ALS Limited (ALQ) Earnings Call Transcript

[Audio Gap] held in person as well as online via the Lumi platform. The company has taken the decision to hold this meeting with all of our non-Australian-based directors and management participating all online rather than being here in person. You might ask why -- it's consistent -- firstly, it's consistent with the approach of a number of other companies with international operations and is seen from the Board's point of view and management's point of view is the most time and cost-effective way of conducting the meeting. For those attending today in person, there just a couple of housekeeping matters. Please ensure your mobile devices are now switched to silent mode. Internally, if we're having a meeting and your phone goes off, it's $100 fine. But we probably won't do that at a shareholders meeting, but please turn your phone off or on to silent. In the unlikely event of an emergency, please follow the hotel staff instructions and make your way to the closest emergency exit, which for those of you here is located on the left-hand side of the event room doors. I'm advised that a quorum of members is present here today, and I therefore declare the meeting legally constituted and open. Before proceeding to the formal business of the meeting, let me introduce the participants joining us today, starting with the directors. Since we last met, there's been an important change to the Board. Christy Boyce was appointed a Nonexecutive Director of the company on the 1st of September 2025. Christy has over 25 years advisory experience in Australia and the United States advising senior leadership across a range of industries, including consumers -- consumer industrial goods, agribusiness and resources. Christy is standing for formal election today, and she will speak to her candidacy later in the meeting. Christy is currently a member of the Audit and Risk Committee, the People Committee and the Nominations Committee. In addition to me, the other independent nonexecutive directors of the Board who are present today, either in person or online, are Mr. John Melcher, noting that this will be John's last AGM with ALS, as he will retire from the Board at the conclusion of today's meeting, and I'll have more to say on this later; Ms. Catherine Farrow from Canada, Mr. Sadafa Cadia from the U.S.; Christy, who I've spoken to; Leslie Desjardins based in the United States, and Leslie is standing for reelection today; Mr. Peter Possemiers from Switzerland, and Peter is standing for reelection today; and Ms. Erica Mann, who's on my right. In addition, we have our CEO and Managing Director, Mr. Malcolm Deane, who will speak later on the company's performance and also present online are Stuart Hutton, our CFO. Also present is Stuart Hutton, our CFO; and Dana Field, our Company Secretary and General Counsel. From our external company auditor, EY, Kelly MacKenzie, in the front row over here, and from our legal adviser, HSF Kramer, Melissa Swan Tonkin, also in the front row here. As the notice of meeting has been sent to all shareholders in advance of today's meeting, I'll take it as read. The procedure for today's meeting, the format and voting will be as follows: first, I will deliver the Chairman's address followed by a presentation from our CEO. We'll then proceed to consider the formal resolutions as outlined in the Notice of Meeting. And for those present in the room this afternoon, I'll allow the opportunity for questions prior to consideration of each resolution. Please hold general questions until we get to the financial statements item at the end of the meeting. For those attending virtually, questions can be submitted at any time. To ask an online written question, select the messaging icon, type your question in the box towards the top right hand of the page and press the send button. To ask an online question verbally, please click the Request to Speak button, and you'll be prompted to confirm your name and enter the topic of your question. Submit your details and then select join the queue, and we'll manage those questions as they come to hand. Virtual attendees should note that while you can submit questions beginning now, I will not address them until the relevant time in the meeting, and they will follow any questions that might be received from people attending today in person. Please also note that your question may be moderated. And if we receive multiple questions on the same topic, they will likely be consolidated. Finally, if time doesn't permit us to answer all questions today, we will ensure responses are provided either via e-mail or posted on the ALS website. Voting today will be conducted by way of a poll for all items of business and by using your phone or tablet. For those present, persons entitled to vote on the poll are shareholders, shareholder representatives and attorneys of shareholders and proxy holders who hold blue admission cards. On the reverse side of your blue admission card is your voting paper, which details resolutions 1 to 7, which are all being put to a poll. Alternatively, you may also vote using your own device, to do so simply scan the QR code that is on your admission card and then select in room to access the resolutions, choose your preferred voting option, for, against, abstain, and your vote will be recorded automatically and may be changed at any time until I deem the poll is closed. If you require assistance, Members of BoardRoom Registry Services are here today to assist you. Please just raise your hand at any point if you require assistance with the voting process. Poll voting cards, so the blue forms, will be collected once the formal business of the meeting has been completed. For our virtual attendees to provide you with enough time to vote, I will shortly open voting for all resolutions. At that time, the resolutions and voting options will appear on your screen. And to cast your vote, simply select 1 of the options. Your vote is then automatically recorded, and there is no need to press to press a submit or enter button. You can, however, change your vote up until the time I declare voting closed. So I now declare voting open on all items of business. Results of the polls will not be available until after the close of the meeting, and they will be announced on the ASX and posted on the company's website. So turning now to the Chairman's address. Ladies and gentlemen, the 2026 financial year was a defining 1 for ALS. Despite heightened levels of geopolitical uncertainty, which have continued, the group delivered a record financial performance and achieved its previous strategic 5-year FY '27 financial target a full year ahead of schedule. This outstanding result reflects the resilience of our diversified portfolio, disciplined execution and continued investment in the capabilities that will support continued future growth. The group delivered its highest underlying net profit after tax of $381.2 million, representing year-on-year growth of 25.8%. Furthermore, the group's revenues also grew strongly by 10.7%, and at the same time, our underlying EBIT margin, so earnings before interest and tax margin grew by 129 points to 18%. Both of these reflect the benefits of more buoyant trading conditions within our commodity-exposed businesses in particular. Our robust operating performance and strong financial position, supported the payment of an increased final dividend to shareholders, had a combined payout ratio for the 2026 financial year of 57%, aligned to our refreshed dividend policy. The company paid a total dividend for the year of $0.425, being a 10.3% increase on the prior year. Turning to capital management. The group continues to take a disciplined approach to capital management and deliver on the key objectives of our value creation framework, including growth, strong cash generation, shareholder returns and balance sheet strength. Shareholders will remember that your company raised capital in June 2025 to fund key organic growth projects and future inorganic growth. Total gross capital expenditure in the '26 year, excluding acquisitions, was $263.3 million, with the group's net cash M&A expenditure being $9.8 million, relating primarily to deferred payments for previously announced transactions. The group's leverage ratio decreased substantially from 2.3x to 1.5x, which is below the lower end of the targeted internal comfort range of 1.7 to 2.3. This reflects a very healthy leverage position. which will enable the group to pursue growth initiatives aligned to the group strategy. The Board and management prioritize disciplined capital allocation to opportunities with the potential for a minimum 15% return on capital employed in keeping with our value creation framework. Our hub lab program, we invested $93.7 million in the 4 major hub laboratory projects that we announced at the time of the June 2025 capital raising. These projects relate to expansion of the company's global platform businesses for both minerals and environmental testing markets. I'm pleased to say all 4 projects remain on track against both our cost and our time line expectations, and they are expected to strengthen our laboratory network in the key geographies where we already have leading market positions, while delivering greater efficiency through smarter automation and modern facility design. In this current financial year, both the Sydney and Lima Peru facilities are expected to be commissioned. These investments provide the additional capacity needed to support both near- and longer-term growth. Turning now to focus on the opportunities that lie before us. We remain committed to executing on our focused strategy, underpinned by our road map to win, which Malcolm will address in his comments. The global tech industry continues to benefit from long-term structural trends, including the shift towards outsourced testing, tightened regulatory standards in both the developed and developing markets, critical minerals demand, the energy transition and the rise of resource nationalism. These dynamics are driving demand for independent, high-quality testing services across critical sectors, from mining and environmental compliance to food safety and pharmaceutical regulation. With a differentiated portfolio and operating model, ALS is well positioned to capture these opportunities and deliver sustainable above-market growth. Turning now to remuneration. In FY '26, fixed remuneration increases for KMP, or key management personnel, range from 0 to 3.5%, reflecting individual performance, market positioning and internal relativities. The company's strong financial performance resulted in achievement of above-target financial measures. Performance across financial and strategic measures resulted in STI, so short-term incentive, outcomes for KMP ranging between 95% and 97% of maximum opportunity. The Board did not exercise discretion, and it is satisfied that the FY '26 outcomes appropriately reflect performance delivered for shareholders. With respect to the LTI program, the LTI framework continues to align executive reward with sustained earnings growth, capital efficiency and long-term shareholder funds. The FY '26 LTI awards will vest at 72.1% of target, reflecting full vesting of the EBITDA, so earnings before interest, tax, depreciation and amortization and TSR hurdles, or total shareholder return hurdles, partial achievement of our ROCE, so return on capital employee measures, and no vesting of the earnings per share hurdle. Looking forward and following shareholder feedback, the Board has approved increasing the LTI ROCE, so return on capital employed target, by a 4 percentage point to 16.5% at the lower end to 21.5% at the higher end. Previously, it was 15.5% and 20.5%. Additionally, the FY '27 base remuneration for the CEO and CFO will increase by 5% and the LTI opportunity for the CEO will increase from 150% to 180%. For FY '27, the Board approved a 6 percentage point increase in NED, so Nonexecutive Director and committee fees I should point out that was after no increase last year. So it's a 6% increase over a 2-year period rather than just a 1-year period. This adjustment remains within the approved aggregate fee pool of $2.5 million, and reflects both market benchmarking and the increasing complexity of board oversight in global economic conditions. We will see some changes to your board in FY '27. As I noted at the start of the meeting, John Mulcahy is stepping down at the conclusion of today's AGM, having served 14 years on the ALS Board. John has been an outstanding director, and we thank him for his dedicated service. And most importantly, the stewardship he has provided the company over his tenure as a director. John has contributed strongly, both as a committee chair and a committee member in addition to his normal NED responsibilities, and his advice has always been significant and well considered. On behalf of the directors and shareholders and management, we wish him well for the future, and thank him for everything he's done over the last 14 years. We are close to concluding a search for a suitable replacement for John and hope that we can announce that appointment in the coming weeks. Despite the retirement of John, we continue to have a variety of tenures on the ALS board as well as a broad range of skills and experience that will continue to serve our shareholders well into the future. Finally, I would like to sincerely thank our shareholders for your continued support of our ALS. I also want to acknowledge my colleagues on the Board and all the talented and dedicated people across the company for their passion and commitment to pursuing a better world through science, assurance and sustainability. I'll now hand over to our CEO, Mr. Malcolm Deane, who joins us virtually today from Madrid for his commentary on our performance over the last financial year. Malcolm, over to you.

