ALS LIMITED — AGM Information 2017

Jul 19, 2017

Greg Kilmister Managing Director ALS Limited

Annual General Meeting 10:00am on 20 July 2017

Thank you Bruce.

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Ladies and gentlemen.

This is the thirteenth opportunity that I have had to address this company’s AGM as CEO. Apart from a slight hiccup caused by the GFC, the first nine of those addresses were reporting on a company that showed consistent high growth year on year. The last three addresses have been in a very different environment where our company profits were declining as we dealt with the steepest downturn in resources related activity that we had seen in many decades; with metal, coal, oil, and iron ore prices all cycling down concurrently. In the year under review, we have seen profits once again start to increase.

The measure of a great company is not about how it fares in good times but rather how it navigates through more challenging times. ALS has weathered that resources downturn extremely well. We continued to diversify our business streams into non-cyclical markets whilst maintaining our capabilities, assets and geographic footprint in the cyclical resources markets to take full advantage of the inevitable upturn in the exploration and mine development cycle. In the financial year just completed, we saw the

commodity cycle turn to growth, and I expect we will see that growth maintained for the next four years; although none of us has the perfect crystal ball in forecasting future market trends.

The 2017 financial year was an improvement on the previous year and I expect that we will return to continuing growth in line with what we saw in the first nine years of my time as CEO of this company. That growth is not just a reflection on the quality of our assets and systems but rather on the people and culture within ALS. ALS is seen by many as the most admired TIC company in the world and that is a reflection of the strong culture that has been built over the last four decades. A culture that is unique and difficult to replicate. A culture committed to the core values of the company and a culture that is real and embraced by all our 14,160 staff around the world. A culture that is the heart of our past and future success.

Today I will make some general comments in regard to the performance of the individual business streams of ALS in the year under review; including commentary on the performance of our commodities businesses in the first quarter of this new financial year. I will also provide an update on the sale of the non-laboratory oil and gas businesses and of course say a few words about our incoming CEO, Raj Naran. Unlike previous years I will keep this address relatively short as I am sure shareholders would prefer to hear from Raj and his vision for the future of this company.

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The year under review was a watershed year for the company. We saw significantly improved market conditions for the geochemistry business; an improving market environment for the metallurgical business; stable conditions in the mineral inspection and coal businesses; good growth in our

developing food safety footprint; and a solid performance from the asset care and tribology businesses.

Details on the performance of the individual business streams in the last financial year are in the annual report and covered in the investor presentation released in late May. I will not reiterate that detail now as I am sure shareholders have reviewed both of those documents, but will be happy to elaborate on any parts of the businesses during question time towards the end of this meeting.

In his address, Raj Naran will cover off on the performance of our Life Sciences businesses last year as well as current operating conditions.

I do however want to provide a further update on our commodities businesses as I know this is a focus for shareholders and analysts at this time.

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The growth in our geochemistry business, which is a bellwether for global exploration, has continued at a pace consistent with what we have been reporting for the last 12 months. I draw your attention to the updated charts on the slide on the screen. In the first quarter of the new financial year we have seen pcp sample volume growth of 39%. We have seen revenue growth of 33%, and more importantly operating profit growth of 69% as we benefit from the leverage our hub and spoke model brings to the business. We are the global leader in this sector and have continued to increase our market share.

In the first quarter, our metallurgy business, whilst still struggling with depressed pricing, saw revenue growth of 13% and an operating profit margin of 7% compared to an operating loss in the first quarter of the previous year. This is a positive and expected development and further evidence of a commodities recovery.

Our coal and mineral inspection businesses are down slightly on the first quarter last year as markets remain challenging, but we do expect a flow through of improved operating and market conditions as we progress through the year.

As announced earlier this week, we have signed a sale agreement with Madison Industries for the sale of the non-laboratory oil and gas businesses for AUD109 million. The sale is scheduled to settle on the 31[st] July and will result in a small capital gain once fees are paid. This is a good outcome for ALS although quite obviously our strategy of entering the oil and gas sector as a broad technical service provider was a failure. ALS has learnt some hard lessons from that failure and as Raj will elaborate shortly, that experience has fed into the new strategic direction for the company.

We are keeping the oil and gas laboratory assets as that business stream is well aligned to ALS’ strengths and that market remains a significant potential market for us globally. The oil and gas laboratory business is a greenfield start-up for ALS and whilst it made an operating loss of $6 million last year is budgeted to make a small operating profit this year.

