2017 morgans conference final - alsglobal.com · richard stephens –chief financial officer, als...
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Right Solutions • Right Partner||
Right Solutions • Right Partner
www.alsglobal.com
Morgans Queensland Conference 2017
Brisbane
11 October 2017
Richard Stephens – Chief Financial Officer, ALS Limited
Right Solutions • Right Partner||
• 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 of this presentation in jurisdictions outside Australia may be restricted by law, and you should observe any such
restrictions.
• This presentation is not, and nothing in it should be construed as, an offer, invitation or recommendation in respect of securities, or an
offer, invitation or recommendation to sell, or a solicitation of an offer to buy, securities in any jurisdiction. Neither this document nor
anything in it shall form the basis of any contract or commitment. This presentation is not intended to be relied upon as advice to
investors or potential investors and does not take into account the investment objectives, financial situation or needs of any investor.
All investors should consider such factors in consultation with a professional advisor of their choosing when deciding if an investment
is appropriate.
• The Company has prepared this presentation based on information available to it, including information derived from public sources
that have not been independently verified. No representation or warranty, express or implied, is provided in relation to the fairness,
accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein.
• This presentation includes forward-looking statements within the meaning of securities laws. Any forward-looking statements involve
known and unknown risks and uncertainties, many of which are outside the control of the Company and its representatives. Forward-
looking statements may also be based on estimates and assumptions with respect to future business decisions, which are subject to
change. Any statements, assumptions, opinions or conclusions as to future matters may prove to be incorrect, and actual results,
performance or achievement may vary materially from any projections and forward-looking statements.
• Due care and attention should be undertaken when considering and analysing the financial performance of the Company.
• All references to dollars are to Australian currency unless otherwise stated.
2
IMPORTANT NOTICE AND DISCLAIMER
2017 Morgans Conference
Right Solutions • Right Partner||
Grow scalable
businesses
through organic
and geographic
expansion
Invest in
New Core
(Testing)
Business
Streams
Improve
Current
Performance
Divest or close
all non-core
(non-testing)
Businesses
Business stream strategy
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Vision 2022: Our Everest (excluding significant acquisitions)
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Assumes no material adverse change in market conditions
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Strategic priorities
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Brand recognition
Operational excellence
Client focused
Leverage services across business streams
Target: non-resource
business to be > 50%
of the company EBIT at
the top of the mineral
cycle through:
Business
service
Delivering
infrastructure to
support the business
Existing market share growth
New business streams
Geographic expansion
Strategic business development
Integrated business services across all business streams
Technology and LIMS
Talent and staff development
Transparency and communication
Balanced
portfolio
One ALS
Strategic priorities Focus (Testing as our Core)
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Acquisitions completed during FY2018 to date
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Total investment
$30 m
FOOD TRIBOLOGY PHARMACEUTICAL
Marshfield (USA) Oilcheck (Brazil) Mikrolab / Toxicon (Sweden)*
* completed since end of September half-year
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USD86%
CAD
14%
Debt Denomination
USD,
119
AUD, 62
EUR, 9
GBP, 11
Other, 48
Cash Holdings AUD$m
Debt Metrics – March 2017
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Mar-13 Mar-14 Mar-15 Mar-16 Mar-17
STATISTICS
Gearing Ratio (comfort 45%) 29% 34% 38% 27% 29%
Leverage (net debt/ EBITDA; max 3.00) 1.0 2.2 2.5 1.7 2.1
EBITDA interest cover (min 3.75) 21.0 12.2 9.1 7.7 8.5
BALANCE SHEET MEASURES
Total Equity (AUD mn) 997 1419 1228 1186 1185
Net Debt (AUD mn) 400 722 762 438 485
17.2%
29.5%
23.6%
29.7%
0
50
100
150
200
250
300
350
2016 2017 2018 2019 2020 2021 2022
AUD$
million
DEBT MATURITY & CAPACITY PROFILE
as at 31 March 2017
Long Term Debt - USPP Notes
Bank Debt - Undrawn Capacity
% Total Debt Capacity
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Debt Facilities – September 2017 following bank debt re-financing
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5.0% 6.6%
