ALS Ltd (ASX: ALQ) is a global leader in testing, inspection, and certification services, providing high-quality analytical solutions across diverse industries. Headquartered in Australia, ALS operates through two primary business segments, Commodities and Life Sciences.
The Commodities division specialises in geochemistry, metallurgy, coal, oil, and lubricants testing, serving the mining, energy, and industrial sectors. This segment ensures efficient resource extraction and processing through advanced laboratory analysis.
The Life Sciences division focuses on environmental, food, and pharmaceutical testing, offering critical analytical services for public health, regulatory compliance, and product safety. Environmental testing includes air, water, and soil analysis, while the food segment supports quality assurance in global supply chains. The pharmaceutical division provides research, development, and regulatory testing for drug formulations.
ALS achieved underlying revenue of $3 billion in FY25, a 16% increase compared to the previous year. This growth was predominantly led by organic and scope expansion within Life Sciences, contrasting with softer market conditions in Commodities.
The company’s underlying earnings before interest and tax (EBIT) rose to $515 million, marking a 4.7% increase. Notably, the Minerals segment maintained a resilient margin of 31.1%, ensuring capacity for future demand linked to global exploration activity.
Despite the overall positive financial performance, underlying net profit after tax (NPAT) declined slightly by 1.4% to $312.1 million. This was attributed to fluctuating market conditions in exploration, unfavourable foreign exchange impacts, and higher interest costs associated with recent acquisitions.
The reported NPAT, however, saw a significant increase to $256.2 million due to the absence of one-off impairments recorded in the previous year. Basic Earnings Per Share (EPS) decreased 1.5% to 64.4 cents per share, the company also generated 13.1% more free cash flow to $590.6M. Net Debt was reported 21.2% higher at $1.42Bn.
The company declared a final dividend for the year of 19.7 cents per share partially franked to 30%, combined with the interim dividend of 18.9 cents per share (30% franked), the partly franked dividend for the year will be 38.6 cents per share representing a payout ratio of 60% of FY25 underlying continuing NPAT.
ALS has initiated a fully underwritten $350 million placement to bolster its balance sheet and support its growth strategy. The funds will be directed towards expanding the laboratory network, ensuring ALS remains positioned for strategic acquisitions and market opportunities.
Additionally, the company will conduct a non-underwritten Share Purchase Plan (SPP) to raise up to $40 million, allowing shareholders to participate in the equity raising.
Following the placement, ALS’ pro-forma available liquidity will reach $677 million, reinforcing its ability to execute value-accretive growth initiatives. The company continues to emphasise strong cash generation, with an EBITDA cash conversion rate of 95%.
The Commodities segment demonstrated resilience, particularly within Minerals, which maintained margins above 30%. Industrial Materials performed strongly, driven by notable growth in the Oil & Lubricants and Coal segments. However, the division experienced margin pressures due to heightened competition, leading to a slight decline in underlying EBIT.
The Life Sciences Division exhibited robust revenue growth of 27.4%, supported by strong performances in the Environmental and Food businesses. Environmental testing continued to lead organic growth, particularly in PFAS analysis. While recent acquisitions—including York and Wessling—were initially margin-dilutive, their integration is progressing well, with expectations of future profitability improvements.
The Pharmaceutical Segment, Nuvisan, acquired by ALS, continued its transformation program ahead of schedule, achieving cost reductions and improving its earnings contribution. However, regulatory changes in Mexico impacted demand for local pharmaceutical testing, presenting an EBIT risk of up to $10 million in FY26.
ALS has committed ~$230 million towards a multi-year capital expansion program across its key hub laboratories in Peru, Australia, Thailand, and the Czech Republic. This investment aims to accommodate increasing demand and enhance operational efficiencies. The company expects to allocate 40% of the budget in FY26, followed by additional investments in subsequent years.
Additionally, ALS extended its debt maturity profile in May 2025, reinforcing its liquidity position. The company’s leverage ratio increased to 2.3x, aligning with its targeted range, while interest costs rose due to recent acquisitions.
Total gross capital expenditure (excl. acquisitions) was $165 million, which represents 148% of depreciation and 5.5% of revenue, of this $120 million was growth related and $45 million was maintenance spending. The Group’s net cash M&A expenditure increased to $198.2 million and Group liquidity was $448 million.
ALS announced that its operational headquarters will relocate from Houston, Texas, to Madrid, Spain, in July 2025. This move reflects the company’s evolving workforce distribution, with Europe now representing a substantial portion of ALS’ operations. CEO Malcolm Deane and CFO Stuart Hutton will transition to the Madrid office as part of this strategic shift.
Looking ahead, ALS aims to sustain organic revenue growth between 5-7% in FY26 while achieving further margin expansion. The Commodities segment is expected to benefit from increased exploration activity, while Life Sciences anticipates continued strong performance across its core businesses. The company will focus on integrating recent acquisitions, completing Nuvisan’s transformation program, and executing planned laboratory expansions.
By FY27, ALS targets revenue growth to $3.3 billion and underlying EBIT of $600 million, with a minimum EBIT margin of 19%. As the company continues to optimise capital allocation and refine its operational strategy, it remains well-positioned to enhance shareholder value and navigate evolving market conditions.
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