Lumi platform as is becoming customary now for those attending in person, just a couple of housekeeping matters. Firstly, please turn your mobiles either off or to silent. At ALS we have a fine if it happens in a Director's meeting. It's a AUD 100 fine towards a Christmas party if your phone goes off. I'm not sure if we're going to do that at AGMs, but we'll see. In the unlikely event of an emergency, please follow the instructions of the hotel staff to your closest emergency exit, which for those of us in the room is out the doors and to the right. I'm advised that we do have a quorum of members 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 has been an important change to the Board. Mrs. Catharine Farrow was appointed to the Board in March 2025 as an independent Non-Executive Director. Catharine brings a deep understanding of the global mining industry with a background of executive and non-executive positions focusing on innovation and technology. You'll hear a bit more from Catharine a bit later and she is proposed for re-election today as is required by the Corporations Code. Catharine is a member of the Sustainability and Innovation Committee as well as the Nominations Committee. The other independent Non-Executive Directors on the Board today who are present either in person or online: John Mulcahy, Tonianne Dwyer. I'll have a bit more to say about this, but this will be Tony Ann's last AGM with ALS as she steps down at the conclusion of today's meeting.
Siddhartha Kadia, who is up for re-election today. Leslie Desjardins, Peter Possemiers, and Erica Mann. In addition, we have our CEO and Managing Director Malcolm Deane, who has just relocated to Madrid, who will speak later to you on the company's performance. Also present today are Dayna Field, who is our General Counsel and Company Secretary, and Stuart Hutton, who was also recently relocated to Madrid, our Chief Financial Officer. From our external company auditor EY, Ms. Kelly McKenzie is at the front here if there are any questions. From our legal advisor HSF, Eloise Jolly is also here for any questions that Malcolm and I are not able to answer. As the notice of meeting has been sent to all shareholders in advance of today's meeting, I'll take it as read. The procedures for today, the format, and the voting will be as follows.
First, I'll deliver a Chairman's address, which I'll try and keep brief, followed by a presentation by our CEO. We'll then proceed to consider the formal resolutions as outlined in the Notice of Meeting. For those present in the room this morning, I'll allow the opportunity for questions prior to each resolution, and I'd ask you to keep your questions to that relevant resolution. When it comes to general questions, we can do that as we go, or we can cover those when we talk about the financial statements item at the end of the meeting. For those attending virtually, questions can be submitted at any time if you need to, or if you want to ask an online written question. Wow, that's bright.
Please select the messaging icon, type the question in the box towards the top of the page, and then press the Send button to ask an online question verbally. There's a button that says Request to Speak. Please click that, and you'll be prompted to confirm your name and enter the topic of your question. Submit your details and then select Join Queue to be connected, and then we'll deal with that at the appropriate time. Virtual attendees should note that while you can submit questions beginning now, I will not address those until a relevant time in the meeting, and they will follow any questions that might be received from people attending here in person. Please also note that your questions may be moderated, and if we receive multiple questions on one 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 email or posted on the ALS Limited website. Voting today will be conducted by way of a poll on all items of business. Persons entitled to vote on the poll are shareholders, representatives and attorneys, and shareholders and proxy holders. Behold these blue admission cards. On the reverse side of your admission card is your voting paper, which details resolutions two to five, and they're the ones that are being put to a poll. If you require assistance, members of Boardroom Registry Services are here today to assist you, and Boardroom Registry Services people are with their hands up there, so either of the two ladies in the aisle will help you if you need to. Please raise your hand at any point if you require assistance during the voting process.
Poll cards 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'll shortly open voting for all resolutions and at that time the resolutions and voting options will appear on the screen. To cast your vote online, simply select one of the options that I have previously gone through. Your vote is automatically recorded. There's no need to press Submit or Enter button. You can, however, change your vote up until the time I declare that voting is closed. I do declare now that voting is open on all items of business. Results of the poll will not be available until after the close of the meeting and they will be announced to the ASX and posted on the Company's website. Now to my address and then I'll hand over to Malcolm.
The 2025 financial year was a pivotal one for ALS . The company delivered solid results, advanced our strategic priorities, and reinforced our position as a global leader in testing, despite what we all know and have seen, macroeconomic uncertainty. The Board and management team have navigated these challenges effectively with performance reflecting disciplined execution of strategy underpinned by a clear capital allocation framework and a culture of curiosity, innovation, and accountability. In the FY 2025 year, ALS grew revenue by 16% to AUD 3 billion and delivered steady underlying earnings. Our underlying NPAT, or net profit after tax, declined slightly to AUD 312.1 million, reflecting adverse foreign exchange impacts and high interest costs. As we continue to successfully implement our growth agenda, excluding the recent acquisitions, and that's York and Westlink which were made 12 months or so ago, the operating margin was robust at 19.1%.
Our strong operating performance and solid financial position supported a final dividend of AUD 0.197 to shareholders at a 60% payout ratio, the top end of our targeted payout range. The company paid a total dividend for the year of AUD 0.386 per share, equivalent to the payment of AUD 187 million to shareholders. I also note that the shares that were issued under the recent equity raise and share purchase plan were entitled to the final dividend and they form part of that AUD 186 million. The group continued its disciplined approach to capital management, continuing to deliver on our key objectives and the value creation framework, organic growth, strong cash generation, shareholder returns, and balance sheet strength. In FY 2025, we continue to invest in the business and gross capital expenditure was AUD 165 million, which was 148% of depreciation and 5.5% of our revenue.
Approximately 70% of that capital was directed to growth initiatives with the remainder for maintenance spend. Our capital strategy combines organic and inorganic investment to support our long-term capital growth and the Board and management prioritize disciplined capital allocation to opportunities with the potential for a minimum 15% return on capital employed. As at 31 March 2025, our leverage ratio was 2.3x at the upper end of our internal targeted range of 1.7x- 2.3 x, but certainly well within our lending covenants. Following the end of the year, we undertook an equity raise to fund expansion of our hub laboratory network and future inorganic growth. This included a AUD 350 million placement and a share purchase plan offered to eligible shareholders raising AUD 22.5 million, so a total of AUD 372.5 million. After the equity raise on a pro forma basis, our leverage reduced to 1.7x of those funds raised.
We are investing AUD 230 million to upgrade four major hub laboratories in Lima, Peru, Sydney, Bangkok, Thailand, and in Prague, all regions where we have seen strong organic growth, where we have a leading position and we have a competitive advantage. These upgrades, which will occur over the next few years, will significantly increase our capacity, support continued market share gains, and enhance efficiency as we incorporate automation and lab of the future thinking. Importantly, this investment also gives us greater flexibility in our cost base during future cycles and reduces our risk around the environmental lab accreditations by securing long-term infrastructure stability. Separately, the capital raise has given us the balance sheet capability to act decisively on M&A opportunities as and when these arise.
ALS has a proven track record of disciplined accretive bolt-on acquisitions and we see a solid pipeline of opportunities to add scale and capabilities to the group. We carefully considered the structure of the capital raising to ensure both institutional and retail shareholders could participate and we were pleased that all shareholders who elected to participate in the share purchase plan received their requested allocation with no scale backs required nor implemented. In fact, just under 90% of participating retail shareholders bid for and received their pro rata share. Delivering on our refocused and strengthened strategy has been a focus of the business as we go forward. We remain committed to executing exactly that. The global TIC industry continues to benefit from long-term structural trends including the shift towards outsourced testing, tightening regulatory standards, the energy transition, and the rise of resource nationalism.
