ALS LIMITED — Investor Presentation 2020

May 26, 2020

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FY20 results

Raj Naran, Managing Director and CEO Luis Damasceno, Chief Financial Officer

27 May 2020

Right Solutions • Right Partner www.alsglobal.com

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IMPORTANT NOTICE AND DISCLAIMER

• 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 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.

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Investor Presentation. Full Year Results FY 2020.

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Safety is a priority - ALS COVID-19 response

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Safety guidance

• Handwashing and sanitation information;

• Hygiene and routine disinfection information and procedures;

• Screening for, and information for, employees feeling unwell;

• Physical distance markings and signs throughout facilities;

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Equipment

• Additional sanitation products and PPE;

• IT resources to enable virtual meetings and remote working;

• Additional guarding, equipment, and walkways to reduce personal contact;

• No contact transfer stations installed for delivery of incoming samples and goods.

• Detailed response and contingency plans.

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Communication

• Regular communication to employees;

• Website and social media announcements and communication to clients.

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Restrictions

• On the number of people per common rooms and spaces;

• Only essential visitors or contractors permitted on sites;

• On social gatherings;

• On international and regional travel.

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Investor Presentation. Full Year Results FY 2020.

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Group performance

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FY20 underlying NPAT of $188.8 million and statutory NPAT of $127.8 million Underlying performance from continuing operations below

Revenue growth

$1,832 m, +10.0% vs pcp

• Organic revenue growth of +5.1% (Life Sciences +5.9%, Commodities +0.6%, Industrial +15.2%)

• Scope growth (acquisition and divestment) of +1.9%

• Favourable currency impact of +3.0%

EBIT* $297.9 m, +6.0% vs pcp

• EBIT increase of $16.8m

• Life Sciences margin at 15.3%, +35 bps pcp (on track to reach +50bps target before impact of COVID-19 )

NPAT* within guidance $188.8 m, +4.3% vs pcp

• Earnings per share* of 39.1 cps, +5.4% pcp

• Final dividend of 6.1 cps compared to 11.5 cps in FY19, reflecting conservative capital management strategy and demonstrating a strong liquidity position

Balance sheet strength and liquidity

• Strong EBITDA* cash conversion rate at 97.1%

• Leverage ratio of 2.1x and gearing ratio of 41.9%

• Projected liquidity of ~$650m including $200m of increased bank facilities

• Diversified portfolio of businesses and geographies have proved resilient during COVID-19 pandemic to date with many deemed as ‘essential businesses’ and continue to operate

Managing through COVID-19

• Management acted swiftly to align cost base to client demand by leveraging ‘hub and spoke model’

• Total revenue decline of 9% in April 2020 (compared to pcp) primarily due to economic shutdowns. Several economies started to relax restrictions in last few weeks although too early to tell the impact on sample volumes

• Capacity for innovation (including launch of new COVID-19 testing services), disciplined acquisition strategy and supportive structural market trends to drive long-term growth

* Underlying from continuing operations before applying AASB 16.

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Investor Presentation. Full Year Results FY 2020.

5

Revenue growth components of diversified business streams (at constant currency)

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% of revenue
(3.0%) - 3.0% 6.0% 9.0% 12.0% 15.0% 18.0%
Life Sciences:
Life Sciences 5.9% 3.3%
51%
Geochemistry (1.2%)
Metallurgy (2.6%)
Commodities:
35%
Inspection 6.5% 8.9%
Coal 12.1%
Asset care 17.6%
Industrial:
14%
Tribology 9.1%
100% Total Group 5.1% 1.9%
Organic % Scope % (net of acquisition growth and divestment)
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Investor Presentation. Full Year Results FY 2020.

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Underlying EBIT growth driven by Life Sciences (continuing operations)

Margin PCP in $m						(0) 297.9 Others FY20 1 2	(0) 297.9 Others FY20 1 2
	281.1	+19	(5)	+3		(0)	297.9
	FY19 Life Sciences Commodities Industrial
	16.9% 15.3% 25.3% 9.7% +35 bps (172) bps (38) bps					16.3% (63) bps

1. Corporate costs + FX 2. Underlying EBIT before applying AASB 16

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Investor Presentation. Full Year Results FY 2020.

