Slide 1: Investor presentation FY21 results
Investor presentation FY21 results Raj Naran, Managing Director and CEO Luis Damasceno, Chief Financial Officer 26 May 2021 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: Safety is a priority — ALS COVID-19 response
Safety is a priority — ALS COVID-19 response Supporting our employees Additional sanitisation products and PPE Communication on hygiene and disinfection procedures Screening of all persons entering our sites Physical distancing and separation screens Restrictions on gatherings and travel S
Slide 4: Managing the COVID-19 pandemic — Group
Managing the COVID-19 pandemic — Group Growth Balance sheet Cost Cash opportunities strength reduction generation Investment in capacity growth Reduced net debt by $186m since Cost base aligned to client Strong cash flow in several markets in Life March 2020 demand early in pandemic generati
Slide 5: Group FY21 performance vs strategic priorities
Group FY21 performance vs strategic priorities Shorter-term strategic priorities FY21 performance Life Sciences • -2.7% organic revenue decline due to the impact of the pandemic, growth of +1.9% in 2H FY21 Strong organic growth and margin expansion • EBIT margin expansion of 72 bps despite impact of
Slide 6: ESG vision
ESG vision Our stated goal: OUR ESG VISION: 40% reduction in Carbon Industry-leading Health and Safety Performance Intensity by 2030 Deliver world-class health and safety outcomes, and attract a diverse, capable and engaged workforce. People Minimise our environmental footprint and build our resilie
Slide 7: ESG program – FY21 achievements
ESG program – FY21 achievements Health & Safety Innovation & Technology People 26% improvement in total recordable injury frequency rate Safety is a Priority Embracing innovation and technology (compared to FY18). Diversity & Equality Human Rights 59% new female professional hires. Respecting di
Slide 8: FY21 results: Group performance
FY21 results Group performance Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 9: FY21 statutory results summary
FY21 statutory results summary Statutory Results FY21 ($m) FY20 ($m) % change Revenue 1,761.4 1,858.1 (5.2)% EBITDA 421.1 469.4 (10.3)% Depreciation, amortisation (132.6) (224.4) (40.9)% and impairment losses EBIT 288.5 245.0 17.8% Interest expense (40.0) (42.4) (5.7)% Tax expense (74.4) (73.1) 1.8%
Slide 10: FY21 underlying NPAT of $185.9 million, significant improvement in second half
FY21 underlying NPAT of $185.9 million, significant improvement in second half Underlying performance from continuing operations (excludes government subsidies and related direct costs, amortization of intangibles, restructuring costs and other items) • Organic revenue decline of -2.1% with signific
Slide 11: FY21 underlying results from continuing operations by division
FY21 underlying results from continuing operations by division FY21 ($m) Life Sciences Commodities Industrial Other Total Group FY21 VLY FY21 VLY FY21 VLY FY21 VLY FY21 VLY Revenue 930.0 (3.2)% 624.8 (2.7)% 206.6 (17.5)% - - 1,761.4 (5.0)% Organic growth (2.7)% 3.8% (15.5)% (2.1)% EBITDA 222.4 (0.2)
Slide 12: FY21 revenue evolution – material impact from stronger AUD
FY21 revenue evolution – material impact from stronger AUD in $m (39.5) +37.3 (90.3) 1,853.9 1,761.4 (0.1)% decline @ constant currency (1) (2) FY20 Organic Scope FX FY21 Revenue (2.1)% +2.0% (4.9)% (5.0)% (1) FY20 revenue increased by $22m to reflect the AASB 15 adjustment. (2) Translation FX: impa
Slide 13: FY21 revenue growth components by business stream