These dynamics are driving demand for independent high-quality testing across critical sectors from mining and environmental compliance to food safety and pharmaceutical regulation, all areas in which ALS is strong. 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 2025, fixed remuneration increases for KMPs, or Key Management Personnel, other than the CEO, range from between 0%- 4%. The CEO received a 9.8% increase but elected to accept only half of that annual increase approved in FY 2025 to demonstrate his leadership in cost control in challenging market conditions. Short-term incentive outcomes range between 21%- 60% of the maximum opportunity based on solid results in financial, strategic, and ESG KPIs.
The CEO's STI award was 43% of his maximum opportunity, recognizing strong leadership and delivery against personal objectives during what was a challenging year. With respect to the LTI program, sustained performance over the three-year period of the plan resulted in the 2022 LTI vesting at 72%. Performance hurdles relating to the EBITDA margin, so the earnings before interest, tax, depreciation, amortization margin, and ROCE, so return on capital employed, were met in full, and the relative total shareholder return hurdle was substantially met. On the other hand, the earnings per share growth hurdle was not met. In FY 2026, fixed remuneration will increase by 3.5% for the CFO and Executive General Managers of both Minerals and Environmental. LTI opportunities for these roles will increase to 125% of fixed remuneration in line with comprehensive benchmarking that we have done across the world.
There will be no change to the fixed remuneration for the CEO in FY 2026. His STI target will increase from 70% to 100% of fixed remuneration, with his LTI opportunity remaining at 150% of his base. The Board continues to review STI and LTI targets to ensure that they remain challenging and aligned to ALS's strategic opportunities. From the Board's point of view, there will be no changes to NED fees or Non-Executive Director fees for FY 2026 while on the Board. We will see some changes to the Board in FY 2026. As I noted at the start of the meeting, Tonianne Dwyer is stepping down at the conclusion of the AGM having served three terms or nine years on the ALS Board. Tonian ne has been an outstanding Director and we thank her for her dedicated service and valued contribution over the last nine years. Thank you, Tonianne .
She has contributed strongly as both a Committee Chair and a committee member in addition to her NED responsibilities, and her advice has always been constructive and well considered. We wish her well for the future. We are close to concluding a search for a suitable replacement for Tonian ne and hope to be able to announce that in the coming weeks. Similarly, John Mulcahy has indicated to me that he will not stand for re-election at the 2026 AGM. John, having served 12 or 13 years on the ALS Board, and we will soon commence a search for a suitable replacement for John. We will have the opportunity to thank John for his service at next year's meeting.
Despite the retirement of Tonianne and next year 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 you as shareholders well into the future. In conclusion, I would firstly like to thank you, our shareholders, for your continued support of ALS. I'd like to acknowledge my colleagues on the Board, the management team, and all of the talented 22,000 people we have across the ALS business for their passion and commitment to pursuing a better world through science, assurance, and sustainability. I'll now hand over to Malcolm who will provide you with some more detail on our FY 2025 operational performance and, importantly, an outlook on FY 2026. Thank you.
Good morning everyone. Thank you very much for being here. Warm welcome to our annual general meeting. Whether you're here in person or joining us online, I am pleased to have this opportunity to reflect on the progress and the priorities we've made in the last year. Over the next 20 minutes I'll cover our fiscal year 2025 performance, progress on innovation, AI, and climate and sustainability, as well to share some thoughts on the year ahead. Let me begin with a few important thank yous. First to our employees, most of you represented at the back of the room, thank you very much for your contribution and the constant drive to improve how we operate. Your curiosity and commitment to excellence continue to strengthen our business. To the Board of Directors, thank you for your ongoing support and constructive challenges. Special thank you to you, Tonian ne.
After nine years as you depart, your dedication was fantastic and your legacy is extraordinary. Finally, to you, our shareholders, thank you for your trust in ALS during all this journey. From humble beginnings to becoming a global leader in testing and analysis, ALS continues to evolve with purpose. At ALS, as you well know, safety is non-negotiable. Alongside curiosity, it remains a core pillar of our culture. Fiscal year 2025 marked another strong year of safety performance, continuing a multi-year trend of improvement, remaining well ahead of the industry benchmarks. We are investing in leadership programs, trainings, and systems that embed safety deeply into every part of our operations. In fiscal year 2025, we welcomed a number of senior leaders to our executive leadership team, strengthening our diversity and capabilities and aligning around a refreshed strategy focused on innovation, agility, and growth.
As Nigel just noted, fiscal year 2025 was marked by geopolitical uncertainties, market volatility, and variable client activity levels in some regions. Despite this, ALS delivered resilient performance through disciplined and operational excellence. As many of you will recall, we introduced a value creation framework back in fiscal year 2024 to guide our strategy and long-term ambition. Overall, we are targeting that disciplined and successful implementation of the refresh, medium and long term strategy will support mid to high single digit organic revenue growth and steady margin improvements as we leverage our scale and deliver benefits from the ALS way, which includes ongoing investments in innovation in terms of returns. With this new capital allocation strategy, we are targeting a minimum return on capital employed of 15%.
This is measured as EBIT over average capital employed in the third and fifth full year post investment for organic and inorganic capital respectively. It prioritizes growth of our core businesses, disciplined capital allocation, and attractive returns with a goal to deliver top quartile shareholders return in the medium term. Digital transformation and sustainability are key enablers of this framework. As Nigel noted in May, we successfully completed an equity raising to fund the development of four hub facilities across geochemistry and environmental. These hubs are not just about adding capacity, they represent a step change in how we deliver testing services. They will be designed as part of our labs to the future. Initiatives will embed automation, AI, and fully digital workflows to enhance efficiency, turnaround time, quality, and scalability.
These investments strengthen our ability to grow in key regions, reinforce our differentiated operating model, and position ALS to resume its disciplined inorganic strategy. Most importantly, it ensures we remain at the forefront of the next generation analytical testing on a global scale. As of today, we have secured the sites for all four developments and accelerated construction at our Smithfield facilities and the Lima facility in Peru, with the remaining projects progressing on schedule. These investments position ALS to lead the next generation of analytical testing globally. Let me now share a high level overview of the performance of each business stream during the last year. Fiscal year 2025, starting with commodities in minerals, despite softer exploration spending, the business delivered low single digit organic growth and margins above 30% for the fourth consecutive year.
Sample volumes were volatile, especially in the first half, but this was mitigated through our flexible hub and spoke model delivering reliable, scalable services to our clients. 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 chains. In industrial materials, we achieved low double-digit organic growth with strong margin expansion. The oil and lubricants business is expanding in the Americas and ANZ with a focus on organic and inorganic opportunities, and we are enhancing capabilities in predictive maintenance and condition monitoring. Moving to Life Sciences, which includes environmental, food, and pharma. The environmental business, our largest business that contributes 37% of the revenue of the group, delivered an impressive 9.8% organic revenue growth in fiscal year 2025. It's an exceptional result.