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Underlying EBIT growth driven by accretive acquisitions and FX gains (continuing operations)

Margin in $m	281.1	277.2 (4.0)	277.2 +4.4	281.5 +16.3	297.9
	FY19 Organic Scope FX FY20 16.9% (1.2) pts +0.1 pts +0.5 pts 16.3% 1

1. EBIT before applying AASB 16

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Investor Presentation. Full Year Results FY 2020.

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FY20 financial summary

Full Year	FY19($m)	FY20 ($m)	FY20 ($m)	FY20 ($m)	FY20 ($m)	FY20 ($m)	FY20 ($m)	FY20 ($m)	FY20 ($m)
	Underlying*	Underlying before AASB 16*	Applying AASB 16*	Underlying after AASB 16*	Restructuring & other one- off items	Discontinued operations	Divestment & other business closures	Impairment and amortisation of intangibles	Statutory Results
Revenue	1,664.8	1,831.9	-	1,831.9	-	4.2	-	-	1,836.1
EBITDA	352.9	378.8	52.7	431.5	(15.5)	(0.7)	54.1	-	469.4
Impairment	-	-	-	-	-	-	-	(90.0)	(90.0)
Depreciation & amortisation	(71.8)	(80.9)	(44.8)	(125.7)	-	(1.1)	-	(7.6)	(134.4)
EBIT	281.1	297.9	7.9	305.8	(15.5)	(1.8)	54.1	(97.6)	245.0
Interest expense	(32.0)	(33.4)	(7.9)	(41.3)	(0.4)	(0.7)	-	-	(42.4)
Tax expense	(67.1)	(74.0)	-	(74.0)	0.9	-	-	-	(73.1)
Non-controlling interests	(1.0)	(1.7)	-	(1.7)	-	-	-	-	(1.7)
NPAT	181.0	188.8	-	188.8	(15.0)	(2.5)	54.1	(97.6)	127.8
EPS (basic – cents per share)	37.1	-	-	39.1	-	-	-	-	26.5
Dividend (cents per share)	22.5	-	-	17.6	-	-	-	-	-

* continuing operations

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Investor Presentation. Full Year Results FY 2020.

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Cash flow – strong cash conversation

50 CASH FROM

million OPERATIONS 97.1% EBITDA cash conversion*

CAPEX 121 6.6% million[=]

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Full year ($m)	FY19	FY20
UnderlyingoperatingEBIT (before AASB 16)	275.6	296.0
Depreciation & amortisation	73.3	81.2
EBITDA (before AASB 16)	348.9	377.2
Workingcapital	(35.4)	(17.9)
Other	2.9	7.0
Cash flow before CAPEX (before AASB 16)	316.4	366.3
CAPEX	(108.9)	(121.1)
Acquisitions	(65.8)	(119.1)
Divestments	5.7	66.9
Dividends paid	(98.0)	(112.0)
Issued capital bought back	(24.6)	(22.0)
Borrowings - movement	29.6	349.7
Interest and tax(AASB 16 adjusted)	(82.3)	(129.4)
Restructuringcosts	(12.3)	(13.9)
Net increase/(decrease) in cash	(40.2)	265.4
Openingnet cash	187.2	148.3
Effect of FX on cash held	1.3	10.3
Closing net cash	148.3	423.9

Analysis includes both continuing and discontinued operations

* Cash flow before CAPEX as % of Underlying EBITDA (before AASB 16)

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Investor Presentation. Full Year Results FY 2020.

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CAPEX by business – investing in growth

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in $m
66 30
121
14
11
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	CAPEX as % of revenue FY20	FY19
	Life Sciences 7.0%	8.3%
	Commodities 4.6%	5.0%
	Industrial 5.3%	4.0%
	Group infrastructure 0.6%	–
	Total Group 6.6%	6.5%
	Life Sciences:Green field and growth projects
	Commodities:Maintenance and geographical expansion
	Industrial: Geographical expansion, growth projects and	new services
	Group infrastructure: Investment in systems

Excludes acquisition CAPEX

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11 Investor Presentation. Full Year Results FY 2020.

