ALS LIMITED — Annual Report 2011

May 23, 2011

2011 FULL YEAR

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Unusual Items

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Sale of Cleantec to Ecolab Inc in December 2010 for $45 million resulting in a gain of $8.7 million

Provision for loss incurred on the sale of Reward Distribution operations in New Zealand to The Service Company Limited (completed on 6[th] May 2011) resulting in a loss of $2.8 million

Impairment of goodwill in Reward Distribution’s Australian operations resulting in a write down of $6.6 million After tax effect of Unusual Items was a gain of $146 thousand

Full Year Results – Overview

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excluding unusual items

	Mar 11	Mar 10	Change
Revenue ($mn)	1,108	826	+34%
EBITDA ($mn)	238	157	+52%
Profit before tax ($mn)	186	106	+75%
Net profit after tax ($mn)	132.2	75.3	+76%
Wtd. ave. number of shares	65,139,000	58,347,000	+12%
Earnings per share (c)	203	129	+57%
Full Year Dividend (c)	140	100	+40%
Number of employees Includes full time, part time and casuals	8,312	7,243	+15%
Safety Statistic – LTIFR	2.5	2.6

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March 2011 Full Year Snapshot

pre unusual items

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Average USD:AUD (cents)
77 88 79 86 95
1200 300
1000 250
800 200
600 150
400 100
200 50
0 0
FY07 FY08 FY09 FY10 FY11
Revenue EBITDA NPAT
EBITDA & NPAT (AUD million)
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REVENUE 31[st] March 2011 $1108mn

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34
%
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EBITDA 31[st] March 2011 $238mn

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52
%
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NPAT

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76
%
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31[st] March 2011

$132mn

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	2011 2010 Change
Revenue EBITDA EBIT EBIT Margin	$130mn $152mn -14% $9.8mn $11.5mn -15% $7.4mn $8.2mn -10% 5.7% 5.4% 24bps

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Overview

• Sale of Cleantec business to Ecolab in December 2010 for $45 million resulting in a $8.7 million pretax gain on sale

• Panamex continued to expand its geographical penetration and range of owned brands

• Panamex consolidated market position in Papua New Guinea

• Deltrex sales increased by 4% - operating profit flat

Outlook

• Realigning Deltrex business post the Cleantec sale

• Fluctuating Australian dollar creating uncertainty

• Conversion of full year benefits of geographical expansions

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Overview

• New General Manager put in place in September 2010

• Group now focused on simplifying the business

• $2 million loss in first half reversed to breakeven in second half

• Loss making New Zealand operations divested in May 2011

• $6.6 million write-down of goodwill in the Australian operations

	2011 2010 Change
Revenue EBITDA EBIT EBIT Margin	$124mn $118mn 5% -$0.6mn $5.0mn -112% -$1.8mn $3.4mn -153% -1.5% 2.9% -437bps

Outlook

• Business is now trading positively with operating profit returning to 2008 levels

• Retail outlets rebranded and refocused

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ALS Group
Full Year Snapshot
Average USD:AUD (cents)
REVENUE
77 88 79 86 95
31 [st] March 2011
1000 300
$858mn
900 270
800 240
700 210
EBITDA
600 180
31 [st] March 2011
500 150
$250mn
400 120
300 90
200 60
EBIT
100 30
31 [st] March 2011
0 0
FY07 FY08 FY09 FY10 FY11 $212mn
Revenue EBITDA EBIT
Revenue (AUD million)
EBITDA & EBIT (AUD million)
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53
%
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64
%
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79
%
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ALS Group Revenue Performance

ALS Revenue by Region FY10 & FY11

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Reported Growth 53%
900
800
700
600
Constant Currency
500
Growth 59%
400
300
200
100
0
FY 2010 Organic Acquired FX FY 2011
Movement
ALS Revenue AUD $million
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37%
46%
6%
6%
4%
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5%
5%
32%
37%
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Australia
Asia
South America
North America
Africa
Europe
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ALS Revenue by Division
FY10 & FY11
8% [4% ]
5% Minerals
11%
13% 4% 36% 39% Environmental
Industrial
Coal
44% Tribology
36%
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ALS Group Performance

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EBIT Margin (Incl ALS OH)

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40%
35%
30%
25%
FY 2010
20%
FY 2011
15%
10%
5%
0%
Minerals Environmental Coal Tribology Industrial
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Revenue Growth FY11 Vs FY10

