IMDEX LIMITED — Interim / Quarterly Report 2013

Feb 17, 2013

==> picture [720 x 78] intentionally omitted <==

==> picture [111 x 36] intentionally omitted <==

Imdex Limited

1H13 resu lt s presen a t ti on 18 February 2013

Bernie Ridgeway - Managing Director Paul Evans - Chief Financial Officer

==> picture [720 x 78] intentionally omitted <==

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

1

Toda ’s a enda y g

==> picture [111 x 36] intentionally omitted <==

==> picture [92 x 49] intentionally omitted <==

Overview Bernie Ridgeway 1H13 financial performance Paul Evans Operational review Bernie Ridgeway St ra egy ou t & tl oo k B ern e i Rid geway

==> picture [132 x 39] intentionally omitted <==

==> picture [125 x 42] intentionally omitted <==

==> picture [720 x 78] intentionally omitted <==

==> picture [132 x 33] intentionally omitted <==

==> picture [125 x 34] intentionally omitted <==

Bernie Ridgeway Mana g in g Director

Paul Evans Chief Financial Officer / Company Secretary

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

2

==> picture [720 x 78] intentionally omitted <==

==> picture [111 x 36] intentionally omitted <==

Overview

==> picture [720 x 232] intentionally omitted <==

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

3

Solid erformance des ite challen in conditions p p g g

==> picture [111 x 36] intentionally omitted <==

• Combined revenue 3%

• O&G revenue  111% to new record hi g h

• Minerals revenue 18%

• EBITA 32%

• Cyclical Minerals slowdown reduced Reflex fleet utilisation and drilling fluids revenue

• 2.50 cps fully franked interim dividend

• Strong balance sheet

• Acquisition of ioGlobal effective 1 November 2012 – diversifies revenue streams

• Significant progress towards strategy of 30%-40% of revenue from O&G

• Positive outlook for 2H13 and beyond

==> picture [720 x 78] intentionally omitted <==

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

4

Ke metrics y

==> picture [92 x 49] intentionally omitted <==

	($m)	1H13 1H12 Var. 1276 1385 8%
	Statutor revenue
	y Combined revenue* EBITA	. . 135.6 139.9 3% 26.2 38.3 32%
	NPAT	 16.6 22.7 27% 35.9 33.2 8% 23% 12% 101%
	Pre-tax operating cash flow Gearing (ND /(ND + E))
	Interest cover Interim DPS (fully franked)	14 times 54 times  2.50 cps 3.25 cps 23%
		597 445 34%
	Number of employees

*Includes 30% of VES International JV revenue

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

5

Revenue

==> picture [111 x 36] intentionally omitted <==

Combined revenue* ($m)

==> picture [92 x 49] intentionally omitted <==

• 3% on 1H12 (record level)

• 1H13 is 3[rd] highest half year revenue

==> picture [363 x 243] intentionally omitted <==

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

139.8 139.1
135.6
109.2
96 0.
80.3
75.9
72.9
69.1
57.9 56.7 58.4
45.9
1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13
----- End of picture text -----

• Includes 30% of VES International JV revenue

• Minerals

• 75% of combined revenue

• Indications that cyclical slowdown may have bottomed

• Good growth available in underpenetrated mining regions

• Gross margins maintained

• Oil & Gas

• 25% of combined revenue

• Record half year revenue with strong momentum in 2H13

Minerals Oil & Gas di v s on i i di v s on i i

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

• Continued expansion of VES International JV via organic and acquisition growth

6

==> picture [720 x 113] intentionally omitted <==

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

EBITA
----- End of picture text -----

==> picture [96 x 16] intentionally omitted <==

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

EBITA ($m)
----- End of picture text -----*

 EBITA 32% on 1H12 (record level)

 1H13 is 4[th] highest half year EBITA

==> picture [660 x 290] intentionally omitted <==

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

38.3
36.9 
Continued investment in:

