · ASX:ALQ
Als — Investor Presentation (May 2023)
47 slides from Als's investor presentation, May 29, 2023
Slide 1: Investor presentation FY23 Results
Investor presentation FY23 Results Malcolm Deane, CEO and Managing Director Luis Damasceno, Chief Financial Officer © Copyright 2023 | ALS Limited 1
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: Appointment of new CEO and Managing Director
Appointment of new CEO and Managing Director • Malcolm Deane appointed as CEO and Managing Director • Been with ALS since 2013 • Held leadership positions in operations, commercial, and strategic roles • Most recently the global Chief Strategy Officer responsible for corporate strategy, business dev
Slide 4: Strong operational performance for the Group
Strong operational performance for the Group Key operational achievements: • Achieved emission reductions1, carbon neutrality2 and obtained Board approval for Net Zero roadmap3 • Maintained world class health and safety outcomes4 • Progressed on Diversity, Equity and Inclusion programs and roadmap5
Slide 5: Delivered industry leading growth and profitability in FY23
Delivered industry leading growth and profitability in FY23 Key financial achievements: REVENUE1 RETURN ON CAPITAL • Maintained industry-leading revenue growth $2,421m EMPLOYED and operating margins +19.5% growth 20.5% • Strong financial performance in a challenging environment +10.8% organic +0.4%
Slide 6: Progressing towards our FY27 financial objectives
Progressing towards our FY27 financial objectives1 FY27 financial objectives: Progress: Highlights: Increase revenue to $3.3b • Revenue growth supported by exposure to 1 Achieved ~$254m growth vs pcp 23% high growth key end-markets and disciplined acquisition approach Increase EBIT to $0.6b 2 Achiev
Slide 7: Our strategy to achieve the 2027 vision
Our strategy to achieve the 2027 vision 1. 3. 5. Strong growth Growth of People focus agenda sustainability Strong culture of Investments to Expansion of Life innovation and capitalise Sciences portfolio. collaboration with megatrends linked to Design client high level of sustainability and Life sol
Slide 8: Strong growth agenda
1. Strong growth agenda Delivering on our M&A growth in FY23 Key achievements: 13 acquisitions executed ~$115 million revenue, ExplorTech Division DB Lab A/S with $51 million (Goldspot) Invitek Molecular delivered in FY23 Centrul de Mediu si Sanatate Laber Reliance Clinical Meaningful contribu
Slide 9: Rebalanced portfolio
2. Rebalanced portfolio Improving diversity of earnings through both organic and scope growth FY23 portfolio revenue contribution 1 FY23 regional revenue distribution 1 In % of Group revenue • Continued growth In % of Group revenue within Life Sciences portfolio despite Africa economic headwinds +31
Slide 10: Sustainability
3. Sustainability ALS committed to building a better world for all FOCUSED ON… …GOALS BY 2027 Our PEOPLE Remain in the top quartile of peers. Maintain our industry-leading safety performance. Our PLANET Maintain carbon neutrality1 for our Scope 1 and 2 emissions while 72% reduction against FY2020 ma
Slide 11: Meeting our client's demand for sustainability services
3. Sustainability Meeting our client’s demand for sustainability services • Our business supports our clients in achieving Sustainability linked revenue1 sustainability outcomes In % of Group revenue • >50% of Group Revenue is derived from services SUSTAINABILITY LINKED that align with UN SDG outcom
Slide 12: Geochemistry market leader
4. Geochemistry market leader Exposure to green metal upside opportunity • Most trusted provider of geochemical data • Positioned to capture growth in energy and battery related metal testing • Industry-leading method sensitivity and performance • Largest and best-distributed network of dedicated Ge
Slide 13: People focus
5. People focus Building an ALS culture that delivers results for all stakeholders SUCCESSION PLANNING DIVERSITY, EQUITY & INCLUSION (DE&I) Identify high potential talent, Intentional DE&I plan and develop action plans, and programs that drive employee share experiences to improve values and innovat
Slide 14: Innovation journey
6. Innovation journey ALS embraces an innovative culture - highly valued by clients and employees Market leading Geochemistry Environmental business is a • Recognised leader leader in client data business an early adopter of in industry management solutions innovation • Adapting LIMS to assist downs
Slide 15: Financial review
Financial review Group performance © Copyright 2023 | ALS Limited 15
Slide 16: FY23 statutory results
FY23 statutory results1 Statutory Results FY23 ($m) FY22 ($m) % change • Statutory NPAT increased by $100.7m to $291.2m, primarily due to: Revenue 2,400.9 2,093.12 14.7% - Strong revenue growth EBITDA 612.6 487.2 25.7% - Net effect of strong underlying EBIT FX losses transferred from FCTR - (26.9) -
