Pretty good growth in this market

Research evidence excerpt

Pretty good growth in this market

Macquarie Equity Research ALS

Key Risks to Investment Thesis Company Description

• Risks to our OP rating are a reversal in upward commodity ALS Limited operates one of the world’s largest analytical and

price momentum, which would see loss of capital raising testing services businesses. Its partnerships span across major

momentum, as well as equity market volatility more sectors including mining, natural resources, environmental,

generally. This could be as a result of economic uncertainty. food, pharmaceutical, industrial and inspection services. The

Lower cap raising activity could result in lower GeoChem Group has two reportable segments: Commodities (45% of

vols thru ALQ's commodities segment. Pricing is typically FY23 Group revenue) and Life Sciences (55%). The Company

pro-cyclical, so sustained decline in volumes could see operates from more than 350 sites in over 65 countries

operating de-leverage as prices adjust. across Asia Pacific (37% of FY23 Group revenue), Americas

• A prolonged Middle East war could negatively impact (40%), EMENA (21%) and Africa (2%).

mining capital raisings and future junior activity, and

may also extend out time lag b/w capital raised and

redeployment in the field.

• Managing labour and supply chain constraints is also a risk

factor. However, ALQ’s global diversification positions it

relatively well. Its hub and spoke model also means ALQ

can flex supply within and across regions to meet demand

and help protect margins (successfully deployed through

COVID).

• Within Life Sciences, a decline in regulation and regulatory

enforcement re environmental and other regs could see a

decline in testing requirements and thus volumes across

ALQ business.

• Lower activity in pharmaceutical drug development and