IMDEX
ANNUAL REPORT 2020
A LEADING
GLOBAL
MINING-TECH
COMPANY
IMDEX is a leading global Mining-Tech company.
Changing the minerals industry forever.
IMDEX LIMITED ANNUAL REPORT 2020
INVESTMENT PROPOSITION
- Strong financial position with improvement in recurring revenue and cash flow from operations
- Outperforming minerals industry market growth with leading patent protected technologies
- Ability to drive growth via strategic acquisitions, ongoing disciplined product development and industry collaboration
- Committed to a sustainable dividend policy while continuing to invest in new technologies that have the potential to deliver earnings growth for shareholders
- Compelling opportunities to grow the business via product and market extension across the whole mining value chain
- World-classR&D capabilities and an exciting pipeline of technology developments
- Established global company with the ability to leverage extensive client network
- Strong leadership team with a successful track record of developing and commercialising technologies
- Opportunities to enhance the sustainability of operations for clients globally
- Strong minerals industry fundamentals underpinning growth - clients are embracing innovation and new technologies to lower costs, increase safety and achieve greater productivity
1
FY20 ANNUAL
GENERAL MEETING
Our Annual General Meeting will be held on 15 October 2020 at 11:00 am (AWST) at IMDEX's Head Office. Members of our Board and Executive Leadership Team will be available to discuss the Company's performance, operations and technologies.
CORPORATE CALENDAR
31 December 2020 | FY21 Half Year End |
15 February 2021 | FY21 Half Year Results Presentation and Webcast |
15 - 19 February 2021 | Half Year Results Road Show |
30 June 2021 | FY21 Year End |
16 August 2021 | Release of FY21 Full Year Financial Results |
16 - 20 August 2021 | FY21 Full Year Results Road Show |
14 October 2021 | FY21 Annual General Meeting |
Note: If there are any changes to these dates, the Australian Securities Exchange will be notified.
ABOUT THIS REPORT
This report is intended to provide IMDEX's stakeholders with information about our Company, for the financial year ended 30 June 2020.
An online version will be available on our website at www.imdexlimited.com/investors.
All reference to dollars within this report are Australian dollars, unless otherwise stated.
Our Corporate Governance Statement, which is also available at www.imdexlimited.com/about-us/corporate-governance, discloses the extent to which IMDEX has complied with the Australian Securities Exchange Corporate Governance Council's 'Corporate Governance Principles & Recommendations - 3rd edition'.
IMDEX LIMITED (IMDEX) ABN: 78 008 947 813
AUSTRALIAN SECURITIES EXCHANGE (ASX) LISTING DATE: 24 SEPTEMBER 1987
ASX CODE: IMD
REGISTERED & HEAD OFFICE: 216 BALCATTA ROAD BALCATTA
WESTERN AUSTRALIA 6021
REGISTERED PO BOX:
PO BOX 1262
OSBORNE PARK
WESTERN AUSTRALIA 6916
T +61 (8) 9445 4010
IMDEX@IMDEXLIMITED.COM
WWW.IMDEXLIMITED.COM
THIS REPORT HAS BEEN PREPARED BY IMDEX LIMITED ("THE COMPANY"). IT CONTAINS GENERAL BACKGROUND INFORMATION ABOUT THE COMPANY'S ACTIVITIES CURRENT AS AT THE DATE OF THE PRESENTATION. IT IS INFORMATION GIVEN IN SUMMARY FORM AND DOES NOT PURPORT TO BE COMPLETE. THE DISTRIBUTION OF THIS REPORT IN JURISDICTIONS OUTSIDE AUSTRALIA MAY BE RESTRICTED BY LAW AND YOU SHOULD OBSERVE ANY SUCH RESTRICTIONS. THIS REPORT IS NOT (AND NOTHING IN IT SHOULD BE CONSTRUED
AS) AN OFFER, INVITATION, SOLICITATION OR RECOMMENDATION WITH RESPECT TO THE SUBSCRIPTION FOR, PURCHASE OR SALE OF ANY SECURITY IN ANY JURISDICTION, AND NEITHER THIS DOCUMENT NOR ANYTHING IN IT SHALL FORM THE BASIS OF ANY CONTRACT OR COMMITMENT. THE REPORT IS NOT INTENDED TO BE RELIED UPON AS ADVICE TO INVESTORS OR POTENTIAL INVESTORS AND DOES NOT TAKE INTO ACCOUNT THE INVESTMENT OBJECTIVES, FINANCIAL SITUATION OR NEEDS OF ANY PARTICULAR INVESTOR. THESE SHOULD BE CONSIDERED, WITH OR WITHOUT PROFESSIONAL ADVICE, WHEN DECIDING IF AN INVESTMENT IS APPROPRIATE. THE COMPANY HAS PREPARED THIS REPORT BASED ON INFORMATION AVAILABLE TO IT, INCLUDING INFORMATION DERIVED FROM PUBLICLY AVAILABLE SOURCES THAT HAVE NOT BEEN INDEPENDENTLY VERIFIED. NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS MADE AS TO THE FAIRNESS, ACCURACY, COMPLETENESS, CORRECTNESS OR RELIABILITY OF THE INFORMATION, OPINIONS AND CONCLUSIONS EXPRESSED. ANY STATEMENTS OR ASSUMPTIONS IN THIS REPORT AS TO FUTURE MATTERS MAY PROVE TO BE INCORRECT AND DIFFERENCES
MAY BE MATERIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW, NONE OF THE COMPANY, ITS DIRECTORS, EMPLOYEES OR AGENTS, NOR ANY OTHER PERSON ACCEPTS ANY LIABILITY, INCLUDING, WITHOUT LIMITATION, ANY LIABILITY ARISING FROM FAULT OR NEGLIGENCE ON THE PART OF ANY OF THEM OR ANY OTHER PERSON, FOR ANY LOSS ARISING FROM THE USE OF THIS PRESENTATION OR ITS CONTENTS OR OTHERWISE ARISING IN CONNECTION WITH IT.