Debt metrics – strong balance sheet

Debt metrics – strong balance	sheet
	Mar-16	Mar-17	Mar-18	Mar-19	Mar-20
STATISTICS
Gearing Ratio(target <45%)	27%	29%	31%	37%	42%
Leverage (net debt/ EBITDA; max 3.25)	1.7	1.9	1.7	1.8	2.1
EBITDA interest cover(min 3.75)	7.7	9.2	11.3	10.5	11.0
BALANCE SHEET MEASURES
Total Equity (in $m)	1,186	1,185	1,122	1,083	1,111
Net Debt (in $m) (AUD = 0.61 USD)	438	485	507	629	800

DEBT MATURITY & CAPACITY PROFILE Weighted Average Maturity: 4.13 years

Long Term Debt - USPP Notes Bank Debt - Drawn Bank Debt - Undrawn Capacity

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Cash Holdings AUD ($m)
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Debt Denomination

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4.13 years
GBP, 8 600 % Total Debt
AUD Other, 37.5%
17% 64
450 92
EUR, 20 23.8%
EUR USD 300 18.3% 20.4%
12% AUD,
53% 40 USD, 401
GBP6% 293 150 240 312 268
CAD
12% 0
2020 2021 2022 2034
$m, calendar year
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Investor Presentation. Full Year Results FY 2020.

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Prudent capital management strategy

Cash flow from operations

• Strong underlying EBITDA cash conversion of 97.1% (on-track to achieve 100% cash conversion pre-COVID-19 impact).

CAPEX

• $121 m in CAPEX (6.6% of revenue).

• Continued investment in growth projects in Life Sciences and Industrial divisions.

Share buy-back program

• Buy-back continues through to December 2020 with a total program of $250m .

Dividend

• Final dividend of 6.1 cps (70% franked), with FY20 payout ratio of 45%

• Reflects prudent capital management strategy and strong liquidity position

Balance sheet

• Leverage ratio of 2.1 times (as at March 31[st] 2020).

• Strong balance sheet and liquidity level to finance operations and meet the maturation of the USPP debt tranche due in December 2020.

Capital management outlook

(until economic environment stabilises)

  - Focus on liquidity preservation.

  - Focus on cash generation (DSO and DPO), leveraging on excellent progress made in FY20.

• Since inception of the buy-back program 22.0 million shares

• (representing 4.3% of the original base) have been bought back on-

• market for an overall consideration of $153.4 m, at an average share price of $7.04.

• CAPEX restricted to essential maintenance and selected growth investments.

• Disciplined bolt-on acquisition strategy.

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Investor Presentation. Full Year Results FY 2020.

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Strong liquidity in place

Liquidity

• Cautious approach in the uncertain economic environment, to build business resilience in the short-term while capitalising on growth opportunities in the medium and long-term.

• Total liquidity available as at 31 March 2020: ~$450m

• Increase in debt facilities: $200m secured from bank providers

• Projected liquidity available after increase in bank facilities: ~$650m

US Private Placement (USPP)

• $245m of bank debt drawn down to cover USPP tranche due at the end of 2020

• Continue to monitor USPP market for longer-term financing

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Investor Presentation. Full Year Results FY 2020.

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Next generation TIC, innovation and technology

Life Sciences

• Development and roll-out of COVID-19 testing services for humans and surfaces

• Robotics in laboratories to improve efficiency.

• Artificial intelligence driving data review and reporting.

• Web and mobile apps for clients to view their data.

Technology and Commodities innovation are a key focus in our - strategic roadmap

• Market-leading position supported by innovative, exclusive testing methodologies.

Industrial

• Working with technology partners to expand ‘IoT’ solutions for asset condition monitoring.

• Investment in data integration and storage to provide clients with improved asset condition insight.

• Ongoing investment in laboratory automatic projects.

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Investor Presentation. Full Year Results FY 2020.

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Review by business stream

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Life Sciences overview – organic and acquisition growth

• Total revenue growth of 13.0%, organic growth of 5.9%, scope growth of 3.3% (acquisitions and divestments) and 3.8% positive currency impact.

• Organic revenue growth driven by green fields and market share gains.