Thank you, Nigel, and good afternoon, everyone, and welcome. Whether you're here with us in person or joining online from somewhere around the world, it's great to have you with us. I am pleased to have this opportunity to reflect on the past year, share our progress and talk about where we are heading. You will notice, I'm joining from Europe today. That's a delivered decision. As a leadership team, we are focused on being disciplined with every dollar we spend, and technology allows me to be here with you while continuing my operational focus. Like so many of you are doing today, I'm participating remotely, but I'm no less committed to this meeting or to speaking with our shareholders. Over the next 20 minutes, I'll take you through our fiscal year '26 performance. I'll update you on the road map to win. We share the progress we are making towards the lab of the future and provide an update on the first quarter trading performance and the year ahead. So let me begin by thanking a few important group of people. First, to every ALS employee. Thank you for energy, your commitment and your constant drive to improve. Your curiosity and dedication to excellence continues to make ALS a stronger business. To the Board of Directors, thank you for your ongoing support and guidance and special thank you to John, who departs after 14 years of dedicated service. John has made an enormous contribution to ALS, and we thank him for everything he's done. And finally, to you, our shareholders, thank you for your trust and support. From humble beginnings, ALS has become a global leader in testing, and we are continuing to evolve with a clear sense of purpose. Before moving into performance, I want to start with animates most. Nothing we achieved matters if our people don't go home safely at the end of the day, and that's why health and safety remains our #1 priority across our business. We are continuing to invest in leadership training and systems that strengthen our safety culture and ensure safety is part of every decision we make. It's fundamental to protecting our people and maintaining the trust our clients place in us. Without foundation in place, let me turn to how we're building ALS for the future. Over the past year, we've refreshed our strategic blueprint, and I am pleased to say we have already seen encouraging early results. Within ALS, we call this our road map to win. Our road map to win is about building lasting advantages in markets where we have a clear right to win. It gives a sharper focus across our global business and ensures we are directing our people, expertise and capital where they create the greatest value. This road map to win is supported by 7 key enablers that help turn our strategy into action. Together with our value creation framework, which guides how we allocate capital, they provide a clear foundation for creating long-term value for you, our shareholders. Over the past 12 months, we have taken delivered steps to position our portfolio in attractive markets and strengthening our competitive position. In refreshing our road map to win, we addressed 2 key questions. First, where we will win, where should we focus our people, expertise and investments. And second, how do we win, what we need to do to build and maintain deeper advantage over the longer term. Those 2 questions now sits behind the decision we make across the business. The strategy refresh also led to the development of the value creation framework, which underpins how we invest today. It introduced minimum return hurdles and a stronger focus on operating performance and capital productivity and has shaped the decision we have made over the past 12 months. Disciplined capital allocation also means regularly reviewing our portfolio, including noncore assets to assess their strategic fit within the broader group. As always, we will assess the best options and keep shareholders updated on any material developments. Fiscal year '26 also marked a significant year of leadership renewal. Two highly respected leaders concluded their outstanding career with ALS. Bruce McDonald, EGM Minerals, retired after 22 years of service. And Tim Kilmister, EGM, Environmental, stepped down after 31 years with ALS, including 5 years leading the global environmental business. On behalf of everyone at ALS, let me sincerely thank you, Bruce and Tim, for the enormous contribution to the business. They leave behind a strong legacy we can build from. And now in the future, as announced with the full year result, Andrea Vallejo joined LS in April as Executive GM of Environmental. Andrea is based in Europe and brings extensive operational experience and a clear vision for the next stage of growth in this crucial business. And today, I'm also pleased to announce that Mr. Raj Kumar Madiravelo has been appointed Global Executive General Manager for Minerals, and we will commence with ALS on our. Raj Kumar brings more than 25 years experience across the mining industry and most recently, serving as Orica's Head of the ACS business and previously overseeing its digital solutions. Together, these appointments strengthen our leadership team as we continue delivering our strategy. I also want to acknowledge today that Michael Williams, our Group Treasurer, Investor Relations and Business Integration Director, has confirmed his intention to leave the company with effect from the 28th of August. Michael has made a significant contribution to the company's growth and success over his 23 years at ALS, and we extend our sincere thanks to Michael and wish him well for the future. Starting with commodities, in Minerals, an outstanding result with 20.2% organic growth and a record year of sample processed. These results bring for ALS leadership position within the resource exploration testing market. Margins also grew strongly, reflecting both the benefit of operating leverage associated with stronger sample volume and a more favorable pricing environment in the second half. We continue investing in regional geochemistry capacity, mine site and metallurgy testing and digital sample tracking and workflow automation. ALS remains a trusted partner across the full mining value chain. Industrial Materials delivered organic revenue growth with margin expansion in ASN inspection contrasted by margin contraction in both oil and lubricants and coal. Coal grew organically by 7.6%, and oil and lubricants grew by 12.2%. To Life Sciences, which includes our environmental food and pharma businesses. The Environmental business is our largest business that registers 35% of the group's revenue and continues to be a key growth platform for ALS. Environmental delivered mid-single-digit organic growth in our largest regions being both APAC and EMEA, which was partially offset by softer conditions in the United States, especially around the integration process of Europe and softness experienced with Latam markets. It's fair to say performance in the Americas was disappointing. Some of those challenges reflected market conditions, but others were within our control. I take responsibility for those. ERG certifications were fully reinstated during the fourth quarter. The impact of the