FY21 revenue growth components by business stream (at constant currency) % of revenue (22.0%) (19.0%) (16.0%) (13.0%) (10.0%) (7.0%) (4.0%) (1.0%) 2.0% 5.0% 8.0% Life Sciences: Life Sciences (2.7%) 3.9% 53% Geochemistry 7.3% Metallurgy (5.9%) Commodities: 35% Inspection (6.2%) Coal (9.5%) Asset care
Slide 14: FY21 organic revenue - significant improvement in H2 with acceleration in Q4
FY21 organic revenue - significant improvement in H2 with acceleration in Q4 Organic growth % Q1 Q2 H1 Q3 Q4 H2 FY21 Life Sciences (10.7)% (4.4)% (7.4)% 0.9% 3.0% 1.9% (2.7)% Commodities (14.7)% (5.1)% (9.6)% 2.0% 35.6% 17.2% 3.8% Industrial (17.0)% (15.5)% (16.2)% (14.9)% (14.4)% (14.7)% (15.5)% To
Slide 15: FY21 underlying EBIT – strong improvement in Group margin
FY21 underlying EBIT – strong improvement in Group margin despite FX headwind and pandemic in $m +12.1 +15.1 (31.6) 320.9 305.8 305.8 301.4 301.4 +151bps @ constant currency (1) FY20 Organic Scope FX FY21 Margin 16.5% +119 bps +32 bps (89) bps 17.1% Life Sciences 15.5% (23) bps +64 bps +31 bps 16.2%
Slide 16: FY21 underlying EBIT evolution
FY21 underlying EBIT evolution – strong margin growth despite FX headwind in $m Other (9.6) (4.7) +1.5 +8.0 +1.9 (11.1) 305.8 301.4 (1) FY20 Life Sciences Commodities Industrial Corporate FX FY21 Margin 16.5% 16.2% 27.6% 9.9% (2.1)% (0.3)% 17.1% PCP +72 bps +199 bps (10) bps (3) bps (61) bps +61 bps
Slide 17: Significant improvement in underlying EBIT margin across divisions
Significant improvement in underlying EBIT margin across divisions vs. pcp (in bps) H1 Q3 Q4 H2 FY21 • Q4 21 organic growth Life Sciences 10 155 91 131 72 benefited from comparison Commodities (107) 160 784 446 199 to pandemic-impacted Q4 20 • Margin improvement in all Industrial (111) 2 202 99 (10)
Slide 18: FY21 financial summary – reconciliation of underlying to statutory
FY21 financial summary – reconciliation of underlying to statutory FY20 ($m) FY21 ($m) COVID-19 Full Year Restructuring & Subsidies & Grants Amortization of Underlying * Underlying * Statutory results other items net of Direct intangibles Costs Revenue 1,853.9 1,761.4 1,761.4 EBITDA 431.5 425.1 (29.
Slide 19: FY21 restructuring & other items – COVID-19 subsidies net of direct costs
FY21 restructuring & other items – COVID-19 subsidies net of direct costs Other non- Total non- COVID-19 subsidies Total in $m Start-up Restructure Acquisition operational items recurring costs net of direct costs non-recurring Commodities - 3.2 - 3.2 (10.5) (7.3) Life Sciences 2.8 5.3 8.1 (12.4) (4
Slide 20: Capital management strategy
Capital management strategy Cash flow from operations Dividend Strong underlying EBITDA cash conversion of 102% (FY20: 98%), driven Final dividend of 14.6 cps (70% franked) compared to 6.1 cps in 2H FY20. by reduction of days of sales outstanding (DSO) and close management Total FY21declared div
Slide 21: FY21 cash flow – strong cash conversion driven by reduction in DSO
FY21 cash flow – strong cash conversion driven by reduction in DSO Full year ($m) FY20 FY21 Underlying operating EBIT 304.0 301.4 Depreciation & amortization 126.8 123.7 9 CASH FROM OPERATIONS Amortization on ROU (45.6) (44.6) million (BEFORE CAPEX) Interest on ROU (8.0) (7.2) EBITDA (Adjusted for R
Slide 22: CAPEX by business – targeted spending on key growth opportunities
CAPEX by business – targeted spending on key growth opportunities $m CAPEX as % of revenue Growth Maintenance FY21* FY20 Life Sciences 2.9% 2.1% 4.8% 6.9% Commodities 2.9% 0.9% 4.1% 4.7% Industrial 1.5% 1.2% 2.8% 5.3% 45 Group Infrastructure 0.3% - 0.3% 0.6% 81 25 Total Group 3.3% 1.3% 4.6% 6.5% vs.
