ALS LIMITED — Investor Presentation 2015

Jan 19, 2015

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

Europe Roadshow

January 2015

All financials are in Australian dollars unless otherwise noted

==> picture [76 x 74] intentionally omitted <==

1

RIGHT SOLUTIONS · RIGHT PARTNER

Important notice and disclaimer

==> picture [42 x 41] 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 may include 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

RIGHT SOLUTIONS · RIGHT PARTNER

Company Profile

==> picture [42 x 41] 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. By Market Capitalisation, ALS is the 5[th] largest TIC company in the world and has a market leadership position in many of its end markets.

==> picture [694 x 358] intentionally omitted <==

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

MANAGEMENT STRUCTURE CLIENT FACING BUSINESSES
Market
Capitalisation Coal
$2.1 bn Energy Division
Oil & Gas
People
Asset Care
12,000
Industrial Division
Environmental Tribology
Revenue
Food - Pharma
$1.5 bn
Life Sciences Division
Electronics Geochemistry
Countries
+60 Consumer Products Metallurgy
Minerals Division
Inspection
Operating
Sites
+350 Mine Site Services
----- End of picture text -----

3

RIGHT SOLUTIONS · RIGHT PARTNER

September 2014 Half Year Summary

==> picture [42 x 41] intentionally omitted <==

	H1 FY14 ($mn)	H1 FY14 ($mn)	H1 FY15 ($mn)	H1 FY15 ($mn)	H1 FY15 ($mn)	H1 FY15 ($mn)
half year	Underlying1		Underlying1	Discontinued Operations & Impairment Restructuring Costs		Amortisation of Intangibles
Revenue	684.6		710.3		58.8 - -
EBITDA	181.4		149.8		(0.6) (2.2) -
Depreciation & amortisation	(34.6)		(40.8)		(0.3) - (6.0)
EBIT	146.8		109.0		(0.9) (2.2) (6.0)
Interest expense	(9.7)		(16.6)		- - -
Tax expense	(36.3)		(24.7)		- 0.7 -
Non-controlling interests	(0.8)		(0.7)		(0.2) - -
NPAT	100.0		67.0		(1.1) (1.5) (6.0)
EPS (basic – cents per share)	27.7		16.9
Dividend (cents per share)	19		11

1 Excludes Reward Distribution which was divested on 31st October 2014

4

RIGHT SOLUTIONS · RIGHT PARTNER

Third Quarter (Dec-14) Performance

==> picture [42 x 41] intentionally omitted <==

– ASX Release 24[th] November 2014

“After tax group net profit for the December 2014 quarter is expected to be approximately $40 million. This represents an improvement in performance over each of the first two quarters ($30.0 million and $37.7 million) of the current financial year.”

==> picture [464 x 288] intentionally omitted <==

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

60
Q3 – outperformed
guidance by 15%
50
40
30
20
10
0
Q1 (Jun) Q2 (Sep) Q3 (Dec) Q4 (Mar)
FY 2014 FY 2015 FY 2015 guidance
Underlying NPAT ($ million)
----- End of picture text -----

5

RIGHT SOLUTIONS · RIGHT PARTNER

Divisional Performance Third Quarter (underlying)