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Industrial (March Qtr)
Tribology
Coal
Environmental
Minerals
-20% 0% 20% 40% 60% 80%
Organic Acquired FX Movement
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	2011 2010 Change
Revenue EBITDA EBIT EBIT Margin	$334mn $205mn 63% $127mn $68mn 87% $112mn $53mn 111% 33.4% 26.0% 740bps

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Overview

• Global sample flows increased by 55%

• Increases across all regions and all commodities

• Hub & spoke model allowed quick response to rapid increase in demand

• Acquisition of Ammtec strategically important

• Nov10 to Mar11 revenues of $30mn

• Focus on increasing capacity ahead of demand

• New long-term strategy put in place – broad based technical service provider

Outlook

• Favourable market conditions for the next few years

• • Globalisation of metallurgical services

• Major new laboratory capacity in Johannesburg, Santiago, Antofagasta, Perth, Burkina Faso, Adelaide (metallurgical), Vancouver (metallurgical)

• Focus on value added services to clients

• Core photography

• Data modeling

• Enhanced geochemical packages

• Transparent QC client tools

• Robotics in metallurgical business

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	2011 2010 Change
Revenue EBITDA EBIT EBIT Margin	$308mn $245mn 26% $82mn $59mn 39% $66mn $44mn 50% 21.5% 17.9% 361bps

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Overview

• Strong demand in USA, Asia and Scandinavia

• Solid margin improvement across all regions

• Successful integration of Ecowise

• Awarded Seqwater contract in Queensland

• New high end technologies (LCMSMS) further rolled out

• New 4,000 m[2] facility developed in Bangkok

• Successful acquisition of ALSI in the USA

Outlook

• Next generation LIMS to go live

• Canadian market to remain challenging

• Focus on regional growth in Europe

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	2011 2010 Change*
Revenue EBITDA EBIT EBIT Margin	$112mn $20mn $15.3mn $1.9mn $12.6mn $1.3mn 11.3% 6.6% 470bps

• 2010 results are for Jan – Mar quarter

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Overview

• Strong margin growth

• “Asset Care” model rolled out

• Advanced Inspection Group established

• New premises in Perth

• Roma office established

• Exited non-profitable market sectors

• Collie coal laboratory transitioned to Coal Division

Outlook

• Consolidation of Sydney sites

• Activity in Queensland and Western Australia to be driven by resource sector CAPEX

• Continued investment in “high end” automated inspection equipment

• Focus on power, resources and infrastructure markets

• Recruitment of experienced engineers and technicians remains a challenge

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	2011 2010 Change
Revenue EBITDA EBIT EBIT Margin	$73mn $62mn 18% $19.9mn $17.2mn 16% $17.2mn $15.0mn 15% 23.5% 24.3% -86bps

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Overview

• Australia very strong but impacted by Queensland floods

• Weak demand in South Africa

• New Brisbane site acquired

Outlook

• Demand in South Africa to improve

• North America to remain challenging

• Demand in Australia to pick up after mid-year

• New sites being developed in Emerald and Mackay

• • New LIMS to be fully implemented

• Automation opportunities

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	2011 2010 Change
Revenue EBITDA EBIT EBIT Margin	$30mn $30mn 2% $5.3mn $5.8mn -9% $4.0mn $4.6mn -13% 13.2% 15.6% -235bps

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Overview

• Strong performance in Australia and South America

• • North America disappointing following business gains in previous year

• LIMS fully implemented in North America

• A number of global service agreements put in place

Outlook

• Business environment to remain challenging in North America

• Margin improvement in North America expected following business simplification

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0 50 100 150 200 250
		Funding Strength						PP AD
			Australian Bank Facilities $AUD		USPP $USD	USPP $USD	USPP $CAD	PP AD
		million	Nov-11	May-12	Dec-17	Dec-20	Dec -20
		Committed Drawn Mar 11	120 39	40 0	30 30	55 55	65 65
		Available	81	40	0	0	0
		0% 10% 20% 30% 40% 50% 2006 2007 2008 2009 2010 2011 Gearing Net Debt Gearing 11.9%
		Net Debt Gearing 11.9%

12mths Ending March

Note: Gearing defined as Net Debt as a percentage of Net Debt plus Equity

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