IMDEX LIMITED — Investor Presentation 2012

Feb 19, 2012

Imdex Limited

1H12 results presentation 20 February 2012 Bernie Ridgeway Paul Evans

Managing Director Chief Financial Officer

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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1H12 Results - February 2012

Today’s agenda

Overview Bernie Ridgeway 1H12 financial Paul Evans performance Operational review Bernie Ridgeway Strategy & outlook

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Bernie Ridgeway Managing Director Paul Evans Chief Financial Officer / Company Secretary

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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1H12 Results - February 2012

Record first-half performance

• Record revenue, EBITA and NPAT

• Record Minerals division revenue

• Strong balance sheet, comfortable gearing

• Strategic acquisitions enhance global footprint

• Record number of Reflex instruments on rent – likely to be exceeded in 2H12

• Significant progress towards strategy to grow Oil & Gas revenue

• Strong growth in interim dividend

• Positive outlook for 2H12

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3

1H12 Results - February 2012

Continued strong financial performance

($m)	1H12 1H11 Var.
Statutory revenue Combined revenue* EBITA NPAT	138.5 95.9 �44% 139.9 95.9 �46% 38.3 21.2 �81% 22.7 12.1 �88%
Pre tax operating cash flow - Gearing (ND / (ND + E)) Interest cover Interim DPS (fully franked)	33 2 15 0 �121% . . 11.5% 18.4% �38% 54 times 16 times � 3.25 cps 1.75 cps �86%
Number of employees	445 310 �44%

*Includes 50% of DHS JV revenue

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4

1H12 Results - February 2012

Record revenue

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Combined revenue
($m)
139.9
109.2
134.3
96.0
80.3
75.9
72.9
69.1
57.9 58.4
56.7
45.9
O&G
1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12
Minerals
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• �� 46% on 1H11

• 1H12 above FY10

• Minerals

• 89% of total revenue

• strong performance in all regions

• Oil& Gas

• 11% of total revenue

• exciting DHS JV opportunity (post 1H12 results)

Minerals Oil & Gas division division

• Includes 50% of DHS JV revenue

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1H12 Results - February 2012

Record EBITA

38.3 EBITA * ($m)

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26.9
38.8
21.2
19.8 20.0
19.0
13.2
12.2
10.1
7.5
4.5
1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12
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• �� 81% on 1H11

• Strong Minerals performance in all major mining regions

• 1H12 in line with pre GFC FY08 performance

• EBITA margin of 27.4% on combined revenue

• JV

• equity accounted

• will make a positive profit contribution in FY12

*Includes equity accounted DHS JV result

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6

1H12 Results - February 2012

Profit & loss

Profit & loss
($m)	1H12 1H11 Var. %
Revenue EBITDA Depreciation EBITA	138.5 95.9 �44% 41.6 23.8 �75% (3.3) (2.6) �24% 38.3 21.2 �81%
Amortisation Net interest expense Tax expense Statutory NPAT	(2.9) (3.5) �14% (0 7) (1 3) �45% . . (12.0) (4.3) �175% 22.7 12.1 �88%
EPS (cents) Pre-tax cash flow from operations	11.14 6.17 �81% 33.2 15.0 �121%

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7

1H12 Results - February 2012

Strong balance sheet

	($m)	Dec 11	�Strong cash position �Net debt at 31 December 2011: $18m �Pro-forma gearing post DHS JV acquisition comfortable at 23.7% �Controlled working capital growth �JV comprises loan + investment Jun 11 18.4 50.2 40.6 16.1 - 17.3 55.9 20 6 . 219.1 32.8 33.8 2.8 1.3 23.0 125.4 1.04 1.62 13.4%
	Net cash Receivables Inventory Investment in SEH	20.3
		50.7
		49.4
		8.8
	DHS JV Fixed assets Intangibles Other assets/deferred tax	4.3
		19.2
		55.8
		33 0 .
	Total assets	241.5
	Payables Bank loans Vendor finance HP Finance Provisions and current tax	37.0
		37.4
		-
		0.9
		27.5
	Total equity	138.7
	(CA – Inventory)/CL CA/CL Gearing (ND / (ND + E))	1.08
		1.77
		11.5%

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8

1H12 Results - February 2012

Minerals division

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Revenue 124.0
($m)
Africa 18%
96.2
81.5
Americas 30%
68.4
63.6 64.8
61.4
Europe 4%
54.1
46.5
42.6
40.4
Asia Pac 48%
1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12
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• � 52% on 1H11

• Record Reflex fleet numbers

• Integration of ADS

• Integration of System Mud (Brazil) enhances geographic reach

• Outlook for 2H12

• strong mining and mineral exploration spending

• exciting solids removal technology

• further Reflex rental fleet records

• continued organic growth in all major mining regions

*Comparative purposes only. Regional structure adopted 1 July 10

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9

1H12 Results - February 2012

Record Reflex rental fleet

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MAY 08 AUG 08 NOV 08 FEB 09 MAY 09 AUG 09 NOV 09 FEB 10 MAY 10 AUG 10 NOV 10 FEB 11 MAY 11 AUG 11 NOV 11 FEB 12

• Reflex rental fleet continued to win market share and created new records in 1H12

