IMDEX LIMITED — Investor Presentation 2013

Jun 5, 2013

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8 Pitino Court, Osborne Park Western Australia 6017 PO Box 1262, Osborne Park Western Australia 6916

Tel: +61 (0) 8 9445 4020 Fax: +61 (0) 8 9445 4042 imdex@imdexlimited.com www.imdexlimited.com ABN 78 008 947 813

6 June 2013

Company Announcements Office ASX Limited Exchange Centre 20 Bridge Street SYDNEY NSW 2001

Dear Sir/Madam

CIMB Asia Pacific Leaders’ Conference - London

Please find attached the CIMB Asia Pacific Leaders’ Conference release to be presented in London later today.

Yours faithfully

Imdex Limited

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Paul Evans

Company Secretary

Providing innovative drilling fluids and advanced down hole instrumentation worldwide.

CIMB Asia Pacific Leaders' Conference, London Bernie Ridgeway - Managing Director June 2013

Overview

• ASX listed industrial company (ASX: IMD) Head office in Perth, Western Australia

• Global operations – presence in all major mining regions, niche Oil & Gas markets

• ~600 people globally (>60% outside Australia)

• Markets:

• Mining

• Oil & Gas

• Products:

• Drilling fluids & chemicals, Equipment

• Down hole instrumentation

• Cloud based data system automation solutions

• 1H13 Revenue ($127.6m) and EBITA ($26.2m)

• Expectation of improved results in 2H13 has not materialised due to non existent seasonal recovery in drilling activity as major resource companies continue to cut costs and reduce expenditure

• Expansion of ioGlobal and continued growth in our oil & gas business

Mission

We deliver leading innovative technologies to the global minerals industry and that enhance our niche oil & gas markets, focusing on integrated solutions customers’ operations and deliver value for shareholders. We achieve this through our extensive industry knowledge and commitment to product development , ensuring innovative , simple to use and fit-for-purpose technologies

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What we do - our products

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Global Business

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Our skill set

• Quality people

• On-site customer service

• Strong brands

• Own production

• IP ownership

• Scalability

• Strong global distribution channels

• Quality products

• Powerful product development capability

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Our Strategy

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Minerals customers (sample)

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Oil & Gas customers (sample)

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1H13 Summary

• Combined revenue 3%

• O&G revenue 111% to new record high

• 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

• Product development and introduction of new technologies – exciting initiatives

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Key metrics

Key metrics
($m)	1H13 1H12 Var.
Statutory revenue Combined revenue* EBITA NPAT	127.6 138.5 8% 135.6 139.9 3% 26.2 38.3 32% 16.6 22.7 27%
Pre-tax operating cash flow Gearing (ND / (ND + E)) Interest cover Interim DPS (fully franked)	35.9 33.2 8% 23% 12% 101% 14 times 54 times 92% 2.50 cps 3.25 cps 23%
Number of employees	597 445 34%

*Includes 30% of VES International JV revenue

Revenue

• 3% on 1H12 (record level)

Combined revenue* ($m)

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

• Minerals

  • 75% of combined revenue

  • Cyclical slowdown commenced in 1H13 and will prevail in 2H13

  • Growth available in underpenetrated mining regions

  • Gross margins maintained

• Oil & Gas

  • 25% of combined revenue

  • Record half year revenue with strong momentum in 2H13

• Includes 30% of VES International JV revenue

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

EBITA

EBITA ($m)*

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• EBITA 32% on 1H12 (record level)

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

• Continued investment in:

• O&G strategy

• Minerals expansion

• ioGlobal

• Skilled staff

• Product development and R&D

• O&G EBITA positive

• VES International JV:

• Strong EBITA performance

• Impacted by amortisation and tax charges and dilution gain

*Includes equity accounted VES International JV result

Profit & loss

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

Solid working capital management

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

• Working capital release due to improved stock and debtor management

Balance sheet

($m)	Dec 12	Jun 12
Net cash Receivables Inventory Investment in SEH	10.0	11.2 59.7 52.1 21.4
	51.8
	49.6
	32.7
VES International JV Fixed assets Intangibles Other assets/deferred tax	25.6	24.3 19.7 61.1 25.1
	34.1
	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
	65.7
	0.6
	6.2
Total equity	186.7	168.1
(CA – Inventory)/CL CA/CL Gearing (ND / (ND + E))	1.29	1.40 2.29 22%
	2.20
	23%

• Strong working capital management

• • Net debt at 31 Dec 12 of $56.3m

• • Gearing comfortable at 23%

• • Fixed asset growth from SRUs and O&G equipment business

• • SEH investment at market value

• Reduction in net deferred tax position as tool fleet depreciates

Minerals division

Revenue

($m)

• 18% on 1H12 (record level)

