Slide 1: Investor Presentation Full Year Results FY2018
Investor Presentation Full Year Results FY2018 Raj Naran, Managing Director and CEO, ALS Limited 28 May 2018 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: FY2018 Highlights
FY2018 Highlights ALS FY2018 Final dividend Underlying EPS is Underlying NPAT 9.0 cents 28.4 cents within guidance at per share, per share, $142.2 million, up FY18 total dividend up 22% 21.1% on up 25.9% prior year On-market Business outlook Share Buyback continues to continue to remain stable Propo
Slide 4: Global Operations Map
Global Operations Map 50+ 300+ 40+ 13,000+ 20+ million $1.4+ billion Countries Locations Years of strong Staff worldwide Processed samples Global revenue business per year performance 4 Investor Presentation. Full Year Results FY2018 Right Solutions • Right Partner
Slide 5: Business streams
Business streams 5 Investor Presentation. Full Year Results FY2018 Right Solutions • Right Partner
Slide 6: Sustainability Program. 2017-18 Achievements
Sustainability Program. 2017-18 Achievements People Health & Safety Training & 53% female new hires Safety as a Priority development investing in talent development Record Low Injury Rates Diversity & equality Respecting differences Global employee survey completed Human rights Worker’s rights
Slide 7: ALS Segments and Business Streams Revenue split
ALS Segments and Business Streams Revenue split COMMODITIES & LIFE SCIENCES INDUSTRIAL Environmental Geochemistry Food Metallurgy Pharmaceutical Trade Inspection Consumer Products Coal Asset Care Tribology 7 Investor Presentation. Full Year Results FY2018 Right Solutions • Right Partner
Slide 8: Full Year FY18 Financial Summary
Full Year FY18 Financial Summary Underlying performance from continuing operations NPAT Guidance met $142.2m NPAT growth 21.1% EBITDA growth 12.3% Revenue growth 14.7% EPS growth 21.9% Share buyback progress $106.8m 8 Investor Presentation. Full Year Results FY2018 Right Solutions • Right Partner
Slide 9: Revenue waterfall FY17 vs FY18 – all operations
Revenue waterfall FY17 vs FY18 – all operations +80 +1 +2 -56 Strong +4 Life Sciences growth +54 -1 +5 +5 Oil & Gas -3 discontinued $1,495.1 million $1,365.6 million operation Strong Flat Commodities Industrial performance performance +39 FY17 Food Pharma Coal Other FY18 Geochemistry Tribology Envir
Slide 10: Cash Flow
Cash Flow FY17 FY18 Full year AUD mn AUD mn Underlying operating profit (EBIT) 171.6 216.7 Depreciation & Amortisation 78.8 72.9 EBITDA 250.4 289.6 Working capital 12.3 (16.1) CAPEX (58.7) (73.4) Other 5.0 7.6 Free cash flow 209.0 207.7 Acquisitions (106.4) (31.8) Divestments - 79.5 Dividends paid (
Slide 11: Capital management
Capital management Share Buyback Up to $175million, commenced mid-December 2017 for up to 12 months Program 15.5 million shares (representing 3.1% of the original base) have been bought back on-market for an overall consideration of $106.8 million Buyback Progress The Company will continue to use it
Slide 12: Margin strong post bottom of the cycle
Margin strong post bottom of the cycle ALS Revenue AUD$ million ALS EBITDA Margin EBITDA ALS Revenue Margin Intertek 1,500 30% SGS Eurofins Bureau Veritas 1,200 24% Applus Mistras 900 18% Bottom of EBITDA Margin for SGS, the cycle Intertek, Bureau Veritas, Eurofins, Applus & Mistras is for Calendar
Slide 13: Commodities. Overview
Commodities. Overview Geochemistry Metallurgy Inspection Coal Sample volumes Revenue up 2.5% pcp Revenue up 16.7% Revenue up 3.6% pcp up 26% pcp pcp Contribution margin Contribution margin Revenue up 27% records improved Contribution margin 14.5% versus 13.3% pcp pcp performance due
Slide 14: Global Exploration Spend
Global Mineral Exploration Market Market Trends Analytical 400 20 Spend Drivers value 350 300 15 DOLLARS Global Exploration Spend 250 Index 18% USD$ billion 200 10 price 150 generic innovative 100 5 SERVICE 50 • ALS continued investment to maintain 0 0 technical capabilities and feed innovation to h
