IMDEX LIMITED — Interim / Quarterly Report 2011

Feb 20, 2011

Imdex Limited

1H11 Results Presentation 21 February 2011

Bernie Ridgeway – Managing Director Paul Evans – Chief Financial Officer

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.

This presentation is not (and nothing in it should be construed as) an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any security in any jurisdiction, and neither this document nor anything in it shall form the basis of any contract or commitment. The 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 particular investor. These should be considered, with or without professional advice, when deciding if an investment is appropriate.

The Company has prepared this presentation based on information available to it, including information derived from publicly available sources that have not been independently verified. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, correctness or reliability of the information, opinions and conclusions expressed.

Any statements or assumptions in this presentation as to future matters may prove to be incorrect and differences may be material. To the maximum extent permitted by law, none of the Company, its directors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising from fault or negligence on the part of any of them or any other person, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it.

Today’s presenters

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Bernie Ridgeway Managing Director

Paul Evans Chief Financial Officer / Company Secretary

Presentation overview

• Overview

• 1H11 financial performance

• Operational review

Bernie Ridgeway Paul Evans Bernie Ridgeway

• Minerals Division

• Oil & Gas Division

• Strategy and outlook

Bernie Ridgeway

Overview

Bernie Ridgeway – Managing Director

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1H11 Results Presentation – 21 February 2011 5
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Continuation of strong performance rebound

• Record half year performance

• Consistent revenue and EBITA improvement since 2H09 low

• Investing through the GFC is supporting our ability to capitalise on improved industry dynamics

• Simplification of brands and regionalised business well executed and delivering benefits

• Market leading technology

• Exciting new product pipeline

Strong financial performance

Key indicator	1H11	1H10	Change
Revenue	$95.9m	$58.4m	�64%
EBITA (excl non-operational items)	$21.2m	$7.5m	�182%
NPAT (excl non-operational items)	$12.1m	$2.9m	�323%
Operational cash flow	$13 9m .	$4 6m .	�202%
Gearing (net debt / capital)	18.4%	19.6%	-
Interest cover	16 times	9 times	-
Interim dividend (fully franked)	1.75 cents / share	-	-

Operational achievements

• Strong global uptake of Reflex mining down hole instrumentation

• Rental tool fleet numbers reach historic highs in1H11 with new record at end Jan 11

• Significant impact globally from regional business model - mining

• Strategic acquisition of Fluidstar, effective 1 September, 2010

• Relocation of Imdex Technology , Sweden to Australia & Germany

• Agreement for DHSO joint venture – down hole survey services - oil & gas

• Potential acquisition of Mud-Data in Germany – drilling fluids and equipment – geothermal and oil & gas, Europe

• Winner - WA Innovator of the Year Award - Solids Control technology

Record revenue level achieved

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120 Revenue
($m)
100 95.9
80.3
80 75.9
72.9
69.1
60 57.9 56.7 58.4
45.9
40
20
O&G
0
1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11
excludes other income & discontinued operations
1H11 Results Presentation – 21 February 2011 9
Minerals
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Brand representation

1H11 Revenue * ($m)

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AMC Flexit
O&G
- Oil & Gas Division (15%)
AMC
Minerals - Minerals Division (85%)
Reflex
excludes other income
1H11 Results Presentation – 21 February 2011 10
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Record EBITA level achieved

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EBITA
25
($m)
21.2
19.8 20.0 20.0
20
15
13.2
12.2
10 1.
10
7.5
5 4.5
0
1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11
excludes discontinued operations and non-operational items
1H11 Results Presentation – 21 February 2011 11
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1H11 financial performance

Paul Evans – Chief Financial Officer

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1H11 Results Presentation – 21 February 2011 12
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Profit & loss