IMDEX LIMITED ANNUAL REPORT 2020
CONTENTS
4 ABOUT IMDEX
10 COMPANY STRATEGY
12 2020 SNAPSHOT
18 CHAIRMAN'S ADDRESS
20 CEO REPORT AND REVIEW OF OPERATIONS
25 BOARD OF DIRECTORS
26 EXECUTIVE LEADERSHIP TEAM
28 OUR PEOPLE
32 GOVERNANCE
33 ETHICS & INTEGRITY
36 SUSTAINABLITY
38 SAFETY & EMPLOYEE WELL-BEING
42 QUALITY
44 COMPANY HISTORY
2 | 3 |
About IMDEX
At IMDEX we develop drilling optimisation products and sensors to provide real-time rock knowledge and quality data. Together they enhance decision making for drilling contractors and resource companies across the mining value chain - from the drill rig to the core farm and processing plant.
"We are enabling the timely delivery of quality data, giving clarity on the nature of the rock to allow real-time decisions to be made, rather than having to wait weeks or months."
DR MICHELLE CAREY
GENERAL MANAGER
- IMDEX PRODUCT DEVELOPMENT
IMDEX LIMITED ANNUAL REPORT 2020
Our integrated product offering includes:
• | Fluids to optimise | • | Secure cloud-based | • | Downhole survey |
drilling productivity | services | sensors | |||
• | Data collection and | • | Real-time subsurface | • | Core orientation |
paperless reporting | visualisation | and gamma logging | |||
software | • | Interpretive software | technologies | ||
• | Drilling productivity | for geological data | • | In-field sampling and | |
and rig alignment | analysis technologies | ||||
technologies |
- Automated and remote drilling fluid testing technologies
1. | Rock | |
Drilling | 33 | Knowledge |
Optimisation | ||
Sensors | ||
......... | ||
Real-time Data and Analytics |
EXPLORATION | DISCOVERY | DEFINITION | PLANNING | FRAGMENTATION | EXTRACTION |
UNDERGROUND | ||
GRAPHIC SOURCE: CRC ORE | ||
EXPLORATION & DEVELOPMENT | Applicable across whole | MINING & PRODUCTION |
Applicable across the whole | ||
mining value chain | ||
maining value chain |
4 | 5 |
ESTABLISHED GLOBAL | IMDEX Facilities | |
BUSINESS | not including distributors | |
Smithers -Canada | East Sussex -UK | Rastede- Germany |
Vancouver - Canada | ||
Timmins -Canada | Amsterdam- Netherlands | |
Salt Lake City - USA
San Luis Obispo - USA
Phoenix - USA
Torreón - Mexico
Coahuila - Mexico
Manila - Phillipines |
IMDEX LIMITED ANNUAL REPORT 2020
We operate in all key mining regions of the world including Africa and Europe, Asia Pacific and the Americas.
Our global presence and extensive client network allow us to:
- Provide local and timely support to drilling contractors and resource companies;
- Have greater access to international mineral exploration and mining markets; and
Quito - Ecuador
Lima - Peru
Mendoza - Argentina
Santiago - Chile
Accra - Ghana | ||||
Parauapebas - Brazil | Jakarta - Indonesia | |||
Belo Horizonte - Brazil | Townsville - QLD | |||
Itajai - Brazil | Kalgoorlie - WA | |||
Brisbane - QLD | ||||
Johannesburg | ||||
PERTH - WA | ||||
South Africa | ||||
Adelaide - SA | Timaru | |||
Melbourne | ||||
- New Zealand | ||||
- VIC | Arrowtown | |||
OUR MARKET LEADING BRANDS
REFLEX and AMC are market leading brands within the global minerals industry. AMC
- Efficiently introduce new
technologies to these | AVERAGE REVENUE PROFILE | ESTIMATED COMMODITY EXPOSURE | ||||||||||
markets. | ||||||||||||
20% | 33% | 25% | 18% | GOLD | ||||||||
50% | 50% | 7% | COPPER | |||||||||
80% | 43% | IRON ORE | ||||||||||
24% | ||||||||||||
50% | OTHER | |||||||||||
SALES | EXPLORATION & | AMERICAS | ||||||||||
DEVELOPMENT | ||||||||||||
RENTAL | MINING | APAC | ||||||||||
EUROPE/
AFRICA
is also growing its presence within the horizontal directional drilling, water-well and civil construction sectors.
6 | 7 |
KEY STAKEHOLDERS
During FY20 we implemented an employee engagement survey and held a key stakeholder workshop to consider what is important to our stakeholders and how we can add value.
We will continue to build on these initiatives during FY21, including a shareholder survey regarding engagement and sustainability.
CLIENTS AND INDUSTRY
PARTNERS
Our clients principally include drilling contractors and resource companies in all mining regions of the world. We also collaborate with industry associations and research partners to address challenges and advance the global minerals industry.
SUPPLY CHAIN
During FY20 we continued to focus on streamlining our supply chain and ensuring it aligns with our Modern Slavery Policy. Other key initiatives included reviewing all aspects of our warehouse locations, inventory turns, risk management of key products, logistics and customer service.
The resilience of our supply chain ensured we were able to adjust sourcing volumes, locations and logistics to ensure our clients were not impacted by COVID-19.
Our Supply Chain covers these critical areas to ensure continued success:
- Manufacturing of fluids and instrumentation
- Global service centres to support clients
- Suppliers of raw materials and technical componentry for instrumentation
- Fast turnaround prototyping for engineering and R&D
- Distribution and Logistics ensuring rapid response to the changing needs of our clients
Government & Regulators
Distributors Industry Partners
Clients Suppliers
Employees Community
Shareholders
INDUSTRY PARTNERS /
THOUGHT LEADERSHIP
8 | 9 |
Company Strategy
We have a clear and consistent strategy to achieve sustainable earnings growth, which includes:
- Growing our core business by enhancing technical leadership and building an integrated product offering that provides greater value to all clients; and
- Further extension into the larger adjacent mining market to increase our less-cyclical revenue.
Key elements of this strategy include strategic acquisitions, ongoing disciplined research and development and industry collaboration.
Our strong financial position, advanced development capabilities, established global presence and strong leadership team support the ongoing success of this strategy.
