Als Ltd. · ASX:ALQ

Als — Investor Presentation (November 2024)

40 slides from Als's investor presentation, Nov 19, 2024

Slide 1: H1 FY25 Results
Investor presentation H1 FY25 Results For six months ending 30 September 2024 Malcolm Deane, CEO and Managing Director Stuart Hutton, Chief Financial Officer
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: H1 FY25 highlights
H1 FY25 highlights • H1 FY25 contribution uplift, underlying1 2.1% EBIT increase to $250.4m suppressed by FX impacts associated with higher AUD during the period. On a constant currency basis2, underlying EBIT was $266.0m (up 8.5%). The underlying result demonstrates the strength of the diversified
Slide 4: Health and safety underpins everything we do
Health and safety underpins everything we do ALS continues to deliver People 2.5 leading safety performance Health and safety is prioritised 2.0 Total recordable in every aspect of our business injury to protect our people, to drive 1.5 frequency1 performance and to build trust 1.18 with our clients
Slide 5: Financial highlights
Financial highlights Underlying revenue1 Underlying EBIT (margin)2 FCF generated Underlying ROCE2,3 $1,464.2m $250.4m (17.1%) $274.3m 19.4% +14.0% growth +2.1% growth Up $38.7m on pcp +66 bps improvement +5.6% organic growth $266.0m (+8.5% growth) 91% Underlying EBIT on CCY basis EBITDA cash convers
Slide 6: Business highlights
Business highlights Commodities Life Sciences Minerals Industrial Materials Environmental Food Pharmaceutical Revenue growth Strong revenue Market leading Double-digit organic Mixed performance driven by improved growth and margin double-digit organic revenue growth within across operations. pricing
Slide 7: Strong revenue growth
Strong revenue growth Total revenue growth of 14.0% Underlying revenue growth composition (A$m) Organic growth of 5.6% a result of: ✓ Increased global demand for Environmental services, underpinned 5.6% 11.6% (3.2)% 14.0% by increased regulation and enforcement ✓ Further demand for value-added servi
Slide 9: Commodities resilient in a soft market
Commodities resilient in a soft market Minerals margins maintained above 30% Underlying results (A$m) • Total revenue declined (1.7%) – organic growth in Geochemistry (despite H1 FY25 Change in H1 FY25 H1 FY24 Change CCY CCY1 subdued conditions) and Industrial Materials was offset by lower volume of
Slide 10: Sample flow performance reflects ongoing fluctuating exploration environment
Sample flow performance reflects ongoing fluctuating exploration environment • Fluctuating and variable sample flows in H1 FY25, with overall (0.5)% decline in sample flows vs (12.3)% decline in H1 FY24 • Sample flow volumes exhibit regional nuances with strength in EMEA (southern markets) offset by
Slide 11: Reduced cyclicality to exploration through downstream growth and increased uptake of new service offerings
Reduced cyclicality to exploration through downstream growth and increased uptake of new service offerings Revenue evolution and downstream growth in % of Minerals revenue New service H1 offerings and (0.5%) 0.3% EBIT margin downstream 26% Continued reduction FY 22% FY of cyclicality within sample o
Slide 13: Strong Life Sciences growth led by Environmental and Food
Strong Life Sciences growth led by Environmental and Food Underlying results (A$m) H1 FY25 Change in • Total revenue growth of 25.6% driven by organic growth of 7.8% and H1 FY25 H1 FY24 Change CCY CCY1 contributions from recent acquisitions partially offset by adverse FX. Revenue $928.5 m $739.4 m +
Slide 14: Legacy Life Sciences margin continues to grow
Legacy Life Sciences margin continues to grow Underlying organic revenue growth % • Legacy Life Sciences organic revenue growth (ex. Nuvisan, Wessling & 9.3% York acquisitions) was 9.3% reflecting the continued strength, 7.8% operating scale, and strategy execution of the large global 5.0% Environme
Slide 15: Integration of acquisitions on track
Integration of acquisitions on track Wessling York Environmental Food Pharmaceutical Environmental Location: Location: Germany, France, Switzerland and Romania Northeast US Focus: Focus: Provides environmental, food and pharmaceutical testing Full-service environmental testing business including PFA
Slide 16: Nuvisan transformation progressing well
Nuvisan transformation progressing well • Cost reduction slightly ahead of plan with YTD savings implemented of ~€13m of targeted ~€25 million over 2-year period – Cost reductions achieved to date (mainly headcount, property, overheads and consumables) will positively impact H2 FY25 – On track to de
Slide 17: Strategic investment to lead and capture expanding PFAS testing demand across all business streams
Strategic investment to lead and capture expanding PFAS testing demand across all business streams • ALS has significant experience and expertise, and the scale to analyse for complex suites of PFAS analytes with accredited methods • Pioneers of PFAS testing with one of the largest PFAS testing labo
Slide 19: H1 FY25 financials
H1 FY25 financials1 A$m, except where stated H1 FY25 H1 FY24 Change • Solid financial performance in mixed market conditions Revenue 1,464.2 1,284.5 14.0% • Revenue grew organically by 5.6%, and was well Underlying EBITDA 354.0 332.9 6.3% supported by acquisitions, to achieve 14% overall H1 growth U
Slide 20: Operating margins remain strong
Operating margins remain strong Underlying Group EBIT margin composition (%) • Underlying Group margins1 contracted by (144) bps at CCY, reflecting the expected dilution H1 FY24 Organic Scope Corporate FX H1 FY25 from recent Life Sciences acquisitions, and lower volumes in Minerals Group margin 19.1