Growth in this sector was driven by increased PFAS regulation in the United States and Europe, strong client demand across soil, air, and water matrices, expansion of lab capacity, and automation. We continue to scale these businesses to support public health, environmental remediation, and industrial compliance programs. Organic growth was driven by regional expansion, enhancement to our operating model, and a continued focus on elevating the client experience. Moving to the performance of our recent environmental acquisitions. First, Westlink is being integrated into the broader ALS platform with work underway to align system processes and quality across all sites. This is a long-term play to grow our presence in Europe and support growing demand for regulatory testing. Now moving to York, York is continuing to focus on business case expectations with synergies to flow through this next fiscal year 2026.
The food business saw a solid performance with organic growth in Europe being a key highlight. Growth was supported by regulation, consumer demands, and ALS quality service model. We continue to invest in regional presence with automation to drive margin expansion over time. Finally, within Life Sciences, the pharmaceutical business delivered mixed performance across legacy operations with improvements coming from Nuvisan. The Nuvisan integration is progressing steadily with focused organizational alignments in 2025 and continued focus on growing third-party revenue in these upcoming fiscal years. We expect further margin recovery and revenue momentum in the years ahead. In the ever-evolving landscape of environmental challenges, we are well positioned not only to keep pace with industry trends, but to actively shape them with a keen eye on emerging contaminants like PFAS. ALS has solidified its position as a market leader.
ALS is accelerating its digital roadmap in response to a rapidly evolving operating environment. We are building advanced capabilities in areas such as AI, robotics, and predictive maintenance. Our goal is to unlock meaningful efficiencies across our operations through the adoption of AI and digital solutions, all while maintaining the highest standards of quality and services our clients expect. Our Labs of the Future initiative is designed to enhance productivity, reduce manual work, and free up our team to focus on higher-value tasks, enabling us to grow faster, support our people, and deliver the responsiveness, trust, and quality that our clients rely on. Sustainability is a key pillar of our strategy, shaping how we operate, make decisions, and deliver impact for our people, the planet, and the communities in which we operate.
We are pleased to have reduced Scope 1 and 2 emissions by 56% since the fiscal year 2020 baseline, and we are progressing towards our 2030 net zero targets. We're also advancing Scope 3 tracking with new focus areas including glassware, solvents, and travel. I'm proud that over 95% of the electricity used across ALS is now renewable. As a global organization, we are committed to supporting local economies and fostering sustainable growth and resilience in the communities we operate in. Now let's turn the attention to fiscal year 2026 and beyond. As you well know, the macro environment remains uncertain with heightened FX volatility and persistent inflation as well as rapid geopolitical and global trade shifts. Despite this, ALS moved into fiscal year 2026 with a resilient operating model and confidence in our strategic direction.
In the May full year results, we outlined our growth targets for fiscal year 2026 being 5%- 7% organic revenue growth and steady margin expansion. In short, after Q1 we are on track to deliver to these expectations. In commodities, the group is anticipating organic revenue growth at the upper end of the 5%- 7% range. We remain cautiously optimistic of what lies ahead. The positive trend in mineral sample volume that began in late calendar 2024 continued through Q1 and into the early part of Q2 of calendar year 2025. This is still being led by majors and mid tier clients. While junior equity rations have been trending positively, we are not yet seeing that activity materializing in our network. In terms of the impact of pricing, we anticipate a more favorable pricing environment to flow through the second half of this fiscal year.
Importantly, as again as communicated at the full year, we are seeing operating leverage from the increased sample volumes coming through EBIT. Margins in the Minerals division after Q1 are at approximately 30%, which is in line with the guidance expectations. Other call outs for Commodities divisions are the industrial materials that has delivered an impressive low double digit organic growth, while metallurgy remains subdued, which is typical for this business as historically there is a six to nine months lag from volume uptick in exploration activity. Moving to Life Sciences, we anticipate organic revenue growth at the lower end of the 5%- 7% range. There has been solid growth in key geographies both in Environmental, which is cycling a strong comparative period, and Food, while pharmaceutical conditions remain mixed at the revenue line.
With the legacy operations, margins are steady and we are targeting margins improvement of 20- 40 basis points in Life Sciences. In addition to the incremental benefit of the recent acquisitions, the integration of Westlink and York and cost reduction programs at Nuvisan continue to track to expectations on a cumulative basis. As always, we remain focused on delivering consistent, safe, and reliable services to our clients. Capital allocation and minimum roadsheet targets will continue in line with the value creation framework. The Group has shifted its focus to organic capital allocation in several key hub locations to accelerate medium term growth in its core focus segments. This is subject to macroeconomic conditions, and with that, the Group reconfirms that it remains on track to meet the fiscal year 2027 financial targets.
As you well know, this includes growing revenue to AUD 3.3 billion and increasing underlying EBIT to AUD 600 million. Our shareholders value creation framework and capital allocation are clear. The balance sheet is strong and our teams are focused on executing our strategic priorities. Before I hand back to Nigel, let me close by saying ALS is a company with operational excellence, a leadership team focused on the long term, a capital approach aligned with innovation and performance, and a culture of safety, curiosity, and accountability. Thank you again to our employees, the Board of Directors, and shareholders for your ongoing support. ALS going forward will be faster, smarter, and even more valuable. We are building that future together. Thank you very much.
Thank you, Malcolm. Now we move to the formal part of the business of the meeting and as I mentioned earlier, voting is open on all of the resolutions. I remind you, you can change your vote up until the time I declare the voting closed. Proxies have been received from approximately 73% of ALS's issued capital. Thank you to all shareholders who have already given their proxies. As we proceed through each resolution, the proxy votes that have been submitted for that resolution will be shown on the screen behind me on all available open proxies given to the Chairman of the meeting. I propose to vote in favor of all resolutions. Moving to resolution number one, the first resolution is for the adoption of the 2025 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. As background, the Board aims to set remuneration for all key management personnel at levels which are both reasonable and designed to attract and retain appropriately qualified and skilled people in what is a globally competitive market. In addition, the aim is to align a significant portion of executive rewards 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 key management personnel of the Group are outlined in the Annual Report and the structure encompasses three main elements. Firstly, fixed salary. Secondly, a short term incentive which is based over one year performance, of which 2/3 is paid in cash and 1/3 is a deferred equity component.
The third is a long term incentive program over three years which is 100% equity based. KMPs must also meet a minimum shareholding requirement as they accumulate shares with the vesting of both STIs and LTIs. Details of proxies received for this resolution are up on the screen. Are there any questions on this resolution from the floor? Can I ask with questions, if you could just state your name and who you are representing and then we'll go from there. Okay.
Good morning, Mr. Chair. My name is John Whittington and I am a volunteer for the Australian Shareholders Association. Today we hold proxies from 27 ASA members and non-members for over 500,000 ALS shares. Our thanks go to you, the board, and all ALS employees for producing another solid result. Mr. Chairman, I must compliment you on an excellent remuneration report which is clear, understandable, and accept the deletion of underlying figures. Transparent. If it weren't for the unnecessarily small font size and large amounts to report, it would likely become minute reference. I do have one question. The ASA is very uncomfortable about hurdles based on underlying figures. For this reason, we are concerned that ALS uses underlying figures and supposedly compares. Is that better?
Yeah.
Yes, for this reason we're concerned that ALS uses underlying figures and supposedly compares them with underlying figures for industry competitors. Given underlying figures are not covered by accounting standards, how can retail shareholders be sure that adjustments are fair and transparent? You are comparing apples with apples.