Slide 17: Reconciliation of underlying to statutory NPAT
Reconciliation of underlying to statutory NPAT FY22 ($m) FY23 ($m) Underlying continuing operations Full Year Underlying Nuvisan Nuvisan equity share (including Nuvisan Discontinued Restructuring & other Amortisation Statutory continuing underlying of profit proportionately businesses items 2 of int
Slide 18: Continued market leading revenue growth
Continued market leading revenue growth • Strong Group revenue growth of 19.5%2, Underlying revenue growth composition (A$m) with both Commodities and Life Sciences above FY27 target growth rate 10.8% 7.5% 1.3% 19.5% • Organic growth supported by: - Price management and value-added services within G
Slide 19: Market leading operating margins
Market leading operating margins • Underlying margins1 at CCY Underlying Group EBIT margin composition (%) expanded by 60 bps, supported by Divestment of FY22 FY23 strong margin performance within FY22 Organic Scope FX2 Asset Care Continuing Continuing Geochemistry, Metallurgy and Group Margin 18.9%
Slide 20: Disciplined capital allocation supporting growth and returns to shareholders
Disciplined capital allocation supporting growth and returns to shareholders • Strong Group liquidity of $572 million1 with balance sheet flexibility to pursue strategic growth opportunities • Solid leverage ratio (1.8x as at March 2023) and improved EBITDA interest cover ratio (16.4x as at March 20
Slide 21: Balance sheet remains strong and below banking covenants
Balance sheet remains strong and below banking covenants Leverage (Net debt / underlying EBITDA) and interest coverage (interest / Debt maturity profile A$m (as at 31 March 2023) underlying EBITDA) 450 2.3 2.1x 18.0 Weighted average debt maturity: 5.8 years 16.4x 22.8% 2.1 1.9x 1.8x 16.0 18.6% 19.1%
Slide 22: Strong cash flow generation to support our growth
Strong cash flow generation to support our growth EBITDA cash conversion (%) • Improved underlying EBITDA cash conversion 102% despite higher working capital requirement funding 97% 97% high organic revenue growth 92% 91% • Maintained DSO of 47 days, largely in line with FY22, supported by continued
Slide 23: Investing in our growth
Investing in our growth Capital expenditure (A$m and % of revenue 1) • Capex % on revenue increased by 36bps vs pcp, 160.00 8.0% approximately $31m. Total capex of $146m representing 6.8% 6.8% 140.00 6.0% 7.0% 6.0% of revenue (4.0% growth and 2.0% maintenance 5.7% 120.00 4.8% 55 6.0% spend) 100.00 5
Slide 24: Divisional review
Divisional review © Copyright 2023 | ALS Limited 24
Slide 25: Diversified growth across the portfolio, in-line with strategy
Diversified growth across the portfolio, in-line with strategy Revenue growth by division and business Total growth @ CCY Total Group Revenue growth at 18.3%, ahead of run-rate Total Group 10.8% 7.5% 18.3% Life Sciences: Total growth of 15.9%, above 5-year target Environmental 7.0% 1.9% 8.8% Food 1.
Slide 26: Life Sciences continues growth momentum in a challenging economic environment
Life Sciences continues growth momentum in a challenging economic environment Underlying results (A$m) Overview • Total revenue growth of 17.1%, of which 5.2% organic and 10.7% scope Change in with a 1.3% favourable currency impact. Strong revenue growth across FY23 FY22 Change CCY1 most regions, in
Slide 27: Nuvisan headwinds impacting Life Science's performance, but strategic long-term value remains
Nuvisan headwinds impacting Life Science’s performance, but strategic long-term value remains Nuvisan impact to Life Sciences: The Nuvisan opportunity: • Nuvisan margin headwinds due to geopolitical instability and Leverage ALS global macro uncertainty limiting spend on new drug development footpr
Slide 28: Our various stage Life Sciences businesses participate in large and fragmented markets
Our various stage Life Sciences businesses participate in large and fragmented markets Portfolio supported by sustainable global market segments and underpinned by industry megatrends Environmental % of Life Sciences Pharmaceutical % of Life Sciences Food % of Life Sciences Market leading position r
Slide 29: Commodities supported by increased capacity growth and base metals demand
Commodities supported by increased capacity growth and base metals demand Underlying results (A$m) Overview: • Total revenue growth of 22.6%, of which 18.0% organic, 3.4% scope with a 1.3% Change in favourable currency impact. Growth was underpinned by strong price FY23 FY22 Change CCY1 management,
Slide 30: #1 provider of analytical services to the global mining industry
#1 provider of analytical services to the global mining industry 2008 2023 • Similar levels of exploration spend in 2008 vs 2023 Revenue growth outpaced EBIT growth Global Global Price increase outpaced volume growth exploration (10)% exploration spend: spend (est.): Grown market share and wil
