Raj Naran
Market Cap (AUD): 3.6B
Sector: Industrials
Last Trade (AUD): 7.46 +0 (+0%)
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1. About

The Company operates one of the world’s largest analytical and testing services businesses and its partnerships span major sectors including mining, natural resources, environmental, food, pharmaceutical, industrial and inspection services. The ALS brand is well recognised internationally by its customers and competitors for the delivery of high-quality testing services. ALS headcount is exceeding 13,000 employees, the company is operating from more than 300 sites in over 50 countries across Africa, Asia, Australia, Europe and the Americas.

Key Statistics :

  • Located in 50+ countries and 300+ location
  • 40+ years of strong business performance
  • 13,000+ Staff worldwide
  • 20+ Million Processed samples per year
  • $1.4+ Billion Global revenue

2. Business model


The Group operates in following divisions:[1]



Revenue(M AUD)

% of Revenue

% of Profit (Before Int & Tax)

Profit drivers[2]





  • $734.1 M Revenue is generated from Life Sciences in 2018 as compared to $641.6 M in 2017
  • $518.9 M Revenue is generated from Commodities in 2018 as compared to $427.2 M in 2017
  • $193.9 M Revenue is generated from Industrial in 2018 as compare to $192.7 M in 2017
  • Underlying NPAT from continuing operations, attributable to equity holders of the Company, was $142.2 M for a 21.1% increase on the $117.4 M underlying net profit achieved in 2017
  • Total revenue from continuing operations for the consolidated Group was $1,446.9 M for 2018, a 14.7% increase on the $1,261.5 M recorded in 2017
  • The Group achieved underlying NPAT from continuing operations (attributable to equity holders of the Company, and excluding all Oil & Gas operations, restructuring and other one-off items, amortisation of acquired intangibles and impairment charges) of $142.2 M for FY2018

Life Sciences












Discontinued operations




3. Strategy


During the year, the Company began to implement its new five-year strategic plan to embark on the future of ALS and focus on the business streams with testing at its core[3]

  • This means not only in building and expanding its highly successful existing businesses but also developing operational efficiency and innovation and technology in non-cyclical sectors of the industry
  • During the year, the Company carried out several acquisitions to help sustain the growth over the longer term, predominantly in the food, pharmaceutical, and tribology testing sectors. Acquisitions included Marshfield Food Services in the USA, OILCHECK in Brazil and the Mikrolab Group based in the Nordic region
  • The Company is positioned to take advantage of opportunities in these sectors during the 2019 financial year provided they are complementary to its existing businesses and consistent with the Group’s strategy



  • Continuation of positive market sentiment and improved market conditions for geochemistry  Geochemistry market share gains globally to translate into improved FY19 performance 
  • Gradual but sustained improvement in Metallurgy expected to carry on throughout FY19  
  • Demand for coal services remains and will be underpinned by recent new contract wins  
  • Inspection business benefiting from capacity upgrade and is focused on cost-based management


Life Sciences

  • Focus on automation and workflow centralisation to improve future operating margins  
  • Food safety and pharmaceutical strategy will continue expansion via targeted acquisitions  
  • The environmental businesses in the Americas and Europe continue to demonstrate improved revenue performance  
  • EMENA revenue growth driven by UK improvement following integration restructure and recent acquisition in Sweden  
  • New greenfield life science business in India to be operational in H2FY19



  • Despite headwinds, well positioned to support mining, O&G, and power generation maintenance programs in Australia. Market to remain highly price sensitive  
  • Mobilisation of US construction projects in FY19 H1 to underpin FY19 regional growth  
  • Lab automation, online monitoring and data management solutions driving increased efficiency and improved quality  
  • Tribology expansion of Prague operations in FY19 H1, creating a footprint in Europe  
  • Asset Care greenfield start-up established in Thailand in FY19 Q1

4. Markets


The Group operates in the following industries:[4]


Industry (Australia)