==> picture [42 x 41] intentionally omitted <==

	Energy Division Q3 FY15 Q3 FY14 Change Revenue $82mn $84mn -2% EBITDA $18mn $22mn -18% EBIT $12mn $17mn -25% EBIT Margin 15.0% 19.7% -466 bps Life Sciences Division Q3 FY15 Q3 FY14 Change Revenue $148mn $141mn +5% EBITDA $38mn $34mn +13% EBIT $31mn $26mn +15% EBIT Margin 20.6% 18.8% +176 bps	Energy Division Q3 FY15 Q3 FY14 Change Revenue $82mn $84mn -2% EBITDA $18mn $22mn -18% EBIT $12mn $17mn -25% EBIT Margin 15.0% 19.7% -466 bps Life Sciences Division Q3 FY15 Q3 FY14 Change Revenue $148mn $141mn +5% EBITDA $38mn $34mn +13% EBIT $31mn $26mn +15% EBIT Margin 20.6% 18.8% +176 bps	Energy Division Q3 FY15 Q3 FY14 Change Revenue $82mn $84mn -2% EBITDA $18mn $22mn -18% EBIT $12mn $17mn -25% EBIT Margin 15.0% 19.7% -466 bps Life Sciences Division Q3 FY15 Q3 FY14 Change Revenue $148mn $141mn +5% EBITDA $38mn $34mn +13% EBIT $31mn $26mn +15% EBIT Margin 20.6% 18.8% +176 bps	Energy Division Q3 FY15 Q3 FY14 Change Revenue $82mn $84mn -2% EBITDA $18mn $22mn -18% EBIT $12mn $17mn -25% EBIT Margin 15.0% 19.7% -466 bps Life Sciences Division Q3 FY15 Q3 FY14 Change Revenue $148mn $141mn +5% EBITDA $38mn $34mn +13% EBIT $31mn $26mn +15% EBIT Margin 20.6% 18.8% +176 bps	Minerals Division Q3 FY15 Q3 FY14 Change Revenue $99mn $101mn -2% EBITDA $30mn $31mn -5% EBIT $24mn $25mn -3% EBIT Margin 24.6% 24.9% -35 bps Industrial Division Q3 FY15 Q3 FY14 Change Revenue $46mn $47mn -3% EBITDA $8.1mn $7.6mn +7% EBIT $6.6mn $6.2mn +7% EBIT Margin 14.4% 13.0% +136 bps
		Q3 FY15	Q3 FY14	Change
	Revenue	$82mn	$84mn	-2%
	EBITDA	$18mn	$22mn	-18%
	EBIT	$12mn	$17mn	-25%
	EBIT Margin	15.0%	19.7%	-466 bps

6

RIGHT SOLUTIONS · RIGHT PARTNER

Revenue by Region by Division (9mths FY2015)

==> picture [42 x 41] intentionally omitted <==

==> picture [676 x 387] intentionally omitted <==

7

RIGHT SOLUTIONS · RIGHT PARTNER

Laboratory revenue - journey over the last decade?

==> picture [42 x 41] intentionally omitted <==

Revenue has approximately tripled every five years with significant diversification of market sectors

FY2015(f) revenue $1400mn

FY2005

==> picture [90 x 124] intentionally omitted <==

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

revenue
$156mn
30%
66%
----- End of picture text -----

==> picture [49 x 35] intentionally omitted <==

FY2010

revenue $565mn

==> picture [179 x 160] intentionally omitted <==

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

43%
36%
----- End of picture text -----

==> picture [48 x 35] intentionally omitted <==

==> picture [292 x 282] intentionally omitted <==

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

34%
19%
----- End of picture text -----

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

8

RIGHT SOLUTIONS · RIGHT PARTNER

Laboratory revenue - journey over the last decade?

==> picture [42 x 41] intentionally omitted <==

Significant geographical diversification

FY2015(f) revenue $1400mn

FY2005

revenue $156mn

==> picture [93 x 85] intentionally omitted <==

==> picture [48 x 35] intentionally omitted <==

FY2010 revenue $565mn

==> picture [189 x 160] intentionally omitted <==

==> picture [48 x 35] intentionally omitted <==

==> picture [288 x 281] intentionally omitted <==

Africa Asia Australia Europe Middle East North America South America

9

RIGHT SOLUTIONS · RIGHT PARTNER

ALS Revenue History

==> picture [42 x 41] intentionally omitted <==

==> picture [618 x 308] intentionally omitted <==

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

Reservoir Group acquired--
1,400
1,200
1,000
800 GFC
600
PearlStreet Ltd acquired--
400
200
-
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15(F)
AUD$ millions
----- End of picture text -----

