ALS Limited (ALQ) Earnings Call Transcript & Summary

Good afternoon all, and welcome to the ALS Investor Day. My name is Cameron Sinclair, Head of Investor Relations. Today will consist of a series of presentations and videos in which the management team will take you through the detail and drivers of our new 5-year vision. Before commencing with the presentations, I'll quickly go through a couple of housekeeping rules for the day. For those of you here in person today, in the unlikely case of an emergency, you will find emergency access towards the rear of the room with the fire escape being the old -- via old staircase. I would also ask that you please turn off your phones and have them in silence. There will be a Q&A session at the end of the presentations. I'd ask for those of you here in the room today, if you wish to ask a question, please raise your hand, wait for the microphone and introduce yourself before asking the question. We'll be taking questions from the floor and also online via the Lumi platform for those who have registered log-in details. Questions are to be limited to 2 per person. And if there is time at the end, we will circle back to you. Today's event will be recorded and available on our website for replay at a later date. There will be a short 2-minute break after Bruce McDonald's presentation. And before I hand over to Raj Naran, Managing Director and CEO, we'll play a short video that represents who we are at ALS. [Presentation]

Good afternoon. Thank you all for being here, both in person, and I guess the folks online. I appreciate you all taking the time. And hopefully, through today's presentation, we can really talk through our 5-year vision for the organization and sort of understand it better. Today's presentation, you'll hear from 3 of our largest businesses. You'll hear about our Minerals business; we'll talk in more detail about our environmental business; and we'll talk about food and pharma. Those are the biggest drivers of our 5-year plan, and we'll go through that in a little bit detail. But before I sort of start talking about the different parts of our business, this is jumping ahead of me. I just -- I thought I'd introduce some of the folks that are here from ALS. So we've got our CFO, Luis Damasceno, he's here, and he'll be presenting and unpacking the financials. Kilmister, who is now our new Global Head of our Environmental business under our new structure and organizational alignment. We've got Cameron, who introduced himself as Head of Investor Relations. And I've got [ conscious ] here, my Company Secretary and Legal Counsel. So he makes sure I don't say anything. I'm not supposed to but really go through that. And I know folks are eager to jump into, I guess people would love to just cut all this and get straight to Q&A. But we'll get there, and we'll give you folks the time that you need to unpack it. So really, the Q&A will be at the end and then we'll do a little bit of a social hour so those that want to hang around and ask more questions, we're happy to stick and do that. So just a little bit about our new 5-year strategy really -- chip it ahead here. Really -- I got to get this right. There we go. Come on. You can do this. Bingo. Really, our 5-year strategy is really around seven key messages. So everyone knows about 5.5 years ago, we released our first 5-year strategy with the new management team, and I'm pleased to report, and Luis will talk about that in a little bit more detail, that we did deliver on our 5-year strategy. In fact, I think overachieved in all categories on our plan. So this next 5-year vision is really an evolution of the company. So for this -- for us, it's an evolution of the business. You'll see us align ourselves with innovation. You'll see the company move into digital technologies, machine learning, artificial intelligence and really focus on what we're good at. And what we're good at is testing. Testing is the core of ALS. It is the area where we see the highest margins in the tech business. And it's an area that we have excelled in, and we continue to do more of the same. So I talk about our 5-year vision as an evolution, not a revolution. It's really looking at what the team has done well. We sat down about 6 months ago and really as a management team went through the things that we do well, the things that we didn't do so well and where are the drivers? Where are the mega trends? Where -- what are the things that are happening in the industry that ALS really needs to align itself? So along with just evolving the company, you'll see the company now move towards end markets. You'll see us move to key geographies, and you'll really see our continuation of globalization of the company. We're going to talk about sort of the end markets, the drivers for the business. I'll cover off on some major megatrends. And as Bruce and Tim and Andreas talk about their individual businesses, the largest businesses we have, they'll sort of talk about the megatrends and the drivers for each one of the businesses. So hopefully, through that process, you'll get a better understanding of the business. We've already started our journey to be leaders in innovation and technology. We're working with data analytics. We're looking at acquiring data analytics companies. We've already got partnerships in data analytics and machine learning. I mean, for those of you that understand the company, we have some of the largest databases in the world. We have the largest geochemistry database in the world since we do work with all of the 4 major mines companies. We have some of the largest environmental, pharmaceutical databases. And we all -- through analytics and AI, we intend to monetize that as well as provide additional services to our company. You'll see us -- everyone talks about the business. And again, those that understand ALS, we've managed the businesses through multiple economic environments. We've gone through cycles, top of the cycle, bottom of the cycle. Most recently, the company managed its way through the pandemic. And I think we manage ourselves very well. And that's all through the hub-and-spoke model that we run as an organization. We have the ability to scale up very quickly, anywhere between 45 and 60 days, we can scale up, and we can do the same, too. We have the ability to scale back. You'll hear each one of the business leaders talk about how we're managing inflationary headwinds, how we're maintaining and improving margin, not only through cost management, but also by pushing price and how we are able to get price through with our customers. You'll hear Luis talk about our proactive and disciplined approach to capital management and how we've strengthened the balance sheet over the last 5 years, the company has never been in a better position than it is today. I mean our balance sheet is extremely strong. You've got a high-performing business, and we're really committed. We've already started delivering on our strategy, and you'll hear Luis talk about acquisitions that have already been done. Sustainability, a big focus for us, big, big focus. I think at last count, almost 85% of the work we do supports sustainability initiatives, and I'll provide a little bit more visibility on it. And we'll also talk a little bit about the energy metals, green metals. Everybody likes to think of commodities as being cyclical. Our view is a little bit different in terms of where we think the commodity demand is going to be. I mean we're seeing a massive shift towards energy metals and decarbonization and electrification. And again, I'm -- got to make believers out of everybody, but we'll see. I'll let you all be the judge of this at the end of the day. So really just talk about that. And again, hopefully, we can have a good discussion at the end of the presentation about everything we've got here. And again, if we don't have the answer, we'll get it for you, but I think we'll answer everything about the strategy here. So just a little bit about the company and what we've done. So we've really evolved the company in terms of who we headed both from a mission standpoint, a vision standpoint, our purpose, our values, we've refreshed everything. I think with our vision, we find our vision resonates very well with the management team, but more important to our people. I mean we've really reposition the company in terms of making a difference in terms of the work we do, supporting, making the world a better place, making it a cleaner place, making sure that we do everything ethically right. And I think our vision resonates very, very well with us. So I'll let you folks read it. I mean some of the mission purpose, I'll leave that alone. Really on our core values, that's really sort of the underlying foundation of the business. I mean that is ALS. So we talk about safety as being important. We talk about resilience and you saw us do that during the pandemic. The company had to reinvent itself within 30 days, others we would have just sort of fallen apart. We talk about us curiosity, our innovation, digitalization. And again, you'll hear the management team talk about that and really committed carrying what we're giving back to our people also back to our communities, and we'll talk about that and really sort of honesty and integrity as it sort of runs through the organization, and we'll go through that. So just a little bit of -- we jumped, so let's see if I can pull this. There we go. So talk a little bit about our realignment of our management team. So historically, we were struggled really around regional lines. We had a revisit of our -- once we released our strategy, we looked at our organizational strategy and we redid our entire organizational strategy. So I'll talk a little bit about each one of them briefly. And you'll find other than just two individuals that we brought in for externally, everybody else has been pulled up and sort of given new responsibilities. Everyone knows who Luis is. So Luis is sort of based half Houston, half Brisbane, depending on what time of the year it is. Bruce McDonald historically ran our Geochemistry business. He's now spearheads the entire minerals business, which includes our engineering, metallurgy, and geochemistry business. Bruce is braced in Vancouver. And I guess, as we talk about it, you'll see we've got a really global decentralized management team. So Bruce sits in Vancouver, sees that business. Andreas Jonsson, he's based in Stockholm, Sweden and you'll hear present or do a video today. Andreas, prior to this appointment, he was Head of the Life Sciences business in EMENA, which is Europe, Middle East, North Africa and now he's spearheading our whole growth in our food and pharmaceutical business. He is a PhD in pharmacology and I think he's going to do a great job with the business. Tim is sitting here, so I won't say anything good about him. But Tim used to run the Life Sciences APAC business and now he spearheads one of our largest businesses, which is the environmental [Technical Difficulty] now corporate office in Brisbane. Grace Coiley, she's based in the U.K. So she has been involved deeply with our operations in the U.K. She's done LIMS deployment. She's very high on technology, and we've pulled her up to run our commodity business, which is really our mineral inspection as well as our coal business. So she's overseeing that business. Malcolm is -- was based in Buenos Aires. He's now Houston-based and he used to run the Latin America Life Sciences business. Did a great job growing that business. Now he is running strategy for us and really spearheading some of our M&A activities. He has got great experience. I think, Michael is here. So again, I'm not going to say anything nice about it. And then Lisa, Lisa is an external appointment we brought in as our new CIO. And really, she's got tremendous experience with cybersecurity and everything that gives us sleepless nights these days. So I think Lisa will do a good job. Michael Burcham used to be our Chief Risk Officer, based in our corporate office in Brisbane and now he's spearheading our sustainability efforts and he's our Chief Sustainability Officer. [ Rick Karg ] has been with our business forever. He's been our global optimization manager, optimization team very, very intelligent. He is now spearheading all of our digitalization, innovation and he's done some really good things so far with the business. And you'll hear Tim and Andreas talk about that a little bit. [ Mark Zorbas ] an external appointment we brought him in. We just need a real focus on our people development. And really we call him HR, but he's really Head of Organizational development. So again, the team lined with our new vision, and I just thought I'd introduce them briefly, and these things jumping ahead of me, so let me get back to something normal. Sorry, this thing. I've got two screens here that are going crazy anyway. So just -- here we go. We've seen that. It's going to stay right. So we talked about the realignment of the portfolio. Our strategy has been communicated to our entire staff, so all 19,000 people, 365 offices that we have around the world. We've had a massive communication, both videos, podcasts, et cetera, just to get the entire group aligned with what we're doing. The way we build our strategy is we build it bottom up. So we really work with the people at the bench. We'll work with the individual offices and then sort of build it up versus sort of a top-down push. So we know that there's alignment with our people there. They're eager. I think they'll deliver on our strategy. I think it's an [Technical Difficulty] strategy, but I think it's one that's easily achieved just because I think we've done a great job communicating. And I think the management team, all of the entire management team is committed, including myself, to deliver on our next 5-year strategy. So I think we'll see that going to happen. I'm going to talk a little bit about sustainability. Again, that's a big, big focus for us. I encourage everybody, if you've not seen, we just released our new sustainability report. It's on our website. If you all need a copy, reach out to Cameron or to my office, we'll get you a copy of it. But you'll find that we've just done a tremendous job with sustainability. You'll find us going climate neutral this year. So that's just a series of making our businesses more efficient. We've reduced significantly our Scope 1, Scope 2 emissions, which is the bulk of our emissions as a laboratory. We're installing solar almost at 1 a month in our facilities. We've got a green build guide. So every time we build a new facility now, it has to meet our sustainability and ESG criteria, and we are purchasing renewable energy, albeit at a higher cost of the business. So we really aggressively moving forward on that. And then this