Slide 1: Investor Presentation Full Year Results FY2019
Investor Presentation Full Year Results FY2019 Raj Naran, Managing Director and CEO, ALS Limited 21 May 2019 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: Global Operations by Revenue
Global Operations by Revenue EMENA $398m 4,200 staff APAC 4,400 staff AMERICAS 4,900 staff $598m $622m AFRICA $54m 1,000 staff 65+ 350+ 40+ 15,000+ 40+ million $1.6+ billion Countries Locations Years of strong Staff worldwide Processed samples Global revenue performance per year 3 Investor Presentat
Slide 4: Full Year FY19 Financial Summary
Full Year FY19 Financial Summary Underlying performance from continuing operations NPAT Guidance exceeded $181.0m NPAT growth 27.3% EBITDA growth 22.0% Revenue growth 15.1% EPS growth 30.6% Final dividend growth 27.8% Share buyback progress $131.4m 4 Investor Presentation. Full Year Results FY2019 R
Slide 5: 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 5 Investor Presentation. Full Year Results FY2019 Right Solutions • Right Partner
Slide 6: Revenue Growth FY19 vs FY18 – Continued Operations
Revenue Growth FY19 vs FY18 – Continued Operations in AUD m Organic Growth +12.7% +1.5% +0.9% +8.0% +7.9% 20 13 +21.7% 16 58 112 1,665 1,447 2018* Commodities Life Sciences Industrial Acquisition Fx 2019* * Continued Operations 6 Investor Presentation. Full Year Results FY2019 Right Solutions • Righ
Slide 7: Underlying EBIT – Continuing Operations
Underlying EBIT – Continuing Operations In AUD m +22 +44 (5) (2) 280 221 2018 Commodities Life Sciences Industrial Others* 2019 Margin 15.3% 27.0% 15.0% 10.0% 16.9% PCP +320 bps +110 bps (350) bps +160 bps * Corporate costs + FX 7 Investor Presentation. Full Year Results FY2019 Right Solutions • Rig
Slide 8: Strong Margin Relative to Peers
Strong Margin Relative to Peers ALS Revenue AUD m Underlying ALS EBITDA Margin Intertek 1,800 SGS 30% Eurofins 1,500 Bureau Veritas 24% Applus 20.9% Mistras 1,200 18% Bottom of Underlying EBITDA Margin 900 the cycle for SGS, Intertek, Bureau Veritas, Eurofins, Applus & 12% Mistras is for Calendar 60
Slide 9: Strategic Roadmap
Strategic Roadmap 9 Investor Presentation. Full Year Results FY2019 Right Solutions • Right Partner
Slide 10: Key Priorities
Key Priorities Priority Progress Strong Cash flow conversion Cash conversion at 93.7% Finance Improve EPS EPS growth +30.6% Standardisation of systems and Implementation of global systems & processes underway processes Organic growth projects Acceleration of green field / growth proj
Slide 11: Continued Innovation and Technology Investment
Continued Innovation and Technology Investment Strategic partnerships with new generation technology companies Beta test projects in artificial intelligence across all divisions Robotics and automation Data analytics Internet of Things (IoT) Global software platforms 11 Investor Presenta
Slide 12: Life Sciences. Overview
Life Sciences. Overview Life Sciences Organic revenue growth at +7.9%, with strong contribution throughout all regions Ongoing cost reduction and rationalisation initiatives leading to EBIT margin improvement in all regions, with total improvement of +110 bps, exceeding guidance Environmental Fo
Slide 13: Life Sciences. Evolution
Life Sciences. Evolution in AUD m 900 Environmental Total Revenue 24% Food / Pharmaceutical CAGR +10.5% Consumer / Electronics 22% Underlying EBIT Margin 20% 600 18% 16% 14% 300 12% 10% 0 8% 2015 2016 2017 2018 2019 13 Investor Presentation. Full Year Results FY2019 Right Solutions • Right Partner
Slide 14: Current ALS Pharmaceutical Footprint
Current ALS Pharmaceutical Footprint Global Pharmaceutical Estimated Global Available Market Size: Over $20 billion 14 Investor Presentation. Full Year Results FY2019 Right Solutions • Right Partner
Slide 15: Current ALS Food Footprint
Current ALS Food Footprint Global Food Estimated Global Available Market Size: Over $3 billion 15 Investor Presentation. Full Year Results FY2019 Right Solutions • Right Partner
Slide 16: Life Sciences. Outlook
Life Sciences. Outlook Life Sciences strategy will continue expansion via targeted acquisitions and investment in selected organic growth projects (start-ups and in expansion of existing capabilities) M&A activity expected to accelerate in FY2020 and FY2021 Focus on cost management, automation,
Slide 17: Commodities. Overview
Commodities. Overview Geochemistry Metallurgy Inspection Coal FY19 Sample volumes Strong total revenue Revenue up 14% pcp Revenue up 11% pcp up 7% pcp, H2 FY19 growth at 40% pcp flat Contribution margin Contribution margin Significant up 590 bps 16.4% versus 14.5% pcp Revenue up 20%
Slide 18: Geochemistry Sample Flows