O&G strategy

26.9 Minerals expansion
26.2

ioGlobal
21.2
19.8 19.0 [20.0 ] 
Skilled staff

13.2 P ro d uc t d eve opmen an l t d R&D
12.2
10.1  O&G EBITA positive
7.5

VES International JV:
4.5

Strong EBITA performance

1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 Impacted by amortisation and
tax charges and dilution gain
Includes equity accounted VES International JV result
----- End of picture text -----*

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

7

==> picture [720 x 78] intentionally omitted <==

==> picture [111 x 36] intentionally omitted <==

1H13 financial performance

==> picture [720 x 232] intentionally omitted <==

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

8

Profit & loss

==> picture [92 x 49] intentionally omitted <==

	Profit & loss
	($m)	1H13	1H12 Var. % 138.5 8%
	Revenue	127.6
	EBITDA Depreciation EBITA	29.6 (3.4)	41.6 29% (3.3) 3% 38.3 32%
		26.2
	Amortisation Net interest expense Tax expense	(1.5) (1.8)	(2.9) 48% (0.7) 157% (12.0) 48%
		(6.3)
	Statutory NPAT	16.6	22.7 27% 11.1 29% 33.2 8%
	EPS (cents) Pre-tax cash flow from operations	7.9
		35.9

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

9

==> picture [92 x 49] intentionally omitted <==

Solid workin ca ital mana ement g p g

==> picture [720 x 309] intentionally omitted <==

==> picture [514 x 44] intentionally omitted <==

• $21.7m of cash generated from $26.2m of EBITA

• Working capital release due to improved stock and debtor management

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

10

Balance sheet

==> picture [92 x 49] intentionally omitted <==

	Strong working capital ($m) Dec 12 Jun 12 Net cash 10.0 11.2 Receivables 51.8 59.7	Strong working capital ($m) Dec 12 Jun 12 Net cash 10.0 11.2 Receivables 51.8 59.7	Strong working capital ($m) Dec 12 Jun 12 Net cash 10.0 11.2 Receivables 51.8 59.7	Strong working capital ($m) Dec 12 Jun 12 Net cash 10.0 11.2 Receivables 51.8 59.7
	($m)	Dec 12	Jun 12
	Net cash Receivables	10.0	11.2 59.7
		51.8
	Inventory Investment in SEH	49.6 32.7	52.1 21.4	management Net debt at 31 Dec 12 of $56.3m Gearing comfortable at 23%
	VES International JV	25.6	24.3
	Fixed assets Intangibles Other assets/deferred tax	34 1 .	19 7 . 61.1 25.1	Fixed asset growth from SRUs and O&G equipment business SEH investment at market value
		68.0 19.8
	Total assets	291.6	274.6
	Payables Bank loans HP Finance Provisions and current tax	32.4	33.4 58.9 0.5 13.7	R d i i d f d  e uct on n net e erre tax position as tool fleet depreciates Reduced current tax liability due to reducedprofitability
		65.7 0.6
		6.2
	Total equity	186.7	168.1
	(CA – Inventory)/CL CA/CL	1.29 2.20	1.40 2.29
	Gearing (ND / (ND + E))	23%	22%

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

11

==> picture [720 x 78] intentionally omitted <==

==> picture [111 x 36] intentionally omitted <==

Operational review

==> picture [720 x 232] intentionally omitted <==

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

12

==> picture [92 x 49] intentionally omitted <==

Minerals division

==> picture [720 x 379] intentionally omitted <==

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

Europe 4% Revenue  18% on 1H12 (record level)
Africa 20% ($m) 124.0 
117.7 1H13 is 3 [rd] highest half year
Americas 31%

Integration of ioGlobal
102.1
Asia Pac 45%
96.2  Global introduction of SRUs –
early stages
81.5

Product development
68.4
63.6 64.8 
61.4 EZ Gyro – FY14
54.1

Smart Barrel – FY14
46.5
42.6
40.4 
Outlook for 2H13

Signs market may be
improving

Solid minin and mineral
g
exploration spending
1H07^ 2H07^ 1H08^ 2H08^ 1H09^ 2H09^ 1H10^ 2H10^ 1H11 2H11 1H12 2H12 1H13

Continued growth in
underpenetrated markets
^Comparative purposes only. Regional structure adopted 1 July 10
----- End of picture text -----