year, towards the end of our fiscal year in 2023, we'll release our road map to Net Zero. So I think ALS will be a leader in this, and I think we're going to do a very, very good job getting there. Just a little bit about sustainability, and we'll talk about everyone -- we talk about ESG and et cetera, but we've added people to sort of our sustainability program. And that's all about developing our people, making sure that they're safe, very, very much committed. We spend a lot of money on developing our staff from the bottom up. You'll find that the management team other than the two external appointments, all folks that have grown up within the business. Everyone there on that management team, especially at an operational level has been 10-plus years with ALS working with the company, understanding the culture, so we spent a tremendous amount of time with people. On the environmental side, I mean, we're going to go through this. We're really focused on reducing our footprint as we look at our businesses, and we are a very, very diverse business. I mean, over 65 countries, 380 -- 385 offices at last count I guess, with the acquisitions, we're probably coming close to 400 offices around the world. So it's important that we have a clear, clear focus around that. In terms of society, we're very big on workplace giving. We're very much committed to our local communities and what we do to give back to our local communities. Charitable, I mean, an example would be what we do with young care here in Australia. We let our staff manage that. We've been supporting it for over 5 years, and we continue to do that across the world. So we're very much committed in that. And in terms of governance, that's all about financial performance, our ethics, our integrity, code of conduct. And I guess this is the stuff that will get people fit, right? We'll work with anybody on anything that you violate any of these things, and you should not be part of ALS. We're happy to refer you to someone else. So this is very, very important to the company, and you'll see us continue to improve our rating. So these are some of the companies that have rated ALS. Our ratings continue to improve and we continue committed to improve our ESG and sustainability footprint. So let me just talk a little bit about our commitment on where we are and the different things we do. So we talked about focus on people. We talked about our focus on the planet, our communities, our best practices. And really in terms of safety and everything, we're already in the top quartile with the ASX 200 already in performance in our safety performance. We want to do that on a global scale. So we continue to improving our performance. Again, we talked about planet and reducing our carbon footprint. Our community in terms of how we encourage our staff to give back and we continue to match and support them in terms of what they're doing and then just business practices in terms of our ethics and integrity and how we do that. Just a little bit about our sustainability outcomes as it relates to our businesses and our clients. So four commodities. I mean, very, very strong focus on the battery metals. If I had to look at our -- everybody sort of knows [ historically ], it's always been 50% goal, 25% -- you all can repeat this in your sleep, I know. 25% couple at zinc and then 25% everything else. Today, the battery metals, if you include copper, have the same sample volumes that gold does. So between 40% and 45% of our sample mix battery metals. So whilst gold hasn't declined the other -- on a relative basis, we've seen the energy metals dramatically increase. And you'll hear Bruce McDonald talk about the mix and the sort of shortage in demand that's going to be out there. You'll see the demand for the energy metals and sort of what the current projected shortage is. So we are seeing a major shift in this. Our commodities business very much focused on supporting that sustainability energy initiative, also the metallurgical business, really focused on improving production for all the different energy metals. It makes sense that our environmental business supports sustainability all the way from what we do with water testing. And you'll hear Tim talk about new contaminants and the drivers and the scale of the testing that's going to happen with new contaminants. And the rest of it is air testing, soil testing, everything that we can do to ensure that we do have a cleaner world. Our food and pharma business, the drivers are there. You've got an aging population, you've got a growing population. You've got -- we've got to make sure that the food is safe, the quality is safe. And also on the pharmaceutical side, you've got just a growing population that everybody is needing more pharmaceuticals. And you'll hear Andreas talk about the footprint of our pharmaceutical business, very different to what it was 5 years ago. So just the vision for the company. So really, we look at this in several 4 major pillars and then clearly, this is the financial one that everybody gets a little bit excited about. And for us, it's really the bottom 4 is how it gets us there. I think the financial is a good outcome for us. But it's really the four things below it that are going to get us there, the innovation and technology. Again, you'll hear the different business leaders talk about the things that we are doing and the commitment that we have. And again, we've appointed someone that's -- they have a whole focus in life every morning, every day as you think about digitalization, think about technology, think about innovation. Growth is a big agenda for us. So Luis will unpack our organic growth drivers for the business. Our CAGR for the next 5 years in terms of what that looks like for the business. We talk about the ALS way. And really, for us, that's what I think makes ALS different. We have a unique way of executing. We have a way where the whole team works as one. We're very transparent with each other as an organization. I mean everybody is involved. We're not management by committee, but we're very [ collegiate ] in terms of how we do things, and we get alignment very quickly as we go to execute. And then we really are building our business around our clients. We're really building in terms of our clients' needs. So we're not saying, this is how you test. We're looking at the markets. We're looking at the end markets and building our business in terms of the needs of our clients. So -- and a very, very different for us as a company. I think the company is evolving into a very unique company, and we'll talk about that today. So revenue targets, financial targets are fairly straightforward. I mean, we're looking at a 50% growth over the next 5 years from our current $2.2 billion to $3.3 billion. I think that's an aggressive target. I will say that within that 5-year period, and it will come up in the Q&A. We have modeled up a strong growth in Life Sciences and a little bit of managed growth in geochemistry. Again, this is a vision, not a forecast. So this is just our view on what we'll have for the next 5 years. Profitability, I think that's a continuation of -- and it shows the leverage in the business in terms of growing the business. And then Luis will really talk about total shareholder returns and return on capital employed. He'll unpack that. We've got a group margin. We say we don't -- it's going to be above 19%. We don't know where yet, but we know it's going to be above 19%, and it will really be a stronger margin contribution from our Life Sciences business. But I think it's a great target for us. Just a little bit about the enablers of our business in terms of how we look at things. And again, we talked about our clients. I mean reputation is very important to ALS. I think we have a very strong reputation in the industry, especially in geochemistry in the minerals business and the environmental. We're starting to build a very solid reputation in food and pharma. We all committed. We're seeing our market share grow across all businesses, including our larger businesses. Our internal processes, we've always talked about optimization. We've always talked about efficiencies. We've talked about service delivery. We monitor all of those things on a regular basis. So we do a portfolio review and we're doing another one as we speak. And then we talk about organizational skills. So really, that's the foundation of our company. It means our people delivering what we need and Luis will talk about procurement and how we're optimizing procurement, so we can offset some of these inflationary headwinds and continue to show margin improvement throughout our business. Again, I'm not going to go through all of this too much. Again, it's just sort of some internal documents that we use. But I'll just sort of talk about just the ALS way because I brought that up earlier, and I'll let everybody read the rest of the deck and the deck, I think we published it earlier today, right, Michael? Yes. So it's there. And if anybody has questions, happy to jump on the call and talk through it. But really, that ALS way, I mean, I think it's the difference between us and the other tech companies. It really makes a difference in terms of how we deliver and the inclusive and sort of the workplace that we create to deliver how we do things. So again, I'll sort of leave it at that and move on to some other things. Just the business, and we talked about end markets. I mean these are all end markets that we serve. And when you look at these end markets, these are all growing end markets. These are all sustainable end markets regardless of what economic conditions are going to do. I mean, air, water testing, it's always going to be there. Drug release, manufacture, food and beverage, regardless of economic conditions people are still eating and still drinking. Personal care, we're becoming the leader provider of personal care products, especially in dermatology. We're one of the leading testers of SPF and makeup around the world, and we continue to improve our position. Everybody understands the mining and the geochemistry side of the business. Minerals, precious metals, and we continue to support transportation infrastructure. So again, you'll see all of our business streams and you'll see the end markets we support. And I think they're all sustainable end markets regardless of economic conditions. And to that degree, I mean you're seeing what the addressable testing market is. I think the message on this slide is clear. We've positioned ourselves into the largest growth portion of the tech business, which is the test. We know from all the research we've done in the available materials that the testing market will continue to grow at least by 4% to 5%. That's where ALS is, that's where all of -- that's our focus. And I think we've positioned ourselves well to benefit from that. And again, you'll hear the executives talk, I'm not going to steal the thunder in terms of the way we position ourselves in terms of the market drivers. But I think ALS is very well positioned over the next 5 years, benefit from this growth in the testing sector. Let me spend a little bit of time on this because really, these are the megatrends business. When you look at them, you're looking at just regulation outsourcing, we know there's more health regulations. So there's one thing that pandemic did, it just added more regulations, which is going to drive more risk. And not only health regulations, there's more regulations around the environment. We've seen growth in our environmental business. We know there's increased spending in health care. You've got an aging population. Everybody is taking a pill for something these days, whether it's a vitamin or they just got an aging population. We're seeing increased outsourcing, especially in the life sciences. And [ in fact ], we saw it happen in environmental. We've seen it happen in food and now we're seeing the same trend happen in the pharmaceutical business. And I think for a commercial enterprise like ALS, we're very well positioned to benefit from that outsourcing, hence, the acquisition of NUVISAN. And you'll hear Andreas talk a little bit about that. Again, aging infrastructure, all coming out of the pandemic, all countries are investing heavily in infrastructure. I mean it's a way to get their population, again it's a way to get the economies back. And I think ALS is well positioned to benefit from that. So what are we doing? We're increasing our geographic footprint, we're building capacity, we're adding additional testing services. And again, as we go across that whole megatrend, you're seeing technology development, you'll see some of the things that we do as a company in terms of machine learning, predictive analytics. We're working with a company in Geochemistry where it could end up being predictive drilling with just looking at the data sets and applying analytics and AI to it. And we're doing all of that. Tim's using artificial learning and machine learning to help us improve efficiencies in the internal business. We're doing the same with drugs manufactured with our -- with our joint venture with NUVISAN. We actually can do predictive drugs instead of just doing research to actually run a data set through artificial intelligence and it sort of points you in the right direction, takes almost 1 to 2 years of drug development. So we're doing some interesting things there, sustainability services demand. I think we've talked a lot about that, so I'm not going to -- going to too much detail there, but you can see some of the things we're doing. And then just digitalization. What we're doing with our business and how we're adding more and more digitalization, more automation to our business, really to reduce our demand for layers the business continues to grow and in terms of how we look at things moving forward. And then the energy transition, probably it's the piece that I'm really excited about because again, as we're looking at data, I see this more as a commodity demand situation over the next 5 years versus people talking about it, are we done juniors, majors, minors, equity raising -- thing is going to change the way the world looks at commodities over the coming years. But again, that's to be seen. We'll sort of have this discussion a year from now and see how it goes from here. So I'm going to stop there, and I'm going to just hand over and let our CFO, Luis talked a little bit about the financial performance and the outlook, and we'll unpack that. After Luis gives his presentation, there'll be a short video presentation from Bruce McDonald. We'll take just a quick 10-minute break because then we'll do two short presentations and then we'll get into the fun stuff, which is the Q&A. So we'll do that. So Luis, if you don't mind. Thank you.