DRILLING | |||||
PRODUCTIVITY | IMDEX MINING | ||||
TECHNOLOGIES | |||||
TECHNOLOGIES | |||||
NEW | |||||
(INC COREVIBE™, | (INC BLAST DOG™ | ||||
XTRACTA™, | & aiSIRIS) | ||||
TECHNOLOGIES/ | MAGHAMMER™ & | ||||
aiSIRIS) | |||||
PRODUCTS | EXISTING | ||||
ONGOING R&D | MARKET EXTENSION | ||||
CORE BUSINESS | CORE BUSINESS | ||||
EXPLORATION | MINING | ||||
& DEVELOPMENT | |||||
MARKETS |
IMDEX LIMITED ANNUAL REPORT 2020
KEY AREAS OF FOCUS AND GROWTH
INITIATIVES FOR FY21
Our priority projects for FY21 include building on our integrated real-time rock knowledge offering for clients, converting client trials with COREVIBE™ and XTRACTA™ to commercial rentals, continuing to progress the development of MAGHAMMER™ and commercialising Mining technologies for Drill & Blast applications - including IMDEX BLASTDOG™.
We will also focus on integrating aiSIRIS and marketing this new technology via our global network.
At the same time we will continue to focus on:
• | Improving our safety performance; | |
• | Streamlining our operations and | |
managing costs; and | ||
• | Maintaining a resilient business that | IMDEX BLASTDOG |
can deliver sustainable and growing | ||
returns to shareholders. |
"There are multiple factors that can lead to asset impairment during the mining life cycle, from exploration through to operations.
However a significant factor Is insufficient rock knowledge or ore body knowledge. The scale of these losses and their preventable nature in the resource sector provides a strong case for placing a high value on having the right information
at the right time."
DAVE LAWIE
IMDEX CHIEF GEOSCIENTIST
10 | 11 |
2020 SNAPSHOT | AS AT JUNE 2020 |
REVENUE | OPERATING CASH FLOW |
$237.7m | $52.4m |
EBITDA | NET CASH |
$54.4m | $32.2m |
EBITDA MARGIN % | NET ASSETS |
23.3% | $221.6m |
NPAT | MARKET CAPITALISATION |
$21.8m | $430.7m |
EPS (CENTS) | SHARES ON ISSUE |
5.64 | 388.1m |
LTIFR (per million hours worked) | 3.97 |
Number of Employees | 485 |
Banking Institutions | Bankwest |
Legal Advisors | HopgoodGanim |
Auditors | Deloitte Touche Tohmatsu |
Share Registry | Computershare |
IMDEX LIMITED ANNUAL REPORT 2020
OPERATIONAL HIGHLIGHTS
- Continued to strengthen quality of the rental fleet. Average monthly revenue per instrument up 8% on FY19
- Progressed strategy for sustainable growth:
- Acquired AusSpec International and its unique aiSIRIS SaaS product to enhance real-time rock knowledge (completed 22 July 2020)
- Completed Flexidrill acquisition and strengthened Drilling Optimisation offering
-
Continued to advance IMDEX Mining technologies including autonomous operation and sensor refinement for
IMDEX BLASTDOG™
- Realised benefits of digital transformation
- in core business and throughout COVID-19 period
- Established an ESG committee to enhance reporting and disclosure
- Achieved certification for Information Security Management standard ISO 27001
- Successfully navigated COVID-19 impacts and restrictions
- Seamless transition to new CEO to drive consistent growth strategy
- Encouraging start to FY21 with improving rental fleet numbers and continued strong industry fundamentals underpinning IMDEX's business growth
12 | 13 |
FY20 Financial Performance
IMDEX LIMITED ANNUAL REPORT 2020
RECORD 9 MONTH | FULL YEAR REVENUE OF |
REVENUE THROUGH TO | $237.7m (FY19 $243.7m) |
MARCH | EBITDA OF |
$54.4m |
INTERIM FULLY-FRANKED DIVIDEND OF 1.0 CPS
SPECIAL FULLY-FRANKED DIVIDEND OF 2.0 CPS FOLLOWING SALE OF VES
FINAL FULLY-FRANKED DIVIDEND OF 0.7 CPS
CONTINUED INVESTMENT IN
LEADING TECHNOLOGIES TO DRIVE
FUTURE GROWTH
ROBUST BALANCE SHEET WITH A STRONG NET CASH POSITION OF $32.2M - UP 38% ON FY19
REVENUE BY REGION ($m)
CASH FROM OPERATIONS ($m)
13.0% - 4 YEAR CAGR | ||||
243.7 | 237.7 | |||
218.5 | 218.5 | |||
176.2 | ||||
143.3 | ||||
FY16 | FY17 | FY18 | FY19 | FY20 |
AFRICA/EUROPE | AMERICAS | ASIA PAC |
- Record revenue for the
9 months through to March - 4Q20 revenue impacted by COVID-19
- COVID-19business disruption stabilised late April
- Continued to strengthen quality of rental fleet. Average monthly rental rate up 8% on FY19
-
Encouraging start to FY21.
Improving rental fleet numbers and continued strong industry fundamentals
5.5 | 3.0 | |||||
54.4 | 52.4 | |||||
STRONG | ||||||
9.6 | ||||||
0.9 | EBITDA | |||||
CONVERSION | ||||||
TO OPERATING | ||||||
CASHFLOW | ||||||
UP 31% | ||||||
ON FY19 | ||||||
EBITDA | Working | Other | Tax | Finance | Cash from | |
(including AASB 16) | Capital | Costs | Operations |
EBITDA ($m) & EBITDA MARGIN (%)
24.0% - 4 YEAR CAGR | |||||||
52.3 | 54.4 | including | • | Sustained investment in R&D | |||
AASB 16 | |||||||
48.0 | excluding | in line with growth strategy | |||||
42.4 | AASB 16 | • | Benefited from digital | ||||
transformation | |||||||
31.5 | • | Ongoing focus on | |||||
streamlining operations | |||||||
20.3 | and managing costs | ||||||
14% | 18% | 19% | 20% | 1 | 1including | ||
23% | AASB 16 | ||||||
FY16 | FY17 | FY18 | FY19 | FY20 |
BALANCE SHEET ($m)
