Imdex Ltd · ASX:IMD

Imdex — FY2008 Earnings Presentation

40 slides from Imdex's earnings presentation, Sep 11, 2008

1. Slide 1: Brokers Presentations cover letter

   For personal use only 11 September 2008 Company Announcements Office Australian Stock Exchange Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2001 Dear Sir/Madam Brokers Presentations Please find attached a copy of the presentation being made to brokers in the United Kingdom, North America and

2. Slide 2: FY08 Full Year Results – Discussion Pack

   For personal use only Imdex Limited FY08 Full Year Results – Discussion Pack September 2008 1

3. Slide 3: Agenda

   For personal use only ƒ Group Overview ƒ Fluids & Chemicals ƒ Down Hole Instrumentation ƒ FY08 Results Summary ƒ Strategy & Outlook ƒ Summary ƒ Appendices 22

4. Slide 4: Imdex Snapshot

   Imdex Snapshot For personal use only ƒ Core business - the manufacture, supply and distribution of high quality drilling fluids and down hole instrumentation ƒ Attractive end markets – strong long term demand for minerals, oil and gas underpinning buoyant global exploration/development activity ƒ Gl

5. Slide 5: Exposure to High Growth Industries – Resources

   Exposure to High Growth Industries Resources For personal use only ƒ Record minerals exploration spend and increased production activity ƒ US$13.1B in 2008 - up 25% on US$10.5B in 2007 ƒ Strong demand for drilling fluids and down hole instrumentation – essential components of exploration and develop

6. Slide 6: Exposure to High Growth Industries – Oil & Gas

   Exposure to High Growth Industries For personal use only Oil & Gas ƒ Strong investment into exploration and development of new reserves ƒ Worldwide exploration spend in 2007 was ~US$332b ƒ Interest in new exploration in all parts of the industry has not been higher for 30 years ƒ Complex exploration

7. Slide 7: Our Skill Set

   Our Skill Set For personal use only ƒ Quality people ƒ Industry respected operational personnel ƒ Experienced locally based management ƒ Customer service ƒ Strong brands ƒ IP ownership ƒ Own manufacture = control of supply ƒ Scalability ƒ Low labour component ƒ High revenue per employee ƒ Strong glo

8. Slide 8: Our Customers

   Our Customers For personal use only And a broad range of medium to smaller sized clients globally 77

9. Slide 9: Our Corporate Structure

   Our Corporate Structure For personal use only ƒ Successful transformation expansion 2005 – 2008 ƒ Growth achieved via non core asset divestments and eight acquisitions ƒ Maximising opportunities through Resources Oil & Gas consolidation, synergies focus focus and additional resources South Africa As

10. Slide 10: Agenda

    For personal use only ƒ Group Overview ƒ Fluids & Chemicals ƒ Down Hole Instrumentation ƒ FY08 Results Summary ƒ Strategy & Outlook ƒ Summary ƒ Appendices 99

11. Slide 11: Fluids & Chemicals – Overview

    Fluids & Chemicals – Overview For personal use only ƒ Drilling fluids and chemicals (DFC) ƒ Main uses: Cool and lubricate the drill bit, keep the drill hole open and return cuttings to the surface ƒ Primarily servicing the global resources industries ƒ Building market share in the international onsh

12. Slide 12: DFC Key Highlights – FY08

    DFC Key Highlights – FY08 For personal use only ƒ Growth across all geographic regions – strong business model with a global footprint – Asia/Pacific, Africa, Canada and Latin America ƒ Distribution and supply agreements with Sandvik, Boart Longyear, Major Drilling and Layne Christensen ƒ Increased

13. Slide 13: DFC – Revenue Growth

    DFC – Revenue Growth For personal use only Fluids and Chemicals Revenue ($m) 90 85.7 ƒ Strong organic growth 80 Ç 37% ƒ Balanced global presence 70 ƒ Facilities being upgraded and expanded to 60 reduce costs and meet demand: 50 40 ƒ Samchem (Africa) 30 ƒ Southernland (Latin America) 20 ƒ Growth expe

14. Slide 14: Agenda

    For personal use only ƒ Group Overview ƒ Fluids & Chemicals ƒ Down Hole Instrumentation ƒ FY08 Results Summary ƒ Strategy & Outlook ƒ Summary ƒ Appendices 13 13

15. Slide 15: Down Hole Instrumentation – Overview

    Down Hole Instrumentation – Overview For personal use only ƒ Down hole instrumentation (DHI) ƒ Types of tools ƒ Down hole survey ƒ Steering ƒ Core orientation ƒ Unique/leading technology in resources sector globally ƒ Entering oil & gas industry ƒ Manufacture and rent/sell ƒ Differentiating factors