• Underlying margin of 15.3%, +35 bps vs pcp, driven by productivity improvements – on track to deliver +50bps target before COVID-19 impact in February and March.

• Strong performance in the USA, delivering +420bps underlying margin vs pcp.

• All regions delivered organic growth and margin improvement for the second successive year.

Environmental

Food and Pharmaceutical

• Total revenue growth of 9.5%, organic growth of 8.1%.

• China environmental business divested during the year.

• Strong organic growth in Australia, LATAM, USA and Northern Europe.

• Margin improvement in key geographies.

• Execution of acquisition strategy with recent acquisitions (Aquimisa and ARJ) performing well, driving further margin improvement.

Underlying results	FY20 post-AASB 16	FY20 pre-AASB 16	FY19	Change pre-AASB 16
Revenue	$939.2 m	$939.2 m	$831.4 m	+13.0%
EBITDA	$222.8 m	$192.8 m	$166.8 m	+15.6%
EBITDA margin	23.7%	20.5%	20.1%	+46 bps
EBIT	$148.7 m	$143.9 m	$124.4 m	+15.7%
EBIT margin	15.8%	15.3%	15.0%	+35 bps

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Investor Presentation. Full Year Results FY 2020.

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Life Sciences – portfolio and margin evolution

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in $m
1,000 Environmental 19%
Total revenue
Food / Pharmaceutical
CAGR +10.3%
900 Consumer / Electronics
18%
Underlying EBIT Margin
800
17%
700
600
16%
500
15%
400
300
14%
200
13%
100
0 12%
FY16 FY17 FY18 FY19 FY20
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Investor Presentation. Full Year Results FY 2020.

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Recent acquisitions performing well

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ARJ

• Acquired in August 2019, based in Mexico.

• Founded in 1967, annual revenue of ~$30m, 500 employees.

• Largest private pharmaceutical testing laboratory in Latin America.

• Strong performance since acquisition.

ANNUAL ~$30 m REVENUE

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ANNUAL ~$35 m REVENUE

Aquimisa

• Acquired in December 2019, based in Southern Europe.

• Founded in 1994, annual revenue of ~$35m, 350 employees.

• Chemical and microbiological food testing, expanding existing footprint in Europe and adding new capability to ALS network.

• Strong Q4 20 contribution despite COVID-19 shutdowns in key markets.

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Investor Presentation. Full Year Results FY 2020.

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Life Sciences outlook – managing cost base and new product development

 Leverage ‘hub and spoke’ model to manage cost base across all businesses and geographies. Ongoing focus on productivity improvement and efficiencies from innovation including data analytics  from production management platform and driving method standardisation.  Continue to develop and roll-out new COVID-19 and pathogenesis human and surface testing services.  Leverage green field and growth CAPEX investments completed in FY20.



Highly disciplined bolt-on acquisition strategy.

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Investor Presentation. Full Year Results FY 2020.

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Commodities overview – organic growth despite Geochemistry sample flow decline

Geochemistry  Sample volumes down 9% vs pcp primarily driven by lack of exploration by juniors.  Organic revenue down 1.2%, price management and mix partially offset volume decline.  Contribution margin of 27% demonstrates resilience of ‘hub and spoke’ model	Metallurgy  Revenue decline of 2.6% vs pcp due to strong prior period and COVID- 19 impact in Q4 FY20.  Strong gold, iron ore and copper related activity with growing rare earth contribution.  Strong margin of 24% based on cost control, solid client relationships and market-leading technical capabilities.	Inspection  Revenue growth of 18.6% vs pcp, with 6.5% organic and 8.9% scope.  Execution of international expansion strategy with green field investments and acquisitions  MARSS International (acquired in Jan 2019) performing above expectations.	Coal
			 Revenue growth with increasing contribution from bore-core work.  Independent investigation into Australian Superintending and Certification unit completed.  Stringent additional controls in place with process improvements and automation nearing completion.
Underlying results	FY20 post-AASB 16	FY20 pre-AASB 16 FY19 Change pre-AASB 16
Revenue	$642.2 m	$642.2 m $620.3 m +3.5%
EBITDA	$201.4 m	$185.5 m $189.6 m (2.2)%
EBITDA margin	31.4%	28.9% 30.6% (167) bps
EBIT	$164.5 m	$162.5 m $167.7 m (3.1)%
EBIT margin	25.6%	25.3% 27.0% (172) bps

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Investor Presentation. Full Year Results FY 2020.