($’000s)	1H11	1H10	Var	%
Revenue (excl interest income)	95,897	58,394	�	64%
EBITDA	23,791	9,443	�152%
Depreciation	(2,637)	(1,935)	�	36%
EBITA	21,154	7,508	�182%
Amortisation	(3,430)	(3,089)	�	11%
Net interest expense	(1 296) ,	(820)	�	58%
Tax expense	(4,348)	(746)	�483%
NPAT before non recurring items	12,080	2,853	�323%
Impairment	-	(28,433)		-
Forex on SEH loan	-	(721)		-
Tax effect of non recurring items	-	1,687		-
Reported NPAT	12,080	(24,614)		-
NPAT / Weighted average shares on issue (cents)	6.17	(12.63)		-
Cash flow from operations ($’000s)	13,857	4,587	�202%
1H11 Results Presentation – 21 February 2011					13

Conservative balance sheet

($ millions) Dec 10 Jun 10 Net cash 15.9 9.0 Receivables 39.8 41.2 Inventory 36.5 28.6 Investment in SEH 16.6 6.8 Fixed assets 15.1 13.6 Intangibles 54.9 50.0 Other assets / Deferred tax 14.2 14.2	Dec 10	Jun 10
Total Assets 193.0 163.4
Payables 25.6 25.7 Commercial bills 27.4 19.5 Bank loan – Canada 8.6 5.7 Bank loan – Sweden 1.4 2.9 HP Finance 3.2 3.9 Provisions / Current tax 17.2 11.2
Total Equity 109.6 94.5
(CA – Inventory)/CL * 0.89 1.03 CA/CL * 1.43 1.58 Gearing(net debt / capital) 18.4% 19.6%

• Strong liquidity and working capital ratios

• Decreased gearing due to strong profits and cash on hand

• Low capital intensity

• � Deferred tax asset on unrealised profits in tools

• using CIBC repayment terms not reported disclosure

Comfortable gearing levels

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50.0
45.0 14.3 (5.0)
40.0
(0.7)
35.0
30.0
25.0
20.0 41.2 40.6 40.6
32.0 32.0
15.0
10.0
5.0
-
Jun-10 Fluidstar Pmts FX Dec-10
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• Additional debt of $14.3m for Fluidstar acquisition

• $5.0m of AUD debt swapped into CAD. Better natural hedge – no net impact on debt levels

• $5.0m of loan repayments as scheduled

• Net debt $24.7m ($23.0m – June 10)

• Gearing 18.4% (June 10 – 19.6%)

• Interest cover of 16 times (EBITA over net interest)

Operational review Bernie Ridgeway – Managing Director

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1H11 Results Presentation – 21 February 2011 16
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Africa
Minerals Division
Americas
Revenue
90 ($m) Europe 81.5
Asia Pacific
80
68.4 15%
64.7
70 63.5
61.4
26%
60 54.0
46.4
50
42.6 2%
40.5
40 57%
30
20
10
0
1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11
NB: Regional structure adopted 1 July 10 – Comparatives have been
reconstructed using assumptions for illustrative purposes
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• excludes other income & discontinued operations

Minerals Division

• �� 26% on 2H10 revenue

• �� 75% on 1H10 revenue

• 85% of Imdex Group revenue

• Record tool fleet numbers achieved. Further records created early 2H11

• Strong uptake of Reflex tools with increased market share

• AMC drilling fluids brand rolled out globally

• Regional structure delivering cross selling advantages

• Seamless integration of Fluidstar into AMC

• Solids control commercial - early stages of market introduction

• Strong relationships with global and local customers

• Upward trend in revenue and margin expected to continue

Record mining tool rental fleet

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�
Significant growth from April 09 low point
Tools on Hire
Feb 08 Apr 08 Jun 08 Aug 08 Oct 08 Dec 08 Feb 09 Apr 09 Jun 09 Aug 09 Oct 09 Dec 09 Feb 10 Apr 10 Jun 10 Aug 10 Oct 10 Dec 10 Feb 11
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• Seasonal slowdown over December - highlighted

