IMDEX LIMITED — Annual Report 2009

Aug 16, 2009

Imdex Limited FY09 Financial Results 17 August 2009

Bernie Ridgeway – Managing Director Paul Evans – Chief Financial Officer

Presentation overview

• Overview

• FY09 financials

• Operational review

• Drilling Fluids & Chemicals Division

• Down Hole Instrumentation Division

• Market outlook

• Signs of recovery

• Mineral exploration

• Oil and gas

• Strategy and growth opportunities

Overview

Bernie Ridgeway – Managing Director

Sound results given difficult markets

• Revenue from continuing operations � 4% to $137m (FY08 - $142m)

• EBITA from continuing operations* � 37% to $24.5m (FY08 - $38.8m)

� NPAT before non-operational items � 46% to $11.3m (FY08 - $21.1m)

• Cash flow from operations � 58% to $16.2m (FY08 - $10.3m)

• Low gearing – net debt / capital of 16.0% (Jun 08 - 17.4%)

• Interest cover : EBITA of 30 times

• Bank facilities extended until 2014

• Full year dividend 1 cps fully franked (FY08 – 4 cps)

• Signs of recovery experienced in 4Q09

* Excluding non-operational items

Revenue and EBITA

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Revenue
EBITA ^
160 ($m)
� 4% 45 ($m)
142.0
140 137.0 40 38.8
35
120 � 37%
103.8
30
100
24.5
25
22.3
80
20
60 52.9
15
40
30.4 10
7.4
5.2
20 5
0
0
FY05 FY06 FY07 FY08 FY09
FY05 FY06 FY07 FY08 FY09
^ excludes discontinued operations and
Drilling Fluids and Chemicals Down Hole Instrumentation
non-operational items
excludes other income & discontinued operations
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Signs of recovery

0 5 10 15 20 25 30 35 40 45 50	Q308 Q408 Q109 Q209 Q309 Q409 Revenue ($m) �Positive tool movements since May 09 �General increase in drilling activity �Customers positive on tender activity �Capital raisings by resource companies �Improved key commodity prices 43.2 37.1 26.2 30.5 39.0 32.8*

• excludes other income & discontinued operations

FY09 financials Paul Evans – Chief Financial Officer

Profit & loss ($ millions)

rofit & loss
($ millions) FY07 FY08 FY09 FY08 / FY09 Var % Revenue 103.8 142.0 137.0 4% �	FY07	FY08	FY09	FY08 / FY09 Var %
EBITDA 25.5 42.1 27.8 34%� Depreciation (3.2) (3.3) (3.3) 2% �
EBITA 22.3 38.8 24.5 37%�
Amortisation (3.4) (6.0) (6.5) 8%� Net interest expense (1.9) (0.9) (0.8) 4%� Tax expense (5.8) (10.8) (5.9) 46%�
Operating profit after tax 11.2 21.1 11.3 46%�
- - - 0.7 RTE recovery Discontinued operations 1.6 10.9 - - Forexgain on SGE - - 0.8 -
Net profit after tax 13.5 32.0 12.1 62%�
Earnings per share (continuing operations) Basic (cents per share) 7.72 11.22 6.37 43%� Diluted (cents per share) 7.09 10.79 6.23 42%�
Cash flow from operations 16.3 10.3 16.2 58%�

Conservative balance sheet

($ millions) Net cash Receivables Inventory Investment in SGE Fixed assets Intangibles Other assets	�Solid working capital ratios �$12.0m cash on hand �$5.4m unused facility �Total debt down $1.5m to $34.0m �$8.5m Flexit liability extinguished �SGE �Investment $8.1m �Secured receivable $12.4m June 09 June 08 12.0 13.3 23.4 32.1 26.4 21.7 20.5 17.5 10.8 7.1 79.2 79.9 1.5 1.4 173.8 173.0 18.1 25.3 21.5 17.0 8.3 13.1 2.5 5.4 1.7 - 5.5 6.6 116.2 105.6 1.62 1.53 2.37 2.05 16.0% 17.4%
Total Assets
Payables Commercial bills Bank loan Vendor finance HP Finance Provisions / Deferred tax
Total Equity
(CA – Inventory)/CL CA/CL Gearing(net debt / capital)

Low gearing

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HPs
ITUK
$1.7m
$2.5m
5%
7%
Bank Loan
$8.3m
25% Comm Bills
$10.0m
29%
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Comm Bills $11.5m 34%
Nil interest rate	Capped interest rate
Floating interest rate	Fixed interest rate