• Continued growth in underpenetrated markets

• i o Gl o b a expans on l i

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

13

Sustainable and diversified revenue base

==> picture [92 x 49] intentionally omitted <==

==> picture [111 x 36] intentionally omitted <==

1H13 Minerals Revenue

Commodity Stage Customer

• 70% from gold and copper where prices are above long term averages

• ~70% from development, production and non-mining sources

 > 80% f rom ma or an j d i nterme di ate customers

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

14

Reflex rental fleet

==> picture [92 x 49] intentionally omitted <==

==> picture [720 x 78] intentionally omitted <==

Number of instruments on rent

==> picture [290 x 78] intentionally omitted <==

==> picture [720 x 155] intentionally omitted <==

==> picture [553 x 23] intentionally omitted <==

FEB 08 JUN 08 OCT 08 FEB 09 JUN 09 OCT 09 FEB 10 JUN 10 OCT 10 FEB 11 JUN 11 OCT 11 FEB 12 JUN 12 OCT 12 FEB 13

• Month on month slowdown from July 12 to Dec 12

• 56% rebound from 31 Dec 12 to 8 Feb 13

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

15

Ac uisition of ioGlobal q

==> picture [111 x 36] intentionally omitted <==

==> picture [92 x 49] intentionally omitted <==

• Effective 1 November 2012

• $8m consideration ($4.8m cash, $3.2m shares)

• Represents multiple of 4x forecast FY13 EBIT

• Provides cloud based data management solutions for the mining, mineral exploration and oil and gas industries

• Acquisition enhances our product offering, broadens customer base and increases exposure to all stages of the project life cycle

• Integration progressing well

• Strong interest from potential new clients

==> picture [720 x 78] intentionally omitted <==

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

16

Oil & Gas division

==> picture [111 x 36] intentionally omitted <==

Combined revenue* 33.5 ($m)

==> picture [386 x 305] intentionally omitted <==

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

21.3
16.2 15.9
14.4
13.1
11.8 11.9 11.1
9 3.
7.7
3.9
3.3
1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13
Includes 30% of VES International JV revenue VES International
JV revenue
----- End of picture text -----*

==> picture [92 x 49] intentionally omitted <==

• 111% on 1H12

• Record half year

• Includes $8.0m from VES International JV

• Stron rowth in Euro e and Asia g g p

• Pac, CBM strong

• Additional management depth

• Outlook for 2H13 - continued revenue growt h f rom:

• VES International JV – performing strongly at EBITA level and rowin g g

• Targeted fluids and equipment strategy for Europe, Middle East and Asia Pacific

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

17

VES International Joint Venture

==> picture [92 x 49] intentionally omitted <==

	(m) unaudited 1H13 2H12 Revenue USD 27.6 27.1 Continued strong EBITA primarily from US based operations	(m) unaudited 1H13 2H12 Revenue USD 27.6 27.1 Continued strong EBITA primarily from US based operations	(m) unaudited 1H13 2H12 Revenue USD 27.6 27.1 Continued strong EBITA primarily from US based operations
		1H13
	Revenue USD	27.6
			8.0 (3.0) 5 0 Middle East operations restructured, profitable at EBITDA line in Dec 12 Negative NPAT due to
	EBITDA USD Depreciation USD	7.8 (2.5)
	EBITA USD	5 3
		.	. - (0.7) Non-cash amortisation catch up pending acquisition accounting being finalised High tax charge due to profits in
	Interest USD Amortisation USD	(0.2) (7.0)
	T USD ax	(4 1) .	(2 0) . 2.3 0.7 taxable jurisdictions and losses in non-taxable ones Once off $3.0m profit on dilution
	NPAT USD	(6.0)
	Imdex 30% share USD	(1.8)
	Imdex 30% share AUD Other * AUD	(1.7)	0.7 (0.9) (0.2) Future growth expected Organically Bolt on acquisitions
		3.1
	Share of associate losses AUD	1.4

