ALS Limited to Acquire Nuvisa Pharma Holding Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jacob Cakarnis - Jarden Australia Partners Pty Limited - Analyst : Thanks, operator. Hi, Malcolm. Hi, Stuart. Just firstly, how did you get to the nil cost for the acquisition of Nuvisan, obviously noting that there was a pre-agreed EBITDA margin on a trailing 12-month EBITDA basis? Just wondering what you can comment there about how that was structured essentially as nil cost, given it looked as though the business was still producing EBITDA on a euro basis in the first half of '24?

Question: Jacob Cakarnis - Jarden Australia Partners Pty Limited - Analyst : Okay, thanks for that, Stuart. And Malcolm, just to follow up there then, targeting the EUR25 million of cost out, obviously it's going to cost you EUR20 million to implement. Is there any way that this business gets back to the EBITDA margin when you acquired it around that 25% mark? Or are we now south of that moving forward, just as a follow-up?

Question: Jacob Cakarnis - Jarden Australia Partners Pty Limited - Analyst : Okay, helpful. And then just one on the trading update, if you can, please. At the first half, you said that the minerals business was doing around 33% EBIT margin. You gave us a number in the first half of '24 where sampling flows were around minus 13%. Can you just comment about why in the trading update you've spoken to those minerals margins being maintained? Is that year on year or relative to the first half? And can you just confirm whether sampling flows were worse in the second half of '24 relative to the first half, please?

Question: Rohan Sundram - MST Marquee - Analyst : Hi, Malcolm and Stuart. I might just start with the -- in terms of the acquisition, can I just get a view on how that impacts the cyclicality of group earnings and taking on the ICB business? Is this is something that can be managed through costs? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 24, 2024 / 11:30PM, ALQ.AX - ALS Limited to Acquire Nuvisa Pharma Holding Call

Question: Rohan Sundram - MST Marquee - Analyst : Thanks. And last one for me. Just with regards to incorporating 100% of Nuvisan in the FY24, as I -- or as I interpret, does that -- how material is that in the context of the guidance that you've provided? Does that have much impact going from that 49% incorporation to the 100%?

Question: Rohan Sundram - MST Marquee - Analyst : Thanks, Stuart. Cheers.

Question: John Purtell - Macquarie Securities (Australia) Limited - Analyst : Good day, Malcolm and Stuart. I hope you are well. Just had a couple of questions there and just building on the prior question. Just around -- Malcolm, originally the EBITDA of the business was EUR40 million of EBITDA, and it was based on a non-contract that went in-house. I mean, I suppose the simple question is, do you think you can get back to close to that level? I'm just trying to think through that, but obviously the EUR25 million of cost out is going to be important and then potentially some market recovery on that. So just wanted to get your thoughts.

Question: John Purtell - Macquarie Securities (Australia) Limited - Analyst : Thank you. And just the D&A of the business, what impact will the write-down and nil acquisition cost have on that? Do you expect then the CD&A reduced from where it has been? I think it's been running at EUR19 million per annum.

Question: John Purtell - Macquarie Securities (Australia) Limited - Analyst : Thank you. And sorry, just a final one, if I could. And just again further to Rohan's question. I mean, the business has proven to be much more cyclical, I think, than anyone expected and appreciate the biotech markets being weak. But aside from the cost-out, I mean, what can you do to reduce the future cyclicality particularly around customer mix orientation, that type of thing?

Question: John Purtell - Macquarie Securities (Australia) Limited - Analyst : Thank you.

Question: Peter Drew - Carter Bar Securities Pty Ltd - Analyst : Hi, Malcolm. Hi, Stuart. Just a question. Can you tell us how much -- it just seems like there's been a bit of a sort of negative swing in earnings from Nuvisan first half to second half, just based on the acquisition price of zero. I'm just wondering what's the contribution of Nuvisan to the earnings in the second half? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 24, 2024 / 11:30PM, ALQ.AX - ALS Limited to Acquire Nuvisa Pharma Holding Call

Question: Peter Drew - Carter Bar Securities Pty Ltd - Analyst : Yeah, that makes sense. And just in terms of, I guess, the EUR25 million cost-out, how do you -- how quickly, I guess, can you get the business back to a breakeven? And then within that sort of EUR25 million cost-out, how much of that are shared services related to easier sort of gains?

Question: Peter Drew - Carter Bar Securities Pty Ltd - Analyst : Great. Thanks. Thanks, Malcolm. Thanks, Stuart.