Good afternoon. Thank you, Raj. I'm going to start covering the performance -- it's jumping. Thank you. We're going to start covering the performance over the last 5 years against our strategic plan. I'm really pleased to say that we exceeded our key targets of our strategic plan over the last 5 years despite [ in light ] of COVID-19. So it was really a very good result. We had a chance to solidify a significant improvement in our safety records. Grew revenue to $2.2 billion. It's an organic growth of 9.7%. And what's important to highlight that, that growth was strong in the commodity business with revenue -- organic revenue growth of 15% and -- but also in the Life Science business with a revenue organic CAGR of 7.8% over the next -- last 5 years. Also improved the margin in a significant way, 350 basis points with 18.8%. And again, it's important to highlight the very good performance and evolution of Life Science business when you saw the margin improvement of 131 basis points over the period. We were able to deliver a very strong cash generation of 90% cash conversion. That was one of the key elements for us to deliver material improvement [Technical Difficulty] employed capital reaching 20% by the end of 2022. So all those elements led to a total shareholder return of 131% over the plan period. Besides this achievement in terms of financial metrics and targets and it may be equally important, was the positioning that ALS was able to solidify at the end of the 5 years plan. We are now positioning key strategic markets and geographies that are prone to benefit from megatrends that we have in the industry right now that just articulated here. Besides this strategic positioning, we are also increasing the participation of our portfolio of a business with a revenue stream that's more predictable and consistent. So that's a very, very important improvement and achievement over the last 5 years as well. In terms of revenue growth, and when you compare our performance in revenue and margin with our peers, and here we are selecting the top chick players in the market. We are -- we had really market-leading organic revenue growth effects -- adjust the revenue growth for one-off COVID revenue that one-off competitors had. So we had market-leading revenue growth there and also market leading margin in this industry. And I think I wanted to pinpoint because, of course, when you look about -- we look at ALS, we think about commodities business with a very high margin and look to Life Sciences, the two core business that we have. Even Life Science with 16.9% margin last year in FY '22, had the market-leading margin among the players. It's a very important accomplishment as well and still have an evolution here for the next few years. This kind of a performance in terms of financial metrics, the execution that we're able to deliver over the last 5 years and the actual positioning that we have in key end markets and the benefits that we expect to have from megatrends impacting the chicken industry, led to a really market-leading performance in terms of share price evolution. Over the period of the plan, we increased our share price by 9%. So maybe change now to our next 5 years of the strategic plan for 2027. And our ambition is to have a total revenue of $3.3 billion. So if you dissect this kind of evolution from $2.2 billion to $3.3 billion, our organic revenue CAGR of 6% with Life Science delivering 7% revenue organic CAGR. So this implies kind of a low single-digit organic revenue growth for commodities business. So this is not a prediction, it's not the forecast. We don't imply that your forecast to hear how the site is going to play in the next 5 years. It's just an assumption for the exercise that we have for the plan. Really focus on all the organization capabilities and all the drivers that will allow us to benefit from whatever way the market plays. But that kind of a low digit organic growth might be considered conservative for many, given the dynamic that we have right now in the commodities markets. When you see a big demand being materialized linked with the electrification megatrend. Scope growth of 3% with a strong concentration in Life Science. Life Science, we are predicting to grow about 7% in terms of scope and acquisitions. Just a reminder, the last 5 years, we grew Life Science by about 4.5% to 5% in terms of acquisitions. That's an important component as well. And those ambitions be supported by the growth that we have in key end markets. I would say without hesitation that ALS today is one of the best companies positioning in the key end markets that the chicken industry. And as Raj mentioned, if you think about segmentation of the [ chicken ], we are focused on the testing side. That's the largest part of the business and one of the fastest-growing part of the business. And we are positioning in specific areas that will benefit from megatrends that we have, specifically in the food, pharmaceutical, environmental and minerals markets. So that will be a very important component. But also continue to execute on the execution of merger & acquisitions. That will be as a very important component of our growth story here. And talk about acquisitions -- if I can change this. Just to recap what we have done over the last 5 years. We completed 17 acquisitions, that added a total of $264 million in revenue for the company. I'm pleased to say that those acquisitions integrated, they deliver the results are core the business plan that we have defined for those acquisitions. This result is really based on a very well-defined governance around M&A where we can have the mechanism that come to guarantee that all the target companies that we pursue, they are aligned with the strategy that we have defined for the organization. But also in terms of execution, we have a very well structured, detailed, documented process around due diligence, deal execution and post-merger integration plan. This year, as an update in FY '23, where we had completed 5 acquisitions that would add on a full year run rate, roughly $60 million in revenue for the organization. If you look at our acquisition strategy, it's really an evolution, not a revolution. We continue to deliver our strategy and acquisitions as we have delivered over the last few years. There will be -- I hope it stops there. Okay. There will be -- we have continued to have a focus on Life Science, particularly in food and pharmaceutical. It doesn't mean that if the right opportunity come across environmental, fulfilling the criteria that we have for acquisitions, we will not do it, also environment will be there. Commodities acquisition technologies and data analytics exactly to leverage the richness that we have in our organization with all the data from our clients in the mining sector. It's a very important element. But also target acquisitions that expand our existing capabilities should new adjacent markets, but it's still keeping our core business at the center of our strategy. That's a very important element to be highlighted. And of course, all of that underpinned by disciplined acquisition governance, process and methodology in the execution of the M&A process. When I look at the margin, and I think that's important to look at the margin under the network driving the growth start of the business. And while driving the growth agenda, we'll continue -- our ambition is to continue to deliver industry-leading margin in ALS. How we're going to achieve that? Continue to work on the portfolio optimization, addressing businesses that have either low growth or low margin is a very important element, is strengthening our procurement, process and practice. The goal is to really make procurement and supply chain. One of the core competencies of ALS is a very critical element for a global business play in the chick space. Continue to leverage technology innovation. I think that Tim was going to ask a little bit of that also in his presentation. And specific for science, continue to work on price management of our services. It is particularly important is the inflationary environment that we're going through right now, and leverage the hub-spoke model as well that we have in the Life Science, more regional rather than global like we have in Geochemistry and the globalization of the business, taking advantage of the new organization and leverage expertise, resource, systems that we have in the global business in Life Science. With that, our ambition is to keep the floor of [ 19% ] margin. It doesn't mean that we cannot go higher, but that would be the goal to keep the floor of [ 19% ], while we drive the growth agenda and with an increasing participation of Life Science business and the overall portfolio that we have in our organization. On return on capital employed, we were able to deliver really significant improvement in the return on capital employed over the last 5 years. And again, in this area, there is no significant change in the approach and the strategy that we're going to have. We continue to deliver return on capital employed above 20% for the next 5 years. That would be supported, of course, by the margin that the business is expect to deliver. Very strong cash generation, driven by working capital optimization. In that regard, we started the process about 3 years ago to really apply to the working capital management, a kind of a lean management concept where we review process, systems, organization, start from the bid phase of a contract to the moment that to receive the cash and really identify all the effects that we have in order to streamline the process and they get better results. And I think that -- it's changed by itself the presentation, stop there. So that was an important improvement that we have achieved and we continue to capitalize on that and implement this plan. And, of course, disciplined capital allocation, not only in terms of M&A, they have already covered, but also in terms of how deploy CapEx for our greenfield investments as well in our organization. As a last point and try to highlight some key elements of capital management framework that brought -- remains broadly unchanged to the approach that we had so far. Again, focus on strong cash generation with cash conversion above 90%. In terms of capital allocation strategy, not foreseen change. So we have, as a policy, to distribute about 50% to 60% of underlying that as dividends, and we'll continue to pursue to that. In terms of [Technical Difficulty] we have already used over the last 3 or 4 years in internal polys to try to manage the business with a leverage ratio of 1.6 to 2.3. And to keep in mind that our bank covenants, we have a leverage ratio of 3.25. And we believe that this gives us enough flexibility to capture opportunities in the market, keep a good liquidity and be able to face any kind of adverse that we have in the marketplace. So that will be our target to operate in that particular range. In terms of debt management, continued the approach to proactively access debt markets in order to keep the liquidity required for the business at optimal costs, and that would be a very important element. This is what we're planning to do, and this is what would be somehow our guidance in order to manage capital in the organization. But I believe that equally important is how we do it. And I think that it's important to emphasize that the disciplined [Audio Gap] execute capital management will continue to underpin our actions here and how we manage the financial affairs of the company. So with that, we're going to have now a video delivered by Bruce McDonald, our Executive General Manager for Minerals. Thank you very much. [Presentation]