Industry Revenue (Annual 2018)

Growth Rate (Annual 13-18)

Environmental Science Services

$5 billion


Engineering Consulting

$44 billion



$225 billion


5. Competition


Major competitors Include:[5]


  • Orica Ltd (ASX: ORI)
  • Silex Systems Ltd (ASX: SLX)
  • Genetic Technologies Limited (ASX: GTG)

6. History



Listed on the Australian Stock Exchange  (ASX:ALQ)



ALS commenced operations in Brisbane as ‘Australian Laboratory Services’ (ALS) in 1974 as a privately owned company



The Company was acquired by ALS Limited (Formerly Campbell Brothers Limited), a Queensland-based company first registered in 1863



Campbell Brothers Limited announced that it has acquired the business assets of New Zealand company, Proclean Limited, a chemical formulator and distributor based in Auckland



Campbell Brothers Limited announced today that its laboratory services division, Australian Laboratory Services Pty Ltd (ALS), has acquired the Chemex Laboratory Group for an initial payment of $8 million with a continuing conditional increment payable to the vendors over a period extending up to five years



International pharmaceutical and healthcare company, F H Faulding & Co Limited (Faulding), announced today that its Faulding Healthcare division has purchased soap manufacturing equipment and associated brands from Campbell Brothers Limited



Diversified industrial group Campbell Brothers Limited will become the world's largest provider of laboratory analysis services to the minerals industry after today announcing its laboratory business,
Australian Laboratory Services Pty Ltd (ALS), will buy major North American minerals laboratory group Bondar Clegg



Sold Pest Control & Washroom Services Business

Campbell Brothers acquired Swedish Lab Group

ALS Limited acquired International labs



ALS Limited signed JV with Norilsk Nickel

Sold stake in CCI Holdings



ALS Limited received over 60% acceptances in Pearl Street Limited



ALS sold Chemical Division & acquired European Enviro Labs

ALS acquired Severn Trent Analytical Services in UK

ALS acquired a majority share of Advanced Inspection Technologies LLC (AIT).  AIT is based in Houston, Texas and conducts advanced non-destructive testing and consulting services globally.  AIT will form part of the ALS Industrial Division and the Asset Care business which provides reliability and integrity engineering services to industrial clients

ALS acquires the assets of Oilcheck Pty Limited



ALS Limited (ASX: ALQ) (“ALS” or the “Company”) agreed to acquire Reservoir Group (“Reservoir”) from SCF Partners, Reservoir management and other shareholders for a total consideration of approximately US$533 million (AU$579 million)

ALS completed acquisition of Reservoir Group



ALS sold Reward Distribution business

ALS Oil & Gas, the new international oilfield services company, formed through the acquisition of Reservoir Group by ALS Limited in 2013, announces the acquisition, of the North American completions services provider, BMP Enterprises LLC (BMP).



ALS expanded in Europe with acquisition of Controlvet



ALS completed acquisition of ALcontrol UK Limited



ALS acquired TECAM Laboratory Group in Brazil

ALS Evaluating Asset Care Business

ALS entered the Food Safety and Environmental markets in Italy with the acquisition of Leochimica SRL

7. Team


Board of Directors[7]


Bruce Phillips – Chairman and Independent Non-Executive Director

Raj Naran – Managing Director and Chief Executive Officer

Mel Bridges – Independent Non-Executive Director

Grant Murdoch – Independent Non-Executive Director

John Mulcahy – Independent Non-Executive Director

Charlie Sartain – Independent Non-Executive Director

Tonianne Dwyer – Independent Non-Executive Director

Michael Pearson – Company Secretary[8]

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8. Financials


2019 Half Year Results Presentation


Financial Year 2017/2018 (ended 31 March):[9]



Revenue (M AUD)

% Change

Profit (before Int & Tax) (M, AUD)

% Change






Life Sciences















Discontinued operations










9. Risk


Major risks include:[10]


Material business risks

The Group has an enterprise wide risk management framework that is structured to ensure its material business risks and controls are captured, assessed and regularly reviewed in a consistent manner.