16. Slide 16: DHI Key Highlights – FY08

    DHI Key Highlights – FY08 For personal use only ƒ Growth across all geographic regions ƒ Strong business model with a global footprint ƒ Distribution and supply agreements with Sandvik, Boart Longyear, Major Drilling and Layne Christensen ƒ Acquisition of SEG business in Germany giving access to wor

17. Slide 17: DHI – Revenue Growth

    DHI – Revenue Growth For personal use only Down Hole Instrumentation Revenue ƒ Entry into oil & gas market with industry ($m) 70 specific down hole instrumentation 62.9 Ç 12% 60 ƒ Continuing to grow rental business 50 ƒ Maintained technology leadership: ƒ Digital down hole survey 40 instrumentation

18. Slide 18: Agenda

    For personal use only ƒ Group Overview ƒ Fluids & Chemicals ƒ Down Hole Instrumentation ƒ FY08 Results Summary ƒ Strategy & Outlook ƒ Summary ƒ Appendices 17 17

19. Slide 19: FY08 – Results Highlights

    FY08 – Results Highlights For personal use only Normalised Revenue by Division Normalised EBITA ($m) ($m) 45 160 148.6 40.1 40 140 Ç 25% 35 Ç 62% 120 30 25 100 20 80 15 60 10 40 5 0 20 -5 0 -10 FY04 FY05 FY06 FY07 FY08 FY04 FY05 FY06 FY07 FY08 Fluids and Chemicals Down Hole Instrumentation Minerals

20. Slide 20: Strong revenue growth across all geographies

    Strong revenue growth across all geographies For personal use only Europe Ç 62% $8.2m Asia Pacific Ç 19% $92.6m Americas Ç 41% $19.1m Africa Ç 26% $28.7m 19 19

21. Slide 21: FY08 – EPS, DPS and ROE Growth

    FY08 – EPS, DPS and ROE Growth For personal use only Normalised Earnings & Dividends Return on Equity 50% (EBITA/Equity) 14.0 c per Share 12.0 c 40% 10.0 c 30% 8.0 c 6.0 c 20% 4.0 c 10% 2.0 c 0% 0.0 c FY04 FY05 FY06 FY07 FY08 -2.0 c -10% -4.0 c -20% FY04 FY05 FY06 FY07 FY08 Interim Div Final Div Ear

22. Slide 22: Strong Balance Sheet

    Strong Balance Sheet For personal use only June 08 June 07 $000’s $000’s ƒ Strong cash position Cash 13,276 15,271 ƒ Growth in assets due to acquisitions and Receivables 32,079 27,806 organic business growth Inventory 21,716 13,839 Investment in SGE 17,508 16,056 ƒ Goodwill/intangible assets due to

23. Slide 23: FY08 Scorecard

    FY08 Scorecard For personal use only Achieved ƒ Integrate acquisitions Yes ƒ Deliver organic growth Yes ƒ Maintain superior customer service Yes, ongoing ƒ Maintain and extend global technology leadership Yes, ongoing ƒ Support global alliances Yes, ongoing ƒ Penetrate oil & gas market – DHI Ongoing

24. Slide 24: Agenda

    For personal use only ƒ Group Overview ƒ Fluids & Chemicals ƒ Down Hole Instrumentation ƒ FY08 Results Summary ƒ Strategy & Outlook ƒ Summary ƒ Appendices 23 23

25. Slide 25: Looking forward – factors underpinning Imdex’s strong growth

    Looking forward – factors underpinning Imdex’s strong growth For personal use only ƒ Continue to build strong customer relationships ƒ Continue to diversify down hole instrumentation into oil & gas industry ƒ Increase competitive advantage and points of differentiation ƒ Continue to invest in R & D

26. Slide 26: Looking forward – strong margins continuing to underpin growth

    Looking forward – strong margins continuing to underpin growth For personal use only Forced ranking by EBIT margin, FY08A 30% 25% 20% 15% 10% 5% 0% AAX MRM MAH SDM JHX BLY NMS IMD ABC MND EAL AJL BKW DOW TBG CLO HST ORI LEI CPB TSE NFK NWH BKN CSR NOD CDD WOR BLD RCR GRD IDL EHL BOL TOL UGL Source:

27. Slide 27: Looking forward – what will Imdex look like in the medium term

    Looking forward – what will Imdex look like in the medium term For personal use only Strong relationships, leading technology, sustainable growth and attractive end-markets Medium Term Objective Past Present (3-5 years) ƒ Greater penetration into 9% oil & gas markets for 1% End-market Early Stage ex