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Geochemistry – early signs of growth in mining activity before impact of COVID-19

ALS Global mineral sample flow (trailing 52 week running average) and global exploration spend

150,000

Average Weekly Sample Flow Global Exploration Spend USD bn Relative Gold Price in USD 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 '20

• Early signs of junior equity raisings improvement in Q4 FY20, however exploration spend was limited due to impact of COVID-19 pandemic

• Gold price (~50% of volume) remains supportive.

• Requirement to replenish resources to drive the need for exploration in the medium-term.

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Geochemistry – sample flow growth before impact of COVID-19 pandemic

ALS Global mineral sample flow (two week growth trend)

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2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 '20
COVID-19 impact
DELTA (last 2 weeks sample flow versus same 2 weeks last year)
Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20
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• Sample flows volume down 9% for FY20 vs. pcp:

• Primarily driven by lower volumes from junior miners, major producer volume was stable.

• Geopolitical uncertainty in LATAM and Africa impacting some mining operations.

• Improvement in sample flow trend in H2 FY20 : H1 vs pcp : -11% / H2 vs pcp -6%

• Decline in sample flows in FY21 to date primarily due to COVID-19 pandemic – immediately prior there were early signs of growth in mining activity in most regions of the world

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Investor Presentation. Full Year Results FY 2020.

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Junior and intermediate fund raisings and pipeline activity showing some improvement

Junior and intermediate financings, March 2018 – April 2020

Project drilling activity by commodity, March 2018 – April 2020

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Amount raised Gold financings Number of Number of distinct projects drilled Number of reported
(US$M) Base/other metals financings financings / Exploration price index Copper Gold drillholes
1,500 Specialty commodities financings 350 350 SilverPGM NickelLead-Zinc 7,000
Number of financings completed
Minor base metals Specialty commodities
Exploration price index Total drillholes reported
300 300 6,000
1,250
250 250 5,000
1,000
200 200 4,000
750
150 150 3,000
500
100 100 2,000
250
50 50 1,000
0 0 0 0
M J S D M J S D M M J S D M J S D M
2018 2019 2020 2018 2019 2020
Data as of May 7, 2020. Source: S&P Global Market Intelligence Data as of May 7, 2020. Source: S&P Global Market Intelligence
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• Equity financings for junior and intermediate miners and drilling activity are key lead indicators of Geochemistry sample flow volume

• Subdued activity in March 2020 due to COVID-19 pandemic followed by an improvement in April 2020

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Commodities – long-term strategy unchanged



Geochemistry using ‘hub and spoke’ model aligning cost base with client demand. Long-term strategy remains unchanged with growth through new opportunities (including mine sites) and innovation.

 Metallurgy continues to see solid ongoing demand for gold, iron ore and copper related services.



Inspection business capitalising on the green field investments completed in FY20, as part of its international expansion strategy.

 Coal oversupply and low coal price reducing market activity in the short term.

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Investor Presentation. Full Year Results FY 2020.

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Industrial overview – organic growth in FY20 with challenging market ahead

Asset Care

Tribology

• Total revenue growth of 19.4%, with strong organic growth of 17.6%

• Total revenue growth of 12.9%, organic revenue growth of 9.1%.

• Australia growth driven by maintenance revenue from energy and mining sectors.

• Australia growth supported by favourable mining production environment.

• USA growth driven by green field investments.

• On track to deliver margin improvement before COVID-19 impact

• USA growth driven by diversification of service offering (innovation and technology) and focused business development efforts.

Underlying results	FY20 post-AASB 16	FY20 pre-AASB 16	FY19	Change pre-AASB 16
Revenue	$250.5 m	$250.5 m	$213.1 m	+17.6%
EBITDA	$38.3 m	$31.7 m	$27.7 m	+14.4%
EBITDA Margin	15.3%	12.7%	13.0%	(32) bps
EBIT	$25.2 m	$24.2 m	$21.4 m	+13.1%
EBIT Margin	10.1%	9.7%	10.0%	(38) bps

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Investor Presentation. Full Year Results FY 2020.