Slide 23: Debt metrics – strong balance sheet with liquidity of $650m
Debt metrics – strong balance sheet with liquidity of $650m Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 STATISTICS Gearing Ratio (target <45%) 29% 31% 37% 42% 36% Leverage (net debt/ EBITDA) (max 3.25) 1.9 1.7 1.8 2.1 1.6 EBITDA interest cover (min 3.75) 9.2 11.3 10.5 11.0 11.4 BALANCE SHEET MEASURES Total E
Slide 24: FY21 results: Review by division
FY21 results Review by division Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 25: Life Sciences overview – robust performance during pandemic
Life Sciences overview – robust performance during pandemic Life Sciences performed resiliently throughout the Significant improvement in organic revenue Strong margin performance in Canada driven pandemic as it operates as an essential part of key growth in the second half +1.9% by innovation
Slide 26: Life Sciences - recent acquisitions performing well
Life Sciences - recent acquisitions performing well Contribution from Life Sciences acquisitions made since FY18 • Recent acquisitions ARJ and Aquimisa 120 17.3% 20.0% continue to perform well, exceeding Revenue ($m) 18.0% expectations 100 12.4% 16.0% EBIT margin 14.0% 80 • Majority of acquisitions
Slide 27: Commodities overview – strong performance in H2 FY21
Commodities overview – strong performance in H2 FY21 Geochemistry Metallurgy Inspection Coal Sample volumes +2% vs pcp. Significant improvement Organic revenue -5.9% vs Revenue decline of -6.2% vs Revenue and margin in second half (Q3: +13%, Q4: +27% vs pcp) pcp with improved H2 pcp, with re
Slide 28: Geochemistry – supportive gold price
Geochemistry – supportive gold price ALS Global mineral sample flow (trailing 52 week running average) and global exploration spend Average Weekly Sample Flow Global Exploration Spend USD bn Relative Gold Price in USD 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ‘21 Oct
Slide 29: Geochemistry – strong sample flow growth in H2 FY21
Geochemistry – strong sample flow growth in H2 FY21 ALS Global mineral sample flow to 14 May 2021 (two week growth trend) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 '21 Oct-06 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13 Oct-14 Oct-15 Oct-16 Oct-17 Oct-18 Oct-19 O
Slide 30: Junior and intermediate fund raisings and pipeline activity showing strong improvement
Junior and intermediate fund raisings and pipeline activity showing strong improvement Junior and intermediate financings, Feb 2019 – Apr 2021 Project drilling activity by commodity, Feb 2019 – Apr 2021 Copper Gold Gold financings Base/other metals financings Silver Nickel PGM Lead-Zinc Specialty co
Slide 31: Industrial overview – Asset Care trading conditions remain challenging
Industrial overview – Asset Care trading conditions remain challenging Asset Care Tribology Total organic revenue decline of -20.6% Total organic revenue decline of -1.6%, with H2 organic growth +1.8% H1 FY21 impacted by cancellation of projects and difficulty accessing Solid improvement in
Slide 32: FY21 results: Summary
FY21 results Summary Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 33: FY21 results – summary
FY21 results – summary Resilient performance across the Group with strong recovery in H2 FY21 Organic revenue decline of -2.1% and scope growth of +2.0% with strong margin performance by ARJ, Aquimisa and MARSS Group EBITDA margin growth across all divisions Cash conversion rate of 102% St
Slide 34: Current trading
Current trading Group Sustained increase in economic activity continues to drive Life Sciences Commodities Industrial improved performance across the Group, although risk of new Remains resilient, with Strong momentum from H2 Asset Care trading economic shutdowns remain as volumes improving
Slide 35: Appendix A - FY21 results financial appendix
Appendix A - FY21 results financial appendix Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 36: Underlying effective tax rate movement
Underlying effective tax rate movement Change $m FY21 FY20 YoY Underlying Profit before Tax (from continuing operations) 261.4 264.5 (1.2)% Tax (74.0) (74.0) (0.0)% Effective Tax Rate (ETR) 28.3% 28.0% +33 bps FY22 outlook: ETR expected to be ~29% on an underlying basis 36 Investor Presentation. Ful
Slide 37: Corporate cost evolution - reduced in-line with revenue
Corporate cost* evolution - reduced in-line with revenue 45.00 2.5% 2.2% 40.00 2.1% 2.1% 35.00 1.8% 2.0% 1.7% 30.00 1.5% 25.00 20.00 39.1 37.0 37.6 1.0% 15.00 26.5 10.00 21.1 0.5% 5.00 0.00 0.0% FY17 FY18 FY19 FY20 FY21 Corporate costs * ($m AUD) Corporate costs as % of revenue • Strict cost control
Slide 38: Net debt evolution
Net debt evolution 800 700 (299) 18 3 600 800 (25) 71 (104) 101 50 614 500 400 31 March 2020 Free Cash Flow Acquisitions Dividends paid Treasury shares Fx Interest and Tax Restructuring Net COVID 31 March 2021 Net Debt bought on-market costs subsidies received Net Debt 38 Investor Presentation. Full
Slide 39: Appendix B – background
Appendix B – background Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 40: Contents
Contents 1 Market and ALS background 2 Life Sciences 3 Commodities and Industrial 4 Strategic roadmap 40 Investor Presentation. Full Year Results FY21. Right Solutions • Right Partner
Slide 41: 1. Market and ALS background
1. Market and ALS background Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 42: Testing, Inspection and Certification (TIC)