� Total debt at 30 June 09 - $34.0m

• Low gearing 16%

• Bank facilities extended until 2014

• Interest cover (normalised EBITA / net interest expense) = 30 times

• ITUK (Chardec) liability paid July 09

• No outstanding vendor liabilities

• Cash flow from operations up 58% to $16.2m

Operational review Bernie Ridgeway – Managing Director

A snapshot of Imdex’s business

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Key markets
Drilling Fluids & Chemicals (DFC)
•Consumable item Mining & Mineral
Exploration
•Keep drill holes open and lubricate
moving parts while removing
cuttings to the surface
•Environmental focus
•Manufacture & supply
Oil & Gas
Down Hole Instrumentation (DHI)
• Core orientation
Global Reach
• Survey tools
• Magnetic and non-magnetic
• World class technology Other markets
• Innovation • Coal Bed Methane (CBM)
• Rental model • Water well
• Manufacture & supply • Horizontal directional
drilling / Civil
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Global presence

FY09 revenue vs FY08 (continuing operations)

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Europe
6%
Americas
22%
Asia Pacific
55%
Africa
17%
FY09 revenue
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Key highlights & operational review (DFC)

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Revenue
($m)
� 7%
100 91.7
90 85.7
80
70 62.4
60
50
41.7
40
30 23.2
20
10
0
FY05 FY06 FY07 FY08 FY09
DHI
33%
DFC
67%
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• Strong organic growth to Nov 08 followed by decline in world markets

• Wildcat successfully integrated and provided positive contribution

• Commissioned new plants to better service regional markets

• Samchem, Johannesburg

• Santiago, Chile

• Commercialised unique solids control units – benefit in FY10

• Global alliances grew global footprint

FY09 Divisional Revenue Split

Key highlights & operational review (DHI)

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Continuing Revenue ($m)
60 56.3
� 20%
50
45.3
41.5
40
30
20
11.2
10 7.2
0
FY05 FY06 FY07 FY08 FY09
DHI
33%
DFC
67%
FY09 Divisional Revenue Split
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• Decline in global mineral exploration partially offset by resilient rental model

• Global alliances grew global footprint

• Flexit $10m liability settled by 10m shares

• Repositioned DHI trading brands

• Reflex – mining & mineral exploration

• � Flexit – oil and gas

• Innovative down hole instrumentation launched at PDAC and OTC

• Research and development centres of excellence

• Relocated Reflex manufacturing from UK to Australia

Market outlook Bernie Ridgeway – Managing Director

Signs of recovery

• 3Q09 represented trough – signs of recovery in 4Q09

� Improved global debt and equity markets – better access to funding

• Key commodity prices such as copper and nickel recovered from 08 lows

• Major customers bottomed out in March/April 2009

• Increased drilling and tender activity globally

• Main activity: gold, iron ore, coal, uranium and coal bed methane

• Oil & gas industry remains robust

• Fundamental supply/demand imbalances remain

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Mining exploration spend v discoveries
12 16
11
Major/World Class Deposit Discoveries 14
10
Worldwide Exploration Spending
9 12
8
10
7
6 8
5
6
4
3 4
2
2
1
0 0
Source: Metals Economics Group & UBS
(US$ Bn)
Number of Discoveries
Worldwide Exploration Spend
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
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• 1 new world class discovery in 8 years

• Higher costs, deeper & more complicated ore bodies

• Supply issues unaddressed

• Misaligned supply and demand

Oil & gas – worldwide upstream capex

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US$Bn
500
� 21% �
Global spend expected to
drop 21% in 2009
400
�
Still high in historical terms
300
�
Supply/demand
imbalances remain
200
�
Exploration - increasingly
100 complex
�
Good opportunities for
0 Imdex’s technology
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
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• Still high in historical terms

Source: APPEA 2009 presentation “Energy Security in an Insecure Financial World”

Strategy & growth opportunities Bernie Ridgeway – Managing Director

Robust strategy – progress on track

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Early Stage
1%
Minerals 20% 19%
Late Stage 49% 50%
Minerals
61%
Oil & Gas
Management’s best estimate Management’s best estimate
Fluids
19%
Downhole
Instrumentation 50% 54% 46%
31%
Services
Sell 24%
Rent
76%
100%
¹ Based on actual or anticipated EBITA
2 Based on actual or anticipated Revenue
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FY10 strategy & opportunities – DFC