$m | 30 JUNE 2020 | 30 JUNE 2019 |
Cash | 38.3 | 29.5 |
Receivables | 43.5 | 54.7 |
Inventory | 41.2 | 37.1 |
Fixed assets 1 | 79.6 | 39.4 |
Intangibles 2 | 83.6 | 59.5 |
Other assets / deferred tax | 31.9 | 39.0 |
TOTAL ASSETS | 318.1 | 259.2 |
Payables | 26.9 | 25.3 |
Borrowings | 6.1 | 6.3 |
Other liabilities, provisions and current tax 3 | 63.5 | 7.6 |
TOTAL EQUITY | 221.6 | 220.0 |
ROE | 10% | 12% |
ROCE | 12% | 15% |
1. Includes Lease assets of $36.5m. 2 Intangible balance includes $25.5m of Flexidrill IP.
3. Includes lease liabilities of $45.1m and deferred consideration for the purchase of Flexidrill of $14.7m.
CASH
$38.3m UP 29.8%
ON PCP
INTERIM FULLY-FRANKED DIVIDEND OF 1.0 CPS
SPECIAL FULLY-FRANKED DIVIDEND OF 2.0 CPS FOLLOWING SALE OF VES
FINAL FULLY-FRANKED DIVIDEND OF 0.7 CPS
CONTINUED INVESTMENT IN LEADING TECHNOLOGIES TO DRIVE FUTURE GROWTH
14 |
15
Summary of Financial Highlights
For the Year Ended
30 June 2020
(Audited Results)
Consolidated | |||
2020 | 2019 | ||
$'000 | $'000 | ||
Revenue (excluding interest income) | 237,691 | 243,655 | |
Earnings before Interest, Tax, Depreciation & Amortisation | 58,072 | 52,336 | |
(EBITDA) 1 | |||
EBITDA margin 1 | 24.4% | 21.5% | |
Depreciation | (18,980) | (14,053) | |
Lease amortisation | (5.943) | - | |
Amortisation | (1,565) | (208) | |
Earnings before Interest & Tax (EBIT) | 31,584 | 38,075 | |
Net interest expense | (2,442) | (623) | |
Net profit before tax | 29,142 | 37,452 | |
Income tax (expense) | (7,384) | (9,844) | |
Net Profit after Tax | 21,758 | 27,608 | |
Basic earnings per share from continuing and | 5.64 ¢ | 7.37 ¢ | |
discontinued operations (cents) | |||
Net Cash provided by Operating Activities | 52,370 | 35,188 | |
Cash on hand | 38,263 | 29,476 | |
Net Assets | 221,632 | 220,012 | |
Total Borrowings | 6,115 | 6,239 | |
Net Tangible Assets per Share | 42.36 ¢ | 42.36 ¢ | |
1. FY20 includes $3.6m profit on sale of interest | Small % variances may exist within |
in VES and $6.4m benefit from AASB16 | this report due to rounding |
16 | 17 |
Chairman's Address
IMDEX LIMITED ANNUAL REPORT 2020
Anthony Wooles IMDEX Chairman
I'm pleased to present the Company's Annual Report for the 2020 financial year (FY20).
The Company enjoyed a positive start to FY20 with increasing activity and demand for IMDEX's leading technologies. Like many businesses, however, this uplift was interrupted in the fourth quarter by COVID-19.
I am immensely proud of how IMDEX's global team was able to remain focused on protecting its people and the continuity of its business during these unprecedented times. The collaborative efforts of the Executive Leadership Team, Crisis Management Team and all employees globally, was outstanding. Together they accepted new ways of working, provided remote support to clients and continued to drive our strategy for sustainable growth.
Safety Performance
Enhancing the Company's safety performance remained a key focus throughout FY20. At the same time, IMDEX heightened its support for employee mental health and well- being and implemented new training and safety engagement initiatives.
The Company unfortunately did not meet its Lost Time Incident Frequency Rate (LTIFR) target of < 2.52. Improving safety performance - and achieving zero harm - will remain a key priority during FY21.
Further information regarding IMDEX's safety targets and initiatives can be found in this report.
Revenue and Earnings
The Company generated revenue of $237.7 million, which represented a 2% decrease on the previous year. Our EBITDA was $54.4 million - including AASB 16 adjustments and excluding gains on the sale of VES.
These are solid results given the severe impact of COVID-19 on the macro environment and demonstrate the strength of the business.
Dividends
IMDEX remains committed to a sustainable dividend policy, while continuing to invest in new technologies that have the potential to deliver sustainable earnings growth for shareholders.
During FY20 the Company paid a fully franked interim dividend of 1.0 cent per share and a fully-franked special dividend of 2.0 cents per share following the sale of its interest in non-core asset Vaughn Energy Services.
Directors have also declared a fully-franked final dividend of 0.7 cents per share.
This brings the full year dividend to 1.7 cents per share, which represents a 30% FY20 NPAT payout ratio. Dividend record and payment dates are 29 September 2020 and 13 October 2020 respectively.
Sustainable Earnings Growth for our Shareholders
IMDEX has a consistent strategy of delivering sustainable earnings growth for shareholders, which includes growth of the Company's core business and extension into the larger and less-cyclical mining and production market.
Throughout FY20 IMDEX pursued this strategy through focused technology acquisitions, disciplined research and development, and industry collaboration. Notable examples include the acquisition of AusSpec International and further development of IMDEX BLASTDOG™ with METS Ignited partners, Orica, Anglo America and Teck Resources.
At the same time IMDEX continued to pay very close attention to cost management and strengthening its resilience in all market conditions.
Transition to New CEO
On 1 July 2020, IMDEX officially confirmed Bernie Ridgeway's retirement as Managing Director and welcomed Paul House as Chief Executive Officer.
Both Bernie and Paul should be complimented on this transition. It was planned and well-considered to ensure 100% business continuity and the seamless execution of our long-term growth strategy.
On behalf of IMDEX's Board of Directors, I would like to acknowledge Bernie's strong leadership and dedication to the Company over the past twenty years. It has been a pleasure working with him and IMDEX has indeed evolved as a leading global Mining-Tech company.
I would also like to express the Board's full support for Paul and the members look forward to building on our excellent relationship with all of IMDEX's Executive Leadership Team in FY21.
A Responsive Board
My sincere thanks to my fellow Board members for their commitment throughout FY20. At all times each member has ensured a high-level of governance and accountability while contributing to the success of IMDEX's growth strategy.
In line with the revised ASX Corporate Governance Principles and Recommendations, IMDEX will consider future appointments of additional Directors to complement the Board's skills, diversity and areas of expertise.
Our Valued Shareholders
On behalf of IMDEX's Board, I would like to thank our valued shareholders for their ongoing support.
Kind regards
Anthony Wooles
IMDEX Chairman
18 | 19 |
Chief Executive Officer's Report and
Review of Operations
IMDEX LIMITED ANNUAL REPORT 2020
Paul House
IMDEX CEO
Dear Shareholders,
It is a pleasure to report on our performance and operations for the 2020 financial year (FY20).