Sure. Thanks for the question. Firstly, I take your point about the font size.
I'll.
I'll make sure that's fixed for next year. Hopefully most people reading it online at least, I just go like that and it makes the fonts bigger. I'm not sure how it works otherwise. On the underlying earnings, I understand the issue and I understand the question. I think shareholders should feel comfortable that the Board takes those adjustments very seriously. We do compare them with our peers across the world each year, and if anything, I think we are tougher in the adjustments that we make compared to our competitors. If you look at the types of things that we put below the line to get to underlying earnings, for example, costs of making acquisitions, major restructuring, laboratory closures, those types of things, which are clearly not in the ordinary course of business, we are acutely aware of people's concerns about managing, if you like, a result.
We are only in a position where we make adjustments for what we think are truly one-off things each year. I think if you compared us with our competitors, then you would see that we're much tougher on those adjustments than others.
Thanks, Mr. Chairman. Perhaps I'd ask for just greater transparency about those calculations in future reports.
I understand. To the extent that that's not commercially incompetent, some of those things, for example, I'm not sure we want to have everybody knowing the intimate details, but I'll take your point and see if we can improve our disclosure.
Given you're doing underlying comparisons with other companies' underlying figures, that must be public information. Sure.
Yep, take your point.
Thank you.
Are there any other questions from the floor? George, thank you.
George [audio distortion].
I've spoken previously about the.
Short and long-term incentive plans about.
One year for short term and three.
Years for long term.
I think that those figures need to be adjusted. I think three years probably reflects a short-term view and maybe seven.
Years, a long term view.
I just think that it doesn't.
Really work very well overall.
Long term at one year and for short term. My other question was a number of.
Years ago, the Board announced a plan.
For short, medium, and long term growth in the company.
How that affects the current board.
It was a plan that was put.
Out by a previous number of board members, how you still approach that and how.
Is the performance in relation to what?
Was set at that time for the short, medium and long term progress of the company.
Thank you.
Thank you. Firstly, on the terms of the short and long terms, the short term I think is pretty standard globally, about one year. We are unusual by global standards with a deferral of, what, one-third. Most of the Northern Hemisphere short term incentives are paid 100% in cash each year. I think the Australian context sees some deferral, which is unusual by Northern Hemisphere comparators. The three year versus four years or longer is the debate that has gone on for some time. I take the point. I think seven years is too long. Three to four years is a debate, and we've looked at what we think is the right thing for ALS . We've benchmarked it against what happens elsewhere in the world. We're comfortable that three years is the right outcome. I understand the point.
I understand the point about three to four years in the current world, and in the current uncertainty, seven years seems like a long time away given how much things change on a week -by-week, month-by- month basis. I'm comfortable with three, and I think we've debated that at the Board again this year. There's an argument to maybe look at four in the future, but at this point I think we're stuck with three. On your last point, the short, medium, and long term goals that were made, I think about, correct me if I'm wrong, Malcolm, three years ago. Yeah. The five year targets that were released three years ago, we as a Board and the management team are committed to those. As Malcolm said in his address, we're on track to achieve the revenue and the AUD 600 million EBIT.
I'd say to you that's not a goal in itself. We're going to do what's right for the business on a year -by- year basis. We understand the goals that were set three years ago for five years, which will be due in 2027, and we're on track at the moment to achieve those. We're not walking away from those at all. Yes, at the back.
Thank you.
I'm just asking, you've got a number of.
I know it's a global company.
You have a number of foreign-based board members.
Yes.
You see the MD is sort.
Of relocating to Madrid. Is there plans for ALS to become a non-Australian company, or are we going to try to maintain ALS 's presence as an Australian company? It's a big concern to me about the number of companies that are.
Being lost to the Australian economy, we lose all that brilliance.
Can you point, please?
Sure.
Certainly. Good question. We have no intention of moving the domicile of the business from Australia. A personal opinion, the Australian equity markets or capital markets are amongst the most efficient in the world and there is no reason why we would seek to change that. Are there any questions online?
There are no questions online.
Okay, thank you. I'll ask those of you in the room to mark that resolution. Resolution two is the election of Catharine Farrow, who is seeking election as a Non-Executive Director of the company. In accordance with the company's constitution and the ASX listing rules, there's a requirement for an election of at least one director each year. Catharine was appointed to the board as a Non-Executive Director in March 2025 and she retires in accordance with our constitution and, being eligible, offers herself for re-election.
The board supports Catharine's election and I'll now invite Catharine to address shareholders. Catharine.
Thank you for this opportunity to address the AGM. It's truly an honor to present myself as a candidate for a Non-Executive Director role with ALS , a globally leading Australian-founded company. My passion for chemistry, particularly geochemistry and mineral chemistry, was ignited and nurtured through my undergraduate and graduate degrees. Soon after completing my PhD and a brief stint as a government geoscientist, I began my mining industry career at Inco Ltd., running the petrology and mineral processing laboratory in Sudbury, Canada. Looking at this incredible opportunity with ALS , I feel my career has come full circle. From those early years in the lab at Inco, I built a long career in diverse aspects of the mining industry. This includes research, exploration, technical roles, corporate development, operations, executive leadership, mine and company building, advisory and consulting directorships, mineral economics, technology and innovation.
I've held a wide variety of executive offices including Chief Technology Officer, Chief Operating Officer and CEO, and have founded, owned or held directorships for organizations such as KGHM International and its precursor companies, TMAC Resources, now Agnico Eagle, Ferrex Geomine , Sentiment and Eldorado Gold. My work has spanned every continent except Antarctica and I've served on boards for Canadian, U.S. and U.K. listed companies. This extensive experience has been enriched by working in diverse cultures and often in harsh remote regions like the Andes and the Canadian High Arctic, and ALS is bringing me back to the laboratory and to the critical science the world needs now. The company is perfectly positioned to capitalize on increasing opportunities to deliver high quality essential scientific data and data sets. These will underpin future technological advancements and meet global health and safety requirements. My commitment to this role is evident.
I've resigned from the board of another public company and as Chair of the Advisory Board of the Commercialization Vehicle of the Canadian Mining Innovation Council. Currently, I serve on the boards of Franco Nevada, one of the world's two largest mining royalty and streaming companies with over 400 assets globally, and Eclaira Resources, an emerging Canadian-listed Latin American-led and focused heavy rare earth exploration, development and downstream separation company to ensure I'm fully prepared for an opportunity such as this. With the ALS Board, I've completed or am completing professional certificates in both Cybersecurity and in AI strategy at Cornell University. I believe ALS is exceptionally well positioned to leverage the world's critical minerals requirements as historical supply chains adjust to rapidly changing macroeconomic conditions, the energy transition, new technologies and emerging markets.
I am honored by the prospect of working alongside ALS 's excellent CEO and management team, its committed board and a company with such strong cultural awareness, all focused on delivering a strategy of growth and value to every stakeholder. Thank you for your support.
Thank you, Catharine. It's an impressive resume and she's already making a solid or strong contribution to the Board in the three or four months that she's been involved with us. Details of proxies received on the election of Catharine Farrow are on the screen behind me, which is pretty impressive. Are there any questions from the floor? Firstly, yes.