*1H13 includes $3.0 million profit on dilution

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

18

==> picture [720 x 78] intentionally omitted <==

==> picture [111 x 36] intentionally omitted <==

Outlook

==> picture [720 x 232] intentionally omitted <==

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

19

On track with strate gy

==> picture [92 x 49] intentionally omitted <==

==> picture [720 x 368] intentionally omitted <==

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

Past 1H13 Medium term
Oil & Gas
25%
Minerals
100%
75%
Asia Pacific
100% 45%
Other 55%
30%
Sales
100%
Rentals
70%
rket
End ma
reach
Geographic
Sell
x
mi
Rent /
----- End of picture text -----

Note: All numbers based on actual or anticipated combined revenue

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

20

: 1H13 Summary

==> picture [92 x 49] intentionally omitted <==

Solid results despite the cyclical minerals slowdown

• Small decline in combined revenues despite challenging minerals market conditions

• Much improved Oil & Gas revenue growth (111% increase)

• Cyclical slowdown impact on Minerals division revenue

• Consequential impact on EBITA

• Continued growth in operating cashflows

• 2.50cps fully franked interim dividend

• Strong balance sheet with conservative gearing

• Continued investment in growth strategies in both Minerals and Oil & Gas

==> picture [720 x 78] intentionally omitted <==

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

21

2H13 Outlook:

==> picture [92 x 49] intentionally omitted <==

Fundamentals point to positive outlook

• Fundamentals of key industry segments positive

• High exposure to Majors and Intermediates with long term projects

• High exposure to late stage exploration and production projects

• Continued geographic expansion and diversification

• Organic growth expected in O&G division

• Market share growth in Minerals division from

• ioGlobal expansion

• Gl o b a l SRU ro ll -ou t

• Market share growth in underpenetrated markets

• New products and technologies planned for release in FY14

==> picture [720 x 78] intentionally omitted <==

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

22

==> picture [720 x 78] intentionally omitted <==

==> picture [111 x 36] intentionally omitted <==

Appendix

==> picture [720 x 232] intentionally omitted <==

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

23

Stren th throu h eo ra hic diversification g g g g p

==> picture [111 x 36] intentionally omitted <==

==> picture [92 x 49] intentionally omitted <==

29% 27% Americas	29% 27% Americas	29% 27% Americas	Increasingly diversified business by
			geographic region
			Further growth opportunity in Europe
15%	Africa	17%	and Africa
11%	Europe	6%	Asia Pacific share likely to decline as a proportion of revenue as other regions
			grow
45% 50% Asia Pacific
1H13 Combined		1H12 Combined
Revenue		Revenue
($135.6m)		($139.9m)

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

24

==> picture [92 x 49] intentionally omitted <==

Com rehensive roduct offerin p p g

==> picture [720 x 386] intentionally omitted <==

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

SRU
Fluids
Integrated SaaS
Core Orientation
Gyro Down Hole Survey
Magnetic Down Hole Survey
Directional Equipment
Exploration Development Production
30% revenue 47% revenue 23% revenue
----- End of picture text -----

==> picture [648 x 14] intentionally omitted <==

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

25

Ke business drivers and outlook y

==> picture [92 x 49] intentionally omitted <==

	Driver	2H13 Outlook
	Exposure to	Medium to longtermproject horizons
	Majors/Intermediates	Many have confirmed similar budgets to CY12 82% of 1H13 Minerals revenue from Major and Intermediate companies
	Exploration drilling	MEG forecast robust exploration and development spending in CY13
	ti it ac v y
	Commodity prices	Stable commodity prices drive exploration, production and mine development 70% of 1H13 Minerals revenue generated from production and
		development
	Instruments on rent	Continued rebound in Reflex rental fleet levels expected Increasing presence in Latin America, Africa and Europe
	Technology leadership	Product development spending to continue New products (SRU and new/updated instrumentation) to generate market share gains

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

26

==> picture [92 x 49] intentionally omitted <==

Disclaimer

==> picture [111 x 36] intentionally omitted <==

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 p ur p ort to be com p lete. The distribution of this p resentation in j urisdictions outside Australia ma y 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.

A ny statements or assumpt ons i i n t hi s presentat on i as to f uture matters may prove to b e i ncorrect an d diff erences 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.

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

27