RBS Morgans Institutional Conference – Brisbane Paul McPhee Group General Manager, Energy Division 11 October 2012
13,000+ staff, 350 locations, in 55 countries, on six continents 2
Commodity Price Cycles are inevitable. Corrections bring opportunities and create stronger industries. ALS is better positioned than ever to respond Superior client portfolios and broadening service streams underpin ALS’ long term growth
Mineral and Metal Price Indices 900 } COAL_AUS 800 COPPER 81.4% of Australia's current Mineral Exploration Expenditure GOLD 700 IRON_ORE_SPOT Price Indices (basis USD) Average Index price for Major Minerals 600 500 400 300 200 100 0 Sources: World Bank Commodity Price Indices & Australian Bureau of Statistics
Mineral and Metal Price Indices 900 800 Recent price falls are relatively modest in comparison 700 Still 33% Price Indices (basis USD) 93% post-GFC above long 600 term Average Index price for Major Minerals Rise average 500 400 22% 300 decline 200 46% 2012 decline 100 GFC 0 Source: World Bank Commodity Price Indices
World Minerals Exploration Expenditure (MEGS) USDm Price impact on exploration expenditure uncertain but should be subdued 25,000 Current (unrevised) 20,000 forecast 15,000 10,000 5,000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Mineral Economics Group Services (MEGS)
Australian Minerals Exploration Expenditure Australian Financial Years AUDm 4,000 81% aimed at just 4 major Others commodities and 69% of total 3,500 Uranium spend is targeting brownfield Other Base Metals deposits 3,000 Copper 2,500 Gold Iron Ore 2,000 Coal 1,500 1,000 500 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: Australian Bureau of Statistics (ABS)
Minerals Exploration Expenditure 4,500 25,000 4,000 Australian Exploration Expenditure 20,000 3,500 Global Exploration Expenditure 3,000 15,000 2,500 2,000 10,000 1,500 1,000 5,000 500 Australia tends to be more resilient throughout the price cycle 0 - 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: ABS & MEGS
Australian Minerals Exploration Expenditure Australian Financial Years AUDm 4,000 Others 500 Uranium 3,500 Other Base Metals 3,000 Copper 400 Gold 2,500 Iron Ore 300 Coal 2,000 ALS Australia Revenue 1,500 200 1,000 100 500 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 So too has ALS’ Australian financial performances Source: ABS
Australian Minerals Exploration Expenditure Australian Financial Years AUDm 4,000 1200 Others Uranium 3,500 1000 Other Base Metals 3,000 Copper 800 Gold 2,500 Iron Ore Coal 2,000 600 ALS Global Revenue 1,500 400 1,000 200 500 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: ABS
Australian Minerals Exploration Expenditure Australian Financial Years AUDm 4,000 Others 120 3,500 Uranium Other Base Metals 100 3,000 Copper Gold 2,500 80 Iron Ore Coal 2,000 60 ALS Australia EBIT 1,500 40 1,000 20 500 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: ABS
Australian Minerals Exploration Expenditure Australian Financial Years AUDm 4,000 350 Others Uranium 3,500 300 Other Base Metals 3,000 Copper 250 Gold 2,500 Iron Ore 200 Coal 2,000 ALS Global EBIT 150 1,500 100 1,000 50 500 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: ABS
World Minerals Exploration Expenditure (MEGS) ALS Limited Financial Years USDm 30,000 1,400 1,200 Global Exploration Expenditure 25,000 1,000 ALS Global Revenue 20,000 800 15,000 600 10,000 400 5,000 200 ALS has evolved beyond a mineral services company 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: MEGS
World Minerals Exploration Expenditure (MEGS) ALS Limited Financial Years USDm 30,000 350 Global Exploration Expenditure 300 25,000 ALS Global EBIT 250 20,000 200 15,000 150 10,000 100 5,000 50 The business has less volatile and more diversified earnings 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: ABS
Despite strong global mineral exploration expenditure, ALS’s spectacular growth has relied less and less on minerals USDm Energy Industrial 7% 13% Life Minerals Sciences 25,000 1,200 49% Energy Industrial 31% 5% 1% 1,000 20,000 Life Sciences 40% Minerals 800 Energy Industrial 54% 15,000 0% 2% Life 600 Sciences 32% 10,000 400 Minerals 66% 5,000 200 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 ALS Global Revenue ALS Global EBIT Global Exploration Expenditure
Similarly, ALS ’ evolving geographic spread has made the Company less exposed to economic volatility and exchange rate movements Revenue by Region EBIT by Region 110% 100% Sth America 100% 90% 90% 25,000 1,200 80% Nth America 80% 70% 70% Europe 60% 60% 50% 50% Australasia 1,000 40% 40% 20,000 30% 30% Asia 20% 20% 10% 10% Africa 800 0% 0% -10% 2005 2008 2012 2005 2008 2012 15,000 600 10,000 400 5,000 200 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 ALS Global Revenue ALS Global EBIT Global Exploration Expenditure
GROWTH OF NON-MINERALS DIVISIONS Revenue EBITDA (incl ALS overheads) 1,400 400 Non-Mineral EBITDA margin 21% 21% 24% 20% 24% 23% 25% 350 1,200 300 AUD$ millions AUD$ millions 1,000 250 800 200 600 150 400 100 200 50 - - FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY06 FY07 FY08 FY09 FY10 FY11 FY12 Life Sciences Energy Industrial Minerals The non- Minerals revenue of ALS is now larger than ALS’ entire revenue only two years ago and the Minerals Division has been transformed from a geochemical only business in 2009 to a geochemical, metallurgical and inspection business in 2012. 17
ALS has strong credentials in navigating through the tougher times and consistently delivering shareholder value Price Index All Minerals Price Index Major Minerals Global Exploration Expenditure ALS Global Revenue ALS Dividend Per Share ALS Market Capital 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sources: World Bank Commodity Price Indices, MEGS, RBS Morgans
TOTAL SHAREHOLDER RETURN ALS Limited Boart Longyear Core Laboratories Monadelphous Cardno Intertek Bureau Veritas MacMahon Orica Eurofins Clough Worley Parsons Ausenco SGS Transfield Services Servcorp Coffey -100% 0% 100% 200% 300% 400% 500% 600% 700% Total Shareholder Return (1st April 2009 to 31st March 2012) Source- Ernst & Young 19
• Price cycles happen and, yes, exploration expenditure is price sensitive • Corrections are healthy for these industries and ALS is well positioned to continue servicing the sector • Current prices for major minerals remain way above long-term averages ALS’ financial performances demonstrate • ALS has limited exposure to the more price sensitive commodities • ALS has lowered its dependency on minerals exploration expenditure and geochemistry services and this strategy will continue to be pursued • ALS has less exposure to any single region and has less currency risk • Our Australian businesses provide high performance and portfolio balance • ALS’ returns to shareholders have been consistently above peers and have not regressed over the past 10 years • ALS remains poised to pursue further growth opportunities and income diversity
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