31.2%
25.8%
31.4%
0
50
100
150
200
250
300
350
2016 2017 2018 2019 2020 2021 2022
AUD$
million
DEBT MATURITY & CAPACITY PROFILE
as at 30 September 2017
Long Term Debt - USPP
Notes
Bank Debt - Undrawn
Capacity
% Total Debt Capacity
USD86%
CAD
14%
Debt Denomination:
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Cash flow FY17
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Full year FY16 AUD mn FY17 AUD mn
Underlying operating profit (EBIT) 177.9 171.6
Depreciation & Amortisation 86.4 78.8
Working capital (6.3) 13.8
CAPEX (73.7) (58.7)
Other 5.1 3.5
Free cash flow 189.4 209.0
Acquisitions (22.8) (106.4)
Dividends paid (72.0) (58.0)
Borrowings - movement (183.2) -
Equity Issued 317.0 -
Interest and Tax (73.5) (68.3)
Restructuring costs (13.9) (19.1)
Net increase/(decrease) in cash 141.0 (42.8)
Opening net cash 163.0 297.9
Effect of FX on cash held (6.1) (6.2)
Closing net cash 297.9 248.9
Analysis includes both continuing and discontinuing operations
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Full Year FY17 Financial summary
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Full Year
FY16 ($mn) Full Year FY17 ($mn)
Underlying* Underlying*Discontinued
Operations
Impairment
Charges
Restructuring &
other one off items
Amortisation of
Intangibles
Statutory
Results
Revenue 1,239.0 1,272.3 93.3 - - - 1,365.6
EBITDA 258.0 253.1 (2.7) - (19.1) - 231.3
Depreciation & amortisation (69.1) (67.0) (11.8) - - (1.5) (80.3)
EBIT 188.9 186.1 (14.5) - (19.1) (1.5) 151.0
Interest expense (34.5) (27.3) - - - - (27.3)
Tax expense (45.0) (44.9) 0.2 - 3.8 - (40.9)
Non-controlling interests (1.0) (1.2) - - - - (1.2)
NPAT 108.4 112.7 (14.3) - (15.3) (1.5) 81.6
EPS (basic – cents per share) 23.7 22.4 16.2
Dividend (cents per share) 13.5 13.5
* continuing operations
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Geochemical markets – strong recovery maintaining momentum
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0
3
6
9
12
15
18
21
24
Jan-06
Apr-06
Jul-06
Oct-0
6
Jan-07
Apr-07
Jul-07
Oct-0
7
Jan-08
Apr-08
Jul-08
Oct-0
8
Jan-09
Apr-09
Jul-09
Oct-0
9
Jan-10
Apr-10
Jul-10
Oct-1
0
Jan-11
Apr-11
Jul-11
Oct-1
1
Jan-12
Apr-12
Jul-12
Oct-1
2
Jan-13
Apr-13
Jul-13
Oct-1
3
Jan-14
Apr-14
Jul-14
Oct-1
4
Jan-15
Apr-15
Jul-15
Oct-1
5
Jan-16
Apr-16
Jul-16
Oct-1
6
Jan-17
Apr-17
Jul-17
Oct-1
7
Glo
bal Exp
lo
ration
Sp
en
d U
S$
bn
Relative G
old
Price in
U
SD
Averag
e W
eekly Sam
ple Flo
w
Week
ALS Global Mineral Sample Flow
(twelve month running average)
201420092006 2007 20102008 2011 2012 2013 2015 2016 2017
Q1FY18
Samples
+39%
pcp
Revenue
+33%
pcp
EBIT
+69%
pcp
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Jan-06
Apr-06
Jul-06
Oct-0
6
Jan-07
Apr-07
Jul-07
Oct-0
7
Jan-08
Apr-08
Jul-08
Oct-0
8
Jan-09
Apr-09
Jul-09
Oct-0
9
Jan-10
Apr-10
Jul-10
Oct-1
0
Jan-11
Apr-11
Jul-11
Oct-1
1
Jan-12
Apr-12
Jul-12
Oct-1
2
Jan-13
Apr-13
Jul-13
Oct-1
3
Jan-14
Apr-14
Jul-14
Oct-1
4
Jan-15
Apr-15
Jul-15
Oct-1
5
Jan-16
Apr-16
Jul-16
Oct-1
6
Jan-17
Apr-17
Jul-17
Oct-1
7
DELT
A (last 2
w
eeks sam
ple flo
w
Versu
s sam
e 2
w
eeks last year)
Week
201420092006 2007 20102008 2011 2012 2013 2015 2016 2017
ALS Global Mineral Sample Flow
(two week growth trend)
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Geochemical markets – junior / intermediate capital raisings, gold drilling
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Gold Exploration Drilling Activity
distribution by region
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Margin Strong at the Bottom of the Commodities Cycle
EBITDA Margin for Core Labs, SGS, Intertek,
Bureau Veritas, Eurofins, Applus, & Exova is for
previous Calendar Year and Mistras year ending
May previous year.
ALS EBITDA includes all Oil & Gas operations.
EBITDA is underlying EBITDA for all companies.
6%
12%
18%
24%
30%
36%
0
300
600
900
1,200
1,500
2014 2015 2016 2017
EBITDA Margin
ALS R
even
ue A
UD
$ m
illio
n
ALS Financial Year Ending March
ALS
Core Labs
SGS
Bureau Veritas
Intertek
Eurofins
Mistras
Applus
Exova
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12
8
6
4
2.4
2.8
3
2.3
1.8
2.1
1.2
1.1
0 5 10 15
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Group LTIFR
(as at March 31)
Safety Performance
Key Performance Indicators
• ALS Group LTIFR of 1.1 is a historical all time low.
• Overall score of 90% for PPI Scorecard
• 97% close out of incident report corrective actions
across all divisions
• 100% of all employee safety training completed
Historical
Record
Low
Injury
Rates
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Final H2FY17 Dividend
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9
13
1921
19
11
7.55.5
11
15
26
27
20
10
68
0
10
20
30
40
50
FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17
AUD
cents
Interim Dividend Final Dividend
H2FY17 Dividend
• 8.0 cps
• Payout ratio 60% (full year)
• Franked to 40%
• Paid on 3 July 2017
• Dividend Reinvestment
Plan