Slide 21: Disciplined capital allocation
Disciplined capital allocation • Solid cash flow generation supporting future deleveraging Balance • Strong Group liquidity of $375 million with balance sheet flexibility to support growth opportunities post period of consolidation in FY25 Sheet • Leverage ratio of 2.3x at upper-end of target range
Slide 22: Strong H1 cash generation ahead of previous years' H1
Strong H1 cash generation ahead of previous years’ H1 $m, except where stated H1 FY25 H1 FY24 • Free cash flow generated increased 16.4% to $274m, Underlying EBITDA 302.0 287.0 reflecting a 91% cash conversion demonstrating the (Pre-IFRS16 basis adjusted for ROU lease assets) strongest seasonal H1 p
Slide 23: Balance sheet and overall liquidity remains strong
Balance sheet and overall liquidity remains strong • Leverage at 2.3x rose to the upper end of the targeted range (1.7x to 2.3x) Debt maturity profile as of Sept 2024 Currency debt denomination following recent acquisitions. Weighted average debt maturity: 4.8 years Committed to reducing leverage in
Slide 24: Corporate cost run rate slightly lower than previous years
Corporate cost run rate slightly lower than previous years Corporate costs (net of FX)1 (A$m) • Corporate costs have been well controlled and slightly below expectations at 2.1% of revenue (previously expected to be ~2.25%). Ongoing quest to improve operating leverage Corporate costs % of revenue •
Slide 26: Value creation framework
Value creation framework Prioritising risk weighted capital to protect, extend and expand the portfolio Re-focused growth 1 aligned to strategic pillars and capital Organic and + innovation led growth + Operational improvements + Cash generation + Selective and opportunistic M&A framework New iterat
Slide 27: H1 FY25 scorecard
H1 FY25 scorecard Portfolio delivering amidst mixed market conditions Minerals Minerals Industrial Materials Industrial Materials Environmental Environmental Food Food Pharmaceutical Pharmaceutical ✓ Minerals: market share ✓ Oil & Lubricants: ✓ Double-digit organic ✓ Mid to high single-digit ✓ Nuvis
Slide 28: Perspectives for FY25
Perspectives for FY25 Business remains well positioned to capture positive long-term industry megatrends Confident in executing on near-term growth ambitions and operational improvements 1 2 3 Organic revenue growth Operating leverage Capital allocation • Targeting mid-single digit organic growth •
Slide 29: Refocused and strengthened ALS
Refocused and strengthened ALS Developing a resilient business for today and the future 1 2 3 4 5 Attractive industry Unique portfolio New management Delivering on Growth and objectives shareholder returns Operate in an attractive Exposed to diversified and Refreshed the strategy and enduring TIC hi
Slide 32: Divisional evolution (underlying continuing business)
Divisional evolution (underlying continuing business) in A$m H1 FY24 Organic Scope Corporate FX1 H1 FY25 Revenue 1,284.5 71.8 149.6 - (41.7) 1,464.2 Revenue Life Sciences 739.4 57.5 150.9 - (19.4) 928.5 Commodities 545.1 14.3 (1.3) - (22.3) 535.7 in A$m H1 FY24 Organic Scope Corporate FX2 H1 FY25 Gr
Slide 33: Reconciliation of underlying to statutory NPAT
Reconciliation of underlying to statutory NPAT H1 FY25 $m Continuing Restructuring and Amortisation of Statutory result operations1 other items intangibles Revenue 1,464.2 1,464.2 EBITDA 354.0 (20.8) 333.2 Depreciation & amortisation (103.6) (9.4) (113.0) EBIT 250.4 (20.8) (9.4) 220.2 Interest expen
Slide 34: Restructuring and other items
Restructuring and other items Other non- Acquisition / Acquisition SaaS system Total non-recurring $m Start-up Restructuring Closure operational Divestment integrations development costs items Commodities 0.1 1.2 0.1 - 0.1 - - 1.5 Life Sciences 0.7 0.2 1.5 - 3.0 - - 5.4 Corporate - - - 4.9 5.5 3.5 1
Slide 35: Underlying effective tax rate movement
Underlying effective tax rate movement Change $m H1 FY25 H1 FY24 YoY Underlying Profit before Tax (from continuing operations) 209.4 222.1 (5.7)% Tax 56.2 63.4 (11.4)% Effective Tax Rate (ETR) 26.8% 28.5% (171) bps FY25 outlook: ETR expected to be between 27 - 28% on an underlying basis right soluti
Slide 36: Net debt evolution
Net debt evolution Leverage ratio Leverage ratio 2.0 x 2.3 x (29) 90 91 9 216 (169) 1,383 1,175 Net debt Cash flow Acquisitions net of Treasury shares bought Interest and tax Dividends paid FX Net debt 1 April 2024 net of capex divestments 1 on-market 30 September 2024 1 Acquisitions includes $174m
Slide 37: Increased exploration and investment into battery and clean energy related metals
Increased exploration and investment into battery and clean energy related metals Exploration budget by commodity (%)1 Global energy investment (US$Bn)2 • The clean energy transition CAGR has accelerated in pace in recent years Other Total 3,119 • Exploration budgets for clean ~9% 4% 3% 4% Silver en
Slide 38: Financings and activity subdued despite strong commodity prices
Financings and activity subdued despite strong commodity prices Junior and intermediate financings1 • Recent financings substantially below 2020– $4,000 2022 period. Average monthly financings Amount raised (US $m) $3,000 over last 2.5 years to September 2024 on par April 2020 – March 2022 monthly a
Slide 39: Acronyms and definitions
Acronyms and definitions bps Basis points CCY Constant currency DSO Days sales outstanding EPS Earnings per share. Basic EPS calculated as: Underlying NPAT / Weighted Average Number of Shares FCF Free cash flow FX Foreign exchange Industrial Materials Includes Inspection, Coal, Oil & Lubricants (for