IMDEX is committed to its journey as a leading Mining-Tech company. The opportunity ahead of us remains very exciting, and the progress we have made in 2020, both because of and in spite of COVID-19, has exceeded our expectations. We have a clear and consistent growth strategy, an exciting pipeline of technologies and a highly capable team that is positioned in every major mining region around the world. Together, we are looking forward to building upon our unique value proposition for clients, and delivering sustainable long-term earnings growth for our shareholders.
Our Unique Value Proposition and Growth Strategy
The IMDEX value proposition principally includes providing quality data and real-time rock knowledge for clients. That is, an informed understanding of the orebody from drilling data and sensing data derived from the drill hole or blast hole. We answer the questions 'where to drill next' and 'how can processing be optimised' - and we do it in real-time or near real-time.
The ability to make these decisions in a timely and efficient way can deliver substantial economic benefits to both the resource companies, as asset owners, and the drilling contractors. Whether it is improving the cost per metre to drill to target by >50%, or through providing optimised blasting solutions that can improve mill throughput by >15%, IMDEX strives to provide real value throughout the mining value chain.
We deliver this value via our integrated product offerings. These include:
- Drilling Optimisation - Products that reduce the cost of drilling and are critical drivers in improving exploration success, particularly with deeper drilling or drilling under cover;
- Rock Knowledge - Best-in-class sensing tools that deliver quality data across all four components of rock knowledge - location, grade, texture and mineralogy; and
- Data & Analytics - Our cloud-based services and software solutions aggregate, store and distribute data to the right client, at the right time, anywhere in the world. Our ISO27000 certification ensures all data is handled securely with clear chain of custody. Our IMDEXHUB-IQ™ cloud services integrate with a range of analytical software to facilitate interpretation, visualisation and critical decision making.
Our strategy to deliver long-term earnings growth for shareholders includes: growing our core business in exploration and development; and further extension into the adjacent mining and production market, which is larger and less-cyclical. To do this, we pursue technology-focused strategic acquisitions, maintain our technology leadership by ongoing and disciplined investment in research and development, and collaborate with industry partners and research associations.
Market Conditions and Financial Performance
It was an extraordinary year. We enjoyed a strong start to FY20 with activity increasing globally - most notably in Asia Pacific and Europe. Drilling activity around the world was impacted in 4Q20 as a direct result of government mandated restrictions in response to the COVID-19 crisis .
The table below summarises the impact of COVID-19 on IMDEX's regions and the recovery to early August 2020. The Company continues to closely monitor all risks associated with secondary outbreaks or possible epicentres at mine sites.
Evolution of Government Mandated Restrictions on Mining Regions Due to COVID-19
Asia Pacific | Apr-20 | May-20 | Jun-20 | Jul-20 | Aug-20 | North America | Apr-20 | May-20 | Jun-20 | Jul-20 | Aug-20 | No Lockdown | ||||
Australia - WA | Canada - Ontario | |||||||||||||||
Australia - QLD | Canada - Quebec | No Lockdown | ||||||||||||||
Australia - NSW | USA - SLO | (regulated) | ||||||||||||||
Australia - VIC | USA - Utah | Soft Lockdown | ||||||||||||||
Australia - SA | USA - Nevada | |||||||||||||||
Hard Lockdown | ||||||||||||||||
New Zealand | USA - Arizona | |||||||||||||||
(exempted) | ||||||||||||||||
Indonesia | Mexico | |||||||||||||||
Hard Lockdown | ||||||||||||||||
Phillipines | ||||||||||||||||
(not exempted) | ||||||||||||||||
Africa & Europe | Apr-20 | May-20 | Jun-20 | Jul-20 | Aug-20 | South America | Apr-20 | May-20 | Jun-20 | Jul-20 | Aug-20 | |||||
South Africa | Chile | |||||||||||||||
Ghana | Brazil | |||||||||||||||
UK | Peru | |||||||||||||||
Germany | Argentina |
The short-term interruption to our business stabilised by the end of April 2020. Pleasingly, the majority of mining regions around the world are through their initial response phase and are moving towards resumption of all mining activities where possible. An indicator of this resumption in activity is the recovery of our rental fleet. As at 14 August 2020, the number of instruments on rent exceeded the pre-COVID peak.
Given the disruption of COVID-19 we are pleased with our results for FY20 as we continue to outperform minerals industry market growth.
We achieved our strongest revenue results through to the end of 3Q20, and finished the full year with revenue of $237.7m, a 2% decline on the record achieved in FY19.
Our EBITDA result of $54.4 million was slightly down on FY19 on a like-for-like basis, due to the impacts of COVID-19 in 4Q20. It also reflected our:
- Growing percentage of rental revenue that yields higher gross margins;
- Ongoing benefits from our digital transformation and supply chain initiatives;
- Savings introduced during 4Q19 in response to COVID-19;
- Increased engineering and product development expenditure; and
- Associated M&A costs and costs to protect our IP.
Our digital transformation project realised real benefits and we maintained our unrelenting focus on being 'match-fit', streamlining operations, continuing our disciplined cost management and finding new ways to work throughout the year. We also accelerated our online Customer Care and IMDEX Academy training platform, in response to demand. These initiatives enable us to provide comprehensive remote support to clients and lower the costs of managing our business for the long-term.
Our cash from operations was strong for the full year. The stronger EBITDA conversion during 2H20 can largely be attributed to our disciplined approach to working capital management.
The strength of our balance sheet and net cash position enabled us to sustain our capital management program and accelerate opportunities for future growth.
20 | 21 |
REAL TIME ROCK KNOWLEDGE & QUALITY DATA
LOCATION:
IMDEXHUB-IQ™ connected survey tools mean geologists can see where their holes are anywhere and anytime, rather than relying on paper-based work flows.
TEXTURE: | MINERALS: |
IMDEX's | AusSpec's aiSIRIS SaaS |
Structural-IQ solution | product provides a |
combines multiple | real-time mineralogy |
sensors to allow | solution to IMDEX's rock |
geologists to see the | knowledge offering. It |
position of their structures | replaces a workflow |
in 3D as they log in the | reliant on laboratory and |
core farm. This replaces | expert interpretation that |
workflow where data | is asynchronous to data |
gathering and | collection. |
interpretation were | |
separated by weeks or | |
months. |
GRADE:
IMDEX's In-field GeoAnalysis solution enables geoscientists to obtain quality assay data at the rig or core farm rather than waiting for laboratory results.
