ALS LIMITED — Investor Presentation 2016

May 30, 2016

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one
ALS
Life Sciences
Commodities
Industrial
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Investor Day March 2016

Melbourne Australia 31[st] May 2016

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All figures stated in AUD unless otherwise stated

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IMPORTANT NOTICE AND DISCLAIMER

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• 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.

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ALS Business Streams

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Environmental
FY2016 Revenue
Food
Pharmaceutical
Life Sciences
Consumer Products
Geochemistry
Minerals
Mine Site
Metallurgy
Industrial
Trade Inspection
Asset Care
Energy
Environmental Food Tribology
Pharmaceutical Consumer Products
Geochemistry Mine Site Coal
Metallurgy Trade Inspection
Oil & Gas
Asset Care Tribology
Coal Oil & Gas
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Note: the majority of Mine Site work is geochemistry

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New Business – structure and end market focus

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• •Environmental

• •Food

• •Pharmaceutical

• •Industrial Hygiene

Life Sciences •Consumer Products

How do our end markets want to interact with ALS?

“One ALS” Project

• promoting a broad range of services to an end market

• packaging services

• cross business stream ALS portal

• •Geochemistry

• •Metallurgy

• •Coal

•Oil & Gas Commodities •Trade Inspection

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Industrial
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•Asset Care

•Tribology

• improve and simplify B2B interaction

• leveraging clients across business streams

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FY 2016 Financial Summary

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	FY15 ($mn)	Full Year FY16 ($mn)	Full Year FY16 ($mn)	Full Year FY16 ($mn)	Full Year FY16 ($mn)	Full Year FY16 ($mn)
Full year	Continuing Underlying	Continuing Underlying	Impairment Charges	Restructuring & other one off items	Amortisation of Intangibles	Statutory Results
Revenue	1422.2	1364.9				1364.9
EBITDA	305.4	264.3	(317.9)	(13.9)		(67.5)
Depreciation & amortisation	(83.4)	(86.4)			(15.2)	(101.6)
EBIT	222.0	177.9	(317.9)	(13.9)	(15.2)	(169.1)
Interest expense	(33.1)	(34.5)				(34.5)
Tax expense	(52.6)	(42.9)	3.9	2.9		(36.1)
Non-controlling interests	(1.6)	(1.0)				(1.0)
NPAT	134.7	99.5	(314.0)	(11.0)	(15.2)	(240.7)
EPS (basic – cents per share)	31.7	21.7				(52.5)
Dividend (cents per share)	21.0	13.5				13.5

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Revenue Waterfall (AUD$ million)

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+24 +1
-10 +5 +2 -9
-7
+52 -3 -101
flat
flat
Industrial
Minerals
performance
performance
strong -11
Life Sciences
growth
severe
Oil & Gas
contraction
$1,422 million $1,365 million
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ALS global locations – a strategic asset

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Life Sciences Industrial Minerals Energy Revenue

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Margin Strong at the Bottom of the Cycle

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1,500 30%
1,200 Core Labs 24%
SGS
Exova
Bureau Veritas Intertek
Eurofins
900 18%
Applus
600 12%
Mistras
300 6%
0 0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
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ALS Financial Year Ending March

ALS EBITDA Margin ALS Revenue

EBITDA Margin for Core Labs, SGS, Intertek, Bureau Veritas, Eurofins, Applus, & Exova is for Calendar Year 2015 and Mistras year ending May 2015. EBITDA Margin & Revenue for ALS includes all corporate expenses. Data for Financial Year ending March 2016 based on current forecasts. EBITDA is underlying EBITDA for all companies.

