IMDEX LIMITED — Investor Presentation 2013

Mar 17, 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

18 March 2013

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

Dear Sir/Madam

1H13 ROADSHOW PRESENTATION

Please find attached the presentation to be used during the 1H13 Investor Roadshow in Sydney and Melbourne this week.

Yours faithfully Imdex Limited

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Paul Evans

Company Secretary

Providing innovative drilling fluids and advanced down hole instrumentation worldwide.

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Imdex Limited

1H13 Roadshow, March 2013

Bernie Ridgeway - Managing Director Paul Evans – Chief Financial Officer Derek Loughlin - Divisional General Manager - Minerals

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

1

Overview

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• ASX listed industrial company (ASX: IMD), head office in Osborne Park, 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)

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

2

Mission

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Provide technologies , information and services that improve the effectiveness , efficiency and safety of field operations within the global minerals industry and niche oil & gas markets .

We do this by:

• Deploying innovative, simple-to-use and fit for purpose technologies

• Providing the most flexible data and applications to enable effective collaboration between the field and the office

Technology

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Deployed
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Simply
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Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

3

What we do - our products

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Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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1H13 Summary

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• 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 customer base and revenue streams

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

• Minerals industry short term outlook subdued, however, Imdex positive outlook due to the introduction of new products to the global Minerals industry, expansion of ioGlobal and the oil & gas business

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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Key metrics

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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  2.50 cps 3.25 cps 23%
Number of employees	597 445 34%

*Includes 30% of VES International JV revenue

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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Revenue

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Combined revenue* ($m)

3% on 1H12 (record level)

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

• Minerals

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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
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     - 75% of combined revenue

     - Indications that cyclical slowdown may have bottomed, however, short term outlook subdued

     - Good growth available in underpenetrated mining regions

     - Gross margins maintained

  - Oil & Gas

     - 25% of combined revenue

• 1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13

• Includes 30% of VES International JV revenue

Minerals Oil & Gas division division

• Record half year revenue with strong momentum in 2H13

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

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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EBITA

EBITA ($m)*

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• EBITA 32% on 1H12 (record level)

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

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38.3
36.9
26.9
26.2
21.2
19.8 19.0 [20.0 ]
13.2
12.2
10.1
7.5
4.5
1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13
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• Continued investment in:

  • O&G strategy

  • Minerals market share growth

  • 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

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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Profit & loss

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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%

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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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

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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Balance sheet

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%

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• 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

• Reduced current tax liability due to reduced profitability

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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Minerals division

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Revenue
Europe 4%
Africa 20% ($m) 124.0
117.7
Americas 31%
102.1
Asia Pac 45%
96.2
81.5
68.4
63.6 64.8
61.4
54.1
46.5
42.6
40.4
1H07^ 2H07^ 1H08^ 2H08^ 1H09^ 2H09^ 1H10^ 2H10^ 1H11 2H11 1H12 2H12 1H13
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• 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

• Introduction of SRU’s globally

• Growth in underpenetrated markets

• ioGlobal expansion

^Comparative purposes only. Regional structure adopted 1 July 10

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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Sustainable and diversified revenue base

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1H13 Minerals Revenue

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Other
15% Junior
Production
Exploration 18%
23%
Iron 30%
12%
Gold
51%
Major / Intermediate
Development
Copper 82%
47%
22%
Commodity Stage Customer
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• 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

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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Reflex rental fleet

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Number of instruments on rent
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MAR 08 JUL 08 NOV 08 MAR 09 JUL 09 NOV 09 MAR 10 JUL 10 NOV 10 MAR 11 JUL 11 NOV 11 MAR 12 JUL 12 NOV 12 MAR 13

 Month on month slowdown from July 12 to Dec 12  49% rebound from 31 Dec 12 to 8 Mar 13

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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Acquisition of ioGlobal

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• 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

• Strong interest from potential new clients including major resource companies and drilling contractors

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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ioGlobal – What we do

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Integrates Service and Resource Companies – internally

& externally. Integrates our product offerings (Instrumentation, Drilling Fluids, Equipment, Data Acquisition & Management and Analytics

ioGlobal links providers and consumers of field operations data with seamlessly integrated, end-to-end solutions in actionable format that are more simple and more reliable than those available by conventional means

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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Comprehensive total mining cycle opportunity

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Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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Oil & Gas division

Combined revenue* ($m)

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33.5
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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
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• 111% on 1H12

• 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

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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VES International Joint Venture

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(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 losses AUD	1.4 (0.2)

• *1H13 includes $3.0 million profit on dilution

• 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

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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On track with strategy

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Past 1H13 Medium term
Oil & Gas
25%
Minerals
100%
75%
Asia Pacific
100% 45%
Other 55%
30%
Sales
100%
Rentals
70%
End market
reach
Geographic
mix
Rent / Sell
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Note: All numbers based on actual or anticipated combined revenue

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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: 1H13 Summary

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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

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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2H13 Outlook:

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Fundamentals point to positive outlook

• Fundamentals of key industry segments remain intact, although cost cutting initiatives and change of CEO’s in major companies slowing expenditure in the short term

• Activity expected to remain subdued for 2H13, picking up in 1H14

• 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

• Global SRU roll-out

• Market share growth in underpenetrated markets

• New products and technologies planned for release in FY14

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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Appendix

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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Strength through geographic diversification

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	29%	Americas	Americas	27%
	11% 15%		Africa Europe	6% 17%
	45%	Asia Pacific		50%
1H13 Combined			1H12 Combined
	Revenue			Revenue
	($135.6m)			($139.9m)

• Increasingly diversified business by geographic region

• Further growth opportunity in Europe and Africa

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

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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Comprehensive product offering

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	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

Providing Innovative Drilling Fluids and Advanced Down Hole Instrumentation Worldwide

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Key business drivers and outlook

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Driver	2H13 Outlook
Exposure to Majors/Intermediates	Medium to long term project horizons Many have confirmed similar budgets to CY12 82% of 1H13 Minerals revenue from Major and Intermediate companies
Exploration drilling activity	MEG forecast robust exploration and development spending in CY13
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

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Disclaimer

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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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