Timely information for critical decision making
IMDEX LIMITED ANNUAL REPORT 2020
Chief Executive Officer's Report And Review Of Operations continued...
We have adhered to our capital management policy and paid dividends while continuing to invest in leading technologies throughout the cycle - including during the impact of COVID-19. This principle remains vital to driving growth for shareholders. The strategic acquisition of AusSpec International (AusSpec) to enhance our real-time rock knowledge offering for clients across the mining value chain is in line with our growth strategy .
Acquisition of AusSpec
We were pleased to announce our acquisition of AusSpec - the world's leading provider of spectral mineralogy through its unique aiSIRIS platform (Artificial Intelligence Spectral InfraRed Interpretation System).
Every mine in the world makes capital investment and production decisions based upon four key components of rock knowledge. Our existing product offering addressed three of these components and now the aiSIRIS solution satisfies the fourth - mineralogy.
In line with our value proposition, aiSIRIS also enables the timely delivery of critical data. This in turn allows real-time decisions to be made, rather than having to wait weeks or months.
AusSpec is great growth story, having delivered four-years of consistent and profitable growth and generates revenue via a SaaS model. It has established both its technology and reputation in the marketplace.
The acquisition is immediately cash flow positive, will provide an additional
recurring revenue stream and is expected to be earnings per share accretive from years 2-3. The opportunity to leverage our global network, integrate the aiSIRIS offering IMDEXHUB-IQ™ and our In-Field Geoanalysis solutions, will drive growth.
The transaction was completed on 22 July 2020 following payment of $1m cash and $5m in IMDEX shares. Further details regarding the risk-shared structure of the transaction are set out in the ASX announcement dated 7 July 2020.
We are looking forward to building on our existing relationship with AusSpec co-founders, Dr Sasha Pontual and Dr Paul Gamson, and their highly-knowledgeable team.
Premium Drilling Optimisation Technologies
QUALITY DATA
- Industry leading sensors
- QA/QC at point of data collection
- Digital workflows remove risk of human error
- AI and machine
learning remove human subjectivity
22
REPRESENTIVITY
- Cost effective methods allowing data to be collected for every metre drilled
- Repeatable
sensor-based data (IoG)
TIME SAVINGS
- Actionable information in real-time
- Driller operable instrumentation
- not reliant on third-party service providers
- More efficient digital workflows
On 6 January 2020 we completed our acquisition of Flexidrill and its unique Drilling Optimisation technologies - COREVIBE™ and MAGHAMMER™. In line with our conservative acquisition strategy, this transaction provided for further development and extensive testing of COREVIBE™ and
MAGHAMMER™.
Successful client trials with COREVIBE™ were undertaken throughout 1H20 and 3Q20. These trials continued to validate the significant benefits of this unique technology, including substantial increases in productivity.
Following the impact of COVID-19, the majority of client COREVIBE™ trials were placed on hold due to limited access to sites for non-essential personnel. Interest in the technology remains high, and we are confident our full pipeline of leads will convert into active rentals as restrictions ease and trials recommence..
Development of MAGHAMMER™ continued to progress well at our test site in New Zealand and has resumed following the COVID-19 related restrictions.
XTRACTA™, which was developed solely through in-house R&D, is also progressing well and while trials were also interrupted by COVID-19 restrictions, we have already rescheduled client trials for 1Q21.
23
Chief Executive Officer's Report And Review Of Operations continued...
IMDEX LIMITED ANNUAL REPORT 2020
Our Board
of Directors
IMDEX Mining Technologies
Once again COVID-19 limited access to operating sites to continue trials. We maintained development of the BLASTDOG™ product during 4Q20, however, by establishing our own test benches on properties in Queensland. Notably, we were able to accelerate our progress its autonomous operation mode and sensor refinement.
During the balance of this year we will continue to leverage our global presence and strong support from METS Ignited partners
- Orica, Anglo America and Teck Resources - to advance our
IMDEX Mining Technologies for further extension into the larger, SOURCE: S&P GLOBAL less-cyclical mining market.
Outlook for FY20
The strong fundamentals underpinning our business growth remain in place despite COVID-19. These drivers include:
- · The major and intermediate resource companies are increasing their expenditure to replace diminishing reserves;
- · Resource companies are embracing innovation and new technologies to lower costs, increase safety and achieve greater productivity;
- · New discoveries are likely to be under cover and at depth resulting in larger drilling campaigns; and
- · Strong commodity prices supported by demand across a broad range of sectors including consumer, industrial and government related industries.
Our growth strategy remains on track. Furthermore, demand and opportunities for our drilling optimisation products and cloud-connected sensors have been heightened to support remote operations and expedite new drilling programs.
A Great Team
IMDEX has a great team of people around the world. The manner and speed with which our team rose to the challenge presented by COVID-19 was exemplary. The leadership and ownership at every level
Our Board has extensive professional expertise, business experience and knowledge of the mineral exploration, mining and technology industries. It also has considerable experience within capital and financial markets. Members of the Board are well respected in these sectors and play an active role in our Company's strategic planning.
Key priorities for the Board during FY20 included:
- Enhancing safety performance
- Strong corporate governance
- Capital management
- Driving growth strategy via strategic acquisitions, ongoing research and development and industry collaboration.
The Board will remain focused on these priorities throughout FY21, together with ensuring the ongoing well-being of IMDEX's people and the continuity of the business.
- in protecting our people and protecting our business - has been the highlight of a difficult time. Into this team I am pleased to warmly welcome our AusSpec colleagues.
IMDEX is a strong and resilient business and I look forward to working with you all in FY21.