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Group Taxable Earnings – franking capacity

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Australian versus Off-shore Taxable Profits

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Australian Profits Off-shore Profits
100%
80%
60%
40%
59%
20%
30%
0%
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
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Debt Metrics

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Mar-12 Mar-13 Mar-14 Mar-15 Mar-16
Statistics
Gearing Ratio comfort 45% 29% 29% 34% 38% 27%
Leverage (net debt/EBITDA) max 3.00 1.0 1.0 2.2 2.5 1.7
EBITDA interest cover min 3.75 23.9 21.0 12.2 9.1 7.7
Balance Sheet Measures
Total Equity (AUD mn) 930 997 1,419 1,228 1,186
Net Debt (AUD mn) 370 400 722 762 438
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Debt Maturity & Capacity Profile as at March 2016

Debt Denomination Cash Holdings AUD mn

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Long Term Debt - USPP Notes Bank Debt - Undrawn Capacity

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Other
CAD
46
14%
USD
122
EUR
84
USD
86% AUD
46
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400
350
300 29.6%
29.5%
250
23.8%
200
17.1%
150
100
50
0
2016 2017 2018 2019 2020 2021 2022
Calendar Year
AUD $million
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Cash Flow

Full year	FY15 AUD mn	FY16 AUD mn
Underlying operating profit (EBIT)	223.3	177.9
Depreciation & Amortisation	83.7	86.4
Working capital	2.7	(6.3)
CAPEX	(76.5)	(73.7)
Other(1)	22.8	5.1
Free cash flow	256.0	189.4
Acquisitions	(30.2)	(22.8)
Dividends paid	(77.9)	(72.0)
Borrowings - movement	(57.0)	(183.2)
Equity Issued	27.2	317.0
Interest and Tax	(89.4)	(73.5)
Restructuring costs	(6.8)	(13.9)
Net increase/(decrease) in cash	21.9	141.0
Opening net cash	136.2	163.0
Effect of FX on cash held	4.9	(6.1)
Closing net cash	163.0	297.9

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• Cash Flow

• free cash flow down $66.6mn

• EBITDA cash conversion 97.1%

• CAPEX $ 73.7mn – 5% of revenue

• 5 acquisitions - $ 22.8mn

• Effective Tax Rate

• 29.9%

1 divestments and sale of assets

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Strategic mix of revenue

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Revenue FY16

FY16 end-customer sector mix

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Other
Cyclical Non-Cyclical Mineral
Manufacturing 5%
Exploration
8%
15%
Engineering
Inspection Government
Metallurgy 7%
Geochemistry
Oil & Gas:
exploration &
Infrastructure
Coal production
Environmental & Property
17%
Development
Oil & Gas
11%
Utilities:
Water
Asset
Care Food/Pharma 7%
Utilities:
Mining:
Tribology Power
Oil & Gas: processing &
3%
downstream trading
5% 22%
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Strategic mix of revenue

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Revenue

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1,600
1,400
1,200
1,000
800
600
400
200
-
FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
Life Sciences Tribology Asset Care (downstream) Mineral Inspection Cyclicals
$ millions
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• Multi-year strategy of growing the non-cyclicals to provide reliable underlying earnings

• Maintain geographical scale and market position in cyclicals to provide leverage and outperformance during top of the cycle

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Life Sciences Division

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	2016	2015	Change
Revenue	$634mn	$557mn	+14%
EBITDA	$145mn	$130mn	+12%
EBIT	$110mn	$98mn	+12%
EBIT Margin	17.4%	17.6%	-20bps

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700
600 CAGR 16.6%
500
400
300
200
100
0
FY10 FY11 FY12 FY13 FY14 FY15 FY16
Asia Australia Europe
Middle East North America South America
Revenue (AUD$mn)
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Overview

• revenue and EBIT growth in all regions

• Life Sciences revenue up by 14%, with Food/Pharma revenue up 34%

• strong recovery in margin in Australia due to increased market share and cost control initiatives

• new chemistry hub in Chatteris (UK) commissioned and new pharmaceutical hub in Ely (UK) close to completion

• three acquisitions completed during the year

• controlVet acquisition successfully integrated – Iberian Hub

• acquired outstanding 20% shareholding in Latin America Life Science business in January 2016

Outlook

• continuing organic growth

• bolt on acquisitions in Europe and USA

• investment in South America in anticipation of further market growth

• global cost initiatives to drive margin improvement

• further development in “gate to plate” food strategy

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Note:- EBIT and EBITDA are underlying measures

RIGHT SOLUTIONS · RIGHT PARTNER

Industrial Division

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	2016	2015	Change
Revenue	$186mn	$190mn	-2%
EBITDA	$31mn	$34mn	-10%
EBIT	$25mn	$28mn	-11%
EBIT Margin	13.5%	14.9%	-140bps