Mr. Chairman, it's John Whittington from the Australian Shareholders Association. We acknowledge Dr. Farrow's excellent skills and experience. Since many retail shareholders are kept in the dark about the process of recruiting new directors and often think it's jobs for mates, we believe the best way of addressing this concern is for greater transparency of the recruitment process. To this end, would you please explain the recruitment process that resulted in Dr. Farrow's appointment and whether she was known to any of the company's directors and KMP prior to her appointment?
Thanks, John. Good question. We're not a Jobs for Boys type company or Jobs for Boys and Girls type company. We employed an international search consultant. We had specific criteria as to the skills and experience we were looking for, and we had a long list which we took to a short list, and Catherine was the preferred candidate. After we went through that process, she was not known to any member of the Board and to my knowledge any member of the executive team. A truly independent process and selection.
Thank you. Good answer. Is Dr. Farrow available to answer questions?
She is online if you have any questions. Yes.
Okay. I have a question for Dr. Farrow. Dr. Farrow, congratulations on your appointment and welcome to the ALS family. Shareholders have only one opportunity each three years to hear what their individuals are like when live. I appreciate the previous thing was pre-recorded. ALS Limited 2025 Annual General Meeting have these two questions for you. Firstly, what do you see as the most important aspect of your role as a Director of ALS over the next decade? Secondly, what activities, other than reading board and committee papers and attending board and committee meetings, do you plan to undertake in your role as Director?
Okay, hopefully this works well. Lumi, can we have Catharine up on the screen, and hopefully Catharine, you've heard that question and can answer those. Let's see how.
Yes, shouldn't be a problem. Hi there. Thanks for the question. What's really interesting about your question is that I've already actually traveled to Vancouver where our hub, Geoscience, and one of our large Environmental testing labs are and have already spent time with the teams out there. I think from the perspective of having the view of nose in, fingers out, which board members should take, and yet really understanding the fabric of the company and the culture of the company and how we're driving the quality and the improvements as far as new technologies in the lab, safety in the lab, which I'm very concerned about, I spent quite a bit of time with both those laboratories while I was there talking about that.
Engagement with the workforce is critical for board members to make themselves available for the workforce to understand that the culture is driven, it has a tone from the top. Also, the employees feel that they're listened to and that they're empowered because that's really our greatest strength as our people. I think from the perspective of your question, sitting and reading board papers, et cetera, et cetera, I think that's an important thing right off is that one of the first things I did was start to visit labs on site. That's aside from the regular board meetings which we do off site as well. That said, next year I hope to meet you and come to Sydney and hopefully we can meet face to face.
Thank you very much.
Are there any other questions from the floor? First moderator, do we have any questions? There are no questions online. No questions. Okay, thank you. If you could, those of you in the room, let's tick the appropriate box for that. The third resolution is the re-election of Siddhartha Kadia, who is seeking re-election as a Non-Executive Director at this meeting. Siddhartha was elected to the board as an NED in 2019 and he retires in accordance with the company's constitution and, being eligible, offers himself for re-election. The board supports the re-election of Siddhartha and I now invite him to address shareholders.
Good morning. Good morning. Thank you for the opportunity to present myself for the re-election to the ALS board. Maybe just to introduce myself a little bit to those of you who haven't met me before. I have been on the ALS board for six years and I can tell you where it all started for me was my passion for science and all the good that it can bring for society. Started as a teenager in India. It is this passion that has actually brought me to many corners of this world, across many continents, starting with my graduate training in biomedical engineering at Johns Hopkins Medical School in the U.S.
and subsequently in my business career that I spent experiences in the U.S.A., Japan, China, other parts of Asia as well as many different parts of Europe, both living and working in many places including working in the U.K. and more recently Australia with ALS. During my 25 years of business ventures I have been blessed with a deep network of customers, suppliers and investors in the life sciences industry. My last role in the life sciences industry prior to me entering the testing industry was to manage about AUD 2 billion of U.S. business supplying scientific goods, reagents and technologies to customers all over the world for a company named Life Technologies Corporation which subsequently was sold to Thermo Fisher Corporation. For a period of time I also had the privilege of building a U.S.-based testing company that was sold to one of ALS 's major competitors in 2018.
It is after that is when I joined the ALS board in January 2019 and it is this board service that I am very proud of. Among all the independent board roles I have been honored to serve on, I've actually served on about 10 different boards. In fact, I will tell you that ALS holds a special place in my heart and in fact I have simplified and designed for many other boards in the last couple of years in order to serve ALS more with focus in addition to my executive role that I have as a CEO of a private company.
When I joined ALS , the share price of ALS was AUD 7 and I'm very proud to be here today and actually been quite personally rewarded in knowing that ALS has now taken its share price to AUD 18 with a strong management team under our new Chairman's leadership of the company. My colleagues on the board and management will tell you that I provide both the support and when appropriate challenge to the management team to do better to serve your interest as shareholders. On a personal note, I would like to also share that my personal values are fully aligned with the mission, the vision, and the values of ALS . I've carefully considered this responsibility and I do not take on commitments that I cannot fulfill, which is the reason for focusing on only ALS .
Being my Non-Executive Director role going forward, I humbly ask for your vote for my continued service on this board as your representative, and I hope to contribute to value creation for all of our stakeholders, including all of you as shareholders. Thank you.
Thank you. Thank you, Siddhartha. Firstly, any questions? Sorry. Details of proxies are for to re-elect Siddhartha up on the screen. Are there any questions from the room? Firstly, John, it's a guess, but I think you have one.
Surely there's someone else going to ask some questions. I don't want to be the only one up here. Mr. Chairman, it's John Whittington from the Australian Shareholders Association and I have two questions for Dr. Cathaerine Farrow. Dr. Farrow, congratulations on your appointment as independent Non-Executive Director of ALS . I note your comments that you made in your prerecorded message about dropping the other director roles. However, is this director role part time, expecting less than 80% of your time being devoted to it? If not, how can ALS shareholders expect you to fulfill the expectations of a director outside just attending board meetings, board and committee meetings, and reading board and committee papers? Do you want me to ask the second one?
Yeah, let's do both. John.
Yeah, it might be easier that way. Dr. Farrow, whilst we understand that you satisfy ALS 's shareholding requirements for a director, ALS believes that after three years, directors should hold equity that is skin in the game, equivalent to 100% of their fees, a level which you do not meet. After six years on the board, will you commit to better aligning yourself with shareholders and lifting your ALS equity to 100% of your fees within the very near future? Thank you.
Thanks. Before I ask Siddhartha to respond, I think from a Board's point of view, Siddhartha has been entirely both transparent and clear. When he was going to accept the CEO role of the private company, he and I had a discussion. He talked about what he was going to give up and his commitment to ALS as a precondition of him agreeing to take on the CEO role. I was very happy with his response and with his commitment, which, by the way, he didn't need to do. I've not seen any signs at all of Siddhartha's commitment, contribution to ALS being less. In fact, in some ways, quite the contrary. It's increased over the last 12 months. I'll let Siddhartha speak for himself. Siddhartha, two questions. I'll leave that to you. Let's hope this link works as well.
Thank you, Mr. Chairman. Thank you, Mr. Wellington, for your question. I understand and I appreciate your question. In your shoes, I would ask a very similar question. Can you hear me okay?