Hello. My name is Bruce McDonald, and I'm the Executive General Manager of Minerals. Following the global realignment of the business earlier this year, I'm responsible for geochemistry, metallurgy and the engineering group given our Minerals business. I've been with the business for almost 20 years. And over this time, I've seen ALS transform its commodities business from a regional player into a global market leader. Our minerals businesses today are enjoying a period of growth after the prolonged down cycle in 2014 through 2016. We've seen sustained business growth since that time, interrupted only by our fiscal year FY '20 ended April 2020 just after the pandemic was declared by the World Health Organization. Unlike the previous business peak in 2012, which was driven almost singularly by the powerful surge of growth in China, drivers for expansion in recent times have been a more diverse set of at least five fundamental megatrends related to: one, the march towards alternative energy generation and storage; two, the development of new technologies to automate physical processes and data assessments; three, increased metals consumption versus declining rates of discovery; four, infrastructure renewal to manage the new needs of a growing population; and five, increasing social and geopolitical uncertainty. With these drivers in the floor, a service provider like ALS must be ready in April to support the growing and increasingly discriminate testing needs of clients with data they can trust. Quality performance is more important than ever as companies attempt to see increasingly more subtle signatures of potential deposits that are hidden and have not previously been found. Technology and tools are important support to help customers identify critical factors of interest and to manage and assess the vast and increasing amounts of information that is produced to satisfy today's requirements. Also, with the advent of increasingly complex geopolitical events, a portfolio of locations in multiple centers has become an important factor in taking advantage of unexpected opportunity as investment interest move away from some areas and into others. In all of this, ALS has worked on strategies to keep ahead of the curve. We stand today in a very good position to contribute strongly to the needs of customers as they cope with these megatrends. ALS has the largest analytical capacity in the exploration testing industry. We have industry-leading method sensitivity and performance. We're the most trusted provider of high-quality geochemical and metallurgical data. We have the largest and best distributed network of dedicated locations worldwide. And we manage active and forward-looking R&D initiatives that are focused on improved analytical performance, client-oriented data tools and internal efficiency and waste abatement improvements. In recent years, gold has seen strong investment interest, which has spurred much of the exploration testing activity around the world. Today, with increasing interest rates serving to moderate gold prices, other mining commodities are taking over as major investor interests. For example, a successful switch to alternative energy sources on a global scale will require and has already produced a large increase in demand for certain critical metals that form the basis for generation, transmission and storage. Our recent study by S&P Global projects the demand for copper will almost double over the next 10 years. That same study projects a possible short fall in supply by as much as 20% over that same time period. Current reserves are becoming depleted while new discoveries become more difficult. And time to production from discovery remains in the range of a decade or more. Copper is not the only metal in demand for this purpose. Nickel and Cobalt are important metals for electrical storage. Warehouse minerals are important to semiconductors, they will control new storage and automation elements. Even Aluminum will play a role as lighter frameworks are required to support new devices and equipment to offset the weight of batteries. The fact is that a systematic change of energy sourcing on a global scale will drive increased demand in many metals for decades. Sustained demand for multiple metals in a long-term global step change of this sort may mitigate the amplitudes we've seen as normal in this cyclical industry. Technology and innovation are core pursuits in our minerals businesses as we seek to find ways to improve our own processes and better inform the workflows by customers. We start the process at home with a continuous improvement and innovation process focused on driving more consistent data outputs, more sensitive testing methods, safer work practices and higher productivity. We work in close partnership with selected suppliers over years to ensure their products are designed with our needs and opportunities in mind. We're often engaged in prototype testing of new concepts, instruments and equipment. This ensures that our methods are uniquely aligned with the instrumentation we use to best effect. Automation of physical processes is an important part of our effort as well. As a result, we are adding a broader spectrum of capabilities to our work groups with additions of employees skilled in engineering, fabrication and electronics technologies. These added skill sets assist our efforts to turn good ideas into real advantages. We have developed and patented several elements of laboratory equipment that contributes specific advantages to our high production commercial analytical processes. These developments provide increasing distinctiveness in our quality execution and our efficiency while reducing employee exposures to injury and reducing waste in our business. We are introducing simple, pre-analytical and in-process tests to determine method performance characteristics in advance of analysis so that we can optimize the testing strategy or catch issues midstream. This helps us avoid rework and reduce waste. It also allows us to catch errors before suboptimal results might be released to a client. Some of these in-process tests include machine learning assessments to inform subsequent process strategies for individual samples. We are also applying machine learning methodologies to create new tools and products for our clients. The work we are doing to improve our capabilities will assist our clients with their core challenges as they increase the intensity of their efforts, to lift their discovery rate and efficiently convert discovery to production. More than ever, today, it is critical that all aspects of the new deposits are fully tested and characterized, not only to maximize recoveries but now also to best inform the reclamation and environmental remediation approach concurrent with mine production or before. Our core services today are aligned along four development pillars: One, our primary exploration and metallurgical testing services focused on optimizing location distribution, insightful client service and effective, efficient sample preparation and analysis; two, our mine production testing services focused on specific site support for production testing, process quality control testing, environmental testing and other tailored testing support; three, technology development and consulting support, focused on extending the application of testing outcomes to convert them into meaningful applications in the field and in our own operations; and four, sustainability systems focused on assurance outcomes for users of ALS Systems and others seeking to validate measured outcomes against indicative expectations or best practice norms. ALS Minerals has a reputation for being ahead of the curve. Our plans and core activities today are aimed at keeping us ahead for the future as well. The opportunity to serve our industry over the next 5 years is very exciting. The potential for the need for testing and the growth of testing requirements seems to expand indefinitely. We look forward to serving our industry as we go forward and face these challenges together. Thank you.