U.S. government shutdown have eased. And while challenges remain, the team remains focused on quality and active engagements with regulators. Across the broader environmental business, we are continuing to see strong growth, driven by increased PFAS regulations in developed markets. We are scaling this business to support public health, environmental remediation and industrial compliance, while continuing to improve how we operate and the experience we provide our clients. With Andrea now leading the business, she has a clear mandate to continue building the best-in-class global environmental business. The food business delivered its third consecutive year of strong organic growth at 7.2%, led by Europe. That's an outstanding achievement and a real credit to the team who continue to deliver consistently. Pharma recorded a slight organic revenue decline of 1.6%. But the real story here is, where EBIT grew 123% and the margin improved approximately 450 basis points since the successful completion of the transformation program. That's trended to the team that led that work. Looking ahead, we'll continue to manage and monitor future investments through our capital allocation framework. So let me move now to something I'm particularly excited about, our Lab of the Future initiative. Digitization is reshaping our industry, and I believe ALS is uniquely positioned to lead that change. The Lab of the Future is our long-term vision for where ALS is heading. It's more than technology alone. It's reimagining how our labs operate, how we create greater value for our clients and how we build lasting advantages for ALS. One of the ways we're bringing that vision to life is through our smart labs. This is where we are integrating technologies, like data robotics and AI into the way we work. The goal is simple, help our people spend less time on repetitive tasks and more time applying their experience while improving quality, productivity and the experience we provide to our clients. Our unified NIMS now supports 80% of the group's revenue and gives us 1 of the largest proprietary data sets in the TIC industry, built over the 30 years across 450 labs. That's a significant competitive advantage and the foundation for everything we're building in AI. Earlier this year, we launched our internal AI marketplace, a platform where we build our solutions once, and we make it available right across ALS. We have already provided access to private secure GenAI tools to more than 5,000 employees at minimum cost. Every hour safe on routine tasks flows directly into the productivity and margins. As we look ahead, we continue investments in smart labs through automation, digital infrastructure and AI. We are already seeing the first tangible returns from those investments, and we expect them to scale over time, delivering stronger productivity, better outcomes for our clients and long-term value for our shareholders while continuing to advance our Lab of the Future initiatives. With that, let me now provide you with a trading update for the first quarter of fiscal year '27. In the May full year results, we outlined our growth target for fiscal year '27, being high single-digit revenue growth and steady margin expansion with Life Sciences expected to contribute more to the second half. After quarter 1 of fiscal year '27, I am pleased to confirm we are on track to deliver these expectations. Within commodities, minerals is running ahead of organic growth expectations with a continuation of the exploration conditions we experienced in the second half of fiscal year '26. While major and mid-tier clients have continued at similar heightened sample volume levels, we have seen growth in activity from juniors at a faster pace. Margins are in line with the first half expectations with a favorable pricing environment and improving operating leverage expected to impact positively as the year progresses. The remaining of the commodity business are broadly in line with expectations, delivering quarterly growth on a PCP basis. The only exception is oil and lubricants, which you'll recall has been a steady performer over the past few years. However, in the first quarter, the business has encountered some short-term volume and related efficiency headwinds and is slightly behind our expectations. We expect this business unit to steadily improve as the year progresses. Moving to Life Sciences. As anticipated, after a slower start, we've seen improved organic growth as the quarter progressed. The division has delivered low single-digit organic growth in the first quarter following a similar pattern from fiscal year '26. Both achieved mid-single-digit environmental, low single digit and pharma negative low single-digit organic revenue growth noting the Nuvisan revenue pipeline looks promising. The divisional revenues improvements since recently are expected to continue as we move forward, although it's reasonable to expect some margin compression compared to H1 in the prior year. In terms of capital allocation, the hub lab upgrades remain on track, both timing and budget-wise, noting that we are assessing alternatives for Prague to accelerate the delivery timing for this site from the planned fiscal year '30. May fill, the environmental hub lab in Sydney, is currently being commissioned, and Lima, minerals hub lab in Peru, is expected to be commissioned in November '26. From this position of strength, we are well placed to continue pursuing organic and inorganic opportunities in line with our value creation framework in a disciplined manner as they present. Aligned to this, the group is pleased to confirm today that it has signed an agreement to acquire an additional 18% interest in its existing JV Saudi operations, increasing our total holdings to 60%, pending receipt of regulatory approvals. It is anticipated that this transaction will close in the coming weeks. As we look forward, the balance sheet remains strong with an ongoing focus on generating strong free cash flow. And before I hand back to Nigel, let me leave you with 1 final thought. ALS is a very different company from the one it was just a few years ago. We have a clear strategy, a refreshed leadership team and a business that is continuing to evolve. We are investing in our people, in technology and in the markets where we know we can create long-term value. Our objective is clear. We want to be the best-in-class for our clients, our employees and for our shareholders. We're focusing giving our clients greater certainty through quality service as our brand promise states because that's what build trust strengthens long-term partnerships and ultimately creates value for our shareholders. Above all, we're doing it with a strong culture built on safety, curiosity and accountability. Those values shape how we work, how we support our clients and how we continue to improve. To our employees, to our Board and to our shareholders, thank you again for your continued support and confidence in ALS. I'm excited about the opportunities ahead, and I look forward to updating you on our progress when we meet again next year. Thank you for your time. And with that, let me hand back the meeting to our Chairman.