Yes, now I can. Yeah.
Yep.
Okay. To answer your first question, I know how I can continue to perform on both ends of my commitments. I can tell you that for the last six years that I have been on the board of ALS , concurrently, I have served on many other boards. I have held a public company CEO role for a global company, and I rarely missed a meeting. Even if the meeting wasn't required of me to attend, for example, meetings of the Audit Committee that I'm not required to attend, I still attend most of them and haven't really missed a bit on my work and expectations. I guess the only thing I can share with you is that some people are wired differently. Some of us are wired to get a lot of excitement from working harder than nine to five jobs, and my current commitment is a full-time job.
However, I think that it's very synergistic with ALS . I considered stepping away from the ALS board and doing something else as one external board membership that most U.S. CEOs who work in United States-based companies perform. That's quite customary for U.S. CEOs to do that. Especially in my case with a private company, my responsibilities are very different and much smaller since there is not a lot of time to give into meetings as such.
This one that we are having today, what I will tell you is that I also consider the fact that I am now one of the most senior members of the ALS board coming into my sixth year of service, and for the sake of continuity for both the management and the Chair, I thought this was a much better use of my extra time and capacity, which is why I have served on and asked for a re-election from all of you. The second question is interesting. I hadn't considered the numbers. In fact, I bought those shares a long time ago. At the time, I believe my understanding was that it was after-tax income, and I had whatever I had made after tax that year I had spent on it. I will take your request under advisement and do the needful as I need to do.
Thank you for your support.
Thank you.
Thanks, Siddharth. I think it is an important point, the custom, or it's quite a regular occurrence in the U.S. where a CEO role has one external NED type role. It's unusual here in Australia, but in the U.S. it's more the norm rather than the exception. I'm very comfortable with the position. Are there any questions online?
There are no questions online.
Good, thank you. I can ask you to mark that one. The next item of business is the approval of the grant of the 2025 performance rights to the Managing Director and CEO Malcolm Deane under the terms of the company's long-term incentive plan, and a summary of the LTI plan and the calculation of Malcolm's proposed grant was set out in the explanatory notes to the notice of the meeting. As the Managing Director of the company, the issue of the performance rights to Malcolm requires approval from shareholders by an ordinary resolution at this meeting. The Non-Executive Directors strongly support the issue of these performance rights, and the proxies we've received are on the screen. I will note that Malcolm is not entitled to vote in relation to this resolution. Are there any questions from the floor? Come on John.
Please. Someone else. Mr. Chairman, it's John Whittington for the Australian Shareholders Association. Again, we thank you for the table on top of page 56 in the annual report outlining historic vesting outcomes, which highlight that the four years up to and including 2024, when the company had exhibited solid but not exceptional performance, the LTI payment had never been less than 97% of maximum. This would suggest that the targets were soft and didn't encourage above average performance. Whilst the payout reduced substantially in 2025, we're still considerably in excess of a midpoint payout for another solid but unexceptional year. Would you please outline the steps you are taking to ensure that future targets are not as soft as previous ones and tell us when shareholders can expect to see the average payout closer to a midpoint 50%?
Let me think about how I might answer that, John. Targets always look soft in retrospect if you achieve them. If you look at where we are today, I think the last four years, 100, 197, 72. I think that reflects the performance of the business or I personally hope we never get to 50% because that means we're underperformed. As far as the targets are concerned, they're over a three-year basis and there are four. One is relative TSR and that's our performance against the comparable companies. There's EPS growth which we set a target at, and that shows sustainable growth, compound growth each year and I think we're at 6%- 12% of that. If GDP growth is 2%, that's even at the low end that's 3x GDP growth and at the top end at 6x GDP growth.
I think that's a very, that's a stretch target. The EBITDA margin we have in there and we are very, very committed to that because that determines whether we're actually offering a specialized service or if we're at the commodity end of the business. We do not want to see our margins decline and we are proud of our results against our competitors. As we look at growth at top and bottom line growth, we want to make sure that we maintain those margins. The last one is Roche, where we put a premium over and above our cost of capital. Cost of capital is the cost of equity plus the cost of debt. I think ours is, correct me if I'm wrong, Stuart, 13% or thereabouts, 10. Then we put a premium on top of that. The targets are 15.5%- 20.5%.
We look at it and say if the cost of capital is 10% or 10.5%, then we've got to get a minimum of 15.5% to score anything under that and a maximum of 20.5%. I take it on, you know, in retrospect, 100, 100, 91, 72 or 97, 72. You can say maybe the targets were too low. I would say the contrary view is that the business outperformed against both its peers and the market and management were appropriately awarded for that outperformance. I would assure you and the rest of the shareholders that we as a board spend quite a bit of time looking at our targets to make sure that they are a stretch and there's a balance. They've got to be achievable, but not a walk in the park, if you use the term.
They've got to be a stretch where performance cadence is there, but they've not got to be unattainable. Otherwise they don't provide both the incentive and the reward that's required.
Okay, thanks, Mr. Chairman. I'm not suggesting that they should be unattainable. It's just that the absolute maximum has been reached too often. That suggests that perhaps they were just set a bit low. The target metrics that you set are excellent ones. No objection to that. It's just what incentive is there to outperform if you're likely to get 100%?
I mean, think last year where the results were flat, they didn't get 100% and that was the right outcome. If they achieve all four of those at the top end, I don't think any shareholder would begrudge us paying out 100%. I take your comment.
Thank you.
Thank you. Are there any other questions from the floor? Nobody else wants to join John in asking questions. Are there any, moderator? Are there any online?
There are no questions online.
Okay, John, I hope you've got one for Resolution 5 as well. Be disappointing. We now move to Resolution 5, which relates to the renewal of the proportional takeover approval provisions. Now, this special resolution has to be passed by at least 75% of the votes cast by members who are entitled to vote on the resolution. In the company's constitution, clause 25 contains provisions which deal with proportional takeover bids for shares in the company. Just by way of background, a proportional takeover bid is an off market takeover offer which offers to buy only a proportion of each shareholder's shares.
The provisions in clause 25 are designed to assist shareholders to receive the proper value if a proportional takeover bid is made for the company by prohibiting the registration of the transfer of the shares acquired under this bid unless shareholders pass a resolution approving the bid or a resolution is taken to have been passed. It's a protection to shareholders, effectively. Now, under section 648G of the Corporations Act, which I'm sure you're all very familiar with, and clause 25 of the constitution, the proportional takeover provisions must be renewed every three years or they will cease to have effect. Every three years we have to have this renewed. The provisions were last renewed by shareholders at the 2022 AGM and they'll cease to apply from 23 August 2025 unless they are renewed at the meeting today.
The board considers it's in the best interest of the company's shareholders to continue to include the proportional takeover provisions in the constitution. Shareholders are therefore asked to consider a resolution to renew these provisions in our constitution. If it's renewed and passed at this meeting, the provisions will be on identical terms to the existing clause and the related definitions that are contained under clause 1.1 of our constitution. Details of the proxies received are behind me. Are there any questions from the floor? John? Okay, you've been taken over. Yes. [Adrian Voss], Shareholder.
Just a quick question.
When there's so many banks and their.
Nominees owning a significant proportion of your shares, and I assume they keep buying.