Ladies and gentlemen, we're just going to have a short 10-minute break where you can have a comfort stop and grab a cup of coffee. And we'll be back at 3:15. Thank you. [Break]

All right. Thank you. So for those of you who I have not met before, my name is Tim Kilmister. I work as the Executive General Manager of the Global Environmental business at ALS, and I'm based out of our corporate head office in Brisbane. My history with the business goes back about 25 years. So I was lucky enough to start there in a technical capacity before progressing. So what I wanted to talk to first was just some of the megatrends and priorities in environmental. And before I do, just highlight that the recent reorganization of the Life Sciences division at ALS was really premised on two key drivers: firstly, a dedicated market segment focus and growth ambitions; and then in creating leverage across the portfolio in the sharing of best practice and client opportunities. The ALS environmental business will benefit from structural changes flowing from megatrends, including increasing regulation and enforcement particularly towards the emerging contaminants and in the emerging economies. Emerging contaminants include pollutants such as PFAS, microplastics, and pharmaceutical and personal care residues. While the emerging economies are orientated towards Asia, Latin America and Eastern Europe, regions in which ALS has an existing presence and generally market-leading position. This includes countries such as Thailand, Malaysia, Brazil, Chile and Romania. Additional megatrends include continuing infrastructure investment to support a growing and increasingly urban global population, compounded by increasing expectations for quality of life. Societal drivers for more sustainable land remediation technologies, and finally, an increasing environmental focus [indiscernible] backdrop. Combined, these megatrends are forecast to see the total addressable environmental testing market grow in the mid-single-digit range over the current ALS vision period. In addition, there's market share upside for ALS with three client clusters a priority, being environmental consultants, the water industry and industry direct. As a geographical consideration, the most material organic market share gains for ALS exist in the large U.S. market and in Southern Europe. The environmental business is committed to a targeted and disciplined M&A strategy, supported by the broader M&A infrastructure at ALS. New market entry into some of the larger markets in Central and Western Europe represent an opportunity, as do roll up and scope diversification opportunities in places like Brazil, Chile, the U.S., Italy and Spain. The Environmental business' approach to inflationary headwinds is threefold, most materially in leverage across the global platform, taking the best bits from our portfolio and looking to see these across our global operations. In client price point uplifts, which have generally been understood and accepted by clientele. And then finally, in scope makeup with an orientation to high-margin end markets and testing capabilities where there are typically higher capital investment requirements and skill sets are harder to recruit. Megatrend drivers and ALS' strategic position in this segment will support growth, margin and the continuing success of the Environmental segment business over the 5-year vision period. Maybe what I'll do, I can push on and a copy of the presentation is going to be on the website after this anyways. And it's appropriate that I'm going to talk about digitization and TIC next. So the TIC market, broadly speaking, is seen as a lagging industry in the Industry 4.0 technology landscape, but is expected to make significant gains in the coming 5 years. This provides opportunities for ALS in technical and technology leadership. Our focus in this space is towards data workflows and digital integration, digitization of processes, robotics is an extension of automation, which is a journey ALS has been on for more than 20 years and with machine learning. One of the key enablers to exploring the full value of new technologies is in harmonization across the global platform. ALS has demonstrated this through a continuing market leadership position and highly leveraged hub-and-spoke model in Geochemistry. While the Environmental segment is slightly different given the regulatory framework, which typically operates the state or country level, ALS has a great opportunity to leverage globally. What this looks like is best practice sharing and global platforms through our line of business applications, management tools and reporting, benchmarking, instrument and vendor platforms and technology share. Under the Life Sciences reorganization, this is now more easily achieved through a global environmental market segment business. Six regions inside that and the ability to effectively interact horizontally as well as vertically in the organization. Digitization and digital integration is a strategic objective of the ALS strategy map for FY '23 through '27. And this has been cascaded into the strategic plan for the Environmental business. So if we start by looking at digitization, it has to be important for the environmental laboratory industry where labor costs typically account for about half of our total cost base. At ALS, we are continually developing and further deploying our in-house proprietary Laboratory Information Management System, or LIMS. Currently, [indiscernible] LIMS is deployed across APAC, Northern and Eastern Europe and Canada. The goal is to have the plant deployed to more than 90% of the portfolio by the conclusion of the current vision and strategy period. Other enterprise-level software investments include an ERP and CRM, the Microsoft Office Suite, including Power BI and in our client-facing solutions. Tools like Power BI give us the ability to interrogate client volume versus discounting, shifts in the mix of work and to benchmark productivity or line item cost globally. The next evolution of digitization is fully utilization of IoT. Robotics and machine learning represent two of the more exciting advancement opportunities for environmental laboratories. These technologies go to the cost to produce challenge, shifting the dependence on labor with additional benefits of quality, service and scalability. One such example for the environmental business is us working with the German manufacturer in the development of a bespoke sample handling and allocating robot that reflected an investment of about $2 million. Other examples include the use of cobots and new generation instrument technologies to which ALS often gets early adopter benefit given our global relationships with the vendors. Machine learning is being pursued through a combination of in-house knowledge -- sorry, in-house knowledge, partnerships with academia and through third-party vendors. Much of the focus is towards data review and reporting, which represents some of the highest per unit technical person labor costs in our laboratories. And then lastly, how we integrate with our clients digitally, benefiting ALS through stickier clients, diluted price point pressure, which helps ALS' margin evolution and increasing value differentiation in the data we produce. Our goal is for our client solutions to be agnostic, so as to work on ALS hosted platforms as well as standard industry software platforms or with clients on their own in-house electronic data management systems. I think this is an area where ALS has a leadership position in the global market. Our strategy is to be the unparalleled leader in our industry, providing a world-class B2B digital experience and delighting clients across all touch points seamlessly. To be the destination of choice where clients can plan, execute and manage their end-to-end field programs. Projects already delivered include ALS Solutions, our web-based portal, ALS Compass, our mobile device, field-based utility and leadership in the preferred laboratory program with Earth Soft, a software vendor who provides the most widely used environmental monitoring software solution in the industry. And then with my last slide, what I want to do is just take you through a PFAS or a case study of an emerging contaminant that's really driving and set to drive our industry into the future. So as we look at the growth of the addressable environmental testing market, no single emerging contaminant will have the same way as PFAS in the coming 5 years. As a quick chemistry lesson, PFAS are a class of synthetic chemicals containing more than 6,000 organo fluorine compounds. Due to their dual hydrophobic, lipophobic characteristics, PFAS have been widely used to make consumer products more stain resistant, waterproof, on stick such as oil and water resistant finishes on paper, fabrics, carpeting and cookware. It has also been widely used in the industry including semiconductor manufacturer, aerospace and electronic applications and aqueous film-forming foams for firefighting. In most modern societies worldwide, PFAS would be ubiquitous in the environment. The largest challenge with PFAS is in its way cumulative nature and where there exists more significant concentrations, predominantly around industrial and firefighting activities. In countries like Australia where ALS has been a market leader in PFAS dating back to the 2000s, regulation and testing has gone from emerging to routine. Today, PFAS in isolation would contribute more than 10% of the total contestable environmental testing market in Australia. Elsewhere, PFAS testing and regulation is more emerging, including the world's largest markets in North America and Europe. For example, we see the U.S. EPA introducing PFAS testing through UCMR 5 as part of the Safe Drinking Water Act, which takes effect from January 2023. My view and that of the broader industry is that things will materially accelerate from there. This PFAS will be found in the water and will catalyze further regulation and monitoring. We also know that the DoE and DoD in the U.S. are expecting to materially increase their PFAS testing needs going forward from now. Global estimates as to the size of the PFAS market highly speculative and covered by a broadband. To state that from where what we see, PFAS is front of mind for environmental regulators, the water sector and land remediation. At ALS, we are positioned globally to benefit from an uptick in PFAS monitoring. We've got global technical working groups to support an evolution of the testing. We've got globally consistent geologies. We've got preferred supplier [indiscernible] instrument vendors to scale up quickly, and we've got broad-based support from our CEO of Board towards proactive investment. Our company estimates suggest the total contestable environmental market for testing is worth approximately $9 billion. Emerging contaminants such as PFAS are going to drive growth in the sector over the coming 10 years. And that's it for the environmental business. So what I would now like to do is introduce a video by Andreas Jonsson. Executive General Manager of our Food and Pharmaceutical business. [Presentation]