To the formal part of the business of the meeting. As I mentioned earlier, voting is open on each of the resolutions. And I remind you that you can change your vote up until the time that I declare voting closed. Resolutions 2 through 5 are for the election or reelection of ALS nonexecutive directors. There are 4 director resolutions this year, which is higher than in previous annual general meetings, due to the timing of each director's initial appointment to the Board and the director reelection requirements under the ASX listing rules. We intend to rephase the timing of director reelections to become more evenly distributed over the coming years. Proxies have been received from 72.29% of ALS' issued capital at the time of this meeting. As we proceed through each resolution, the proxy votes for that resolution will be shown on the screen. On all available open proxies given to the Chairman of the meeting, I propose to vote in favor of all resolutions. Turning to Resolution 1. This is the first resolution is for the adoption of the 2026 remuneration report. This resolution will be decided in accordance with Section 250R of the Corporations Act. It should be noted that the vote on this resolution is advisory only and does not bind the directors nor the company. Your Board aims to set remuneration for all key management personnel at levels which are reasonable and designed to attract and retain appropriately qualified people in what is a competitive global market. In addition, the aim is to align a significant proportion of executive reward to growth in shareholder value with a view to both the short and the long term. The reward structure for the Managing Director and other KMP of the group are outlined in detail in the annual report. The structure encompasses 3 main elements: firstly, fixed salary; secondly, a short-term incentive over 1 year, which is 2/3 cash based and 1/3 is a deferred equity component; and three, our long-term incentive program based over 3 years, which is wholly equity based. KMPs must also meet a minimum shareholding requirement.