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200
160
120
80
40
0
FY10 FY11 FY12 FY13 FY14 FY15 FY16
Australia North America South America
Revenue (AUD$mn)
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Overview

• solid organic tribology growth across all regions

• Tribolab acquisition in Brazil performed in line with expectation for first six months of ownership

• Maverick integration complete and new site opened in Louisiana to expand Gulf Coast footprint

• further decline in Australian welding and fabrication revenue

• severe price pressure in mining, oil & gas and power

• new long term maintenance contracts secured in mining and oil & gas

Outlook

• continued contraction of the Australian market due to completion of LNG construction projects

• Australian business well positioned to secure additional maintenance contracts in mining and oil & gas

• Maverick acquisition positioning North American business for diversification into downstream oil & gas, petrochemical and power

• market share growth remains the key focus in all regions

Note:- EBIT and EBITDA are underlying measures

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Minerals Division

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	2016	2015	Change
Revenue	$343mn	$367mn	-7%
EBITDA	$82mn	$97mn	-15%
EBIT	$59mn	$73mn	-19%
EBIT Margin	17.2%	20.0%	-280bps

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600
500 stabilising
400
300
200
100
0
FY12 FY13 FY14 FY15 FY16
Geochemistry Metalurgy Inspection Other
Revenue (AUD$mn)
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Overview:

• Geochemistry underlying EBIT margin 19%

• Metallurgy Markets challenging in all regions

• Inspection EBIT margin improved to 27% - some price pressure realised in H2

• Mine Site pipeline continued to grow however project timeline extensions delayed awards.

Outlook:

• focus remains on Cost Base and Market Share Growth

• cost base improvements have facilitated price positioning and expect to generate further market share growth

• new emphasis on Productivity and Efficiency with both incremental and step change programs in place

• price pressure easing in some Geochemistry markets in line with increased seasonal activity, but remains in Metallurgy sector and is increasing in Inspection.

• closer operational relationship between coal and mineral Inspection Service lines expected to deliver growth opportunities via expanded footprint.

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Note:- EBIT and EBITDA are underlying measures

RIGHT SOLUTIONS · RIGHT PARTNER

Global Mineral Exploration Market

Market Trends

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400 20
350
300 15
250
200 10
18%
150
100 5
50
0 0
$ Grassroots $ Late STage $ Minesite
Grassroots Late Stage Minesite
USD$ billion
Expenditure rebased to 100
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Source: SNL Data

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Analytical Spend Drivers

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generic innovative
SERVICE
value
DOLLARS
price
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• ALS continued investment to maintain technical capabilities and feed innovation to high end value added services

• ALS focus on systems, productivity and cost base to maintain volume in generic services market sector

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Global Exploration Market

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18%
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SNL Data

• calendar years 2014 and 2015

• ten best intersections reported for gold, copper, lead, zinc, silver and nickel per quarter

• 387 reported intersections analysed

• ALS estimate of analyzing laboratory for each reported intersection

• • number of reports per region

• North America – 167

• Asia & Pacific – 88

• South America – 58

• Africa – 50

• Europe – 23

• Middle East - 1

ALS leveraged to inevitable market recovery

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Energy Division

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	2016	2015	Change
Revenue	$203mn	$307mn	-34%
EBITDA	$14mn	$59mn	-77%
EBIT	-$8mn	$37mn	-123%
EBIT Margin	-4.1%	12.0%	-1610bps

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stable
FY11 FY12 FY13 FY14 FY15 FY16
ALS - Australian Coal Business
Revenue (AUD$mn)
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Overview – Oil & Gas

• global Oil & Gas markets remain volatile

• pricing pressure and delayed projects

• new products introduced and gaining market acceptance

• Cedar Turbine

• QuickCapture V2

• Houston laboratory fully commissioned and gaining market traction

• changed coring operating model to reduce fixed cost base

• continuing efforts to “right size” all business streams

• consolidating locations globally

Overview - Coal

• solid performance in Australia – revenue flat pcp

• revenue growth in Production and Superintending services with stable margin

• Bore Core (exploration) further decline with significant pricing pressure

• market leader in Australia in

• coal technology

• exploration

• production

• shipping services

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Note:- EBIT and EBITDA are underlying measures