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

Life Sciences Energy

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

Industrial Minerals

10

RIGHT SOLUTIONS | RIGHT PARTNER

RIGHT SOLUTIONS · RIGHT PARTNER

Global Location Map – genuine global footprint

==> picture [42 x 41] intentionally omitted <==

==> picture [708 x 424] intentionally omitted <==

11

RIGHT SOLUTIONS · RIGHT PARTNER

CAPEX and Depreciation

==> picture [42 x 41] intentionally omitted <==

==> picture [566 x 305] intentionally omitted <==

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

25
CAPEX remains tightly controlled in line with current operating environment
BUT
assets maintained in prime condition for inevitable market upswing
20
15
10
5
0
Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14
Quarter
CAPEX ($ million)
----- End of picture text -----

Approved CAPEX (excl. property purchases) Depreciation & Amortisation

12

RIGHT SOLUTIONS · RIGHT PARTNER

Cash Flow and Funding

==> picture [42 x 41] intentionally omitted <==

	Sep-14	Sep-13
Cash Flow
EBITDA(excl Reward write-down )	$149mn	$179mn
Operating cash flow	$133mn	$147mn
Conversion	89%	82%

		**Oct-14 ***	Mar-14
Funding statistics
Gearing ratio	Comfort 45%	34.2%	33.9%
Leverage (net debt / EBITDA)	Max 3.00	2.5	2.2
EBITDA interest cover	Min 3.75	9.0	12.2

• At 31 October 2014 following sale of Reward Distribution

Debt Maturity

==> picture [495 x 235] intentionally omitted <==

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

AUD$m
350 30%
26%
23%
300
21%
250
200
150
100
50
0
2014 2015 2016 2017 2018 2019 2020 2021 2022
Bank Debt - Drawn Bank Debt - Undrawn USPP Notes
----- End of picture text -----

13

RIGHT SOLUTIONS · RIGHT PARTNER

Life Sciences Division* – market overview

==> picture [42 x 41] intentionally omitted <==

==> picture [143 x 18] intentionally omitted <==

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

Environmental
----- End of picture text -----

Food

==> picture [178 x 18] intentionally omitted <==

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

Pharma & Biotech
----- End of picture text -----

==> picture [208 x 25] intentionally omitted <==

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

global market estimated at US$ 5bn
----- End of picture text -----

==> picture [208 x 85] intentionally omitted <==

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

ALS - global market leader
non-cyclical market linked to GDP
growth
----- End of picture text -----

==> picture [81 x 9] intentionally omitted <==

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

services – full range
----- End of picture text -----

• •waters – potable and marine

• •soils and sediments

• •air

• •waste characterisation – liquids and solids

==> picture [209 x 24] intentionally omitted <==

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

global market estimated at US$ 4bn
----- End of picture text -----

==> picture [209 x 111] intentionally omitted <==

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

ALS – mid sized player - but in the top 10
globally
non-cyclical market but seasonal –
fragmented laboratory market
services – full range
----- End of picture text -----

• •microbiology and pathogens

• •contaminants

• •nutritional, vitamins and additives

• •consultancy and label compliance

==> picture [209 x 115] intentionally omitted <==

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

Global market estimated at US$ 6bn
ALS – small player
non-cyclical market
----- End of picture text -----

==> picture [96 x 10] intentionally omitted <==

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

services – limited range
----- End of picture text -----

• •batch release testing

• •intermediate and raw material testing

• •stability studies

• •method validation – transfer - verification

market drivers

• •growing middle class in developing countries

• •heightened awareness of health impact from the environment

• •underpinned by regulatory requirements

• •outsourcing

market drivers

• •growing international trade in fresh food

• •heightened awareness of health impact

• •growth in pre-packaged foods

• •private labelling – brand protection

• •outsourcing

• •legislation

==> picture [60 x 8] intentionally omitted <==

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

market drivers
----- End of picture text -----

• •nutraceuticals

• •generic drugs

• •outsourcing

• •legislation

Global Market Size are Company estimate

• for ALS also includes the Electronics and Consumer Products businesses

14

RIGHT SOLUTIONS · RIGHT PARTNER

Life Sciences Division

==> picture [42 x 41] intentionally omitted <==

Life Sciences Revenue

==> picture [329 x 271] intentionally omitted <==

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

600 30%
500 25%
400 20%
300 15%
200 10%
100 5%
0 0%
Asia Australia Europe
North America South America Middle East
EBITDA
millions
EBITDA margin
Revenue per Annum ($)
----- End of picture text -----