Details of the proxies received for this resolution are up on the screen. So I'll start with, are there any questions on this resolution from the floor? George?

[indiscernible]

The directors pay went up 46%.

Directors pay pool went up from $1.518 million in '23 to $2.225 million in 2026, which is 46% in that period. In that time, the revenue for the company went up 37.1%. Underlying net profit went up 18.9%. Earnings per share went up 14.2%. The dividend growth was 7.1%. The dividend growth was about 40% less than what the directors got. So I think that there's a large disparity there in what the directors pay remuneration by comparison to the increase in dividends that the shareholders got, which you might like to explain.

So I think returns to shareholders are a combination of dividends and share price appreciation. So I understand the point about dividends, but you'll be aware that the proportion of net profit paid out by way of dividend has decreased over that 5 years, and we have looked at capital appreciation in the share price over the period. Second point I would make is that I think over that period, correct me if I'm wrong, the number of directors has increased, so that, by definition, will have some effect. And thirdly, it is a competitive market. And it is -- there are plenty of options for nonexecutive directors. We benchmark our fees every 3 years, and we pay at the 50th percentile. And from a director's point of view, as I said earlier, there was no increase last year, reflecting the fact that the -- in FY '25, that is reflecting the fact that the company was not performing well and directors didn't think it was appropriate that they took an increase as a result.