RIGHT SOLUTIONS · RIGHT PARTNER

Life Sciences Division

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Lima

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Singapore

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Bangkok

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Raj Naran

Group General Manager Life Sciences

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Our Market Sectors

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TIC - Available Market 2016

T esting I nspection C ertification

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Metals & Minerals
Consumer Goods 5%
10% Environmental
6%
Business Systems Food
6% 4%
Oil, Gas &
Chemicals
(upstream)
5% ALS
Strategic
Focus
Industrial Services
Automotive
17%
23%
Agro-commodities
Marine 1%
3%
Trade Assurance
1% Oil, Gas & Chemicals Pharma & Bio-
(downstream)
Source: Rothschild 2012 2% analytics
17%
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Key Dynamics - driving growth in TIC Industry

• •increasing sophistication and automation of TIC programs combined with a shortage of skilled professionals and stricter regulations, has caused companies to outsource non-core activities

outsourcing of noncore activities

• •companies looking for 3[rd] party providers with a proven safety record and “technical know-how”

• •outsourcing trends are expected to accelerate, driven by cost, time-to-market and increased credibility of 3[rd] party providers

• •increasing sensitivity of public opinion to risk management continues to drive strengthening and convergence of Quality, Health, Safety and Environment regulations

meeting safety regulations

• •owners and operators of infrastructure assets increasingly face strict government regulations and safety requirements driven by recent failures

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• •failure to meet safety standards can result in financial liabilities and tarnish brand value

• •trend of moving up the value chain (upstream) to provide testing at the point of production

growing end markets

• •advances in innovation coupled with rapid technological progress by customer may create demand for more testing while life-cycle management will become the predominate approach to managing infrastructure systems

• •retailers are using shorter product cycles, and quicker inventory turns

expanding geographies

aging infrastructure

• •globalisation and the demand for low-cost sourcing from emerging markets has required greater scrutiny of quality along an increasingly complex supply chain

• •the new middle-class rising in emerging markets is demanding higher quality safety standards

• •North America will continue to be a driver of incremental demand as companies seek to partake in secular growth driven by the shale gas boom

• •prohibitive cost / challenge of building new infrastructure has caused significant aging of existing infrastructure and companies are looking for ways to extend the useful life of existing assets

• •large, growing market as companies increase spending and frequency of maintenance / repair

• •North America is evolving to be a net exporter of oil. That process will require both current infrastructure to be upgraded as well as investment into new facilities

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Life Sciences Markets – poised for continued growth

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Commentary

• increasing regulations and complexity of testing functions have made outsourcing more appealing

• concentration on core competencies with a greater focus on efficient use of capital

• time to market – outsourcing allows for quicker turnaround times, reduces costs and is vital in markets with shortening product lifecycles

increased outsourcing and more stringent regulations are catalysts for growth

• the TIC industry is highly driven by increasingly stringent regulatory requirements, with Europe traditionally leading the way

• catalysts for new regulation / legislation including emerging market food testing

TIC Outsourced Market

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Outsourced
25%
TIC
market
US$200bn
In-House
75%
Source: Wells Fargo
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(US$ in Billions)
70
60
50
40
30
20
10
0
2014 2018
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Life Sciences Markets – poised for continued growth

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Strong emerging middle class growth driving global trade – Asia Pacific leading the way

Middle Class Population by Geography

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2009 2020
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664
338
525
181
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12%
4%
1% (0%)
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Source: Brookings Institution

Growth CAGR by Region

Asia Pacific Rest of World

North America

Europe

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End Markets and Market Drivers - ALS positioned to benefit

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• Environmental • Food Safety
and Water
Specialized Increased and
and Complex Enforced
Testing Regulations
Public
Infrastructure
Awareness
and
and
Population
Consumer
Growth
Concern
• Consumer
Products • Pharmaceutical
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Global Life Sciences TIC Market – ALS perspective

