ALS LIMITED — Investor Presentation 2014

May 26, 2014

==> picture [720 x 293] intentionally omitted <==

2013-14 Full Year Result

Investor Presentation May 2014

Greg Kilmister – CEO

Paul McPhee – Group General Manager Energy Division

==> picture [100 x 97] intentionally omitted <==

RIGHT SOLUTION S | RIGHT PARTNER

IMPORTANT NOTICE AND DISCLAIMER

==> picture [45 x 44] intentionally omitted <==

• 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 forwardlooking 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

RIGHT SOLUTIONS | RIGHT PARTNER

Company Profile

==> picture [45 x 44] intentionally omitted <==

ALS Limited (ASX:ALQ) is an ASX 100 company that provides professional technical services to the global Metals & Mining, Life Sciences, Oil & Gas, and Industrial sectors throughout the world. The Reward business is an Australian distributer of non-perishable hospitality supplies.

==> picture [686 x 358] intentionally omitted <==

----- Start of picture text -----

Market
Coal
Capitalisation Energy Division
$3.1 bn
Oil & Gas
Asset Care
People Industrial Division
12,000
Tribology
Life Sciences Division Environmental
Revenue
$1.5 bn
Food - Pharma
Geochemistry
Minerals Division
Electronics
EPS
Metallurgy
45 cents
Consumer Products
Reward Distribution
Inspection
Dividend
39 cents Mine Site Services
----- End of picture text -----

3

RIGHT SOLUTIONS | RIGHT PARTNER

OHS&E

Group LTIFR

LTIFR = Lost Time Injuries per million hours worked

==> picture [341 x 177] intentionally omitted <==

----- Start of picture text -----

14
12
10
8
6
ASX top 100 average = 3.6
4
1.8
2
0
FY FY FY FY FY FY FY FY FY
2006 2007 2008 2009 2010 2011 2012 2013 2014
----- End of picture text -----

Severity rate- Average days lost per LTI

==> picture [340 x 134] intentionally omitted <==

----- Start of picture text -----

20
16.0
15
11.4
9.5
10
5
0
FY 2012 FY 2013 FY 2014
----- End of picture text -----

==> picture [45 x 44] intentionally omitted <==

ALS Group Compliance Portal

PPI Chart

Profile: ALS Limited Financial Year: April 2013 – March 2014 Total Score: 93.25%

Met ric Injury	PPI Met ric Descript ion Total recordable injury frequency	Target Score 5.90	Act ual Score 4.98	PPI Tot al Available 6.25	PPI Achievement 6.25
	rate (TRIFR) for chosen level
Injury	Lost Time Injury Frequency Rate (LTIFR) for chosen level	2.00	1.78	6.25	6.25
Injury	Average days lost per Lost Time	10.00	10.24	6.25	0.00
	Injury (days)
Injury	Near Miss Report Submitted (2 per year)	2.00	842.00	6.25	6.25
Leadership	Number of Presentations of a safety	2.00	3.00	12.50	12.50
	topic to staff (base employees and management)
Leadership	Manager participation in site safety	2.00	2.00	12.50	12.50
	inspections (count)
Program	Close out of incident reports reported on compliance portal (%)	0.90	0.97	12.50	12.50
Program	Close out of Annual Compliance Sign- off Corrective Actions (%)	1.00	0.98	12.50	12.26
Training	New Employees completing	1.00	0.98	12.50	12.24
	induction training including safety
	components as outlined in ALS
	minimum standard (%)
Training	Completion of Compliance Training	1.00	1.02	12.50	12.50
	Sessions on PULSE (%)
Total					93.25

4

RIGHT SOLUTIONS | RIGHT PARTNER

Financial Summary

==> picture [45 x 44] intentionally omitted <==

AUD$mn	FY14 Statutory	Significant Differences1	FY14 Underlying	FY13 Underlying2	Change in Underlying
Revenue 1503.4 0			1503.4	1455.6	+3.3%
EBITDA 325.7 (13.3)			339.0	406.0	-16.5%
Depreciation & Amortisation (83.2) (7.0)			(76.2)	(55.4)	+37.5%
EBIT 242.5 (20.3)			262.8	350.6	-25.0%
Finance Costs (26.8)			(26.8)	(19.6)	+36.7%
Tax Expense (59.1) 2.8			(61.9)	(89.5)	-30.8%
Net Profit After Tax 154.4 (17.5)			171.9	238.3	-27.9%
Basic EPS (cents) 40.7			45.3	69.7	-35.0%