Rental Global Oil and Gas Research and Development Operational efficiencies

FY10 strategy & opportunities – DHI

Rental Global Oil and Gas Research and Development Operational efficiencies

Resilient business with attractive growth opportunities

• 4Q09 signs of recovery – market fundamentals improving

• Global growth opportunities in FY10 and beyond, particularly oil & gas

• Strong position to deliver on focused strategy

• Conservative balance sheet - bank facilities extended to 2014

• Strong management team

• World class expertise and innovation

• Continuing R&D spend to maintain market leadership

Appendices

Statutory profit & loss statement

Continuing operations Revenue from sale of goods and operating lease rental Other revenue from operations Total revenue Other income Raw materials and consumables used Employee benefit expense Depreciation expense Amortisation expense Finance costs Other expenses Profit before tax Income tax expense Profit from continuing operations Profit from discontinued operations Profit for the year	Year Ended Year Ended 30 June 2009 30 June 2008 $’000 $’000 136,968 142,009 2,024 1,900 Consolidated
	138,992 143,909
	253 369 (61,700) (59,589) (28,467) (22,996) (3,318) (3,266) (6,535) (6,055) (2,850) (2,762) (18,180) (17,725)
	18,195 31,885
	(6,128) (10,804)
	12,067 21,081
	- 10,921
	12,067 32,002

Statutory balance sheet

Current Assets Cash and Cash Equivalents Trade and Other Receivables Inventories Other Financial Assets Other Non Current Assets Classified as Held for Sale Total Current Assets Non Current Assets Other Financial Assets Property, Plant and Equipment Goodwill Other Intangible Assets Total Non Current Assets Total Assets Current Liabilities Trade and Other Payables Borrowings Current Tax Payables Provisions Other Current Liabilities Total Current Liabilities Non Current Liabilities Borrowings Deferred Tax Liabilities Provisions Other Non Current Liabilities Total Non Current Liabilities Total Liabilities Net Assets Equity Contributed Capital Foreign Currency Translation Reserve Employee Equity-Settled Benefits Reserve Retained Profits Total Equity	30 June 2009 30 June 2008 $’000 $’000 11,975 13,276 23,367 32,079 26,535 21,716 12,340 13,237 1,507 1,200 Consolidated
	75,724 81,508 8,130 4,500
	83,854 86,008
	- - 10,781 7,140 55,268 52,626 23,915 27,289
	89,964 87,055
	173,818 173,063
	12,769 16,522 13,514 13,016 5,268 8,792 1,317 972 2,492 2,687
	35,360 41,989
	18,033 17,132 3,674 5,024 553 558 - 2,717
	22,260 25,431
	57,620 67,420
	116,198 105,643
	67,136 64,883 (4,105) (4,863) 4,024 2,573 49,143 43,050
	116,198 105,643

Statutory cash flow statement

Cash Flows From Operating Activities Receipts from customers Payments to suppliers and employees Interest and other costs of finance paid Income tax paid Net cash provided by / (used in) Operating Activities Cash Flows From Investing Activities Interest received Payment for property, plant and equipment Proceeds from sale of property, plant and equipment Payment for development costs capitalised Payment for shares of Wildcat net of cash acquired Payment for shares of Imdex Technology UK net of cash acquired Payment for shares of Poly-Drill net of cash acquired Payment for shares of Suay net of cash acquired Payment for shares of Southernland net of cash acquired Payment for shares of ITG net of cash acquired Proceeds on the sale of Surtron net of cash disposed Net cash provided by / (used in) Investing Activities Cash Flows From Financing Activities Cash received on exercise of options Dividend paid to equity holders of the parent Hire purchase debt raised Hire purchase and lease payments Payment for interest rate cap Payment of convertible note interest Proceeds from borrowings Repayment of borrowings Net cash used in Financing Activities Net Increase / (Decrease) in Cash and Cash Equivalents Held Cash and Cash Equivalents At The Beginning Of The Financial Year Effects of exchange rate changes on the balance of cash and cash equivalents held in foreign currencies Cash and Cash Equivalents At The End Of The Financial Year	Year Ended Year Ended 30 June 2009 30 June 2008 $’000 $’000 161,981 154,253 (132,564) (126,292) (1,963) (2,342) (11,279) (15,362) Consolidated
	16,175 10,257
	119 451 (7,741) (4,803) 2,113 1,138 (3,650) - (1,902) - (3,106) (5,088) - (899) (500) (246) - (1,446) - (13,853) - 18,000
	(14,667) (6,746)
	93 674 (5,975) (5,934) 1,838 - (227) (888) - (239) - (464) 7,000 12,000 (6,592) (9,983)
	(3,863) (4,834)
	- -
	(2,355) (1,323)
	13,276 15,271 1,054 (672)
	11,975 13,276

Imdex Group structure

Global reach

Disclaimer

This presentation has been prepared by Imdex Limited (“the Company”). It contains general background information about the Company’s activities current 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.

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