Slide 31: Innovation supporting market share growth and improved profitability
Innovation supporting market share growth and improved profitability ALS Global mineral sample volume (trailing 52-week running average), S&P Global Exploration Spend and ALS Geochemistry Revenue in US$1 450,000 Average Weekly Sample Volume (LHS) Global Exploration Spend US$ (RHS) Relative Geochemis
Slide 32: Strong organic revenue growth reflects superior service offering
Strong organic revenue growth reflects superior service offering ALS Global mineral sample volume to 19 May 20231 | two-week growth trend 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 ALS geochemistry sample volume growth -25% 59% 48% -3% -35% -13% -2% 22% 26% 7% -9% 2%
Slide 33: Outlook
Outlook © Copyright 2023 | ALS Limited 33
Slide 34: Strategic priorities for FY24
Strategic priorities for FY24 Sustainability and Focus on people Innovation and Growth and ESG agenda technology profitability • Support growth for Sustainability • Succession plan for all executive • Implementation of standardised • Strategic acquisitions in key growth linked revenue opportunities
Slide 35: Outlook for FY24
Outlook for FY24 Medium to long-term outlook for both Life Sciences and Commodities remains supportive. Group well positioned to execute on its FY27 objectives to capture sustainable structural growth opportunities Life Sciences: Commodities: • Environmental business continues to perform well across
Slide 36: Questions
Questions © Copyright 2023 | ALS Limited 36
Slide 37: Appendix
Appendix FY23 Investor Presentation
Slide 38: Our sustainability scorecard
Our sustainability scorecard People Planet Community Business practices Deliver world-class health and safety Minimise our environmental Operate ethically and responsibly Make a positive contribution outcomes, and attract a diverse, capable footprint and build our resilience to deliver sustainable o
Slide 39: Case study: Supporting clients and the environment with PFAS and microplastic testing
Case study: Supporting clients and the environment with PFAS and microplastic testing Per-and poly-fluoroalkyl substances (PFAS): • Have decades of experience in analysing thousands of PFAS samples per week for complex suites of analytes globally under accredited methods • Global network of expert P
Slide 40: Significant market share within Environmental available for ALS
Significant market share within Environmental available for ALS • Estimated available market of A$9B Fragmented landscape (% market share1) • Highly fragmented market – global, regional and local competitors, with significant opportunity for consolidation • Regulatory environment driven at the count
Slide 41: Corporate cost evolution
Corporate cost* evolution 60.0 2.2% 2.1% 1.9% 50.0 48.6 50.0 2.0% 1.9% 1.6% 40.0 37.0 39.1 37.6 1.5% 30.0 1.0% 20.0 38.5 40.9 39.8 36.8 33.9 0.5% 10.0 - - FY19 FY20 FY21 FY22 FY23 Total Corporate costs * 2.2% 2.1% 2.1% 2.3% 2.0% % of revenue • Strict cost control in Corporate Corporate costs * exclu
Slide 42: FY23 restructuring and other items
FY23 restructuring and other items Other Total Acquisition / SaaS system in $m Start-up Restructuring non-operational non-recurring Divestment development items costs Commodities - 0.4 - - - 0.4 Life Sciences 3.9 4.3 - - 0.5 8.8 Corporate - - 7.3 12.5 1.6 21.4 Discontinued business - - (9.2) - - (9.
Slide 43: Underlying effective tax rate movement
Underlying effective tax rate movement Change $m FY23 FY22 YoY Underlying Profit before Tax (from continuing operations) 446.8 365.4 22.3% Tax 125.1 103.8 20.5% Effective Tax Rate (ETR) 28.0% 28.4% 41 bps FY24 outlook: ETR expected to be between 28% and 29% on an underlying basis right solutions. ri
Slide 44: Net debt evolution
Net debt evolution Leverage Ratio Leverage Ratio 1.9 x 18 1.8 x 126 7 64 177 1,023 (404) 902 133 31 March 2022 Net Free Cash Flow Acquisitions net of Dividends paid Treasury shares bought Fx Interest and Tax Restructuring costs 31 March 2023 Net Debt divestments on-market Debt right solutions. right
Slide 45: The mining industry is in transition
The mining industry is in transition Committed mine production and primary demand for select clean energy metals (2020-2030)1 Copper Lithium carbonate equiv. Cobalt 30 3000 400 Kt of lithium carbonate equiv. 25 2500 300 20 2000 15 1500 200 Mt kt 10 1000 100 5 500 0 0 0 2020 2022 2024 2026 2028 2030
Slide 46: Range of metals important for future clean energy technologies
Range of metals important for future clean energy technologies Critical minerals needs for clean energy technologies • Clean energy technologies require a wide range of minerals and metals Cu Co Ni Li REEs Cr Zn PGM Al • Rapid deployment of clean energy technologies Solar PV implies significant incr
Slide 47: right solutions. right partner.
right solutions. right partner. © Copyright 2022 | ALS Limited 47