• 1 Acquisition costs, Restructuring and other one-off costs, Amortisation of Intangibles, Divestments and Impairments

• 2 Excluding discontinued operations (Deltrex and Panamex)

5

RIGHT SOLUTIONS | RIGHT PARTNER

Historical Trend – Five Year Journey

==> picture [45 x 44] intentionally omitted <==

Revenue

Underlying After Tax Profit

Underlying Earnings Per Share

==> picture [658 x 287] intentionally omitted <==

----- Start of picture text -----

AUD $m AUD $m AUD
1,600 CAGR 16.1% 1,503 250 238 $0.70 $0.70
$0.66
1,456
1,406 222
1,400
$0.60
200
1,200 1,108 CAGR 23.1% 172 CAGR 14.7%
$0.50
$0.45
1,000
150 $0.41
826 132 $0.40
800
$0.30
100 $0.26
600
75
$0.20
400
50
$0.10
200
0 0 $0.00
FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14 FY10 FY11 FY12 FY13 FY14
----- End of picture text -----

6

RIGHT SOLUTIONS | RIGHT PARTNER

FY14 – Revenue by Region by Division

==> picture [45 x 44] intentionally omitted <==

==> picture [670 x 336] intentionally omitted <==

----- Start of picture text -----

Europe
North America
Middle East
Asia
Africa
South America
Australia
Life Sciences Division
Minerals Division
Energy Division
Industrial Division
Reward Distribution
----- End of picture text -----

7

RIGHT SOLUTIONS | RIGHT PARTNER

Foreign Currency Revenues

==> picture [45 x 44] intentionally omitted <==

47% 21% 15% 5% 3% 3%3%3% AUD 42% USD 22% CAD 14% EURO 6% GBP 7% Krona 3% ZAR 2% Asia 4% FY2014 revenue AUD $1.503 billion
		Average Exchange Rate
		FY2014	FY2013	Change
	USD	0.9235	1.0323	-10.5%
	CAD	0.9776	1.0354	-5.6%
	EURO	0.6880	0.8016	-14.2%
	GBP	0.5796	0.6536	-11.3%
	SEK	6.0287	6.8819	-12.4%
	ZAR	9.3955	8.8238	+6.5%
	SGD	1.1639	1.2806	-9.1%

Note: Krona includes SEK, NOK, DKK & FMM Asia includes HKD, SGD, THB, MYR, IDR, CYN & TWD

Outer annulus FY14, Inner annulus FY13

8

RIGHT SOLUTIONS | RIGHT PARTNER

Revenue Growth - laboratories

==> picture [45 x 44] intentionally omitted <==

ALS (laboratories) Revenue Growth

• Organic Growth -18.0%

• • Acquired Growth +17.5%

• • Currency Impact +4.1%

Reported Growth 3.6%

==> picture [44 x 127] intentionally omitted <==

----- Start of picture text -----

1250
1000
750
500
250
0
Revenue (AUD$mn)
----- End of picture text -----

==> picture [333 x 156] intentionally omitted <==

Revenue Growth YoY

==> picture [546 x 166] intentionally omitted <==

----- Start of picture text -----

Industrial
Energy +100%
Life Sciences
Minerals
-40% -30% -20% -10% 0% 10% 20% 30% 40%
Organic Acquired FX Movement
----- End of picture text -----

9

RIGHT SOLUTIONS | RIGHT PARTNER

Dividend

==> picture [45 x 44] intentionally omitted <==

Full Year Dividend per Share

• Payout ratio 93%

• Franked to 50%

• Dividend Reinvestment Plan retained at 5% discount

==> picture [262 x 299] intentionally omitted <==

----- Start of picture text -----

18% CAGR
AUD
cents
50
40
27
26
30
20
20 15
11
10 19 21 19
13
9
0
FY10 FY11 FY12 FY13 FY14
----- End of picture text -----

10

RIGHT SOLUTIONS | RIGHT PARTNER

CAPEX (excluding land & building purchases) and Depreciation

==> picture [45 x 44] intentionally omitted <==

CAPEX Vs Depreciation & Amortisation[1]