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Environmental
Food Safety
Global Market
–
US$ 7bn
Pharmaceutical
Growth +6% p.a. Global Market
–
US$ 11bn Consumer
Addressable Market
– US$ 4bn Growth +7% p.a. Global Market Products
-
US$ 20 bn
ALS market share Addressable Market
– 10% – US$ 2bn Growth +6% p.a. Global Market
–
US$ 12 bn
Opportunity ★★★ ALS market share Addressable Market
– 4% – US$ 5bn Growth +5% p.a.
Timing - now
Opportunity ★★★★★ ALS market share Addressable Market
- <1% – US$ 7 bn
Timing - now
Opportunity ★★★★★ ALS market share
-
<1%
Timing – CY2017
Opportunity ★★★★★
Timing - CY2018
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Note: Company estimates

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Life Sciences Division

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	2016	2015	Change
Revenue	$634mn	$557mn	+14%
EBITDA	$145mn	$130mn	+12%
EBIT	$110mn	$98mn	+12%
EBIT Margin	17.4%	17.6%	-20bps

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700
600 CAGR 16.6%
500
400
300
200
100
0
FY10 FY11 FY12 FY13 FY14 FY15 FY16
Asia Australia Europe
Middle East North America South America
Revenue (AUD$mn)
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Overview

• key growth focused:

• substantial addressable market in Life Sciences growing at 7-10% p.a.

• strong market position

• revenue grew 75% since 2012 achieved through both organic growth and M&A

• strategic plan has Life Sciences being closer to 65% of ALS’ portfolio in 3-5 years

• targeted bolt-on acquisitions will continue to be made if shareholder value enhancing

• performance reflects ALS’ ability to secure a global leadership position in this market

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Note:- EBIT and EBITDA are underlying measures

RIGHT SOLUTIONS · RIGHT PARTNER

Life Sciences growth 2007 to 2016

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FY07

FY16

LOCATIONS	REVENUE	EBITDA	EBITDA%
34	$165mn	$37mn	22%

LOCATIONS	REVENUE	EBITDA	EBITDA %
155	$634mn	$145mn	23%

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Revenue
16% CAGR
over 9 years
Consumer Testing
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Environmental

Food/Pharma

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2007 – 2016 Life Sciences

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Life Sciences Revenue

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700 35%
600 30%
500 25%
400 20%
300 15%
200 10%
100 5%
0 0%
FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16
EBITDA
Revenue (AU$ million)
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Life Sciences Revenue EBITDA %

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ALS Market Share – food & environmental

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Europe

Asia Pacific

Americas

Note – Company estimates

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ALS Value Proposition

continued highly trusted and investment in client experienced management company systems

commitment to Client Service

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market leading IT
and LIMS
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well established reputation for superior quality

track record of growth

well diversified revenue base – geographies and markets

15% experienced management team

lean and focused cost base

geographic footprint in growing markets

strong and loyal client base

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Current Opportunity

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Life Sciences EBITDA % by Country
bubble size = revenue Opportunity
increase market share
60%
55%
50% Opportunity
improve margin
45%
40%
35%
30%
25%
ALS minimum target
20%
15%
10%
5%
0%
by Country
EBITDA percentage
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Environmental Business Stream

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Rayong

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Beijing

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Houston

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Andreas Jonsson General Manager Life Sciences – Europe

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Environmental Market Overview

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Total contestable market is estimated to be in excess of AU$ 5.5 billion

global environmental testing market continues to grow

• rise in contamination and pollution issues

• progress in research has identified more compounds as toxic

• increasing demand by citizens for a clean environment

trends in regulation supports the business

• strong regulated markets (EU, USA) are amending and adding regulations

• increasing enforcement in Eastern Europe to catch up with EU

• fast development of regulations in emerging markets (Asia, Latin America)

increased outsourcing increases the contestable market

• requirement for more sophisticated analyses – investment barrier

• third party evaluation a requirement for independence

• pricing pressure drives the outsourcing of non-core business

• government regulatory bodies

key clients

• environmental consultants

• water utility companies

• private industries

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Market Drivers

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Regulations Infrastructure
Public Emerging
Awareness Markets
Population Social
Growth Responsibility
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Market Expectations

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brand and
value-based ease of use geographic safety and risk
pricing footprint management
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ALS’ Commitment to the Environmental Sector