Kind regards
Paul House
IMDEX CEO
Ms Sally-Anne Layman | Mr Kevin Dundo | Mr Anthony Wooles | Mr Ivan Gustavino |
Non-Executive Director | Non-Executive Director | Non-Executive Chairman | Non-Executive Director |
Appointed to the Board | Appointed to the Board | Appointed as Chairman | Appointed to the Board |
6 February 2017 | 14 January 2004 | 1 July 2016 | 3 July 2015 |
Expertise: | Expertise: | Expertise: | Expertise: |
Exploration, mining | Corporate and | ||
Financial and capital | Strategic growth and | ||
and finance | commercial Law | ||
markets and | transactions within the | ||
strategic marketing | technology sector |
24 | 25 |
Executive Leadership Team
IMDEX LIMITED ANNUAL REPORT 2020
Mr Paul House
Chief Executive Officer
- 30 years' experience within the resources and technology sectors
- Areas of expertise include: management, operations, strategy and governance across a wide range of markets around the world, including: USA; Australia; Africa; India; the Middle East and South East Asia
- 14 years with SGS, the world's leading inspection and testing firm, with a dominant presence in the resources geochemistry assay and metallurgy sectors. Additional roles have included strategy, innovation, market entry strategy, turnaround performance management and corporate finance positions
- Fellow of the Australian Institute of Management and a Graduate Member of Australian Institute of Company Directors
Mr Paul Evans
Chief Financial Officer &
Company Secretary
- Chartered Accountant Australia and New Zealand
- Member of the Institute of Chartered Accountants Australia and New Zealand and the Australian Institute of Company Directors
- Chief Financial Officer and Company Secretary since 17 October 2006
- Extensive experience in commercial, general management and financial roles
- Industry experience covering the media, manufacturing, mining services and telecommunications industries
Mr Shaun Southwell
Chief Operating Officer
- Extensive management experience. One of his key strengths is delivering operational excellence across multi- disciplined teams
- An excellent knowledge of the drilling tools business and all aspects of the supply chain including: manufacturing; service; fleet management; and logistics
- Prior to joining IMDEX, Shaun worked with SGS Gearhart United, which includes Redback Drilling Tools, for 27 years. He commenced his career as an apprentice fitter and turner and progressed to senior management positions including: Global Head - Drilling Equipment Inspection; General Manager - Oil, Gas & Chemical; and General Manager Industrial & Gearhart Group
Mr Tim Price
General Manager
IMDEX Product Research
- 33 years' experience in engineering and product development
- Eight years with IMDEX, 20 years with Scientific Drilling International holding positions from Design Engineer to Senior Vice President of Engineering
- Five years in Aerospace and Semiconductor Test Industries
- Bachelor of Science in Electronic Engineering and Master of Science in Electrical Engineering from California Polytechnic State University, San Luis Obispo
Ms Kylie Panckhurst
IMDEX Acting General Counsel
- Over ten years' experience supporting clients with operations, issues management and opportunities
- Admitted as a barrister and solicitor in the High Court of New Zealand (2008), the Federal Court of Australia and the Supreme Court of Western Australia (2012)
- Bachelor of Law, Honours (First Class) and Bachelor of Arts (majoring in Politics) from the University of Otago, New Zealand
Dr Dave Lawie
Chief Geoscientist / Chief
Technologist - Mining
Solutions
- Chief Geoscientist for IMDEX since 2012 and Chief Technologist - Mining, for IMDEX since 2015
- Global positions in exploration geochemistry and R&D with Pasminco and Anglo American before co-founding ioGlobal in 2004
- Grew ioGlobal as Managing Director into a global company specialising in geochemistry and geometallurgical consulting services, cloud-based data management and the ioGAS desktop analytics software- the company was acquired by IMDEX in 2012
- PhD in Geosciences and Analytics from the University of New England
Derek Loughlin
26
Mr Mathew Regan
Chief of Corporate Shared Services
- Extensive Executive management experience in business transformation, strategy, innovation, supply chain optimisation and digital technologies
- Bachelor of Computer Science from Edith Cowan University and a Master of Information Technology from the University of Western Australia
- Stanford University Executive Program
- Member of Australian Institute of Company Directors
Dr Michelle Carey
General Manager
IMDEX Product Development
- Over 20 years' experience in the mining industry working for companies including BHP and WMC
-
Eight years in senior leadership roles at
IMDEX - Extensive experience in developing innovative products for the mining industry
- PhD in Geochemistry from Monash University
Ms Kiah Grafton
Global Head of Human
Resources
- 18 years' experience in senior management and leadership positions for national and global organisations within the banking, hospitality and not-for-profit industries
- Strategic expertise across all aspects of human resources with a passion for culture transformation, industrial relations, talent acquisition and organisational development.
- Bachelor of Business (Double Major in Human Resource Management and Management) and a Certificate IV in Training and Assessment
Global Business Development
Director
- Held executive management positions at IMDEX since 2006
- More than 30 years' experience within the mining and drilling industry, including international assignments
- Honours Degree in Mining Engineering from the Camborne School of Mines, UK
- Programme for Executive Development at IMD Switzerland
27
Our People
IMDEX LIMITED ANNUAL REPORT 2020
GLOBAL WORKFORCE
During FY20 our global workforce decreased by
5% to 485 people, largely due to our ongoing focus on streamlining operations and our internal digital transformation.
EMPLOYEES BY AGE CATEGORY | |||
12% | |||
UNDER 30 | 21% | ||
30 - 50 | FY20 | ||
OVER 50
67%
DIVERSITY AND EQUALITY
We value and encourage diversity in our global workforce. We seek to employ, retain and develop employees for the long-term, assisting in their professional development and the development of the culture and values of our Company.
Our aim is to build a diverse workforce and inclusive environment where everyone feels able to participate and achieve their potential. This strategy extends beyond legal compliance and seeks to add value by contributing to our employees' health and well-being.
Temporary | |
Permanent | |
Temporary | |
FEMALE | |
Permanent | |
Female | MALE |
Male | |
Part Time | |
1% | |
Part Time | Full Time |
10% | APAC |
EMPLOYEES BY GENDER
23%
FY20
67%
EMPLOYEES BY REGION
20%
IMDEX is committed to providing equal opportunities for all employees. We ensure employment decisions are made solely on the basis of merit, taking into account relevant skills, qualifications, experience and ability and without bias or prejudice.
Further information can be found within our Diversity Policy and Global Code of Conduct Policy on our website.
IMDEXWOMEN-EQ
In October 2020, members of our management team established IMDEXWOMEN-EQ. The aim of the forum is to share learnings and provide guidance, leadership, inspiration, empowerment and support for the personal and professional development of all women at IMDEX.
The forum recognises that everyone has diverse skills, experiences, strengths, challenges and aspirations. Sharing these attributes in a supportive environment can be highly valuable for personal development and the growth of others.