• Capacity CAPEX reduced substantially in line with market conditions

• Replacement CAPEX being maintained for inevitable market upswing

• Research and Development CAPEX being maintained

• Higher near-future CAPEX required in Oil & Gas and Food businesses during the development phase

• Stronger business stream focus on Return on Capital Employed

• Most major (hub) laboratory upgrades now completed allowing footprint for significant future capacity increases

==> picture [388 x 364] intentionally omitted <==

----- Start of picture text -----

CAPEX as a % of D&A
22% 91% 126% 70% 71% 58% 106% 64%
Reservoir Group acquired--
$20
$15
$10
$5
$0
Minerals Life Sciences Industrial Energy
Millions
----- End of picture text -----

• 1 Amortisation does not include amortisation of goodwill

11

RIGHT SOLUTIONS | RIGHT PARTNER

Cash Flow and Funding

	Cash Flow	Cash Flow
Underlying EBITDA	$328mn	-19%
Operating Cash Flow	$346mn	-6%
CAPEX (excl. land & buildings)	$68mn	-16%

==> picture [274 x 274] intentionally omitted <==

----- Start of picture text -----

AUD$m
450
400
350
300
250
200
150
100
50
0
EBITDA Cash EBITDA Cash . EBITDA Cash
Flow Flow Flow
FY12 FY13 FY14
----- End of picture text -----

==> picture [45 x 44] intentionally omitted <==

			Mar-14	Mar-13
	Statistics
	Gearing Ratio	Comfort 45%	33.9%	29.3%
	Leverage (net debt / EBITDA)	Max 3.00	2.2	1.0
	EBITDA interest cover	Min 3.75	12.2	20.7
	Balance Sheet Measures ($ mn)
	Total Equity		1,419	997
	Net debt		729	413

==> picture [318 x 180] intentionally omitted <==

----- Start of picture text -----

AUD$m
300 Debt Maturity
26%
250 23%
21%
21%
200
150
100
6%
50 3%
0
2014 2015 2016 2017 2018 2019 2020 2021 2022
----- End of picture text -----

12

RIGHT SOLUTIONS | RIGHT PARTNER

Employee Numbers - total head count

==> picture [45 x 44] intentionally omitted <==

• Mineral Division head count down by 46% from peak in June 2012…but expertise and management structure retained

14,000

12,000

• Life Sciences Division head count growing as we enter new geographies (South America, United Kingdom) and develop Food/Pharma footprint

• Coal business stream head count down by 38% from peak in September 2012…but underlying capabilities and service coverage maintained

• +1000 staff added due to move into the Oil & Gas sector

==> picture [182 x 169] intentionally omitted <==

Africa Asia Australia Europe Middle East North America South America

10,000

8,000 6,000

4,000

2,000

0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY12 FY12 FY12 FY12 FY13 FY13 FY13 FY13 FY14 FY14 FY14 FY14

Environmental Food/Pharma Consumer Products Geochemistry Metallurgy Inspection Engineering Coal Oil & Gas Asset Care Tribology Reward Distribution

13

RIGHT SOLUTIONS | RIGHT PARTNER

Margin – peer comparison

==> picture [45 x 44] intentionally omitted <==

==> picture [464 x 330] intentionally omitted <==

----- Start of picture text -----

35% 33.4%
31.1%
30%
25% 24.3%
21.9%
20.5%
20% 18.8% 19.0%
16.8% 16.7%
15.7% 15.4%
15%
13.2% 12.9%
10%
5.8%
5%
0%
ALS SGS B.V. Intertek Eurofins Mistras Core Labs
EBIT EBITDA
----- End of picture text -----

Note: FY Dec 13 for all companies excluding ALS (FY Mar 14) and MISTRAS (FY Jun 13) EBIT and EBITDA underlying margins

Data from company reports

14

RIGHT SOLUTIONS | RIGHT PARTNER

ALS journey over the last decade

==> picture [45 x 44] intentionally omitted <==

==> picture [495 x 140] intentionally omitted <==

----- Start of picture text -----

FY2005 FY2009 FY2014
revenue revenue revenue
$448m $951m $1,503m
----- End of picture text -----

==> picture [140 x 137] intentionally omitted <==

Environmental Food/Pharma Consumer Products Geochemistry Metallurgy Inspection Engineering Oil & Gas Coal Asset Care Tribology Reward Distribution Chemical Campbell Brothers Services