• 1H13 is 3[rd] highest half year

• Integration of ioGlobal

• Global introduction of SRUs – early stages

• Product development

• EZ Gyro – FY14

• Smart Barrel – FY14

• Outlook for 2H13

• Resource companies remain in cost cutting, expenditure reduction phase

• Growth in under penetrated markets

^Comparative purposes only. Regional structure adopted 1 July 10

• ioGlobal expansion

Sustainable and diversified revenue base

1H13 Minerals Revenue

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

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

• 80% from major and intermediate customers

Reflex rental fleet

Number of instruments on rent

• Month on month reductions from July 12 reflecting cyclical slowdown

• Post traditional Dec 12/Jan 13 holiday season, instruments on hire relatively flat until May 13 due to transition between winter and summer drilling seasons in Canada

Acquisition of ioGlobal

• Effective 1 November 2012

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

• 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

• New cloud based solutions being trialled by major resource companies and major drilling contractors

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ioGlobal – What we do

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• Provide innovative software-as-aservice (SAAS) data management solutions to major, intermediate and junior resource and service companies

• Seamlessly links field data collected by service providers to resource companies

• Field data is collected, validated, stored and accessed immediately for analysis and management reporting via a secure web portal

• Integrates Imdex product offerings (Instrumentation, Drilling fluids, Equipment, Data acquisition and Management and Analytics)

Comprehensive total mining cycle opportunity

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Oil & Gas division

• 111% on 1H12

Combined revenue*

($m)

• Record half year

• Includes $8.0m from VES International JV

• Strong growth in Europe and Asia Pac, CBM strong in Australia

• Additional management depth

• Outlook for 2H13 - continued revenue growth from:

• VES International JV – performing strongly at EBITA level and growing

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

*Includes 30% of VES International JV revenue

VES International Joint Venture

(m) unaudited	1H13 2H12
Revenue USD	27.6 27.1
EBITDA USD Depreciation USD	7.8 8.0 (2.5) (3.0)
EBITA USD	5.3 5.0
Interest USD Amortisation USD Tax USD	(0.2) - (7.0) (0.7) (4.1) (2.0)
NPAT USD	(6.0) 2.3
Imdex 30% share USD Imdex 30% share AUD Other * AUD	(1.8) 0.7 (1.7) 0.7 3.1 (0.9)
Share of associate profits / (losses) AUD	1.4 (0.2)

• 3[rd] largest provider of down hole survey services in global oil & gas market

• Continued strong EBITA primarily from US based operations

• Negative NPAT due to

• Non-cash amortisation catch up pending acquisition accounting being finalised

• High tax charge due to profits in taxable jurisdictions and losses in non-taxable ones

• One off $3.0m profit on dilution

• Future growth expected

• Organically

• Bolt on acquisitions

*1H13 includes $3.0 million profit on dilution

On track with strategy

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Note: All numbers based on actual or anticipated combined revenue

3Q13 Summary (unaudited):

Challenging market conditions prevailed due to a continuation of the cyclical minerals slowdown

• Combined Group revenue  17% to $55.5m (3Q12: $66.6m)

• Minerals Division revenue 30% to $39.5m (3Q12: $56.4m)

• Oil & Gas Division revenue 57% to $16.0m (3Q12: $10.2m)

• Includes $3.8m from Imdex’s 30% of VES Joint Venture revenue

• EBITA (including equity accounted VES) of $5.7m  64% (3Q12: $15.8m)

• Traditional seasonal recovery did not occur in Minerals industry

• Oil & Gas division performing strongly, contributing close to 30% of Group revenue

• Product development and other market share growth initiatives continued during 3Q13

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2H13 Outlook:

Fundamentals point to continued subdued activity in Minerals, however, robust activity in Oil & Gas

• Minerals industry in cyclical slowdown

• Despite expenditure/cost reductions by the Majors and Intermediates, a certain amount of spending will continue on long term projects

• Increasing exposure to development and production projects

• Continued geographic expansion and diversification

• Substantial organic growth expected in O&G division

• Market share growth in Minerals division from

• ioGlobal expansion

• Global SRU roll-out

• Market share growth in underpenetrated markets

• New products and technologies planned for release in FY14

• Looking inward - focused on cost cutting, efficiency and productivity improvements

APPENDIX

Strength through geographic diversification

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• Increasingly diversified business by geographic region

• Further growth opportunity in Europe, Africa and Americas

• Asia Pacific share likely to decline as a proportion of revenue as other regions grow

1H13 Combined Revenue ($135.6m)

• 1H12 Combined

Revenue ($139.9m)

Comprehensive product offering

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Production
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Key business drivers and outlook

Driver	2H13 Outlook
Exposure to Majors/Intermediates	Medium to long term project horizons 82% of 1H13 Minerals revenue from Major and Intermediate companies. Similar exposure expected in 2H13. Subdued activitydue to cyclical slowdown
Exploration drilling activity	Global rig utilisation <50%
Commodity prices	Commodity prices under pressure. 70% of 1H13 Minerals revenue generated from production and development. Similar exposure expected in 2H13
Instruments on rent	Reflex rental fleet levels expected to remain flat or slightly down in 2H13
Technology leadership	Product development spending to continue New products (SRU and new/updated instrumentation) to generate market share gains in FY13 and beyond

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.