==> picture [344 x 278] intentionally omitted <==

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

Life Sciences - Europe
30 35%
13% organic growth
25 30%
20 25%
15 20%
10 15%
5 10%
0 5%
Revenue EBITDA 4 per. Mov. Avg. (Revenue)
millions
EBITDA margin
Revenue per Quarter (Euro)
----- End of picture text -----

Life Sciences - Global

• Strong consistent revenue growth whilst maintain margin

Life Sciences - Europe

• Strong revenue growth despite very mature market and very low growth economies

• Full Service offering

• Hub & Spoke (Centres of Excellence) model

• EBITDA margin in excess of competitors despite strong competition

• Inclusive of abnormal costs

15

RIGHT SOLUTIONS · RIGHT PARTNER

Geochemical Markets – global perspective

==> picture [42 x 41] intentionally omitted <==

==> picture [265 x 216] intentionally omitted <==

==> picture [254 x 215] intentionally omitted <==

• Global exploration budgets down 47% from actual spend in CY2012

• Commodity mix and geographical activity consistent with previous years

• Focus on minesite and late stage at the expense of grassroots

Source: SNL Metals and Mining report

16

RIGHT SOLUTIONS · RIGHT PARTNER

Exploration spend – the future

==> picture [42 x 41] intentionally omitted <==

==> picture [665 x 417] intentionally omitted <==

17

RIGHT SOLUTIONS · RIGHT PARTNER

Discoveries Versus Spend

==> picture [42 x 41] intentionally omitted <==

==> picture [597 x 412] intentionally omitted <==

18

RIGHT SOLUTIONS · RIGHT PARTNER

Hub and Spoke – unique global model

North American Hub & Spoke Model for Geochemical Services

Overview

==> picture [42 x 41] intentionally omitted <==

• global LIMS

==> picture [512 x 360] intentionally omitted <==

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

Overflow from
• South America
• Asia-Pac
• Africa
• Europe
46%
41% 42% 44%
38%
33% 32% 35% 34% 31%
29%
25%
22%
58% decrease in sample volume
11%
Dec YTD from FY12 to FY15
FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15E
EBITDA margin
----- End of picture text -----

• single global database

• standardized methods

• standardized equipment

• standardized quality

• logistics tracking

==> picture [50 x 52] intentionally omitted <==

efficiency and optimal performance (scalability – up & down)

==> picture [50 x 52] intentionally omitted <==

lower cost base and globally consistent service

19

RIGHT SOLUTIONS · RIGHT PARTNER

Geochemical Market – ALS perspective

==> picture [42 x 41] intentionally omitted <==

==> picture [338 x 326] intentionally omitted <==

==> picture [394 x 323] intentionally omitted <==

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

?
----- End of picture text -----

• CY2012 – activity stalled halfway through the field season as the industry went into decline

• CY2013 – sample flow decrease through most of the field season – underlying market decline

• CY2014 – sample flow increasing through the field season – more normal pattern

• Current sample flow slightly better than same time last year – bottom of cycle? &/or market share increase

• Global fortnightly sample flow now growing in comparison to last year – past the bottom of the cycle?

20

RIGHT SOLUTIONS · RIGHT PARTNER

ALS Oil & Gas – financial journey

==> picture [42 x 41] intentionally omitted <==

LS	LS	Oil & Gas – financial journey	Oil & Gas – financial journey	Oil & Gas – financial journey	Oil & Gas – financial journey	Oil & Gas – financial journey	Oil & Gas – financial journey	Oil & Gas – financial journey	Oil & Gas – financial journey	Oil & Gas – financial journey
0 5 10 15 20 25 Revenue USD$ Millions		0% 8% 16% 24% 32% 40% Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 May-12 Jul-12 Sep-12 Nov-12 Jan-13 Mar-13 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 Jul-14 Sep-14 Nov-14 ALS Oil & Gas EBITDA margin Coring Surface Logging Specialty Well Services Laboratories Down Hole Tools EBITDA Margin ALS ownership
			Coring		Surface Logging		Specialty Well Services		Laboratories