28. Slide 28: Agenda

    For personal use only ƒ Group Overview ƒ Fluids & Chemicals ƒ Down Hole Instrumentation ƒ FY08 Results Summary ƒ Strategy & Outlook ƒ Summary ƒ Appendices 27 27

29. Slide 29: Summary – Attractive market fundamentals

    Summary For personal use only ƒ Attractive market fundamentals ƒ Continued growth in mining and mineral exploration spend ƒ Increased drilling in oil & gas with expenditure at 30 year highs ƒ Commodity prices expected to drive demand for the foreseeable future ƒ Balanced global exposure ƒ Imdex supp

30. Slide 30: Summary – Strong growth in earnings

    Summary For personal use only ƒ Strong growth in earnings ƒ FY08 was a record year for Group revenues and profit ƒ Fifth successive year of increased revenues and profits ƒ Profit margins and profit per employee highest amongst peers ƒ Outlook ƒ Strong track record in revenue and profit growth expec

31. Slide 31: Agenda

    For personal use only ƒ Group Overview ƒ Fluids & Chemicals ƒ Down Hole Instrumentation ƒ FY08 Results Summary ƒ Strategy & Outlook ƒ Summary ƒ Appendices 30 30

32. Slide 32: Appendix – Resources – market outlook for growth in global exploration spend

    Appendix – Resources – market outlook for growth in global exploration spend For personal use only ƒ Record minerals exploration spend Estimated Exploration Spend Worldwide (Non Ferrous) and increased production activity (US$b) 12 ƒ US$13.1b in 2008 – up 25% on US$10.5b in 2007 10 8 ƒ Strong demand

33. Slide 33: Appendix – Resources – market outlook by geography and stage

    Appendix – Resources – market outlook by geography and stage of development For personal use only Worldwide Exploration Budgets* Worldwide Exploration Budgets* by Region 2007 (%) by Stage 2007 (%) Pacific / Minesite United Latin SE Asia Grass States America 20% roots Australia 8% 4% 39% 24% 12% 16%

34. Slide 34: Appendix – Oil & Gas – market outlook for growth in global exploration spend

    Appendix – Oil & Gas - market outlook for growth in global exploration spend For personal use only ƒ Strong investment into exploration and development of new reserves Oil & Gas Exploration Spend ƒ Significant uplift in exploration spend 30,000 Exploration spend as a % of total E&P spend 30% over pa

35. Slide 35: Financial Results Overview

    Financial Results Overview For personal use only FY08 FY07 $000’s $000’s Change Fluids and Chemicals Revenue 85,711 62,353 Ç 37% Down Hole Instrumentation Revenue (incl Surtron) 62,882 56,139 Ç 12% Normalised Revenue 148,593 118,492 Ç 25% EBITA (incl Surtron trading, excl profit on disposal) 40,071

36. Slide 36: Appendix – FY08 Revenue Growth

    Appendix – FY08 Revenue Growth For personal use only Normalised Revenue Growth ($m) ƒ 25% revenue growth – 20% organic growth 160 Ç 5% 148.6 and 5% acquisition growth Ç 20% 140 ƒ Organic growth - all geographic areas 118.5 120 ƒ Highest organic growth - AMC and Reflex 100 ƒ The growth in AMC was dri

37. Slide 37: Appendix – FY08 EBITA Growth

    Appendix – FY08 EBITA Growth For personal use only Normalised EBITA Growth ($m) ƒ 62% EBITA growth – 57% organic growth 45 and 5% acquisition growth Ç 57% Ç 5% 40.1 40 ƒ Growth in margins achieved by: 35 30 ƒ Growing economies of scale 24.7 25 ƒ Controlling back office costs, 20 particularly in newl

38. Slide 38: Appendix – Senior Management – breadth and depth

    Appendix – Senior Management – breadth and depth For personal use only Strong operational management Gary Weston Group GM – founder of AMC and over 30 years experience, Imdex and Baroid Derek Loughlin Divisional Manager – Instrumentation – 19 years experience, Boart Longyear and others Paul Mander D

39. Slide 39: Appendix – Board of Directors

    Appendix – Board of Directors For personal use only ƒ Non Executive Chairman, Ian Burston AM ƒ Appointed Chairman 2000 ƒ Experienced leader of many mining and exploration companies including Hamersley Iron, Kalgoorlie Consolidated Gold Mines, Aurora Gold Ltd and Portman Limited ƒ Current Chairman of

40. Slide 40: Disclaimer

    Disclaimer For personal use only This presentation has been prepared by Imdex Limited (“the Company”). It contains general background information about the Company’s activities current as at the date of the presentation. It is information given in summary form and does not purport to be complete. Th

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