Thank you, Mr. Chairman. I brought up at the previous meeting when you were talking about the short-term growth, long-term and medium-term growth projects, which were over a much longer period and have a short-term incentive over 1 year, et cetera, I think, is too short a period. And the huge difference between a 46.5% increase for the directors and the shareholders up 7.1% increase is a worrying concern. It's -- that's why you invest in the company so to get an increase in dividends and growth over a long period, and that's a very big percentage difference in those 2 figures. And I think that you should look at those figures and reconsider them. And I understand dividend is pulled back, but we were told at the last AGM that you were very happy with the gearing ratio of the company. You went to shareholders with a placement issue. And I noticed that from that, that not all the directors participated in the placement issue. And I think that, that's an just reflect for the company if the directors weren't prepared to put some of their money into the placement as well. I think that, that put some money back into the company and your placement and get some of the dividends.

So there's a couple of points there. Firstly, you mentioned short-term incentive and long-term incentive, just to be clear, no director participates in a short-term incentive nor a long-term incentive program. That's only for KMP and the executives. Second point about the capital raise. The capital raise was a share purchase plan and was only available to shareholders who had an Australian address. So none of the overseas directors were legally able to participate in the share purchase plan. Erica, if you don't mind me speaking on your behalf, had only recently purchased shares. She was ineligible to participate. As a result, from a personal point of view, I took up the maximum amount that was possible. I think you'll find that those who were eligible under the terms of the share purchase plan participated. But unfortunately, the rules in the U.S. and Europe are such that residents there are not able to participate under those plans. And I think if you look at all directors who have been on the board more than 3 years, they comfortably exceed their minimum shareholding requirement, which is equivalent to 1 years of fees. And Erica itself after which you'll see in annual report purchased, from memory, just under 6,000 shares, which is -- which was after the share purchase plan as part of her requirements.

Adrian Vols, shareholder. When do you set the ALS share price? Because I noticed before AGM this year and last year, the share price had a mark fall. I'm not suggesting it's a manipulation, but why is that? And when do you set the share price? Is it over a certain trading days or what?

You mean the share price for NCT programs?

Correct.

Yes, is on a number of days. I think it's either 30 or 90 days up until the date of issue. So it's the weighted average over that period. So we don't say that the market does. .

But when is that date?

I think, correct me if I'm wrong, Dan, it's 30 days in the period up to 31st of March. I think that's right, but we'll double check. Yes.

It's strange that you'll share for price falls just before our AGM this year and last year.

Well, some of that may be that we go ex dividend. So a dividend is declared, and they trade what they call come dividend. So with the expectation of a dividend. And post that date, once the dividend has been paid, the share price would normally drop by roughly the value of the dividend.

Went down much further just recently.

I wish we could control the market and the share price that might be a bit better outcome for all of us, but that's not something that we can control. But from our point of view, it's the same period of time every year. We are consistent in the way we do it. And it's the average of shares over and now days, and Dan will just check whether it's 30 or 60.

Noel Ambler from the Australian Shareholders Association, representing our 13,000 members with my colleague, Susan Bailey. And I must compliment you this year. I can actually see you promptly. You are not standing in front of the screen...

No, we took on board the feedback from last year. And 1 of the small contributions I made was I move the from there to here to make sure that we didn't have that issue again.

Very good. The letter to shareholders basically said the balance sheet is strong, which is good. But unfortunately, that's been reduced to still to around 75% the debt-to-equity ratio. Many investors consider this a bit high, even though you have brought it down. Can the Board comment on the risks posed to us if the interest rate rises or any other unforeseen global events on our cash flow?

Sure. Thanks for the question. I think if you look at our overall debt, our overall leverage is low in comparison with our competitors. And our interest rate management would have us securing over 1, 2, 3 and potentially 4 years of interest rates. We use the financial instruments available to us to minimize that risk. So there's not a lot of exposure to floating interest rates. Yes, as we take a 2-year fixed or a 3-year fix that's reflective of market conditions at the time, but we're not heavily exposed to short-term market fluctuations in interest.

Performance has been good despite the challenges for the company. Can the shareholders expect this performance to be maintained?

I wish I had a crystal ball. Look, I think what Malcolm said is the performance for the first quarter was in line with expectations that we announced in conjunction with our full year results. And our plan is for that to continue for the full year. We can only control the controllables. And as we all know, there are a lot of uncertainties in the world that are outside of our control. What I would say is our Minerals and Environmental and Life Sciences business more broadly, have a number of favorable conditions that they're in the markets at the moment, which we hope to continue. But again, outside our control.

In relation to the cyber attack, I must confess -- cyberattack.

I think we probably should hold that till the end because this is just in relation to remuneration. And we'll hold that to the end. I'm happy to answer that at the end.

Affecting the ongoing viability business about, but I'm prepared to wait.