Thanks for having me. I'm Andreas Jonsson, I'm the Executive General Manager for ALS Food and Pharmaceutical. I will take you through the journey of Life Sciences and also highlight focus areas and priorities for food and pharmaceutical in the new 5-year strategy. Well, let's start with the megatrends in the market before we jump into ALS priorities. There are clearly a number of market trends, very favorable and supportive for our business. We have continuously an increasing amount of governmental regulations being implemented and regulatory bodies demanding improved safety. We also have consumer demands with high -- or higher awareness for quality products and safe food. New products are being developed in both the food and pharmaceutical industry, that's increasing the complexity of testing. And due to all of this and a few other factors, I must admit, we have a growing and aging population. And that in itself means an increased market size. And to address this, the priorities for ALS, food and pharma is to expand our geographic presence to support global and local clients. Our footprint is very important. Also to provide services throughout the entire value chains, we're talking about from farm to fork in the food business, talking about discovery to distribution in pharma. And as you can see, we're developing three distinct business lines for pharma, and we'll get back to that later. We also identify niche opportunities with higher margin through development of value-add services and end-market specialization. And finally, we have a strong focus on M&A activities and inorganic growth. So if we look at the journey of ALS Life Sciences, we've created a life science business, supported by sustainable and global market segments and really underpinned by the main TIC megatrends, some we just touched upon. First, we developed a global market-leading Environmental business, and we've done that over the past 25 years. And recently, we have diversified the life science activities into food safety and pharmaceutical QC testing. And recently, is over the last 10 years. So we've created a global network of food and pharma laboratories, and you can see the development in the graph on the right-hand side. We have very good discipline in this expansion. First, in food, focus. And that journey started back in 2012. And over the last 5-year cycle, we've added services to the global pharmaceutical market, including clinical services to the Beauty & Personal Care business, primarily in North America and LatAm, and also entry into the CRO market through the investment in NUVISAN in Europe. So we are now transforming our Pharmaceutical business. We're developing three business lines. First one to become a global leader through offering complete industry solutions from discovery through development to distribution in the CRO and CDMO market. Secondly, expanding our network for analytical testing services. We recently added DB Lab in Denmark, an acquisition to build further QC testing capabilities and capacity in the European Union. And thirdly, we will be a high-quality global provider of clinical research, marketing, sensory analysis, for the Beauty & Personal care market, and that's our dermatology line. We will achieve this by developing relationships with global key accounts, leverage ALS core values and the ALS culture that's very well aligned with drivers in the pharmaceutical industry. As you heard, we're honest, we are resilient. Integrity is embedded in our culture, in our DNA. And this is a very good match to build partnerships in the industry. It is worth pointing out that this is a very large, contestable global market. Our current market share is low single digit. There's definitely an opportunity for ALS to grow above market rates in this segment. And in order to do that, we've reorganized the business into a global structure to address a global market and leverage knowledge, technologies and services across regions. Also to drive economies of scale with our well-defined hub and spoke model, complemented with centers of excellence and also to develop digital solutions for easy interaction between clients and the service provider and also digital solutions for data analytics purposes. So a bit of a case study on NUVISAN. We're marketing the business as a science CRO with 1,200 highly educated employees spread over six sites in Germany and France, covering the entire pharmaceutical value chain from basic research and drug discovery through the clinical phases to distribution. We have organic growth driven by a strong outsourcing trend in the pharmaceutical industry in general. And the NUVISAN business is also uniquely positioned for big pharma, biotech and venture capital clients, and outsourcing of fully integrated projects all the way from early discovery to the molecule and to the patient. The idea here is to leverage ALS' global footprint to expand the CRO and CDMO services into selected regions globally. As you can see in the graph, the traditional analytical capabilities of ALS is very complementary to the services provided by the NUVISAN team. And then finally, if we focus on our continued growth journey in the Food segment, our focus here is really on end market specialization to grow higher-margin testing. We have an upstream client focus, including farmers, producers and looking at expanding our pesticide capabilities, for example. We have downstream expansion and rollout of our technical services offering and systems, an introduction of internally developed innovative diagnostic kit solutions. It is both geographic and capability expansion as priorities for the food business. Also here in order to add value to global clients and create further outsourcing opportunities. I want to highlight a few recent additions completed during this fiscal year. First of all, the HRL acquisition, you might have heard of a publicly traded business in Australia and New Zealand to further strengthen our position in the region. These are major environmental and food export markets. to provide specialist testing higher-margin services upstream in the dairy and honey markets, create the global offering with the center of excellence and expertise in New Zealand, replicate these services in new geographies and focus on high-quality testing and authenticity services. Other upstream and downstream expansion completed this fiscal year is 2 labs in Spain, LABER laboratory in Galicia, it's an upstream testing business with focus on fish industry and Biolab in the Canarias, focused downstream on tourism, hotels and cruise ships. And recently, the carton quality business in Chile, which is an upstream expansion into new markets with new segment capabilities in fresh fruit and vegetables, for example. Personally, I'm very excited to lead ALS food and pharmaceutical business through the upcoming 5-year cycle and really add value to the company itself and to the diversification of ALS Life Science business. So that was all I had for today. Thanks for your attention.

So I'm going to do a quick wrap up here and just so we can sort of move on to what everybody wants to go on to questions and answers. So will ALS look like in fiscal year '27? We'll have a rebalanced portfolio, really focused on our end markets and our core business. We'll see continuation of our Life Sciences group business, and you've heard both Tim and Andreas talk about it. And that is both organic and inorganic growth. So they've talked a little bit about the ambitions for acquisitions but there's also a clear expectation for the underlying business to grow. Geochemistry and minerals leadership, and you heard Bruce talk about some of the things they're doing, not only in terms of diversifying their portfolio into new market segments, but also in terms of technology development. We've talked a little bit about digitalization and data focus and the tools that we're going to have in the business. People is a big part of the future of ALS, and you'll see a very, very strong culture of innovation, but also a very strong focus on people. I mean I think from our perspective, our people, our biggest asset. Anybody can buy lab and equipment. So we have a very strong focus on that. And also our sustainability agenda. You've heard us talk about it. I think you'll see us deliver. We've already delivered so far. Again, I encourage you all to look at sustainability report and also our progression as we move along the next 5 years. We've addressed the revenue target. So I'm not going to repeat those. We've looked at -- Luis has talked a little bit about our financials and our strong balance sheet and also a continued improvement. So the next 5 years are really an exciting time for ALS, and so I'm going to cover off on a few things why ALS. I think what you have here is a proven product. You've got a business, a management team that has delivered on their commitment. You've seen them deliver on one strategic plan. You'll see us position the business in line with industry megatrends. You'll see portfolio realign to what is taking the world by storm, which is electrification and decarbonization. Very strong balance sheet, very strong financials in the business with strong cash generation. You've got a balance sheet, and Luis talked about that. And again, I mentioned it earlier, I don't think the company has been in a better financial position ever in the history of the organization. Focus on recurring revenue. So we not only look driven by projects, but we're seeing a very strong recurring revenue. Clear focus on margins. I mean, I think even in an inflationary environment, we're looking at margin improvement, that margin protection, and we have the ability to push price and manage some of these inflationary headwinds and a clear track record of disciplined capital management. So I do think we do a good job taking care of our shareholders' money. And finally, industry-leading shareholder return. So the company has delivered. I think we've sort of unpack this a little bit more. And I do think the business is well positioned to benefit from it. So before I go into Q&A, I just want to take a moment and just thank the ALS folks, for Cameron and the lady that runs the company, Diane, for helping us put all of this together and also for my management team. So Luis, Tim, Bruce and Andreas for the presentation, also, Michael, for having put this together. So I appreciate all with your focus on time. Thank you very much. So thank you all for your attention, and now we can go to the fun part, Q&A. So the floor is now open to questions. However, you want to handle. If you got a question, just put your hand up. get a microphone, tell us who you are, why you're here? No, we're happy to answer the questions.

And I just got a question on geochemistry. I understand that exploration volumes are going to be a [ Technical Difficulty ]. I'm sticking a little bit about margins. you said is probably looking at this opportunity as well. Should we think about EBITDA margins as basically rebasing now about that 30% mark permitted even if you do start to see more capacity coming through potential?

Yes, for us, I mean, just the fact that we are seeing our competitors continue to build capacity is a good indicator for the business. I mean if we were the only ones doing it, I'd be very concerned. I mean if you want to get a feel for the current trading conditions, but we are seeing that business perform above 30% in terms of its margins, probably closer to the mid-30s than we are at 30%.

And so in the future, we expect less [indiscernible] that you said almost no cyclicality in the margins?

Yes. I think from our perspective, and we've talked about it, again, I think from -- and I'd be curious what is more curiosity, what it thinks because you've got -- historically, we've looked at [ metas ] drilled, we've looked at drilling activity. We've looked at capital raisings in -- both in Canada and in Australia. And that's been a little bit of a proxy for what sample volumes are expected to. We also now have this commodity demand story. And I do think that it is going to play a part now. Again, I think the rhetoric from ALS is, we're not trying to bear our head in the sand, but we are seeing commodity demand and we are seeing drivers from the industry to fill that demand. So I do think that there is a strong possibility for less cyclicality in the market, especially when you're looking at the sample mix, et cetera.

Jakob Cakarnis from Jarden. Two questions quickly. Firstly, just in the geochems business. Can you just talk to some of the movements that you're seeing in compare that maybe to replicate your hub-and-spoke model and how that evolution may have looked over the last half or where they are on that process?

Yes. I don't know where they are. I mean I think from an ALS perspective, we've always been transparent. I mean even before my time, we've always talked about the hub-and-spoke model. That hub-and-spoke model is not as simple, go build a big hub in a city and it's supported by over 15 to 20 years of development of a management information system where we can transparently move samples around the world, clients can look at data. So the reason why the big mining companies enjoy ALS because they can look at their data from anywhere in the world across our entire portfolio. So I mean, I think copying is almost the ultimate compliment for ALS. And I guess, in one regard, I'm glad someone's trying to replicate the model. But we have a very, very mature model. And again, it's not just the model, it's all the information management systems and the logistics. I mean we probably, as a company, have better logistics than DHL and UPS. I mean, the amount of samples that we move around the world transparently, and we don't lose samples because when we lose samples, it cost us a lot of money. So I think there's a lot more to it just to say we're going to start building that. And I don't disrespect our competitors. I have a lot of respect for them, and they have a lot of money. So I suspect they will get there. And again, you're seeing what we do and we've got an established hub and spoke model. We've cascaded it across our larger businesses you're seeing Tim talk to have been spoke model in the environmental. We're doing it in food. We've got centers of excellence. You're seeing -- you saw Andreas talk about it in terms of the centers of excellence that we're doing in pharmaceutical. And behind that, there's a whole -- I mean years and millions and millions of dollars in development or software to go behind it to support it. So again, I don't know where they are, but I think it's the right move.

And then just on Life Sciences, obviously, you've now carved out food and pharma. It seems as though that's a way that you can exploit and expand your market share or some of the earnings in that business? Describe some of the dynamics that you're seeing from competitive intensity? It sounds like that's a very regionally based competitive model, maybe less price sensitive. But if you can talk to some of those competitive points why there? And how you can grow that either through scope growth or the organic growth that's ahead?