• New records being set in 2H11

Oil & Gas Division

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18
Revenue
($m) 16.2
16
14.4
14
11.8 11.9
12
11.1
10
9.3
8 7 7.
6
3.9
4
3.3
2
0
1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11
excludes other income & discontinued operations
1H11 Results Presentation – 21 February 2011 20
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Oil & Gas Division

• �� 21% on 2H10 revenue

• �� 21% on 1H10 revenue

• 15% of Imdex Group revenue – drilling delays experienced due to persistent wet weather in eastern Australia

• Adjusted Flexit path to market strategy from products to services

• Continued product development on existing/new tools

• Growth expected in fluids, completion and production chemicals

• Proposed Mud-Data acquisition to contribute mainly from FY12 and beyond

• Upward trend in revenue and margin expected to continue

Strategy and Outlook Bernie Ridgeway – Managing Director

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1H11 Results Presentation – 21 February 2011 22
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On track with strategy

Oil & Gas Minerals 85% Instruments 33% Fluids 67% Services Sales 29% Rentals 71% ¹ Based on actual or anticipated EBITA 2 Based on actual or anticipated Revenue

Key business drivers and outlook

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Client rig utilisation % Current high utilisation levels expected to continue
Level of tool rentals New tool records set in 1H11
Already exceeded in 2H11
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Development of new R&D investment spending continued on both
instrumentation mining and oil & gas tools
Further tool releases expected in 2H11 and beyond
Key growth strategy Increasing # of preferred supplier agreements
Revenue and cost 3 global brands (AMC, Reflex, Flexit)
synergies Regional structure = more effective cross selling
1H11 Results Presentation – 21 February 2011 24
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Global exploration spend (non ferrous)

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Estimated Exploration Spend Worldwide
16.0
US$ Billions
14.0
Source: Metals Economics Group
12.0
10.0
8.0
6.0
4.0
2.0
0.0
�
Rising metals prices and more stable markets drove spending � 44% on 2009
�
Major, Intermediate and Junior companies all spending
Securities Estimate
Beacon
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
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• Main commodities include gold and copper

• C2011 expenditure forecast to return to pre-GFC levels

Oil and Gas E & P expenditure

Source: BP Statistical Review, IEA World Energy Outlook, Monthly Oil Market Report, MediumTerm Oil Market Report, Barclays. Revised 0310

• E&P spending up in 2010 after decreasing in 2009 due to GFC

• More drilling needed to sustain and increase world oil & natural gas production

• Deeper and more complex reserves mean greater drilling intensity and complexity

• Unconventional hydrocarbons - increased drilling intensity and complexity to reach remote reserves and improve recovery rates

Summary

• Strong financial results delivered

• 1H11 record revenue and profit levels

• 1.75 cents per share fully franked interim dividend

• Record mining tool rental numbers

• Strong balance sheet with comfortable gearing

• Growth initiatives

• Mud-Data acquisition drives Oil & Gas fluids growth in Europe

• DHSO joint venture drives Oil & Gas instrumentation/services market growth

• Further market share gains expected from new/improved instrumentation

• Organic growth in DFC and DHI, primarily in Africa and the Americas

• Proven solids control technology in FY12 and beyond

Appendices

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1H11 Results Presentation – 21 February 2011 28
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Business overview

� 2 divisions defined by 2 end markets

� mining/mineral exploration

• oil & gas

• Own IP, manufacture products which are sold / rented to 3[rd] parties

• Strong investment in product development

� leading technology

• continuous innovation and product development

• Global footprint

• ~320 employees

• significant presence in all major mining regions

Structured to meet client needs

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Fluids Instruments

Fluids Instruments

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Brand
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Comprehensive product portfolio

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Cool and lubricate Determines the Allows geologists Allows precision the drill bit while exact position of a to determine the drilling in complex returning cuttings core sample exact trajectory of multiple well to the surface and within a bore hole a bore hole environments or stabilising the prior to extraction where drilling for bore hole small targets