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Industrial outlook – rationalisation and leveraging innovation

Asset Care

Cost reduction and rationalisation initiatives to protect margin.

• Concentrate business development efforts on markets not significantly impacted by COVID-19 pandemic.

Tribology

• Continue to execute on global business development strategy to deliver organic growth.

Leverage implemented innovation, automation and data analytics to drive revenue and EBIT growth.

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Investor Presentation. Full Year Results FY 2020.

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Group FY20 performance vs strategic priorities

Shorter-term strategic priorities

FY20 performance

Life Sciences

Strong organic growth and margin expansion (pre AASB 16 impact) across all regions

• 5.9% organic growth.

• • +35 bps margin improvement vs FY19 (on track to deliver +50bps pre-COVID-19). • All regions delivered positive organic growth and margin improvements for the second successive year.

Commodities

• Single digit revenue growth across the division • 3.5% revenue growth. •

• Stable Geochemistry sample flow volumes -9% sample flow vs pcp, largely offset by price management and mix. Industrial • 17.6% revenue growth.

• Drive revenue growth and stabilise margin • -38 bps margin vs FY19 (on track to deliver margin improvement pre-COVID-19).

Longer-term strategic priorities

Non-cyclical businesses contributing 50% of Group EBIT by 2022

Strategic acquisitions in key growth markets

FY20 performance

• 51% EBIT contribution in FY20 (47% in FY19).

• • ARJ and Aquimisa acquired in FY20, ~$65 m combined annual revenue, both performing in-line with expectations.

• • Highly disciplined acquisition strategy.

Investment in technology and innovation

• Continued focus and investment across the businesses with selective CAPEX spending.

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Investor Presentation. Full Year Results FY 2020.

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History of ALS revenue mix (from continuing operations) – increasing diversity

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2.00
Total revenue
CAGR +12.9%
CAGR +23.2%
1.80
1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20
0.00
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20
Commodities Life sciences Industrial
$ billion
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Managing through COVID-19

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Managing through COVID-19

• Industry-leading safety performance.

Strong balance sheet with ~$650 million of liquidity available including ~$200 million increase to existing facilities agreed with bank debt providers.

Swift action taken by management to align cost base with client demand while maintaining strong capability in people, capacity, supply chain and client service.

Group has demonstrated resiliency during the COVID-19 pandemic to date, due to diversified portfolio of  businesses across a wide range of geographies, with many operations deemed as ‘essential businesses’ that continue to operate.

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Managing through COVID-19



Decision to impair Latin American Life Sciences business reflects enhanced risk profile of market, particularly in Brazil and Peru, due to ongoing socioeconomic issues, prolonged impact from COVID-19 and material devaluation of currencies. Impairment to Industrial division also due to impact from COVID19 combined with recent downturn in oil and gas sector.

Total revenue decline of 9% in April 2020 (compared to pcp) primarily due to economic shutdowns  making sample collection difficult (particularly in Life Sciences), several economies have started to relax restrictions in last few weeks although too early to tell the impact on sample volumes. Capacity for innovation and product development (including recently launched COVID-19 human and  surface testing services) and supportive structural market trends (such as increasing outsourcing by clients) to drive long-term growth.

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Investor Presentation. Full Year Results FY 2020.

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Financial appendix

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One-offs, amortisation and impairment of intangibles – FY20

		Restructuring and Other One-Off Items	Restructuring and Other One-Off Items	Restructuring and Other One-Off Items	Restructuring and Other One-Off Items	Restructuring and Other One-Off Items	Restructuring and Other One-Off Items	Restructuring and Other One-Off Items	Amortisation and
in $m		Start up	**Restructure **	Acquisition	Other One- off Items	Divestment & Other Business Closures	Total		Impairment of Intangibles
Commodities Life Sciences Industrial Corporate Discontinued		- (0.9) (0.1) (1.1) - (2.0) (6.3) (1.7) (1.3) (0.3) - (9.5) (0.8) (0.1) - 0.2 - (0.8) - - (3.3) 0.2 - (3.1) - - - (0.1) 54.1 54.0							(50.0) (40.0) (7.6)
Total		(7.1)	(2.7)	(4.6)	(1.1)	54.1	38.6		(97.6)

Over 75% of one-off costs, excluding divestment and business closures (excluding impairments), is related to execution of ALS growth strategy (start-ups and acquisitions).