ALS serves all the main environmental testing markets

state-of-the-art laboratory infrastructure

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 technical and quality expertise

 best practice sharing

testing of all sample matrix types

 water: drinking-, ground-, wastewater testing

 soil/sediments: analysis for full range of contaminants

 air: outdoor, indoor and ambient pollutants

 waste: solid waste, ash

strong global presence

supported by regional hub-and-spoke model

harmonization

of systems, processes and global IT platforms

value added service model

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Historical – Environmental in 2006

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SITES	REVENUE	EBITDA
25	$80 mn	$17 mn

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Historical – Environmental in 2011

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SITES
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REVENUE
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EBITDA
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25
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$80 mn
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$17 mn
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SITES	REVENUE	EBITDA
90	$306 mn	$82 mn

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Today – Environmental 2016

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SITES
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REVENUE
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EBITDA
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25
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90
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$306 mn
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$82 mn
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SITES	REVENUE	EBITDA
125	$522 mn	$121 mn

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Environmental – FY2016 overview by numbers

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	1 largest provider of environmental analytical services 522 million AU$ Revenue 11 % year on year growth 23 % EBITDA Margin 125 locations globally 4500 staff 25 million AU$ CAPEX (excl. acquisition and facilities) >50,000 sqm lab space upgraded to state of the art condition 10 million AU$ investment in LIMS/client portal Global

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Significant events from FY2016

expanded new greenfield European locations footprint

UK growth water contracts

North America Asia Pacific growth expanded air through testing industry direct footprint contracts

ALS Experience

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South America major remediation project

LIMS harmonization road map

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Outlook

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segment geographic diversification further diversification development of in existing through the hub-and-spoke geographies by acquisitions and model leveraging the greenfield start-ups existing network

LIMS harmonization implementation of a to improve internal best in class client efficiency and portal create innovative client solutions

single global management reporting portal

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Food Business Stream

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Chatteris
Singapore
Sydney
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Tim Kilmister General Manager Life Sciences – Asia Pacific

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Key Dynamics - driving growth in the Food Sector

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Market Long-wave Increased Evolving Client
Macros Total Market Outsourcing Testing Profile
Growth Requirements
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• •Global Food Safety and Food Quality market is estimated to be in excess of US $11 Billion

• •Increased outsourcing to •Government regulatory increase proportion of •New product development bodies market that is contestable

• •Increasing regulatory requirements

  • •Sensorial testing •Food & beverage

  • •Globalisation of the food manufacturers supply chain •Food packaging and food contact •Restaurants and hotels

• •Consumer awareness and increasing requirements for better labelling

• •Current contestable market is 20% of the total (big upside)

  • •Consumer requirements for independence •Emerging food safety •Retailers trends – e.g. Allergens and •Wholesalers

  • •New technologies – adulterants •Primary producers investment barrier for laboratory services

• •Consumer requirements for foods with health promoting properties

• •Total market CAGR 7-8%

• •Food testing market remains highly fragmented, early part of curve in market consolidation (providing economies of scale)

• •Importance of brand protection

• •Consumer pricing pressure driving the outsourcing of non-core business

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Key Dynamics – ALS perspective

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Hub and
Spoke Model
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Common Elements

Diverse range of testing capabilities

• •ability to leverage existing Environmental locations in target Food geographies

• •providing local reach, economies of scale and centres of excellence

• •microbiological

• •chemical and nutritional

• •facilitated by global IT platforms

• •pesticides and agrochemicals

• •high contribution from laboratory services (Microbiology, Chemistry and Molecular Biology)

• •excellence in logistics management

• •contaminants

• •vitamins and additives

• •reliance on technology and technical expertise

• •integrated management team

• •adulterants

• •allergens

• •commitment to harmonise systems and processes

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Value Added Service Model

• •high functionality client portal

• •consulting support and services

• •training and knowledge base

• •auditing

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FY2016 ALS overview by numbers

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• revenue AU$ 105mn

• global headcount 1,200

• EBITDA Margin 22%

• CAPEX AU$ 7mn

• (excl. acquisition and facilities)

• investment in LIMS/client portal AU$ 2.5mn

• • new geographies entered; Portugal, Spain, Norway, Denmark and Poland

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ALS Journey in the Food Sector

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ALS Global Food/Pharma by Quarter