Als — Investor Presentation (November 2024) on 6ix

Als — Investor Presentation (November 2024)

Slide 1: H1 FY25 Results

Slide 2: Important notice and disclaimer

Slide 3: H1 FY25 highlights

Slide 4: Health and safety underpins everything we do

Slide 5: Financial highlights

Slide 6: Business highlights

Slide 7: Strong revenue growth

Slide 8: Commodities

Slide 9: Commodities resilient in a soft market

Slide 10: Sample flow performance reflects ongoing fluctuating exploration environment

Slide 11: Reduced cyclicality to exploration through downstream growth and increased uptake of new service offerings

Slide 12: Life Sciences

Slide 13: Strong Life Sciences growth led by Environmental and Food

Slide 14: Legacy Life Sciences margin continues to grow

Slide 15: Integration of acquisitions on track

Slide 16: Nuvisan transformation progressing well

Slide 17: Strategic investment to lead and capture expanding PFAS testing demand across all business streams

Slide 18: Financial review

Slide 19: H1 FY25 financials

Slide 20: Operating margins remain strong

Slide 21: Disciplined capital allocation

Slide 22: Strong H1 cash generation ahead of previous years' H1

Slide 23: Balance sheet and overall liquidity remains strong

Slide 24: Corporate cost run rate slightly lower than previous years

Slide 25: Strategy and FY25 perspectives

Slide 26: Value creation framework

Slide 27: H1 FY25 scorecard

Slide 28: Perspectives for FY25

Slide 29: Refocused and strengthened ALS

Slide 30: Questions

Slide 31: Appendix

Slide 32: Divisional evolution (underlying continuing business)

Slide 33: Reconciliation of underlying to statutory NPAT

Slide 34: Restructuring and other items

Slide 35: Underlying effective tax rate movement

Slide 36: Net debt evolution

Slide 37: Increased exploration and investment into battery and clean energy related metals

Slide 38: Financings and activity subdued despite strong commodity prices

Slide 39: Acronyms and definitions

Slide 40: right solutions. right partner.