==> picture [654 x 220] intentionally omitted <==

----- Start of picture text -----

1,600 Severn Trent BMP 1,600
Laboratories Enterprises
Feb-13 Feb-14
1,400 McCarthys Analytical Columbia Corplab ALS Taiwan 1,400
Feb-07 Laboratory Analytical Laboratories. Jan-14
Services Inc. Services Dec-12
1,200 Campbell Witlab DataChem Dec-10 Nov-11 OilCheck Pty 1,200
Ecochem Brothers Ltd., Nov-07 Oct-08 Panamex Ltd.
Jan-06 Pest Control & Ammtec Ltd. Austpower Pacific Oct-13
1,000 Brothers Ltd.,Campbell ETL Group Washroom Services ACIRL Pty Ltd Oct-07 May-08 IQA PealStreet Ltd. Nov-10 Engineering. Oct-11 Oct-12 AIT 1,000
Major Laundry Jan-06 Jan-07 Dec-09 Campbell Deltrex Oct-13
& Detergent eLab Stavely Brothers PearlStreet Chemicals
800 Brands Caterworld Consulchem Analytical Inc. Services Ecowise Limited Energy Sep-12 Reservoir 800
Oct-04 Jan-06 Nov-06 Aug-07 May-08 Environmental Cleantec Services Group Ltd.
Pty Ltd.. Business Jul-11 Artek Aug-13
600 HospitalityQCC Hospitality QCC Nov-06 Abilab MineralogyJK Tech Microtech Technical Nov-09 Nov-10 Stewart Group Laboratories Aug-12 PSI Inc . 600
Aug-04 Jun-05 Aug-07 Services Ltd. LabMark Jul-11 Aug-13
Pandee Apr-08 Environmental Milana A.S.
400 Services Laboratories PMS Micro Jul-12 EarthData Pty 400
Acquisition Sep-06 May-10 Jun-11 Eclipse Jul-13 Ltd.
200 Divestment Analytica AB Jul-06 Scientific Group Reliance 200
Apr-12 May-13
0 0
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14
----- End of picture text -----

15

RIGHT SOLUTIONS | RIGHT PARTNER

Growth of non-Minerals Divisions

==> picture [45 x 44] intentionally omitted <==

Lab Services Revenue

Lab Services EBITDA

Non-Mineral EBITDA margin

==> picture [628 x 307] intentionally omitted <==

----- Start of picture text -----

1,400 450
21% 21% 24% 20% 24% 23% 25% 25% 24%
400
1,200
350
1,000
300
800
250
200
600
150
400
100
200
50
- -
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14
AUD$ millions
----- End of picture text -----

==> picture [24 x 19] intentionally omitted <==

Life Sciences Energy

==> picture [25 x 19] intentionally omitted <==

Industrial Minerals

The non-Minerals revenue of ALS lab services is now more than ALS’ entire lab services revenue just three years ago

16

RIGHT SOLUTIONS | RIGHT PARTNER

Minerals Division

==> picture [267 x 82] intentionally omitted <==

Revenue (AUD$mn)	Revenue (AUD$mn)			2014	2013	Change	Change
		Revenue		$426mn	$608mn	-30%
		EBITDA		$126mn	$234mn	-46%
		EBIT		$102mn	$212mn	-52%
		EBIT Margin		24.0%	34.9%
		0 100 200 300 400 500 600
	Geochemistry			Metallurgy	Inspection

==> picture [179 x 63] intentionally omitted <==

----- Start of picture text -----

geochemistry
metallurgy
inspection
mine site services
----- End of picture text -----

==> picture [45 x 44] intentionally omitted <==

Overview

• Geochemistry EBIT margin 26.0% for full year

• Rationalization of Hub and Spoke laboratories to protect margin

• Inspection EBIT margin improved from 9.5% to 20.3% YoY

• New metallurgical facility in Santiago (Chile) fully operational

• Joint Venture Inspection business established in Tianjin (China) now fully operational

• Mine Site strategy working

Outlook

• Improved margin performance in Metallurgy and Inspection in FY15

• Geochemical sample flow to be down in H1FY15 pcp before recovering in H2 to be flat pcp for full year