Yes. I think the sort of the rationale behind our business is we know we grow anytime we give a business attention, and we have a dedicated executive running we see that business grow. So the whole focus around environmental was that -- and Tim talked to it is giving us leverage, giving us a value proposition that we can now cascade globally. And we're also seeing our clients buying practices change from being regional to global. We're seeing the same behavior in -- with food and pharmaceuticals. So when you talk about food, the global food manufacturers, they want a single QC, they want a single report, they want the quality, they want the service, all aligned with their products. And that's why we developed our global food. We developed a global pharmaceutical business and the pharmaceutical companies are all the same, whether it's Pfizer in Latin America or in Europe or it's Sanofi who is doing all the beauty and personal care. They want to global company that's going to service them on a global basis. In terms of pricing and pricing power, I think if I had to rate the businesses, I think pharmaceutical has higher margins. our environmental business is a well-tuned machine. It has very strong margins. And I think the food business is on a journey. I think out of the food business, you really have to do a lot of microbiology work first before you get -- before you're able to do the higher-margin contaminant work, et cetera. So I think ALS is on their journey. And so part of splitting that business up, we've got to get some scale to our food business. I think we've got -- I mean, clearly, the environmental business has scale. Our pharmaceutical business now has scale. And if we acquire the rest of NUVISAN, it will be a large business in our portfolio, and the intent is to be with the food business. I don't know if that answers your question.

John Purtell here from Macquarie. In terms of the first question, sorry, it's in a couple of parts. But question around the energy crisis in Europe and whether you're seeing any impacts at present from that. But I guess more particularly longer term, whether as part of your 5-year plan, you're assuming lower growth in Europe versus other regions? And whether there's any flow on impacts from your M&A sort of focus regionally going forward?

Yes. I mean, I think just as a general comment, I mean, we don't have a meaningful presence in Russia. And we don't have any presence in the Ukraine. And those are probably the two biggest impacted areas. And part of our strategic plan did not contemplate or expect growth in those regions. I think the impact that we're seeing energy costs. I mean if you look at what's going on with energy costs in the U.K. You talked on -- [ Andreas ] yesterday, when they've seen energy costs in Sweden go up 200% in the U.K., they're expecting anywhere from 400% to 500% energy and they're expecting an energy shortage over the winter. So all those European countries are talking about rolling blackouts during winter. So for us, that's an impact because we're going to see those costs come through. Labor inflation is extremely high. The last set of data I looked at in the U.K., they're expecting a 10% labor inflation rate there. And we're starting to -- we're seeing that across Europe. From our perspective, it's a good discussion. I mean, again, it is what it is. It's a good discussion that we have with our client in terms of price and price point. The issue there becomes you'll get an immediate impact on energy. And when you put price increases in place, that happens over a period of 3 to 6 months. You just can't change everything overnight. So that's what I see. I don't think -- I mean, if you go into Europe, the situation is a lot more confronting when you go there versus just reading the news from the rest of the world, where we participate in. But I think overall, I think that impact will be short. I mean the energy crisis is what it is. I think the world will figure out how to get around it. But we will see higher cost of doing businesses. And again, from our perspective, we continue our acquisition strategy, both in Eastern Europe, Central Europe and Northern Europe because I do think it regionalized. And again, that creates opportunities for those countries, all sort of sitting further down south. So I do think Poland will be a hotbed for growth in sold Romania, and Tim talked a little bit about Romania, and we have done some acquisitions in that, just making sure we got a flag in the ground, and we understand those markets.

And just the other question was around the battery minerals and commodities business. Is there a positive mix effect as you sort of shift into battery minerals given these are new sort of emerging areas? Is there more testing, more analytics? So is there a greater technical requirements versus existing? Or is it pretty similar?

Yes. I think for us -- and Bruce talked a little bit about our market-leading position with detection limits, especially when you're looking at some of the rare earth metals, I mean, you find them in very trace amounts, having the analytical capability to see low level and get low-level detection limits. I think it's going to give ALS a strategic advantage. There's no magic mix, mix, mix perfect for us right now because we're in uncharted territory. I mean we've not seen this happen in our business before. So we're sort of learning as we go. But I do think just from a positioning standpoint, ALS is very well positioned because we continue to develop those low level methods, and it's playing very well for us. We're seeing new entrants in the business. We are seeing -- it's not only juniors and majors and now you're seeing some of the battery manufacturers, folks like LG and Apple and Tesla all wanting to secure up their supply. So they're looking at investing in the sector, too. So I think that story will play itself out over the next 12 months but we are seeing some positive activity there.

Daniel Seeney from Q Value Equity Research. I was just wondering, there wasn't a lot of focus on the industrial segment today. Does that segment feature in the FY '27 guidance that you provided? And could we see that segment become noncore given it's increasingly overshadowed by commodities and Life Sciences?

Yes. I mean I think today's focus was really on the large businesses, the minerals and the life sciences. I mean, they account for 80% of our portfolio. I think with the industrial business, I mean, as long as that business sits in our portfolio, it needs to perform. I think from a long-term strategy, I mean that business, it does some testing, I think we're going through a portfolio review to determine whether it's core to the business or not. It doesn't have the same leverage, so what we're doing is looking at all the low-margin business and determining is it core to our business or not. It doesn't have the scale and leverage like the rest of our businesses. So when we talk about geochemistry or minerals and we talk about environmental food, those businesses are all about scale and leverage. The Industrial business is a time and materials business. And again, as long as it sits in our portfolio, it needs to perform. But longer term, we'll just have a strategic review about it.

Okay. And secondly, under the prior 5-year plan, I think you had a capital allocation target $100-ish million to M&A on average over the course of that plan. Is there some similar data point or number you can give us which can give us a feel for how much money excluding NUVISAN should be allocated to M&A over the course of the current 5-year plan?

Luis, you want to answer that?

The fact that there are patients [indiscernible] in terms of the patent for acquisitions and NUVISAN. So we have above $1 billion in terms of capital allocation for acquisitions. And NUVISAN represents in case we exercised the option, represents about $300-plus million for that and the rest will be for the rest of acquisitions that we have in our portfolio. On average, it's about $200 million per year in terms of investment and acquisitions that we have factored in the plan.

Rohan Sundram from MST. Can you maybe talk us through or can we get a refresh on that MinAnalytical acquisition and the rationale behind taking in-house that crisis technology? And where does that technology sit in your strategic plan?

Yes. So I think MinAnalytical did several things for us. I mean, ALS has always been an adopter and an early adopter of new technologies. So we've been following the crisis technology for a while. And MinAnalytical created a unique opportunity for us to provide two things: One, give us access to the technology; and two, give us capacity. So if you remember our discussions last year, our limitation for sample volume growth was prep capability. And if you look at MinAnalytical's facilities, they have very large facilities, unused capacity. So we saw that twofold. So we were able to increase our capacity by 5% so that was an immediate benefit versus us trying to build buildings. And Chrysos technology, I think the technology is good. I think for ALS, that technology works very well for mine sites and grade level samples. And that's why the technology has been well adopted. And again, everyone has a view. We like the technology, but we like it specifically for a single purpose. I think when you get into exploration and low detection limits and some of the drivers in the market, I still think our current technology works well. But we are buying Chrysos units, and we are putting that into play. And I think when you're looking at -- as we want to penetrate that Bruce talked about us penetrating that mine site. We are an industry leader in exploration. I think we have 50-plus percent market share. And we think we can be a major play in that mine site. Again, that I think the Chrysos technology like -- would play well for us. We also have to be cautious about our hub-and-spoke model and scalability. The Chrysos business model is a pay per use. So you lease the unit and then you pay for every sample you put through it. So it works great when there's a high demand, and it can impact your breakeven if we see things slowdown a little bit. But it's working great for us. We like the technology. I mean I think there are some kinks that we're working through. But again, but we don't see ALS has adopting Chrysos across all of our businesses and replacing. I don't see that working for ALS.

Andrew Hodge from Crédit Suisse. Just the first question, around the 5-year strategic targets. If we look back to what you achieved in the previous 5-year targets, these ones are just modestly below those outcomes. And I'm just interested in whether that's a function of you're working off a bigger base or you're coming -- we're effectively entering this 5-year period of what we would call cyclical highs as opposed to maybe cyclical lows 5 years ago. What the difference between the 2 5-year periods are with regard to these targets versus what was achieved in the last 5?

Yes. I think for us, when we went through the strategic planning, I mean, there's several -- again, and it's pure vision for the business. We were in some unusual times. We're in the middle of a pandemic. No one knew what the other end was going to look like other than the fact that the team believed that we could manage the business and grow the business regardless of market conditions. We're also in the 5-year vision, we also made the assumption that there will be somewhat of a slowdown in geochem, now is changing by the day. And so potentially, we have been a little bit conservative. I think on the margin itself, we said I think we've got a set of flow for ourselves. We've got to say we can never perform less than this. I do think there's an upside. What that is, is yet to be determined because we are in some interesting times right now. And we do believe that even on the ROCE, et cetera, we know that our plans are a little bit again, a little bit more aggressive. And we'll see what that plays out to me because, again, we -- all of us are a little bit in uncharted territory as far as what's going on in the economy. You've got recession, you've got geopolitical issues and you've also got high demand. So -- and rising interest rates, you got all the -- so again, I get -- I see your point, but growing a business, 50% of the high base, I think is -- would be a great outcome for ALS.

And then just exploring the idea around maybe less cyclicality in the geochem business, it just feels a little incongruous to think that the cyclicality could reduce but that sort of peak margin can be maintained. You just got a feel that if volumes were very stable, that the competitive environment would increase because people could comfortably put capital into that area without the concern on capital. So just I'm just trying to explore why you think that sort of very high 30% plus EBITDA margin could be maintained if we move into an environment where there's much less cyclicality?