50,000 0 100,000 150,000 200,000 250,000 300,000 350,000 400,000 Jan-06 0% -50% -40% -30% -20% -10% 100% 10% 20% 30% 40% 50% 60% 70% 80% 90% 18 Apr-06 Jan-06 Apr-06 Jul-06 2006 Jul-06 Oct-06 2006 Oct-06 Jan-07 Jan-07 Apr-07 Apr-07 Jul-07 2007 Jul-07 Oct-07 2007 Oct-07 Jan-08 Jan-08 Apr-08 Apr-08 Jul
Slide 19: Global Mining Capital Expenditure Outlook
Global Mining Capital Expenditure Outlook Strength in global capital expenditure on metals and mining projects expected to continue Growth in Global Mining Capital Expenditure Greenfield Capital Expenditure at Low Levels but Expected to Continue Expected to Grow as Commodity Prices Stabilise Mining
Slide 20: Junior and Intermediate Financings, March 2017 – April 2019
Junior and Intermediate Financings, March 2017 – April 2019 Data as of May 7, 2019. Source: S&P Global Market Intelligence 20 Investor Presentation. Full Year Results FY2019 Right Solutions • Right Partner
Slide 21: Commodity Cycle and Trends
Commodity Cycle and Trends Global economic fundamentals remain strong in the absence of trade uncertainty Demand is still high and inventory/stockpiles are low (<2 years) Currently the cycle appears to have a short-term moderation due to geopolitical activity Major miners still demonstrating s
Slide 22: Commodities. Outlook
Commodities. Outlook Geochemistry market share gains globally. Cost-base management to maintain existing margins Sample flows in Geochemistry from major clients still increasing Demand for coal services remains. Business is expected to continue to grow based on focused client service and expan
Slide 23: Industrial. Overview
Industrial. Overview Asset Care Tribology • Total revenue growth of 11.5%, with strong growth • Total revenue growth of 7%, with good in the USA as result of investments in FY19 performance in the main geographies (Australia, North America and Brazil) • Margin reduction driven by change in mix of pr
Slide 24: Industrial. Outlook
Industrial. Outlook Despite headwinds, continue to be well positioned to support mining, O&G, and power generation maintenance programs in Australia. Market to remain highly price sensitive Continue to invest in the expansion of Asset Care and Tribology businesses Lab automation, online monitori
Slide 25: Full Year FY19 Financial Summary
Full Year FY19 Financial Summary FY18** Full Year FY19 ($m) ($m) Full Year Divestment & Restructuring Discontinued Amortisation Statutory Underlying* Underlying* Impairment & other one Operations of Intangibles Results Charges off items Revenue 1,446.9 1,664.8 7.7 – – – 1,672.5 EBITDA 289.3 352.9 (4
Slide 26: Capital Management
Capital Management Capex Dividend $35.5 m increase in Capex mainly Final dividend 11.5 cents per share, up 27.8% focused on growth projects in Life Sciences Full Year underlying payout ratio 60.4% (equipment for new methods, green fields, etc.), and in commodities to support growth Existing
Slide 27: Cash Flow
Cash Flow Full year FY18 FY19 AUD m AUD m Underlying operating profit (EBIT) 216.7 275.5 35.2 Depreciation & Amortisation 72.9 73.3 million EBITDA 289.6 348.8 Cash flow (pre CAPEX) Working capital (16.1) (35.4) Other 7.6 2.9 Cash flow (before CAPEX) 281.1 316.3 CAPEX CAPEX (73.4) (108.9) 108.9 milli
Slide 28: Acquisitions & Organic Growth Projects
Acquisitions & Organic Growth Projects Organic Growth Acquisitions $66 m CAPEX Projects $34 m Felsilab (Italy) Labfor (Brazil) $20 m LIFE SCIENCES EMEA LIFE SCIENCES LA LIFE SCIENCES Truesdail (USA) BioScreen (USA) $10 m LIFE SCIENCES NA COMMODITIES MARSS (Chile) $4 m COMMODITY TRADE & INSPECTION IN
Slide 29: CAPEX by Business
CAPEX by Business in AUD m CAPEX as % of Revenue FY19 FY18 Life Sciences 8.3% 6.5% 70 Commodities 5.0% 4.0% Industrial 4.0% 2.9% TOTAL 6.5% 5.0% 109 31 Life Sciences : Green field and growth projects 8 Commodities: Maintenance and capacity increase Industrial: Automation, expansion to new geog
Slide 30: Debt Metrics
Debt Metrics Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 STATISTICS Gearing Ratio (comfort 45%) 38% 27% 29% 31% 36% Leverage (net debt/ EBITDA; max 3.00) 2.5 1.7 1.9 1.7 1.8 EBITDA interest cover (min 3.75) 9.1 7.7 9.2 11.3 10.9 BALANCE SHEET MEASURES Total Equity (AUD m) 1,228 1,186 1,185 1,122 1,103 Net De
Slide 31: Sustainability Program. 2018-19 Achievements
Sustainability Program. 2018-19 Achievements People Health & Safety Innovation and New Executive Development sessions delivered Safety is a Priority Technology Embracing innovation Equal Pay Pledge Diversity & equality Respecting differences and technology Improved employee satisfaction survey
Slide 32: Right Solutions • Right Partner
Right Solutions • Right Partner www.alsglobal.com Right Solutions • Right Partner