Slide 15: Geochemistry – The Recovery looks real
Geochemistry – The Recovery looks real ALS Global Mineral Sample Flow (trailing 52 week running average) and Global Exploration Spend Average Weekly Sample Flow Global Exploration Spend US$bn Relative Gold Price in USD 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Week 100% 90% AL
Slide 16: Commodities. Outlook
Commodities. Outlook Continuation of positive market sentiment and improved market conditions for geochemistry Geochemistry market share gains globally to translate into improved FY19 performance Gradual but sustained improvement in Metallurgy expected to carry on throughout FY19 Demand for co
Slide 17: Life Sciences. Overview
Life Sciences. Overview Environmental Food & Pharma Revenue growth (in AUD) Focus on developing new greenfield Revenue growth (in AUD) Asia (+16.7%) opportunities within selected Asian and Europe (+33.1%) Australia (+5.2%) European markets to deliver new growth Australia (+7.3%) – all organic
Slide 18: Financial update: Longer term trends, Life Sciences
Financial update: Longer term trends, Life Sciences EBITDA Life Sciences Underlying Food & Pharmaceutical, UK mn EBITDA by half FY17 vs FY18 Monthly development, underlying EBITDA 80 800 12 per. Mov. Avg. (EBITDA Underlying) 60 600 GBP ‘000’S 40 400 20 200 0 H1FY17 H2FY17 H1FY18 H2FY18 Mar-14 Mar-15
Slide 19: Life Sciences. Outlook
Life Sciences. Outlook Focus on automation and workflow centralisation to improve future operating margins Food safety and pharmaceutical strategy will continue expansion via targeted acquisitions The environmental businesses in the Americas and Europe continue to demonstrate improved revenue
Slide 20: Industrial. Overview
Industrial. Overview Asset Care Tribology • In Australia, growth in Mining maintenance services • Revenue growth and margin improvement delivered offset smaller FY18 power generation outage in all regions – Australasia, North America and South program and O&G maintenance services America • Continued
Slide 21: Industrial. Outlook
Industrial. Outlook Despite headwinds, well positioned to support mining, O&G, and power generation maintenance programs in Australia. Market to remain highly price sensitive Mobilisation of US construction projects in FY19 H1 to underpin FY19 regional growth Lab automation, online monitoring an
Slide 22: Strategic Priorities Unchanged
Strategic Priorities Unchanged Strategic priorities Focus (Testing as our Core) Brand recognition Operational excellence One ALS Client focused Leverage services across business streams Existing market share growth Target: non-resource Balanced business to be > 50% New business streams of the compan
Slide 23: Strategic Roadmap
Strategic Roadmap ▪ Organic growth projects… +5% of ▪ Integrated to cost based revenues operational model ▪ Technology and efficiency ▪ Procurement leverage projects ▪ Strong cash conversion ▪ Focus on ROCE ▪ Improve earnings per share ▪ Capital management Capital strategy ▪ Analytics for operations
Slide 24: FY2018 results Financial appendix
FY2018 results Financial appendix Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 25: Full Year FY18 Financial Summary
Full Year FY18 Financial Summary FY17** Full Year FY18 ($mn) ($mn) Full Year Divestment & Restructuring Discontinued Amortisation Statutory Underlying* Underlying* Impairment & other one Operations of Intangibles Results Charges off items Revenue 1,261.5 1,446.9 48.2 - - - 1,495.1 EBITDA 257.6 289.3
Slide 26: Debt Metrics
Debt Metrics Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 STATISTICS Gearing Ratio (comfort 45%) 34% 38% 27% 29% 31% Leverage (net debt/ EBITDA; max 3.00) 2.2 2.5 1.7 1.9 1.7 EBITDA interest cover (min 3.75) 12.2 9.1 7.7 9.2 11.3 BALANCE SHEET MEASURES Total Equity (AUD mn) 1419 1228 1186 1185 1122 Net Debt (