Annual Report ALS Limited 2016
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Annual Report ALS Limited 2016 Right Solutions • Right Partner Contents Global Operations ...................................................................................... 4 Board of Directors ..................................................................................... 30 Financial highlights .................................................................................. 6 Group Management............................................................................... 32 Health, Safety and Sustainability .......................................... 8 Financial Report........................................................................................... 33 People and Performance................................................................. 12 Shareholder Information ..............................................................100 Financial and Operating Overview ..................................... 14 10 Year Summary ...................................................................................102 Life Sciences .................................................................................................... 17 Principal Group Offices ....................................................................103 Minerals ................................................................................................................. 22 General Information ...........................................................................103 Energy ...................................................................................................................... 26 Industrial ............................................................................................................... 28 2 ALS LIMITED • ANNUAL REPORT 2016 ALS Limited is one of the world’s largest and Financial Calendar most diversified testing services providers. 2015/16 We are the global benchmark for quality and integrity, and have Record Date for Final Dividend – 9 June 2016 built our reputation on quality, client service, innovation, and Final Dividend Paid – 1 July 2016 technical excellence. Annual General Meeting – 26 July 2016 With headquarters based in Brisbane, Australia we are one of the longest-established companies listed on the Australian 2016/17 Securities Exchange (ASX Code: ALQ). Half-Year End – 30 September 2016 The Company was founded in 1863 and listed on the ASX in Half-Year Results and Dividend Announced July 1952. We are an ASX100 Company with a multi-billion 29 November 2016 dollar market capitalisation. Record Date for Interim Dividend – 6 December 2016 The ALS brand is well recognised internationally by our customers and competitors for delivery of high quality testing Interim Dividend Paid – 21 December 2016 services. Note — Dates subject to alteration The Company operates four main testing service divisions: Minerals, Life Sciences, Energy and Industrial. Annual General Meeting ALS has over 11,000 employees, operating from 370 sites The 65th AGM of ALS Limited will be held at in 65 countries across Africa, Asia, Australia, Europe and the 11.00am on 26 July 2016 at The Pullman Hotel, Americas. King George Square, Brisbane. We operate one of the world’s largest analytical and testing services businesses and our partnerships span major sectors including mining, natural resources, environmental, food, pharmaceutical, industrial and inspection services. Our Company is focused on driving growth by continuing to successfully operate our existing businesses while pursuing new opportunities. Our success has enabled us to achieve excellent results for our shareholders and we have an established trend of attractive investor returns. Our Vision ALS is committed to maintaining the strong and sustainable growth strategies which have made us a successful global Company. We will maintain the rewarding partnerships we share with our clients, business partners, shareholders and communities and identify and develop new opportunities. Our Values Our Company upholds the values which are the foundation of our proud tradition of excellence. Our people are dedicated to the values of quality, integrity, reliability and innovation which ensure we deliver the highest level of customer service. We value efficiency, safety and diversity in our workplaces. We value the leadership and learning that develops our people and our businesses. ALS’s Corporate Governance Statement is available online at alsglobal.com under the Investor & Media › Corporate Governance section. ALS LIMITED • ANNUAL REPORT 2016 3 Global Operations ALS comprises four global business divisions which operate across Australia, Asia, the Pacific, North and South America, Africa and Europe. These business divisions provide a range of services and products tailored to the demands of their respective markets. 