How relevant is this?
Provision?
It's actually relevant for all shareholders. If I give you an example, somebody could make a takeover bid without this. Somebody could make a takeover bid for, say, 35% of your shares or 40% of your shares at a certain price. That means you're left with the other 60% or 65% that are less liquid, arguably less valuable, and they may not have paid a premium for effective control of the company. You don't need to really own 51% to have effective control. Whether the shares are held by us as individuals, all of us as individuals, or by superannuation funds or investment funds, it doesn't matter. This protects everybody to make sure that we as shareholders have to agree in any proportional takeover rather than happen without our approval. That's in the interest of the investment funds, just as it's in our interest.
Everybody, I think, is equally, equally motivated other than the person who would be trying to buy 35% or 40% of our company and not pay a premium. I understand that, but the investment funds own more than.
50% of the company.
Yeah, but they don't act together. There's, you know, somebody owns 2% or 1%, and under the corporations code, they are not allowed to act together if they own more than 20% or 19.9% of the issued capital of the company without then making a takeover bid for the business, which is about the end. I'll have to ask HSF for any more legal advice if we come to that. They don't act in concert at all. They are independently held. Are there any other questions here in the room? Moderator, are there any other online questions?
There are no questions online.
Okay, thank you. I'd ask you to tick that box. The next and last item of business is the consideration of the company's financial statements for the year ended March 2021, including the Director's report and a report from the auditor. They were all included in our 2025 annual report. I now open it for shareholders to ask questions regarding these financial statements and reports, the operations and management of the company, or any questions you have for Kelly, our auditor, in respect of the audit report. Are there any questions here in the room?
Yes, sir. My name is David Bolton, just an individual shareholder. It seems to me that it's a very big move you made when you decided that you would have four hubs in the world rather than the older style laboratory setups, which I don't know the difference, but they're obviously a lot more.
I'm a bit concerned that this may lead to some of the smaller companies being able to make effective attacks on the business that the company owns by getting staff and so forth from those previous laboratory investments we had. I just wonder whether you could outline how you're going to stop this or whether this is no risk at all. Thank you.
Thank you. Good question. First point is the four hubs, they're not new hubs. All four of them are extensions to or expansions to existing hubs. The requirement for the investment in those is because of the growth that we've had in each of those hubs. The reasons are different by the geographies. I don't think there's any risk with smaller hubs being consumed or the business going to the larger operation any more than currently exists.
You should look at it to say this is a growth investment in each case. As the business grows, our market share grows and the market itself grows that we can then deliver to those. The contrary, I think, is the case. If we don't do this, then we become inefficient in that we don't have the scale to deliver to our customers. Our turnaround time would increase and that means we are less competitive and less likely to win new business without these investments. The ALS success comes down to a range of things. Culture, obviously, which Malcolm has talked to, but our hub and spoke system, which has been developed across investment in further continuing with that, that we see as really, really, really important. I don't see the risk, the broader risk you talk about without people looking to poach our staff.
Every one of the 22,000 people who work for us are important. I think what keeps us here or what keeps them here is the culture, is a fair and just remuneration, is a career, is training, is belief in our values, a customer centricity, and wanting to be part of a winning team. They're the things that we think have been important, are important, and will continue to be important as we go forward. Does that answer your question?
Yes. Thank you.
Thank you. Are there any other questions in the room? Yes, sir.
Thank you. What do you see as the challenges?
Ahead with the changes in AI.
New technologies like Chrysos have got that gold metal testing thing.
There is going to be a lot of changes in technology and AI. How is that going to impact on ALS going forward? Good question. I think technology has been changing for the last 20 years. Certainly, the pace of change has increased. I think for us, AI and automation is both a challenge, but it's also an opportunity. There is an old saying that leaders are bleeders. I'm not sure that's the case today with AI. Malcolm and the team have taken a really focused and disciplined approach to how we implement AI in our business. We actually see it as quite an opportunity for us. It's a threat if we do nothing and it's a threat if we let others steal the march on us. It's a real opportunity if we can leverage it and improve our service delivery and our efficiency to our customers.
I think net, it will do both of those: improve efficiency, improve consistency, and effectiveness. I think it's an opportunity. We have a shareholder briefing tomorrow in Perth and Malcolm and the team will be talking a bit more about that. Malcolm mentioned Lab of the Future, which is one of the initiatives for the next three years. The Lab of the Future will certainly have a higher level of AI, of automation, and the use of data as we go forward. Is it a challenge? Yes, but it's equally an opportunity and I think one we're pretty excited about, that the team is embracing. There was a second part of your question which I've forgotten now. Chrysos, look, Malcolm's probably better served to answer that than me. Chrysos has a different technology to the one that we use.
We already use the Chrysos technology in some circumstances, but our job is not to disregard changes or improvements in technology, but rather to embrace them and we'll continue to do that. It's not something we should be afraid of, it's something that we should embrace and include in part of what we're doing.
No, I wasn't talking about being afraid of, just being ready for.
Oh, yeah, no, absolutely, yeah. We actually spend quite a bit of time at the Board looking at those type of things. The two directors you've talked about, you've voted on today, Catharine has a lot of exposure to what's happening in the mining industry. For example, Siddhartha has been involved in technology and laboratory and the TIC industry more broadly. Both of them are well connected into, you know, initiatives, innovation. It gets quite a bit of airtime at the Board and certainly for Malcolm and his team, quite a bit of time around the executive table. I think we're excited by it, it's challenged by it and, you know, the fear of the unknown a little bit, but that's a good thing. That keeps it, keeps performance on edge. Good question. Thank you. Thank you. Any other questions in the room, George?
Thank you, Mr. Chairman.
I'd just like to congratulate the Board on setting a solid foundation for the future. I think that you can only build something if you've got a good foundation there to start with. I think that Malcolm and his team have done a terrific job on setting that solid foundation, and I think they can be congratulated on the job that they've done. My other question was that in the last four years, I think we've had three venues for the AGM.
If we're going to have it here.
Next year, can we have the podium moved to the side so that we can actually see what's going on behind you with the votes and the numbers? This year we could only get half the picture. I don't know where they're going to hold it next year, but if it is here, maybe we could improve the visibility on the information that's behind you. Thank you.
Thanks, George. I fully understand why you'd like to see the screen and not me. I take that on board and fully understand that. As for the location, the place we had it last year was not available for this date, which is why we're here. I take it on board it is difficult to see the screen behind us and on the foundation. I think you're right.
When I was very young, I remember the analogy of the wise man built his house upon the rock. I hope that what we're doing now is ensuring that the foundation that we're building the house on is in rock, not on sand. That'll provide for shareholders well as we go forward. Thank you. Any other questions in the room? Yes, sir.
Apprentice. I'm a shareholder. My question was also on the venue.
For next year's meeting.
I was concerned by a comment that Catharine Farrow made implying it may be in Sydney. One of the admirable things about ALS and Campbell Brothers are that they were Brisbane companies. As ALS now stands, it's very much a global company and maintained its headquarters in Brisbane.
Will the next year's AGM be in?
Brisbane or in Sydney?
No, it'll be here in Brisbane. I think that was just a misspeak from Catharine. Next year we held in Brisbane. A lot warmer here than it is in Melbourne. I can tell you that for free. Any other questions? Yes.