• Seasonal low in Dec 11 above pre GFC peak. Strong bounce back followed

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10

1H12 Results - February 2012

Solids Removal Units (SRUs)

Technology

• Previously known as Solids Control Units

• Unique technology for the diamond drilling industry

• Provisional patents lodged

Advantages

• Low environmental footprint

• Reduced water usage & operating costs:

• low wear & tear

• simple mob/demob

• Significant market demand globally

• Rental model to ensure greater economic return

• Australian roll-out to begin in 2H12, global roll-out thereafter

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1H12 Results - February 2012

Oil & Gas division

Combined revenue*

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($m)
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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
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• � 10% on 1H11

• Includes $1.4m from DHS JV

• AMC Europe building expertise and planning for growth

• Outlook for 2H12

• Vaughn acquisition to support growth and make a positive profitcontribution

• continued development of instrumentation

• opportunities for growth of AMC Europe with large tender volume across Europe

DHS JV revenue

*Includes 50% of DHS JV revenue

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12

1H12 Results - February 2012

Integrating ADS & System Mud

Australian Drilling Specialities (ADS)

• Purchase price ~$12.0m, effective date 1 July 2011

• Immediately EPS accretive and provided additional benefits such as:

• product formulations and intellectual property, key polymer technology

• increased control over the supply chain and additional manufacturing expertise

System Mud (Brazil)

• Purchase price ~$9.0m, effective date 1 August 2011 (completion outstanding)

• Immediately EPS accretive

• Benefits to the Imdex Group:

• access to expanding Brazilian market

• strengthen position in South America

• in country manufacturing, product formulations and intellectual property

• strategically placed to service global customers operating in Brazil

• platform for growth of Reflex brand and cross-selling

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

13

1H12 Results - February 2012

DHS JV acquisition of Vaughn Energy Services

Vaughn Energy Services (Vaughn)

• Oil & gas services business in US onshore market

• Acquired 100% effective 1 Jan 12

• CY11 revenue of US$39m

Purchase price (US$m)

• $38m cash on settlement ($19m Imdex share)

• $12m cash in 2 EBITDA earn outs over next 12 months (funded by JV)

• $50m equity in combined DHS entity

• Vaughn shareholders to retain 40% ownership of the JV and remain with the business

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

14

1H12 Results - February 2012

DHS JV acquisition of Vaughn

• Immediately earnings accretive for Imdex

• Becomes 3[rd] largest global provider in the US$400m-US$500m oil & gas down hole survey market

• Substantive entry into US onshore oil & gas market, representing approximately one third of the global market

• Diversifies the geographical footprint, range of technologies and customer base of the DHS JV, and introduces new technologies to the Group

• Expected to generate revenues of approximately US$70m in CY12

• Co-ordinated technology development

• Supports Imdex’s strategy to generate 30 - 40% of revenues from the oil & gas market within the next 3 - 4 years

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

15

1H12 Results - February 2012

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On track with strategy
Past 1H12 Medium term
Oil & Gas
11%
Minerals
89%
Instruments
Fluids 28%
Services 72%
Sales 30%
Rentals 70%
2
End market
1
it
f
Pro
2
mix
Rent / Sell
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¹ Based on actual or anticipated EBITA[2] Based on actual or anticipated combined revenue

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1H12 Results - February 2012

Estimated global exploration spend (non-ferrous) (US$Bn)

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22.5
20.8
20.4
19.3
19.0
18.2 18.0
17.1
13.2
11.5
10.4
7.5 7.7
5.2 5.1
4.6
3.5 3.7 3.5
2.5 2.9 2.8 2.6 2.2 2.4
1.9
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: Metals Economics Group (1993-2011); Mckinsey analysis (2012-2018). Reproduced with permission from Boart Longyear
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• CY11 � 58% on CY10 to highest level ever

• Due to industry capacity constraints in C2011, likely flow into subsequent years

• Future levels expected to be maintained above this peak

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17

1H12 Results - February 2012

Key business drivers

Robust commodity prices Mineral exploration spend Exploration activity levels and spending at record levels and expected to continue Client rig utilisation % Current high utilisation levels expected to continue Level of Reflex rentals New record fleet levels in 1H12 to continue in 2H12 Development of new New releases expected in 2H12 and beyond instrumentation Increasing # of preferred supplier agreements Key growth strategy Growth in the JV & integration of Vaughn Continued investment in product development Revenue & 2 global brands in mining industry (AMC & Reflex) cost synergies Regional structure for more effective cross selling

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

18

1H12 Results - February 2012

Summary

1H12 – Another set of record results

• Record revenue, EBITA & NPAT

• Record operating cash flow

• Strong balance sheet with comfortable gearing after DHS JV acquisition of Vaughn

• FY12 interim dividend of 3.25 cps, fully franked

• 2H12 – P os t ve out oo i i l k w t i h cont nue i d growt h expecte d

• Underlying fundamentals of key industry segments positive

• Vaughn acquisition to support JV growth

• Exciting instrumentation releases in 2H12

• Solids removal technology initial roll out in Asia Pacific

• Further organic growth expected across all global regions

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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1H12 Results - February 2012

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.

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1H12 Results - February 2012