Slide 1: Full Year Results FY2017
Full Year Results FY2017 Investor Presentation 23rd May 2017 All figures stated in AUD unless otherwise stated 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: ALS Business Streams
ALS Business Streams LIFE SCIENCES Environmental Food Pharmaceutical Consumer Products INDUSTRIAL Asset Care Full Year Tribology Revenue FY17 COMMODITIES Geochemistry Metallurgy Trade Inspection Coal Oil & Gas (Laboratories) 3 | Full Year Results FY2017 Right Solutions • Right Partner
Slide 4: Full Year FY17 Financial Summary
Full Year FY17 Financial Summary FY16 Full Year FY17 ($mn) ($mn) Full Year Restructuring & Discontinued Impairment Amortisation of Statutory Underlying* Underlying* other one off Operations Charges Intangibles Results items Revenue 1,239.0 1,272.3 93.3 - - - 1,365.6 EBITDA 258.0 253.1 (2.7) - (19.1)
Slide 5: Final H2FY17 Dividend
Final H2FY17 Dividend AUD cents H2FY17 Dividend 50 • 8.0 cps Interim Dividend • Payout ratio 60% (full year) 40 Final Dividend • Franked to 40% • Record date of 27 26 8th June 2017 30 • Dividend 20 Reinvestment Plan 20 15 10 11 10 21 6 19 19 8 13 11 9 7.5 5.5 0 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY1
Slide 6: Debt Metrics
Debt Metrics Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 STATISTICS Gearing Ratio (comfort 45%) 29% 34% 38% 27% 29% Leverage (net debt/ EBITDA; max 3.00) 1.0 2.2 2.5 1.7 2.1 EBITDA interest cover (min 3.75) 21.0 12.2 9.1 7.7 8.5 BALANCE SHEET MEASURES Total Equity (AUD mn) 997 1419 1228 1186 1185 Net Debt (A
Slide 7: Cash Flow
Cash Flow FY16 FY17 Full year AUD mn AUD mn Underlying operating profit (EBIT) 177.9 171.6 Depreciation & Amortisation 86.4 78.8 Working capital (6.3) 13.8 CAPEX (73.7) (58.7) Other 5.1 3.5 Free cash flow 189.4 209.0 Acquisitions (22.8) (106.4) Dividends paid (72.0) (58.0) Borrowings - movement (183
Slide 8: ALS global locations – a strategic asset
ALS global locations – a strategic asset Canada UK Nordic USA Mainland Europe Middle East Asia Australia Africa Latin America Life Sciences Industrial Commodities REVENUE (FY2017) 8 | Full Year Results FY2017 Right Solutions • Right Partner
Slide 9: Acquisitions completed during the year
Acquisitions completed during the year* *most completed in the later part of FY17 – little benefit to the FY17 financial results reported 9 | Full Year Results FY2017 Right Solutions • Right Partner
Slide 10: Life Sciences Business Streams Overview
Life Sciences Business Streams OVERVIEW Environmental Food • Revenue growth • Margin improvement in Asia, • FY17 revenue including (in AUD) Australia and Middle East acquisitions (on a full year basis) AUD$154mn Asia (+10.4%), • USA improved revenue and margin Australia (+2.4%), (+102 bps) • Higher
Slide 11: Life Sciences Business Streams Outlook
Life Sciences Business Streams Food Safety geographical reach to expand further Remediation contracts in South America Significant multiyear Oil & Gas remediation projects won in Indonesia using innovative technology OUTLOOK Focus on leveraging Hub & Spoke model Global LIMS rollout continuing Strate
Slide 12: Commodity Business Streams Overview
Commodity Business Streams OVERVIEW Geochemistry Metallurgy Inspection Coal • Sample volumes • Revenue down • Contribution • Revenue down up 22% yoy 7.6% yoy but up margin 18.4% 8.7% yoy 39% H2 pcp versus 27.1% yoy • Revenue up 15% • Contribution yoy • Contribution • Impacted by margin 13.3% margin
Slide 13: Commodity Business Streams Outlook
Commodity Business Streams Geochemistry markets - strong consistent growth even through the off-season Geochemical sample volume up 22% FY17 pcp, and growth expected to be maintained through FY18 Metallurgy activity continuing to improve Junior explorers ramping up activity, and mining OUTLOOK compa
Slide 14: Geochemical markets – fundamentals remain positive
Geochemical markets – fundamentals remain positive Exploration Drilling Activity distribution by region April 2017 53% increase April 2016 Source: S&P Global Market Intelligence 2017 14 | Full Year Results FY2017 Right Solutions • Right Partner
Slide 15: Geochemical markets – strong recovery continuing
Geochemical markets – strong recovery continuing 100% 90% ALS Global Mineral 80% Sample Flow DELTA (last 2 weeks sample flow Versus same 2 70% (two week growth trend) 60% 50% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 40% weeks last year) 30% 20% 10% 0% Oct-06 Oct-07 Oct-08 Oct-09 O
Slide 16: Geochemical markets continue recovery
Geochemical markets continue recovery Eastern Canada West Africa Congo South America Australia -14% or more +53% or more 16 | Full Year Results FY2017 Right Solutions • Right Partner