11,500 370 65 6 STAFF SITES COUNTRIES CONTINENTS ASIA ORTH AMERIA EUROPE ETRAL ASIA LIVERPOOL PRAGUE VAOUVER LOUGHREA AFRIA HOUSTO SOUTH EAST ASIA MIDDLE EAST SOUTH AMERIA SIGAPORE LIMA AUSTRALIA OHAESURG RISAE PERTH 4 ALS LIMITED • ANNUAL REPORT 2016 GLOBAL OPERATIONS ALS Life Sciences ALS Energy ALS Life Sciences is comprised of four primary analytical ALS Energy delivers quality technical solutions to the coal, oil testing areas: Environmental, Food and Pharmaceutical, and gas industries through an expansive range of analysis and Electronics, and Consumer Products. It is the leader in global, certification testing services supporting exploration, production comprehensive analytical testing services demonstrating and cargo shipment. It has two operating businesses servicing expertise in microbiological, physical and chemical testing the energy sector: Coal and Oil & Gas. services. ALS Minerals ALS Industrial ALS Minerals is the leading full-service provider of testing ALS Industrial is a leading provider of diagnostic testing and services for the global mining industry in four key service engineering solutions for the energy, resources, transportation areas: Geochemistry, Metallurgy, Mine Site Services and and infrastructure sectors. It is made up of two complementary Inspection. Its services cover the entire resource life-cycle business streams: Asset Care and Tribology. from exploration, feasibility, production, design, development through to trade, and finally rehabilitation. ASIA ORTH AMERIA EUROPE ETRAL ASIA 12,605 12,206 12,101 LIVERPOOL 11,722 11,568 PRAGUE VAOUVER LOUGHREA 8,936 AFRIA HOUSTO 7,570 SOUTH EAST ASIA MIDDLE EAST SOUTH AMERIA SIGAPORE LIMA AUSTRALIA OHAESURG RISAE PERTH 2010 2011 2012 2013 2014 2015 2016 Group employee numbers as at 31 March ALS LIMITED • ANNUAL REPORT 2016 5 6 2016 the relevant performance of the Group from year to year. to year from theGroup of performance the relevant of intheassessment to assist andhasbeenpresented isanon-IFRSdisclosure profit ^ Underlyingnet year the dividendfor Total Underlying Earnings^ profit^ Underlying net Revenue Financial Highlights the year will be 13.5 cents (2015:21cents). will be13.5cents year the The dividend for total (2015:30%). rate the30%tax at (2015:10cents) share per 6.0cents 2016of dividend for (40%) afinal,partly-franked will pay The Company Dividends Sales revenue ($m) Sales revenue 1364.9 2012 1405.6 2013 1499.3 down 8.6% to $1.365billion 8.6%to down 2014 1503.4 2015 1492.7 2016 1364.9 per share down 32.0% to 21.7cents 32.0%to down share per down 26.5% to $99.5million 26.5%to down after Tax ($m) Tax after Profit Underlying Net 2012 222.4 (Before unusualitems) (Before 99.5 2013 238.3 share per 13.5cents 35.7%to down 2014 171.9 2015 135.4 2016 99.5 per share (cents) share per Underlying Earnings 2012 65.9 21.7 2013 69.5 2014 43.0 2015 33.7 2016 21.7 share (cents) share Dividends paidper 2012 45 13.5 2013 48 2014 39 2015 21 2016 13.5 ALS LIMITED • ANNUAL REPORT 2016 FINANCIAL HIGHLIGHTS Year at a glance as at 31 March 2016 2015 Revenue ($m) 1,364.9 1,492.7 Underlying net profit^ after tax ($m) (before unusual items) attributable to members 99.5 135.4 Less: Acquisition and restructuring costs (net of tax) ($m) (11.0) (7.2) Less: Divestment and amortisation costs (net of tax) ($m) (15.2) (12.1) Less: Impairment charges (net of tax) ($m) (314.0) (290.6) Net profit/(loss) for the period attributable to members ($m) (240.7) (174.5) Share capital ($m) 1,452.7 1,134.1 Total equity ($m) 1,185.6 1,228.4 Underlying earnings per share^ (attributable to members) (cents) 21.7 31.9 Dividends per share (cents) 13.5 21.0 Net tangible asset backing per share (cents) 51.9 (5.4) Gearing ratio (net debt/(net debt + total equity) (%) 27.0 38.3 EBITDA* Interest cover (times) 7.7 9.1 ^ Underlying net profit is a non-IFRS disclosure and has been presented to assist in the assessment of the relevant performance of the Group from year to year. * EBITDA=Earnings before interest, tax, depreciation and amortisation. The calculation of EBITDA is unaudited. Revenue Underlying Profit Total revenue for the consolidated Group was $1.365 billion for Underlying net profit after tax, attributable to equity holders 2016, a 8.6% decrease on the $1.493 billion recorded in 2015. of the Company, was $99.5 million for 2016, a 26.5% decrease on the $135.4 million underlying net profit achieved in 2015. The revenue generated by each Business Division was as follows: The underlying profit contribution from ordinary activities, before interest, tax and corporate overheads for each Business 2016 2015 % Business Division ($m) ($m) Change Division was as follows: ALS Life Sciences 633.5 557.4 +13.7 2016 2015 % Business Division ($m) ($m) Change