• Restructuring costs have not been removed in calculating EBITDA

• • Revenues stable despite downturn in coring

• EBITDA margin in more recent months returning to more historical levels prior to full benefit of restructuring and cost reduction initiatives

21

RIGHT SOLUTIONS · RIGHT PARTNER

ALS Oil & Gas – operational journey

==> picture [42 x 41] intentionally omitted <==

• All business stream (coring, surface logging, specialty well services, laboratories, down hole tools) global managers relocated to Houston Texas – effective September 2014

• Reservoir Group Corporate office in Aberdeen closed – effective December 2014

• Reservoir Group Corporate office in Houston closed - effective November 2013

• Previous CEO of ALS Oil & Gas exited – effective August 2014

• North American support services integrated into ALS resources – effective October 2014

• • Global Mobility Policy in place – effective August 2014

• Rationalised facilities and “right sized” businesses – effective December 2014

• Relocated Surface Logging business into new 40,000 sq. ft. building in Houston – effective January 2014

• Control Room built in Houston for remote control surface logging initiative – July 2014

• Purchase of a 40,000 sq. ft. building in Houston to house hub laboratory – January 2015

• • Development plans for hub laboratory in Houston now finalised – expected to be operational in August 2015

• Oil & Gas laboratory LIMS & Client Portal 40% completed – December 2014. Full completion by August 2015

• Five key technical staff recruited for Houston laboratory – September 2014

• Global ALS financial portal customised and fully adopted by all business streams – effective April 2014

• All sites on ALS global IT network – completed August 2014

• New strategic development three year plans in place for all business streams – effective November 2014

• Stronger profit performance in 3[rd] quarter compared to the 1[st] and 2[nd] quarters

22

RIGHT SOLUTIONS · RIGHT PARTNER

Asset Care Market Analysis – Australia

==> picture [42 x 41] intentionally omitted <==

		$350						Source: Company es
		$300					Welding & Fabrication
$ million		$150 $200 $250					Mining O&G Power
		$50 $100				ALS Market Share 42%
		$0
		Total Australian ALS Revenue
			Market
		Sector			Driver			Market Demand
		Power			Production			−
		Oil & Gas			Construction--> Production			↑
		Mining			Production			↑
		Welding & Fabrication			Construction			↓

Source: Company estimates

23

RIGHT SOLUTIONS · RIGHT PARTNER

What makes ALS different

==> picture [42 x 41] intentionally omitted <==

==> picture [290 x 104] intentionally omitted <==

• Assets

• State of the art laboratories

• High end technical services

• Unique service offerings

• Operating Model

• Hub and spoke

• Centres of Excellence

==> picture [292 x 107] intentionally omitted <==

• Systems and standards

• “Decentralised” laboratory Vs many laboratories

• Low cost base

• Client focus

• People

==> picture [197 x 214] intentionally omitted <==

• Training

==> picture [135 x 126] intentionally omitted <==

• Passion

==> picture [165 x 118] intentionally omitted <==

• Culture

• Loyalty

• Innovative

• Entrepreneurial

• Communication

• Strategy

• Long-term horizon

• Focus

• Execution

• Disciplined investment model

24

RIGHT SOLUTIONS · RIGHT PARTNER

What makes ALS different

• Management Information Systems (MIS)

• LIMS

  • GEMS – Geochemical

  • Coal8 – Coal

  • EnviroLIMS – Environmental

  • SAM – Tribology

  • ELMS – Food

  • OSPrey – Asset Care

  • Pipeline – Oil & Gas

• Webview – Management Interface

==> picture [42 x 41] intentionally omitted <==

==> picture [360 x 179] intentionally omitted <==

• WebTrieve[TM]

• Other Portals

• iLEAD – training

• EPC – succession planning

• Compliance

• Financial – TM1

• CAPEX

• Safety Tracking

• Human Resources

• Business stream SharePoint sites

• Support group SharePoint sites

==> picture [253 x 132] intentionally omitted <==

25

RIGHT SOLUTIONS · RIGHT PARTNER