Yes. I mean I think that's yet to be determined. From an ALS perspective, it's our operating model, right? It's the hub and spoke, it's our leverage we get out of the business. And it's also the reputation that goes with the business. I mean I think when you look at sort of that mining industry, unlike a regulated business like Life Sciences, where everything is competitively bid, in that mining business, they actually take that data either back to the majors or they go back to the markets to raise more capital. So I think our technical reputation that goes with that is significant. So we still are able to push price. We're still pushing price as we speak. And we know our competitors. And again, we can talk all day about that. They're building capacity. They're buying Chrysos, some are buying more, some are buying less. So they're all doing that. I think it really is your business operating model. And I think I think it's a fair statement and it's not -- it's just -- it's not an arrogant statement, I think even if we ask our competitors who are the best [indiscernible] is in the industry, they will say ALS. I mean, our people -- as Tim, how people get job office every day to go because they -- because our operating model is very, very different. And we're all operators. I mean we all grew up in the lab. I mean that's sort of our DNA. And so very much focused on productivity and efficiency, again, and it may change, and I respect that. But I think we have to set our own internal targets and really sort of watch what we don't be mindful of what our competitors are doing. But as long as we can maintain our price and push price, we will. And we've got some very clear matrix and program that we monitor price on a daily basis yes. So yes, I think that's a fair statement, but we also have to believe in our operating model.

John Clifford, Morgan. I appreciate you guys taking the time. Question on NUVISAN and progress on the large customer that was a big percentage of revenue. Just interested in what you could give us on how that's being worked through? Whether it's reduced now as a percentage of total revenue for that business and the dynamics around that?

Okay. Thank you, John. I think just as a recap for everyone that NUVISAN business that everyone knows that we acquired that business. It really is an outsourcing model. So big pharmas sort of outsourced it, when they outsource to give you a guaranteed revenue contract, but that's on a declining scale. So that's why we manage the risk with the purchase price in terms of what we bought it for and really over, and we've owned that business since October. So we're coming on 1 year of owning that business. What we've done over that period is we've really gotten team. So really what that business, technically, it's very strong, very strong. What that business needed to do is commercialize. It went from an in-house testing and that's got its own challenges. It's probably a beer drinking story at some point. But it really needed to learn how to be commercial. So what we've done is we've sort of got our teams together, especially the ALS team and worked with their teams in helping them commercialize business. They're doing a good job. We'll come on to a year at the end of September of owning that business. I think the business is on plan. They just got a big award the other day, awarded with the Bill & Melinda Gates Foundation. They've got a EUR 10 million to EUR 20 million project award, which will give that business a lot of credibility, and it's really dealing with reproductive medicine for Africa. But again, the business is doing what it needs to do. From my perspective, it's on plan. I think they internally had a more aggressive plan. Our plan was a little bit more conservative realistic. And so the business is doing what it's doing. We will meet with them again next week, Thursday in Singapore. So we're using them to globalize our business too as well taking the capabilities and cascading them around the world. So that's all going as planned, John. I think once we get a full year, we've got -- they've got another 18 months after this to demonstrate they can clearly be commercial. And I think they're doing what needs to be done to get it. I mean they're adding a lot of business development folks and I mean, it's a little bit of a -- they've had a few bumps in the road. But overall, if you look at the end product, I think they're doing what they need to do, and it's working well.

The other question I have was around food business, which you talked about needing that scale. I think you've always expressed the issue that there really aren't a lot of bigger companies that you can acquire. Just wondered what the strategy is there? Has that changed? Are there businesses that are consolidated? Or is it still that little piece meal deal?

Yes. It's going to be -- and you're right, I mean, I think all the big potential acquisitions have been acquired or they're being acquired for multiples that were not willing to pay. So what you're seeing us do is we're building a hub-and-spoke model, right? So we've done it in the U.K. We acquired that Eclipse business 8 to 10 years ago, and we built a big hub. And now we're the major provider of food testing in the U.K. We're doing the same, we did the same in Singapore. We've done the same in Thailand. And now we're starting to do it in Eastern Europe. We've built a big hub facility in Prague and be buying smaller labs feed into our hub. We're doing the same in India now. And we're doing the same now in APAC. So I think for us rather than pay those 18x multiple for -- and really for microbiology labs is little bit silly. I think we were off doing greenfield start-ups and building our own hub and spoke model. So really, that's our strategy around that. Now you saw the most recent acquisition for HRL and bring some new capabilities and things that we can cascade on a broader base. And that's our strategy around there because I think trying to find a platform business will be difficult for us. It's the highly sort of after assets. And I think it just -- I think given the choice, if we had the same amount of money, we would deploy it either into pharmaceutical into our environmental business. So I think we've just got to keep building it. And I think that you'll see this year, you'll see the outcome will be positive.

Mick Ronson from Jefferies. Just a quick one on commodities. Fillers are talking about junior slowing down their campaigns. But apparently, the larger miners are soaking up any excess rigs? Are you sort of seeing that mix shift already? And is that potentially going to weigh on margins in the near term?

Yes. So we've not seen the mix shift yet. We are aware of those discussions that are going on. and we do think that we'll see the mix shift as we go into this next field season. So we do see that. I think from a margin perspective, again, as long as we see the volumes, I think we'll still see the leverage in our business. It's really when the volumes slowdown that we see our margins start eroding.

And also just a quick one on turnaround times. How are they faring at the moment?

So turnaround times are good right now because we've built the capacity. We've got all our instruments in a functioning, so whilst volumes are still high. So our volumes are still above volumes last year. So we are seeing volume growth in the business. We are seeing better turnaround times because, again, we've built the capacity, and we're providing good service to our clients.

Jakob Cakarnis again from Jarden. Maybe one for Luis. Just thinking about the free cash flow profile given the 90% cash conversion guidance you've now given us about $200 million of acquisitions per annum. If there's any surplus left after the dividends, is the company willing to still look at buybacks or alternative capital distribution? Or will it be about providing a better basis for the balance sheet for further acquisitions moving forward?

I think that we try to manage the business within the range that we have provided between $1.6 billion and $2.3 billion. We see the share buyback as the tool that we have no capital management toolbox, if you will, to a we have cash available, the company's deleverage it fast given the strong cash generation and we don't have opportunities that we can invest that share buyback option couldn't be triggered. But that would be evaluated at certain point in time and given the opportunity that we have.

Do you have any questions online, Cameron?

Your question comes from Adam Hackel at Comcast. He asks, in pharmaceutical testing, do you see geopolitics getting increasingly important, i.e., in U.S., China? Currently, Chinese CDMOs have strong market share. Do you see geopolitics becoming a headwind for them and a tailwind for you?

Yes. I do think that the world learned an interesting lesson during the pandemic and the reliance on a single geography for a lot of our pharmaceuticals or consumables. So we are seeing sort of decentralization of supply, both in the pharmaceutical industry. So we have seen a tick up in our pharmaceutical business around the world and really just in an effort to not be went on a single geography.

There's no other questions online.

And Peter's got a question here.

Daniel Seeney from Q Value again. One of the features of the FY '22 result was the very strong organic growth in Life Sciences. Just in terms of current trading, can you give us an update of how that momentum has carried on into early FY '23?

Yes. So we continue to see organic growth in our Life Sciences business currently. I think there's a slight impact in Europe with sort of some of the geopolitical issues. But overall, we're seeing organic growth -- Luis is nodding his head, so it's good answer. We are seeing organic growth in our businesses. I don't think it's as strong as we saw last year, but I think we'll end up in a good place on a full year basis this year.

Peter Drew from Carter Bar. Just a question on NUVISAN. I mean, I'm just curious, as the earnings sort of dip as that client complete, I'm just wondering, is it reasonable to assume that you'll get the earnings of that business back to where they were by the end of the vision range?

Yes, absolutely. I mean, our goal with that business, we know that business is not performing at our current expectations. So it is a little bit of a margin drag on our -- on our current business. We've known that, that was sort of in our modeling. The expectation is that business under our ownership, we know the synergies we had in the business. We're seeing the opportunities, and we'll work diligently to ensure that we validate those synergies. And then our -- once we get the business and our ownership will materialize the images.

Just another question on sort of the group margin target of 19% plus. Now I'm thinking that just based on the numbers that I've done that the commodities business is kind of assuming a pretty flat large and from where it is or where it was in FY '22.

A good flat margin, right? Just checking.

And so basically, that means that in order to offset your group costs, you support costs, you're going to have to see some improvement in Life Sciences margin. I'm just wondering, can you kind of maybe give us a bit more of an idea of the push and pull from the various verticals and how you -- that sort of materializes?

Yes. I mean I think the Life Sciences business has been on a margin improvement journey for the last 5 years. We've seen that margin improve every year. And early on, we saw big improvements. And as we get up to a higher base, we see that, we see 30 basis points, 40 basis points. Our goal is to get that business above 17.5% margin. And if we can get there and continue that journey, it would be a good outcome. And again, all the executives -- stick around after the meeting and talk to them, you'll see that they're all committed to, and they've all got strategies in place to ensure that we deliver on that outcome. No more questions. All right, folks, thank you very much for being here. Please stick around. We're going to be around, if anyone wants to ask any personal questions. I guess we've got drinks and others. Is that true? So for you guys on virtually, cheers, thank you for being online. All right. Thank you, folks. Thank you.