Yeah.
Hopefully I haven't stopped anyone else asking a question. Mr. Chairman, John Whittington from the Australian Shareholders Association. Would you please provide more information to your shareholders as to why you are moving your operational headquarters from Houston to Madrid? This is likely to be a costly exercise with the risk of losing corporate knowledge from those who don't want to relocate. What's the benefit?
Yeah, good question. Thank you. This is something that's been under consideration for some time. When you run a global business, timescales, time frames, different time zones make it difficult. We had a situation 12 months ago, I think, where our exec team, our global exec team, everybody lived in a different city pretty much. That is difficult to manage a business that way, and the time frames or the time zones were making it difficult. We made a decision after using some external advice on the cost effectiveness of this, as to where we should locate our corporate head office or the head office where the CEO is. After looking at various options, particularly in Europe, we chose Madrid. Others were too costly and were discarded as a result of that. To put it in perspective, John, the head office sounds much grander than it is at the moment.
Malcolm and the team are working out of a WeWork office, which is a temporary thing, but we'll have 15 or so people, maybe 18 people there in total. All of the key people who we have wanted to relocate have agreed to locate and are now living in Madrid. We're scaling back the amount of office space we have in Houston, which is where Malcolm used to be based. The cost of an office for 15 or 20 people is relatively small. The savings in air travel alone and in time are going to compensate us pretty much for the cost of the additional costs in Madrid. The efficiencies, though, I think shouldn't be underestimated. Firstly, Europe is sort of the center of the TIC industry, so access to talent is pretty strong there.
We've, for example, just appointed a CIO who's come from Orange, the telecommunications company, who was already based in Madrid and has joined us at ALS three months ago or so. He'll be presenting tomorrow at the shareholders or an analyst meeting. The thing that people sometimes forget is that unofficial time when you can bounce ideas off each other, which just does not happen if you're not in the same city. I'm fond of saying the two most important places in an office are the kitchen and the corridor, because you'll walk past someone or you see someone and say, look, have you heard about, can I talk to you about. It's not the same as can I make a meeting request for you on Teams or Zoom for tomorrow at 3:00 P.M. and then that person's busy, the moment's lost.
We've now got the CEO, the CFO, the CHRO. The HR Head, the CIO, they're full time. Our Head of Strategy lives in London and will be spending half of her time in Madrid to put the executive team in one place where they can be together to look at strategy, to share ideas, and to look at opportunities is, I think, incredibly valuable for shareholders. The additional costs are negligible when you look at reduction in travel costs and the offset of reduction in the real estate costs in Houston versus the real estate costs in Madrid. I think if anything, the Board—I know I have been pushing Malcolm to do this sooner rather than later and we needed to have a few other things come in place.
I think it's a really positive thing for the business and I think you'll find that the exec team will be increasingly efficient as a result.
Now thanks Mr. Chairman, really, really appreciate that. Answer one brief question and then one follow up question or one other question. Underlying profit has decreased slightly year on year now for three years. Does this signify that there is little opportunity for organic and that the company can't grow without acquisitions?
No, absolutely, absolutely not. I think you've got to look at the business in two parts. Life Sciences by any stretch had an exceptional year of growth last year. Total growth of Life Sciences, so good growth there, well above GDP. The mining sector is cyclical. The last couple of years we've seen downturns in the mining sector. Our market share in both mining and Life Sciences has continued to grow. There is nothing to say that there's no growth without acquisitions. If you look at the priority of growth, organic growth, things that we generate ourselves, is the cheapest and normally the most profitable when compared with anything else. That continues to be the priority, and bolt-on M&A or acquisitions should be cream on the cake, not the cake itself.
Okay, thank you very much. Our final question is we were disappointed that your recent capital raising was not a renounceable entitlements or rights issue, which is the fairest to all shareholders. All other methods dilute some shareholders without compensation, and placements can give non shareholders a better deal than loyal retail shareholders. Would you please commit to using fairer capital raising approaches in future?
I'm not sure I completely agree with what you're saying. We were very conscious of our retail shareholder base, which is why we put the SPP in place, share purchase plan in place, which was initially set at a level which gave everybody the opportunity to participate and at least match their pro rata entitlements. I think the AUD 22.5 million, as I said in my address, nobody was scaled back and approximately 90% of shareholders who participated had their pro rata matched. You got to look at it at the time we did that, the market was pretty uncertain and one of the things you need as a business is certainty, not uncertainty. We did what we thought was fairest for shareholders. I take on board your comment. We did the best that we could based on the circumstances.
We had to balance the requirement for the capital raise, but also the interests of individual shareholders, which, by the way, we are those as well. I understand the point, but I think retail shareholders were offered the opportunity to participate at the AUD 16.70, which was the institutional price or the VWAP of the previous—sorry, the volume weighted average price of the previous—was it five days, Stuart? Previous five days. They had an opportunity. They were not going to pay more than the institutional shareholders.
The main trouble, Mr. Chairman, is that retail shareholders don't always have AUD 30,000 sitting available for immediate use.
I understand.
They're in ownership structures like RAPs, which don't allow them to participate, and that's what disadvantages them.
I understand. Thank you.
Thank you.
Any other questions from the floor? Firstly, yes, sir,
just a quick question. Relocating from the U.S.A. to Spain, will that incur the wrath of Donald Trump?
He's a non-nationalist. I doubt very much whether it will come to the President's notice, but no, I don't think so. The good thing about all of the tariff talk, we're largely not affected by tariffs. The only things that are going to affect us are the importation of a few minor things into the U.S., which are negligible effect. No, I don't think it'll affect the U.S. operations at all. Any other questions in the room? Yes, ma'am.
I'm [Linda Bretherton], I'm a shareholder.
Just a very quick admin question. Why do we have to put our name and signature on the voting cards?
I haven't seen it.
I haven't seen it before myself.
Okay, Linda, I reckon you can answer that. I suspect that's a question actually for our registry.
We might come back to you after the meeting with the answer to that one. Thank you, Linda.
Any other questions? That's a good question. I don't know the answer to the question, so we'll have to ask someone else. Any other questions? Moderator, have we got any online?
We have one question online from shareholder Mr. [Kevin Daly].
He has asked, is there much demand yet for microplastics detection?
Malcolm, do you want to take that?
Yeah, absolutely.
Yes, we've seen an increase of demand of microporastic, but it's not yet at the levels that we see in other emerging contaminants like PFAS. It's more regionally based than a global trend as we're seeing those other emerging contaminants. I would say that yes, but not at the levels of other emerging.
Contaminants as I just described. It's a good question. Thank you. Anything more online, Moderator?
That's all, thank you, Chair.
Okay, I think as there are no more questions, last opportunity in the room. I'm standing between you and a cup of coffee and morning tea. We'll now move to collect the poll voting cards and close the online voting. I'll just allow a minute or so for us to collect all of the cards. If you could give those to the representatives of Boardroom. Are there any more cards for collecting? No. Ladies and gentlemen, I'll now declare that voting is closed. The results of the poll, as I said, will be announced to the ASX as soon as possible after the meeting, and we'll also post them on the company's website. I now declare the meeting closed and in doing so, thank you again for your participation today and please join us outside for a cup of tea, coffee, or what I hope is some nice morning tea.
Thank you.