Testing, Inspection and Certification (TIC) Others 9% Certification Verification of a system or item against a recognised Standard 17% Testing (core service for ALS) taking measurements either in a laboratory or in the field 56% Inspection Visual inspection or physical 18% measurement (in situ) of a
Slide 43: $US204bn global TIC market
$US204bn global TIC market Market drivers Market size by service offering and growth to 2025 Growing trend of outsourcing TIC services to $140 2020 2025 third party providers $120 Increasing number of new regulations and $100 standards to ensure the quality and safety of $80 products $60 Globa
Slide 44: TIC market by region – global growth
TIC market by region – global growth TIC market size by region and growth to 2025 $100 EUROPE 2020 2025 25.4% $80 3.8% $60 NORTH AMERICA $40 29.9% 3.3% APAC $20 34.7% 3.7% $0 REST OF THE WORLD North Europe APAC RoW 10.1% America 3.4% 2020 $60.8bn $50.1bn $72.0bn $21.3bn 2025 $71.6bn $60.5bn $86.4bn
Slide 45: Company history
Company history Established as Campbell Australian Laboratory Services (ALS) began as a Following rapid growth and Brothers in 1863, a small small geochemistry laboratory in 1976 in diversification across Australia in the chemical company in Brisbane (Australia) to service mineral 1980s, ALS expande
Slide 46: ALS service offering – testing is core
ALS service offering – testing is core OVERALL CAPABILITIES SCOPE 46 Investor Presentation. Full Year Results FY21. Right Solutions • Right Partner
Slide 47: ALS products and services
ALS products and services 47 Investor Presentation. Full Year Results FY21. Right Solutions • Right Partner
Slide 48: ALS current cyclical vs non-cyclical revenue split
ALS current cyclical vs non-cyclical revenue split 35% LIFE SCIENCES COMMODITIES & INDUSTRIAL Environmental Geochemistry Food Metallurgy Pharmaceutical Trade Inspection Consumer Products Coal Asset Care Tribology 65% 48 Investor Presentation. Full Year Results FY21. Right Solutions • Right Partner
Slide 49: ALS global operations by revenue (FY21)
ALS global operations by revenue (FY21) 65+ Countries EMENA 4,800 staff 350+ Locations $466m 40+ Years of strong performance APAC $588m 15,000+ $672m 4,900 staff Staff worldwide AFRICA AMERICAS $35m 5,500 staff 500 staff 40+ million Processed samples per year $1.8 billion Global revenue 49 Investor
Slide 50: 2. Life Sciences
2. Life Sciences Main business streams: Environmental testing | Food safety and quality | Pharmaceutical Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 51: Life Sciences division
Life Sciences division Key drivers Life Sciences ($m) • Increasing regulation, complexity and $1,000 specialisation of testing requirements $900 • Increased outsourcing allowing companies to focus on core $800 competencies $700 • Focus on high level of quality brand protection, particularly for food
Slide 52: Life Sciences – 239 global locations
Life Sciences – 239 global locations 78 62 28 71 52 Investor Presentation. Full Year Results FY21. Right Solutions • Right Partner
Slide 53: 3. Commodities and Industrial
3. Commodities and Industrial Commodities: Geochemistry | Metallurgy | Commodity trade and inspection | Coal quality Industrial: Asset Care | Tribology Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 54: Commodities division
Commodities division Key drivers Commodities ($m) • Commodity pricing cycle $650 • Mining capital expenditure by major miners and exploration by junior miners $600 • Junior miner’s exploration generally driven by equity market activity (particularly in the Australian and Canadian markets) $550 Strat
Slide 55: Commodities – 131 global locations
Commodities – 131 global locations 29 34 39 13 16 55 Investor Presentation. Full Year Results FY21. Right Solutions • Right Partner
Slide 56: Geochemistry 'hub and spoke' model
Geochemistry ‘hub and spoke’ model • 5 global hubs provide capacity, supported by smaller regional ‘spokes’ • ‘Spoke’ operations are scaled up or down to match client demand and ensure effective use of hub capacity • Technology platform also supports efficient global allocation of sample flow 56 Inv
Slide 57: Industrial division
Industrial division Key drivers Industrial ($m) Support asset owners, operators and constructors to: $300 • Comply with codes and regulations • Provide confidence in safe operations $250 • Optimise production and maintenance Strategy $200 • Grow market share and geographic reach • Diversify service
Slide 58: Industrial – 39 global locations
Industrial – 39 global locations 1 13 22 3 58 Investor Presentation. Full Year Results FY21. Right Solutions • Right Partner
Slide 59: Industrial – confidence in assets
Industrial – confidence in assets ENGINEERING-LED INTEGRITY AND RELIABILITY SERVICES Engineering Tribology assessment Mechanical testing Integrated condition Fitness for service / monitoring Non-destructive remaining life assessment testing (NDT) Maintenance Training academy planning and review Qual
Slide 60: 4. Strategic roadmap
4. Strategic roadmap Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner
Slide 61: Strategic roadmap
Strategic roadmap 61 Investor Presentation. Full Year Results FY21. Right Solutions • Right Partner
Slide 62: Selection of 2,000+ different clients
Selection of 2,000+ different clients 62 Investor Presentation. Full Year Results FY21. Right Solutions • Right Partner
Slide 63: alsglobal.com
Right Solutions • Right Partner alsglobal.com 63 Investor Presentation. Full Year Results FY21. Right Solutions • Right Partner