Yes, let's deal with that at the end. Yes. Any more questions in relation to remuneration. Yes, sir.

A quick question on the remuneration report. Do any of the directors have a lot of experience in laboratory science and technology and where technology is going in the future, so we're ready for it?

In short, yes, I think Peter Possemiers who's up for election today has something like 39 years of experience in the tech industry. Safadia Acadia has had 10-plus years experience in the industry. All directors are across the opportunities when it comes to how we use information and technology to improve our operations as a key focus of the Board and, frankly, is covered at every Board meeting. Have we got any questions online?

For resolution 1, there are no questions online.

All right. Thank you.

So I'll now move on to Resolution 2, which is the election of Christy Boyce, who is seeking election as a Non-Executive Director and in accordance with the company's constitution and the ASX listing rules, an election of at least 1 director is required each year. Christy was appointed to the Board as a Non-Executive Director in September 2025. And she filled a vacancy following the departure of Ms. Tonianne Dwyer, who retired from the Board following last year's AGM. So in accordance with our constitution and being eligible, Christy offers itself for election. The Board supports Christy's election. And I now invite her to address shareholders. Christy?

It's an honor and a privilege to serve on the ALS Board. I want to thank everyone for this opportunity. I've followed and admired ALS for many years before joining the Board. As Nigel mentioned, I have a background in management consulting. I spent 15 years at McKinsey and was a partner there, working with McKenzie in Australia, the U.S. and the U.K. and then I had 10 years at Port Jackson Partners. I have a Bachelor of economics from the University of Sydney and a Master of management from Kellogg at Northwestern University in the United States. The focus of my career in management consulting has been big picture strategy and portfolio optimization, development and refinement of customer value propositions, sales and marketing, including pricing and go-to-market strategies, customer experience and loyalty and organizational effectiveness and performance management. I've worked in a range of industries, including consumer goods, industrial products, agribusiness resources. I have a range of ASX Board experience, recent and current listed boards include CSR, which I left after the sale to Saint-Gobain and JB Hi-Fi. In these companies, I've served on the People and Remuneration Committees, the Audit and Risk Committee and the Safety and Sustainability Committee in the case of CSR. I feel very privileged to work with the company whose aspirations align with many of my professional interests. And I'm very excited to be involved with an Australian company that is building itself as a global champion. I feel great alignment with the purpose and the values of ALS, and I'm really excited to be working with a very strong management team that continues to push and challenge itself. I'm excited to support and challenge the team on many of our key opportunities, including continuing to strengthen our portfolio, ongoing enhancement of our customer value proposition, ensuring that we capture the benefits of one ALS across a range of geographies and business lines and capturing the potential of AI. I appreciate the trust placed in me and look forward to continuing to work for the benefit of all stakeholders and in particular you, our shareholders.

Thank you, Christy. So details of the proxies received on the resolution to elect Christy Boyce are up on the screen, overwhelmingly positive.

Moderator -- no, before moderate do we have any questions on the floor?

Susan Bailey, speaking from the Australian Shareholders Association and also as a share shareholder. Christy, your -- you obviously have a strong experience and strong background. But can you tell us where you might be able to contribute to the Board that doesn't overlap with other Board members?

So I think my strategy background is useful -- it's very useful in this particular case. So I have been talking to the management team, for example, about how we think about the portfolio and also the issue of not just where we play and how we play, but also how we extract the value from being 1 ALS across different geographies and different business lines. And they are the type of issues that I've dealt with in my management consulting experience. Similarly, I think I bring a different perspective on the AI opportunity, which is more about how organizationally we structure ourselves and what we do to demonstrate the opportunity to engage our people. So obviously, I'm not making any of these decisions. It's more about challenging and asking the right questions and helping management, but I do think I bring a different lens and also bring a very customer-focused blends. So clearly, there are people on the Board who have much deeper technology experience than I do, but thinking about how we actually manage the customer experience and how we enhance that, particularly leveraging some of the digital tools that are emerging.

Are there any other questions in the room? Moderator, are there any online questions?

Just 1 question for resolution 2. This question comes from Mr. Stephen Mayne. Which recruitment firm assisted with the search to secure Christy Boyce's appointment to the Board? Was it a full competitive process? And how many other candidates did the full board interview. Did Christy know any of our directors, or KMP, before engaging with the recruitment process?

Firstly, I would say, Spencer Stuart, 1 of the large global HR consulting firms has been involved in selecting directors for this business for some time, and they are involved in Christy's process. The way it works, the way the appointment works, we have a brief. We got a long list from Spencer Short. We reduced it down normally to 7 or 8. And then, I would interview 7 or 8 people. And then, we reduced it down to 3. And then the full board interviews 3, sometimes it's 4, but 3 or 4. And then, we look at if we have unimenity or a majority support for 1 particular candidate. So it's an independent process, and it is 1 using an external search firm. I was -- I personally knew Christy before that. I sat on the CSR Board with Christy until we were taking or CSR was taken over Saint Gobain. I don't think to my knowledge, you know any of the other directors or management?