• Increase in market share due to new services and cyclical recovery in H2

• Pricing to remain flat

• Focus on better data management/presentation for clients

• Pipeline of Mine Site opportunities remains strong

17

RIGHT SOLUTIONS | RIGHT PARTNER

Life Sciences Division

==> picture [267 x 83] intentionally omitted <==

	2014	2013	Change
Revenue	$527mn	$454mn	+16%
EBITDA	$124mn	$114mn	+9%
EBIT	$94mn	$90mn	+5%
EBIT Margin	17.9%	19.9%	-200bps

==> picture [284 x 155] intentionally omitted <==

----- Start of picture text -----

600
CAGR 20.3%
500
400
300
200
100
0
FY10 FY11 FY12 FY13 FY14
Asia Australia Europe North America South America
Revenue (AUD$mn)
----- End of picture text -----

==> picture [182 x 63] intentionally omitted <==

----- Start of picture text -----

environmental
food/pharma
electronics
consumer products
----- End of picture text -----

==> picture [45 x 44] intentionally omitted <==

Overview

• Pricing pressure in Australia and Canada

• 6% organic growth in environmental revenue in Europe

• Operational issues in South America fixed

• Centre of Excellence (GLP laboratory) in Edmonton closed

• Exited Taiwan market

• New laboratory in Beijing - China

• New global Food LIMS and client portal developed

• Food/Pharma revenue grew 10% to $57mn

Outlook

• US market to continue improving

• New hub food chemistry lab to open in England in June 2014

• Focus on growing business in Latin America

• Acquisitions in the food sector

• Geographic expansion of environmental business

18

RIGHT SOLUTIONS | RIGHT PARTNER

Energy Division

==> picture [267 x 83] intentionally omitted <==

	2014	2013	Change
Revenue	$248mn	$105mn	+136%
EBITDA	$69.2mn	$36.1mn	+92%
EBIT	$53.5mn	$32.6mn	+64%
EBIT Margin	21.6%	31.1%	-950bps

==> picture [279 x 170] intentionally omitted <==

----- Start of picture text -----

250
200
150
100
50
0
FY10 FY11 FY12 FY13 FY14
Asia Australia Europe
North America South America Africa
Middle East
Revenue (AUD$mn)
----- End of picture text -----

==> picture [45 x 44] intentionally omitted <==

==> picture [123 x 31] intentionally omitted <==

----- Start of picture text -----

coal
oil & gas
----- End of picture text -----

Overview

• Successful acquisition and integration of the Reservoir Group and EarthData

• Operations in 60 countries with 1,650 staff

• Coring – soft in North America in Q4FY14

• Oil & Gas EBITDA 25.3% - weaker than expected

Outlook

• Australian coal market to remain challenging

• Oil & Gas operations to balance exploration Vs production

• Margin improvement in Oil & Gas as integration benefits flow

• Australian coal production and exports expected to grow

• Integration of Oil & Gas service offerings and geographic leverage

19

RIGHT SOLUTIONS | RIGHT PARTNER

Industrial Division

==> picture [267 x 83] intentionally omitted <==

	2014	2013	Change
Revenue	$183mn	$169mn	+8%
EBITDA	$31.6mn	$35.4mn	-11%
EBIT	$26.4mn	$30.7mn	-14%
EBIT Margin	14.4%	18.2%	-380bps

==> picture [279 x 153] intentionally omitted <==

----- Start of picture text -----

200
160
120
80
40
0
FY10 FY11 FY12 FY13 FY14
Australia South America North America
Revenue (AUD$mn)
----- End of picture text -----

==> picture [45 x 44] intentionally omitted <==

==> picture [123 x 31] intentionally omitted <==

----- Start of picture text -----

asset care
tribology
----- End of picture text -----

Overview

• Revenue mix shifted from “outage” to construction

• Australian market price sensitivity impacted margins

• Declining power and welding & fabrication markets - higher margin work

• Significant mobilization costs for LNG projects

• strong recovery in H2

• third LNG project secured in Feb-14

• Demand for in-service plant inspection continued to grow

• Epicor (Asset Care LIMS) rolled out to 90% of sites

• OilCheck and AIT integrations completed

Outlook

• Restructured Asset Care business along market segment lines cf. geographies - creating better focus and client alignment

• Australian market to remain challenging

• Mining sector very cost focused

• Leveraging capabilities of AIT into Australian construction projects

• Tribology to continue growing in line with previous years

20

RIGHT SOLUTIONS | RIGHT PARTNER