The key material business risks and associated mitigation controls identified include:

  • ALS is exposed to financial risks such as liquidity risk, interest rate risk, foreign exchange risk, and credit risk (counterparty exposure). Group treasury and cash management policies are in place to mitigate these risks, and key indicators are monitored monthly including gearing and leverage ratios, interest cover by EBITDA, minimum liquidity reserves, weighted average debt maturity, and earnings at risk.
  • The Group’s success is dependent upon attracting and retaining staff in key technical and management roles. ALS mitigates this risk by striving to be an employer of choice, implementing its organisational development programs, monitoring and benchmarking its employee benefits, career progression and succession planning, and oversight by the Board People Committee.
  • The ALS Commodities business stream operates in a cyclical resources sector with fluctuations in commodity prices and global demand. ALS mitigates this risk by ensuring the Group has a diverse testing and inspection service offering across a range of industry sectors and geographies. Other controls include a business model that allows for scalability of services, a disciplined focus on operational costs, and close monitoring of economic trends.
  • ALS has a reliance on IT systems and infrastructure to manage and store its data. ALS mitigates this risk by having back-up systems and redundant servers located at offsite data centres, disaster recovery plans, and information management policies in place.
  • The Group operates across a number of industries that have inherent safety risks. ALS mitigates this risk by making “Safety as a Priority” a core value of the Group. Management have implemented a robust safety management system, employed significant HSE resources, and through their strong leadership are developing a culture of safety within their businesses, overseen by the Board Sustainability Committee.  
  • ALS is a market leader in testing and inspection services. A loss of reputation due to poor quality service would erode market share. This risk is mitigated by implementing robust quality control policy and procedures, requiring its businesses to obtain third party accreditation to international quality standards where available, and investing in custom built laboratory information management systems.


Credit Risk

The Group has an established credit policy and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. The Group does not require collateral in respect of financial assets. There is no single customer making up a material percentage of the Group’s revenue.  

The maximum exposure to credit risk is represented by the carrying amount of each financial asset, including derivative financial instruments, in the balance sheet. Goods are sold subject to retention of title clauses, so that in the event of non-payment the Group may have a secured claim. Counterparties to transactions involving derivative financial instruments are large Australian and international banks with whom the Group has a signed netting agreement. Management does not expect any counterparty to fail to meet its obligations. Group policy is to provide financial guarantees only to wholly-owned subsidiaries.


Liquidity Risk

The liquidity position of the Group is continuously managed using cash flow forecasts to ensure sufficient liquid funds are available to meet its financial commitments in a timely and cost-effective manner. The Group is party to a number of bilateral debt facility and long term note agreements which provide funding for acquisitions and working capital.


Market Risk

  • Interest Rate Risk

Interest rate risk is the risk that the Group’s financial position and performance will be adversely affected by movements in interest rates. Interest rate risk on cash and short term deposits is not considered to be a material risk due to the short term nature of these financial instruments. The Group’s interest rate risk arises from long term debt. Floating rate debt exposes the Group to cash flow interest rate risk and fixed rate debt exposes the Group to fair value interest rate risk. Interest rate risk is managed by maintaining an appropriate mix of fixed and floating rate debt. The Group enters into interest rate swaps to manage the ratio of fixed rate debt to floating rate debt.

  • Foreign Exchange Risk

The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures. Foreign exchange risk arises from future purchase and sales commitments and assets and liabilities that are denominated in a currency that is not the functional currency of the respective Group entities.


  1. ^ Annual Report  2018, P. 48-49
  2. ^ Annual Report  2018, P. 05, 14
  3. ^ Annual Report 2018, P. 06
    Investor Presentation 2018, P. 16, 19, 21
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  9. ^ Annual Report 2018,  P. 48-49

  10. ^ Annual Report 2018, P 19, 59-60