No.

Thank you. Any other questions?

There are no further questions.

Yes, at the front here. Yes.

Frans Bradenburg. I was also a shareholder of CSR. A bit upset that they got taken over. I'm just wondering what the ALS situation is as far as the competition and future prospects -- people looking at taking over ALS? And what your strategy is for preventing that? Sorry, just another with the dividends. Just current government, the way they're carrying on about okay for dividends, but not for capital growth and reducing that incentive, what the thoughts are there?

So I think I'll hold both of those until we get to the end. So we'll do the things for the directors, but 2 very good questions. Thank you. Are there any further questions?

There are no further online questions.

Okay. Thank you.

So the Resolution 3 is the reelection of Leslie Desjardins, who is seeking reelection as a nonexecutive director at this meeting. Leslie was elected to the Board as a Nonexecutive Director in November 2019. She retires in accordance with the company's constitution and being eligible offers herself for reelection. The Board supports the reelection of Leslie, and I now invite her to address shareholders.

Good afternoon, shareholders. My name is Leslie Dujardin, and I'm seeking reelection to the Board for my third term. What motivates me to continue in this role is the connection I have to the company's purpose of making the world a better place, whether that be through environmental, food, pharmaceutical or minerals testing. It is a noble purpose and 1 that I'm proud to be a part of. I'm probably best known as a finance professional. My passion for numbers led me into finance. As I grew my career within General Motors and Amkor, the 1 thing I valued about being in finance was that it enabled me to see all parts of the company, such as a company's strategy, operating model, culture, talent and, of course, the commercial aspects of how money is made. At General Motors, I gained financial and governance and manufacturing operating experience, while living and working in Canada, the United States and Australia. Like ALS, both General Motors and Amkor operate across global markets, managing the complexities of multinational businesses, including matrix organizational structures, global manufacturing footprints, and from a financial and risk perspective, exposures related to multicurrencies and taxes. For my core expertise wise in finance, I also held P&L and operational responsibility early in my career Managing General Motors international export program for North America. This kind of operating experience strengthen me as a financial professional and gave me an appreciation for the end customer needs and other drivers for long-term sustainable growth. Throughout my career, I've worked across all facets of finance, including internal control, financial performance, accounting, treasury, tax, M&A, debt and equity funding. My roles in Australia as Chief Financial Officer for Amkor and Chief Financial Officer for GM, gave me a strong understanding of Australian regulatory bodies and listing rules, all of which are critical to ensuring robust corporate governance for ALS shareholders. I believe my skills and experience with as well as the Audit and Risk Committee Chair at ALS for the past 6 years. I look forward to contributing to the ALS success and working with my Board colleagues and the management team. Thank you for your continued support, both to me personally and to the company.

Thank you, Leslie. Details of the proxies received on the resolution to elect Leslie Desjardins are up on the screen.

Are there any questions from the floor? No. Any questions online?

There are no questions.

Okay. Thank you.

So I'll move to resolution 4, the reelection of Peter Possemiers. Peter is seeking reelection as a Nonexecutive Director at this meeting. He was elected to the Board as a director in November 2022. He retires in accordance with the company's constitution and being eligible offers himself for reelection. The Board supports the reelection of Peter and I now invite him to address shareholders.

Dear shareholders, my name is Peter Passives. I'm an Australian and Belgian Jewel citizen based in Geneva, Switzerland. Three years ago, you elected me to the Board and have bought with me 39 years of experience in the testing inspection certification sector, together with the European base perspective. During my term, I have focused on advancing our strategic priorities and supporting strong governance. A great deal has changed over the past 3 years. We never guided significant leadership transition, including the appointment of a new CEO, sharpened our focus on our core sector, expanded our European presence through the acquisition of Westling, doubled our share price and reached our 2027 target a full year ahead of plan. I'm grateful for the trust and for the encouragement I've received to stand for reelection. If reelected, I will continue to act in the best interest of all shareholders and to contribute to the company's sustainable growth and long-term success. I respectfully ask for your vote and look forward to continuing this journey together. Thank you.

Thank you, Peter. Details of the proxies received on the resolution to elect Peter are up on the screen.

Are there any questions from the floor? Yes, sir?

As Peter is your laboratory man, how aware is he of modern technology? I mean Crisis has developed a testing machine for gold nondestructive. Are you keeping an eye out for the changes in technology to improve testing due to any research and development in that area?

So I'll answer the question specifically in relation to Peter. He's very well aware of the technology advancements and developments across the business. And whilst it's not directly related to Peter, yes, we are aware of crisis. Yes, we do R&D. And yes, we use crisis in some of our operations.

It could be other generations of...

Absolutely. Absolutely. Any other questions from the floor? Are there any questions online?

There are no questions online.