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28 FY2006
0.24
revenue
24
$1.9mn
0.21
20
0.18
16 0.15 FY2011
revenue
0.12
12 $17mn
0.09
8
0.06
4
0.03 FY2016
revenue
- 0
$105mn
Asia
Growth Contributions FY11 - FY16
•
acquired growth 300%
•
organic growth 217%
Millions
Revenue AU$
EBITDA margin
Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16
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Market Share Commentary

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Region	Country	ALS Position and Comments
Asia	Singapore	market leader with significant brand presence and reputation
	Thailand	strong market position and brand awareness, with significant additional organic growth opportunities
	Malaysia	market leader, with significant additional growth opportunities
	Hong Kong	strong position in a relatively small market
Australia	Australia	growing brand awareness with significant additional organic growth opportunities
Europe	UK & Ireland	market leader with significant brand presence and reputation, large market which is still fractured
	Portugal	market leader with significant brand presence and reputation
	Spain	ALS is a new entrant in a fractured market with significant growth opportunities
	Czech Republic	strong position in a relatively small market
	Poland	ALS is a new entrant in an emerging market
	Slovakia	ALS is a new entrant in an emerging market
	Denmark	ALS is a new entrant in a market with significant growth opportunities
	Norway	ALS is a new entrant in a market with significant growth opportunities
	Sweden	ALS is a new entrant in a market with significant growth opportunities

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Significant events from FY2016

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• expanded European footprint through acquisition

• ControlVet ; Portugal, Spain and Poland, OMM Lab ; Norway and Mikrolab ; Slovakia

• new greenfield locations in Asia

• Songkhla (Thailand), Sentul (Indonesia)

• consolidation of market position in Ireland and Hong Kong (growth and margin improvement)

• growth of complementary medicine and dairy industries in Australia

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Significant events from FY2016 (cont.)

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• enhanced capabilities to meet emerging market opportunities – Pesticides and Allergens

• • development of on-line audit tool, Food Consultancy services, client training workshops (part of right solution model )

• 5,000 active clients using new client portal

• investment in new technologies

• best practice technology and method transfer between European and APAC business units

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Eclipse Scientific was acquired by ALS in April 2012 as an entry point into the UK food sector

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Since acquisition the business has established itself as a market leader for service and quality, providing ALS with a strong brand presence

• •staff engagement and management inputs

• •capital investment in facilities, equipment and IT platforms

• •integrating ALS strategic planning and management processes

• •networking with touch points across the ALS network

• •leveraging expertise within the business to benefit the

• Ingredients greater ALS business for success

• •significant revenue growth and margin improvement in one of the most price sensitive markets globally (FY2016 EBITDA margin of 19%)

• •expansion in Chatteris (hub laboratory) to provide a 50% increase in floor space – to accommodate growth in Chemistry testing

• •expansion in Ely to provide a 200% increase in floor space – positioning the business for growth opportunities in the

• Success Pharmaceutical sector

• outcomes •new technologies for the automation of Microbiology and Chemistry analytes

• •new LIMS platform and client portal

• •developed to provide as a hub laboratory for Northern Europe

• •ability to share best practice with the global ALS food business

• •UK Industry recognition and awards

Hub Spokes Pharmaceutical

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Outlook

• exciting Future growth trajectory of the sector, driven by increasing consumer awareness, regulation and outsourcing

• quantum of total market opportunity in ‘new’ geographies for ALS

• continued organic growth opportunities in existing ALS geographies

• demonstrated integration roadmap and ability to add value on 12 month timeline

• ability to leverage existing presence from nonfood ALS businesses in target acquisition geographies

• commitment to complementary services (both testing and non-testing)

• expanding client relationships - internationally

• previously demonstrated execution in the Environmental sector

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Current ALS
Revenue
Opportunity in
Current ALS
Geographies
New
Geographies -
No immediate
Interest
US$2.5 billion
(available)
New
Geographies -
Prospecting
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Panel Discussion

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Vision Statement – Food Sector

The ALS Food & Pharmaceutical Division will be a global leader in customer service and ease of “ use. Providing customers with competitive pricing through leveraging best practice testing processes and data tools that add value and reduce end user costs. A differentiated service culture will provide customers with reliable and consistent results, access to technical expertise, a network of services, and logistics support.

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