Nature of One-Off costs :

• Startup: losses incurred during startup phase of new businesses

• Restructuring: office closing costs and severance costs linked to business reorganisation and restructuring plans

• Acquisition: transaction and integration costs linked to acquisitions

• Other one-off Items: corporate (realised FX in intercompany loan), discontinued (oil and gas business)

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Investor Presentation. Full Year Results FY 2020.

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Corporate cost evolution

Corporate costs* Revenue Corporate costs % on revenue	H1 FY18	H2 FY18	H1 FY19	H2 FY19	H1 FY20	H2 FY20
	12.4 721.6	14.1 725.3	18.2 826.1	18.8 838.7	19.7 919.1	19.4 912.8
	1.7%	1.9%	2.2%	2.2%	2.1%	2.1%

* exclude net foreign exchange gain or loss.

• FY20 absolute cost increase mainly driven by increase in insurance premium and investment in human capital

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Investor Presentation. Full Year Results FY 2020.

35

Underlying effective tax rate movement

$m Underlying profit before tax (from continuing operations) Tax Underlying effective tax rate (ETR)	FY20 After AASB 16 264.5 (74.0) 28.0%	FY19 249.1 (67.1) 27.0%	Change
			YoY
			6.2% 10.3%
			1.0 pts

FY20 vs FY19

• Increase in underlying ETR driven by changes to the anti-hybrid interest deductibility rules in Australia

• Treatment of tax startup costs for green field operations

FY21 outlook

• ETR is anticipated to be ~29% on an underlying basis

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Investor Presentation. Full Year Results FY 2020.

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Net debt evolution

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14
800
129
700
88 800
600
22
500 246
112
67
629
119
400
300
200
31 Mar 2019 Net Free cash Flow Acquisitions Divestments Dividends paid Issued capital FX Interest and Tax Restructuring 31 March 2020
Debt bought back costs Net Debt
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Investor Presentation. Full Year Results FY 2020.

37

Sustainability program – FY20 achievements

Health & Safety Safety is a Priority

Innovation & Technology

Embracing innovation and technology

Diversity & equality Respecting differences Human rights

Worker’s rights upheld / Modern Slavery Assessments

Training & development Investing in talent development

People

• 11% improvement in total recordable injury frequency rate (record low injury rate).

• Improved employee satisfaction survey results.

• 53% new female professional hires.

• Motor vehicle tracking (IVMS) introduced across the fleet.

Environment

Operational Environmental Waste reduction Performance Reduce, reuse, recycle Mitigation of environmental emissions

Water conservation

Managing a scarce resource

Energy management The pursuit of energy efficiency Climate Change

Managing and reducing our CO ₂ emissions

Economic Contributions Supporting local stakeholders

Employment creation

Creating jobs in the local community

Local investment

Enriching our communities / ALS Workplace Giving / Community Sponsorships

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Society

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• On track with 5% reduction target in scope 1 & 2 greenhouse gas emissions intensity by 2021 (based on 2018 baseline).

• Strengthened climate change reporting using TCFD framework.

• Over 50 tonnes reduction in plastic from sample bottle miniaturisation project (since inception in 2010).

• Continued implementation of LED lighting program.

• University student programs continued

• ‘ALS Cares’ Workplace Giving Program established

• Support for 3 key charities

• AUD$1.8 bn economic contribution

• Over 1,000 new employees joined ALS

Financial performance Maximise return for shareholders

Anti-bribery & corruption Zero tolerance for bribery and corruption

Honesty & integrity

An ALS core value

Regulatory compliance

Systems to maintain legal compliance

Enterprise Risk Management Building resilience Information Security

Governance

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• New whistleblower protection training rolled out

• Commenced implementation of a new global ERP

• Revised Crisis Management Procedures to build more resilient businesses.

• Performed an external review of IT network to ensure strong IT security.

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39 Investor Presentation. Full Year Results FY 2020.