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Two years ago I advised you that ALS in partnership with British Telecom was building a new state of the art global IT network. That project has now just completed and provides the infrastructure to support the development of the company in a digital world for many years to come. This is an important building block in providing a strong foundation for the future.

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The company’s Balance Sheet is very strong and provides significant flexibility. Net debt at the end of the financial year was $485 million, with all borrowings in USPP notes at a relatively low average interest rate of 3.83%.

Our cash conversion last year was also very strong at 105% as a stronger focus was placed on debtor management. Total CAPEX expenditure in the year was relatively low at $59 million; being approximately $30 million in maintenance CAPEX and $29 million in capacity and new services CAPEX mainly in the Life Sciences business streams. I expect that CAPEX in the current year will revert to a more normal level of $70 million as we ramp capacity in the commodity exposed business streams and accelerate the development of the Food Safety and Pharmaceutical businesses. ALS invested $106 million in acquisitions during the year.

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In his address, the Chairman provided an overview of our safety performance last year. Safety is a journey and during the year we made further progress on that journey of ensuring safety is embedded in the thinking and behaviour of every single employee. Investment in training and creating a safety focus is being recognised by clients and is generating a safety record we can take some comfort in.

Safety is at the very centre of ALS’ Core Values and I would once again acknowledge Michael Burcham and his small but dedicated global team who steer us on that safety journey and ensure safety is part of our DNA and not just a slogan or poster on a wall.

Hand in hand with safety is ALS’s commitment to social responsibility and sustainability. Whether that be reducing waste, reducing our environmental footprint, reducing energy consumption, supporting local communities or just participating in local activities, ALS strives to be a good corporate citizen in every region of the world in which we operate.

This is important to clients and local communities, but more so to our own staff. If we want to attract the very best and engender loyalty from staff then we need to ensure they are proud to be associated with ALS. It is very important to staff that ALS behaves in a socially responsible manner; consistently and globally.

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This brings me to my retirement because as you know at the conclusion of this meeting I officially retire as Managing Director and CEO of this great company. In my 36 years with the company I have seen ALS grow from 38 staff and a single laboratory here in Brisbane to a global Testing Inspection and Certification company with more than 13,000 staff and operations in 65 countries. I have seen Campbell Brothers Limited change from an Australian diversified industrial outside of the ASX300 into ALS Limited, a focused global leader in providing testing services and a proud ASX100 company. It has been an amazing journey and one that I have been blessed to be part of and to lead for many years.

But this company is all about the future and it is time to pass the baton to someone with fresher legs. I had made a commitment to the Board two years ago that I would not retire until we had seen the resources cycle turn, as I believed a new CEO needed to come into the role when markets were positive and growing so that he or she was provided with an opportunity to focus on positive initiatives and not be consumed with having to deal with overly challenging negative market activity and the criticism which often then flows. Certainly, today we are in a much more positive market environment.

Secondly it was important to me that the incoming CEO was an internal appointment and I am very pleased that Raj Naran is the new CEO of ALS. Raj has ALS DNA flowing through his veins. He understands the importance of the ALS culture in ensuring the company builds on the successes of the past, and he appreciates and embraces the power of the ALS brand and what it stands for; quality, integrity, innovation, and an undying commitment to client service. Whilst we can be rightly proud of our achievements over the last few decades, I have no doubt that the ALS story is just unfolding. The next

chapter, under Raj’s leadership and with a truly first-class executive and management team around him, will far exceed what has been achieved to date. I feel very comfortable that your company is in safe, capable, and committed hands. I wish Raj well in the knowledge that I will observe with pride what he will achieve for the company over the coming years.

In closing I would like to acknowledge the support and loyalty I have received through my career from the staff of ALS; especially over more recent years from the corporate staff here in Brisbane. The corporate staff’s efforts do not always get the same recognition and kudos in ALS as the higher profile operational staff but they are just as important to the smooth and effective running of the company. Would all ALS staff present here at this meeting please stand so that you can be acknowledged by the shareholders. I am in no doubt that in my retirement I will miss the camaraderie and intellectual stimulation of such a talented and interesting group.

On a more personal note I would also like to acknowledge the support and encouragement of my wife and family throughout my entire working career.

Thank you to the past and present directors of ALS for your support and counsel over the years and more importantly to shareholders for your kind words, encouragement and at times patience over the last 13 years.

Thank you.