Slide 17: Geochemical markets – strong recovery continuing
Geochemical markets – strong recovery continuing 24 ALS Global Mineral Global Exploration Spend US$bn Average Weekly Sample Flow Sample Flow 21 Relative Gold Price in USD (twelve month running average) 18 15 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 12 9 6 3 0 Oct-06 Oct-07 Oct-08
Slide 18: Industrial Business Streams Overview
Industrial Business Streams OVERVIEW Asset Care Tribology • Strong Oil & Gas maintenance programs • Significant contract wins in • Strong Power Generation outage maintenance programs Canada • Increased activity in the mining sector after deferrals of the last few • Australia continues to perform yea
Slide 19: Industrial Business Streams Outlook
Industrial Business Streams 27 27% Well positioned to support resource Operating margin Millions based maintenance programs in 24 24% Australia 21 21% Four year US$20mn contract win in USA 18 18% for Asset Care 15 15% Revenue (AUD$ mn) Tribology revenue Revenue diversification via OUTLOOK 12 12% gro
Slide 20: ALS Limited Strategic Plan 2017-2022 Update
ALS Limited Strategic Plan 2017-2022 Update Right Solutions • Right Partner www.alsglobal.com | Right Solutions • Right Partner
Slide 21: TIC Markets
TIC Markets 21 | Full Year Results FY2017 Right Solutions • Right Partner
Slide 22: Strong TIC Market Drivers
Strong TIC Market Drivers • Increasing number of new regulations and standards • Growing trend of outsourcing TIC services to third party providers • Formulation of stringent regulations and standards to ensure the quality and safety of products • Increasing product diversification in several indust
Slide 23: TIC trend to more outsourcing
TIC trend to more outsourcing Growing trend of outsourcing TIC services to third party providers Independence CAGR CAPEX increasing More & more sophisticated services Source: Testing, Inspection & Certification (TIC) Market – Global Forecast to 2022…..MarketsandMarkets 23 | Full Year Results F
Slide 24: Expected TIC CAGR by Geography
Expected TIC CAGR by Geography Source: Testing, Inspection & Certification (TIC) Market – Global Forecast to 2022…..MarketsandMarkets 24 | Full Year Results FY2017 Right Solutions • Right Partner
Slide 25: TIC World Market in 2022 – US$113 billion
TIC World Market in 2022 – US$113 billion Source: Testing, Inspection & Certification (TIC) Market – Global Forecast to 2022…..MarketsandMarkets 25 | Full Year Results FY2017 Right Solutions • Right Partner
Slide 26: Drivers of Non-resource TIC Markets – GDP per Person
Drivers of Non-resource TIC Markets – GDP per Person Source: Company Research 26 | Full Year Results FY2017 Right Solutions • Right Partner
Slide 27: Drivers for Resources – Mineral Production US$
Drivers for Resources – Mineral Production US$ Source: Company Research 27 | Full Year Results FY2017 Right Solutions • Right Partner
Slide 28: Vision 2022: Our purpose
Vision 2022: Our purpose 28 | Full Year Results FY2017 Right Solutions • Right Partner
Slide 29: Vision 2022: Our Everest
Vision 2022: Our Everest (excluding significant acquisitions) Assumes no material adverse change in market conditions 29 | Full Year Results FY2017 Right Solutions • Right Partner
Slide 30: Next Generation TIC (NGT)
Next Generation TIC (NGT) Technology Disruptors Artificial Intelligence, Voice Supply Chain Integrity (Robotics, Virtual Reality) Recognition Digital Innovation Big Data Software 30 | Full Year Results FY2017 Right Solutions • Right Partner
Slide 31: Strategic priorities
Strategic priorities Strategic priorities Focus (Testing as our Core) Brand recognition Operational excellence One ALS Client focused Leverage services across business streams Target: non- Existing market share growth resource business Balanced to be > 50% of the New business streams company EBIT at
Slide 32: Business Stream Strategy
Business Stream Strategy Grow scalable Invest in businesses New Core through organic (Testing) and geographic Business expansion Streams Divest or close Improve all non-core Current (non-testing) Performance Businesses 32 | Full Year Results FY2017 Right Solutions • Right Partner
Slide 33: Business streams
Business streams 33 | Full Year Results FY2017 Right Solutions • Right Partner
Slide 34: Business Services Discipline
Business Services Discipline Integrated to cost based Organic growth projects… +5% of operational model revenues Procurement leverage Bolt on acquisitions that provide synergies Strong cash conversion Focus on ROCE Improve earnings per share Capital management strategy Analytics fo