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RBS Morgans Institutional Conference – Brisbane
Paul McPhee
Group General Manager,
Energy Division
11 October 2012
2 13,000+ staff, 350 locations, in 55 countries, on six continents
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
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Mineral and Metal Price IndicesCOAL_AUS
COPPER
GOLD
IRON_ORE_SPOT
Average Index price for Major Minerals
} 81.4% of Australia's current Mineral Exploration Expenditure
Sources: World Bank Commodity Price Indices & Australian Bureau of Statistics
Source: World Bank Commodity Price Indices
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Mineral and Metal Price Indices
Average Index price for Major Minerals
Recent price falls are relatively modest in comparison
46% decline
GFC
22% decline
2012
93% post-GFC Rise
Still 33% above long term
average
0
5,000
10,000
15,000
20,000
25,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
World Minerals Exploration Expenditure (MEGS) USDm
Source: Mineral Economics Group Services (MEGS)
Current (unrevised)
forecast
Price impact on exploration expenditure uncertain but should be subdued
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Australian Minerals Exploration Expenditure Australian Financial Years AUDm
Others
Uranium
Other Base Metals
Copper
Gold
Iron Ore
Coal
81% aimed at just 4 major commodities and 69% of total spend is targeting brownfield
deposits
Source: Australian Bureau of Statistics (ABS)
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5,000
10,000
15,000
20,000
25,000
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Minerals Exploration Expenditure
Australian Exploration Expenditure
Global Exploration Expenditure
Australia tends to be more resilient throughout the price cycle
Source: ABS & MEGS
So too has ALS’ Australian financial performances
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500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Australian Minerals Exploration Expenditure Australian Financial Years AUDm
Others
Uranium
Other Base Metals
Copper
Gold
Iron Ore
Coal
ALS Australia Revenue
Source: ABS
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200
400
600
800
1000
1200
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Australian Minerals Exploration Expenditure Australian Financial Years AUDm
Others
Uranium
Other Base Metals
Copper
Gold
Iron Ore
Coal
ALS Global Revenue
Source: ABS
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500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Australian Minerals Exploration Expenditure Australian Financial Years AUDm
Others
Uranium
Other Base Metals
Copper
Gold
Iron Ore
Coal
ALS Australia EBIT
Source: ABS
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50
100
150
200
250
300
350
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Australian Minerals Exploration Expenditure Australian Financial Years AUDm
Others
Uranium
Other Base Metals
Copper
Gold
Iron Ore
Coal
ALS Global EBIT
Source: ABS
0
200
400
600
800
1,000
1,200
1,400
0
5,000
10,000
15,000
20,000
25,000
30,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
World Minerals Exploration Expenditure (MEGS) ALS Limited Financial Years USDm
Global Exploration Expenditure
ALS Global Revenue
ALS has evolved beyond a mineral services company
Source: MEGS
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0
5,000
10,000
15,000
20,000
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30,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
World Minerals Exploration Expenditure (MEGS) ALS Limited Financial Years USDm
Global Exploration Expenditure
ALS Global EBIT
The business has less volatile and more diversified earnings
Source: ABS
Life Sciences
31%
Minerals49%
Energy7% Industrial
13%
Life Sciences
32%
Minerals66%
Energy0%
Industrial2%
Despite strong global mineral exploration expenditure, ALS’s spectacular growth has relied less and less on minerals
USDm
Life Sciences
40%Minerals54%
Energy5%
Industrial1%
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400
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800
1,000
1,200
0
5,000
10,000
15,000
20,000
25,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
ALS Global Revenue ALS Global EBIT Global Exploration Expenditure
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2005 2008 2012
Revenue by Region
Sth America
Nth America
Europe
Australasia
Asia
Africa-10%0%10%20%30%40%50%60%70%80%90%100%110%
2005 2008 2012
EBIT by Region
Similarly, ALS’ evolving geographic spread has made the Company less exposed to economic volatility and exchange rate movements
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800
1,000
1,200
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5,000
10,000
15,000
20,000
25,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
World Minerals Exploration Expenditure (MEGS) ALS Limited Financial Years USDm
ALS Global Revenue ALS Global EBIT Global Exploration Expenditure
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200
400
600
800
1,000
1,200
1,400
FY06 FY07 FY08 FY09 FY10 FY11 FY12
AU
D$
m
illio
ns
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FY06 FY07 FY08 FY09 FY10 FY11 FY12
AU
D$
m
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Non-Mineral EBITDA margin
21% 21% 24% 20% 24% 23% 25%
GROWTH OF NON-MINERALS DIVISIONS
Life Sciences Energy Industrial Minerals
Revenue EBITDA (incl ALS overheads)
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 Market Capital
Price Index All Minerals
Price Index Major Minerals
ALS Dividend Per Share
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
ALS has strong credentials in navigating through the tougher times and consistently delivering
shareholder value
Global Exploration Expenditure
ALS Global Revenue
Sources: World Bank Commodity Price Indices, MEGS, RBS Morgans
-100% 0% 100% 200% 300% 400% 500% 600% 700%
CoffeyServcorp
Transfield ServicesSGS
AusencoWorley Parsons
CloughEurofins
OricaMacMahon
Bureau VeritasIntertekCardno
MonadelphousCore Laboratories
Boart LongyearALS Limited
Total Shareholder Return (1st April 2009 to 31st March 2012)
TOTAL SHAREHOLDER RETURN
19 Source- Ernst & Young
• 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