EMPLOYEE ASSISTANCE PROGRAM
To support the health and well-being of our employees, we continue to offer an Employee Assistance Program
Full Time | AFRICA |
11%
21%
(EAP). Our EAP is provided by Lifeworks, a global and independent organisation that specialises in coaching
Female | Male | EUROPE | ||
N. AMERICA | ||||
S. AMERICA | ||||
FY20
7%
41%
and counselling services. The confidential EAP is available 24/7 and is free for all IMDEX employees and their immediate families.
28
29
Our People continued...
IMDEX LIMITED ANNUAL REPORT 2020
REMUNERATION
Market evaluation of base salaries is conducted regularly to ensure our Company remains competitive and is able to effectively achieve our corporate strategic objectives. Evaluations are based on external market data and advice from third party consultants in each region.
Consistent with best practice, base salary ranges are determined by a target market position set by business strategy.
Salary banding is used to ensure consistent salary rates and to simplify remuneration decisions within similar roles across our Company. Roles are grouped into bands and levels based on the job scope, accountability and responsibilities. Further information can be found in the Levels of Work Standard (GRHR-STA-03-02).
An individual's base salary within the recommended range is influenced by a number of factors including:
variable pay design and ensuring appropriate alignment with contemporary market practices.
The annual Remuneration Report disclosure provides a detailed narrative for stakeholders to understand the outcomes of the annual review of our Company's remuneration programs strategy, emoluments and what outcomes were realised for the period.
EMPLOYEE BENEFITS
Our Company complies with legislation in all localities it operates in. Part-time employees are not excluded from any of the full-time employee benefits including life insurance, health care, disability and invalidity coverage, retirement provision, stock ownership and parental leave. In jurisdictions where casual employees exist, they do not receive parental leave.
ENHANCING ENGAGEMENT
In February 2020 we conducted an employee engagement survey to ensure our culture supports our strategy. We had excellent participation with an 81% response rate globally.
Based on the survey results our strengths included:
- Positive supervisor relationships with team members
- Direct line managers creating trusting and open environments
- Safety in the workplace
- A commitment to quality work
Areas to focus on included:
• | Communication of our mission and strategy to |
ensure alignment for all team members | |
• | A review of our values and behaviours to create |
greater connection for our employees |
- Relevant experience at the level of the role
- Consistency and level of previous performance
- Alignment with company values
- Business criticality of the role
- Relative scarcity or availability of required skills in the market.
- Independent remuneration consultants are also engaged to assist with remuneration/reward design and strategy.
Further information relating to our remuneration policies for the Board and Executive Leadership Team are set out in the Remuneration Report within the FY20 Financial Report.
For 4Q20 Board members, the Executive Leadership Team and all employees accepted new arrangements in response to COVID-19.
REMUNERATION AND NOMINATION COMMITTEE
As part of our annual calendar of activities, the Remuneration and Nomination Committee monitors shareholder and proxy advisor sentiment towards remuneration practices. Shareholder views and their proxies are taken into account when reviewing remuneration policy setting each year, including
PEOPLE HUB
Further enhancements to People HUB, our human resources information system, were implemented over the course of the year. In October 2019, the Achievement and Development Reviews were introduced to the platform to help us efficiently performance manage our diverse teams. In July 2020, leave management was also implemented for USA and Canada. Further modules have been planned, including succession, development, compensation, recruitment and onboarding.
GLOBAL INTERNSHIP PROGRAM
During FY20 we continued our Global Internship Program. The Program offered undergraduates and new graduates the opportunity to work at one of our global facilities and provided a hands-on learning environment and practical experience, together with coaching and mentoring opportunities.
The Internship Program was run in Asia Pacific and the Americas and enrolments spanned diverse disciplines including: engineering; geology, procurement; finance; legal; human resources; and information technology.
• | Design and implementation of a recognition |
program to ensure our employees continue to feel | |
valued | |
• | Supporting the execution of our Learning and |
Development framework to allow our employees to | |
be their best at IMDEX. |
CAPABILITY DEVELOPMENT
Throughout May 2020, managers reviewed 482 employees utilising tailored functional competency assessment matrices. All employees were assessed against a 5-point rating scale (unskilled, developing, competent, highly proficient and mastery) for each capability. These assessments have formulated the design of a customised learning and development framework for opportunities including:
- How we align new employees to our company
- Creating operational excellence in each function
- Fostering leadership growth
- Building strategic leadership
In June 2020, we launched our IMDEX leadership capability assessment process and 60 leaders globally were assessed against 14 leadership specific competencies based on Korn Ferry research.
During FY21 a global leadership development plan will be designed based on this assessment.
30 | 31 |
Governance
IMDEX LIMITED ANNUAL REPORT 2020
Ethics & Integrity
The Australian Securities Exchange (ASX) Corporate Governance Council sets out best practice recommendations, including corporate governance practices and suggested disclosures (ASX Recommendations).
ASX Listing Rule 4.10.3 requires companies to disclose the extent to which they have complied with the ASX Recommendations and to give reasons for not following them. Unless otherwise
COMPANY VALUES
The IMDEX Way sets out the key principles and expected behaviours that govern our Company's decision making, business practices and employee reward programs. Our values and behaviours were based on feedback from employees and our Executive Leadership and Senior Management Teams.
During FY21 a project is being undertaken to review these values. The project will include the Barrett Values assessment survey, values summits in our regions and feedback from our clients.
Our Company values will then be accompanied by behaviours to be cascaded to all employees through a structured communication plan.
indicated, the ASX Recommendations, including corporate governance practices and suggested disclosures, have been adopted by our Company for the full year ended 30 June 2020.
We also provide a Corporate Governance section on our website, which includes the relevant documentation suggested by the ASX Recommendations: www.imdexlimited.com/ about-us/corporate-governance.
STAKEHOLDERS
Government & Regulators | Suppliers | Industry Partners | ||
Distributors | Clients | Employees | Community | |
Shareholders | ||||
Board of Directors | ||||
Board Committees | ||||
ESG | Audit, Risk & | Renumeration | Digital | |
Committee | Compliance | & Nomination | Advisory | |
Committee | Committee | Group |
Policies & Procedures | Corporate Culture | Risk Management |
& Values | & Internal Control | |
System | ||
Chief Exective Officer | ||
Management & | ||
Employees |
INTEGRITY
Communicating openly and honestly. Avoiding activities or organisations that are unethical, harm people or the environment.
ACCOUNTABILITY
Taking responsibility for and delivering on IMDEX's commitments to the Company, clients and colleagues.
TEAMWORK
Working collaboratively, safely and with respect for diversity within the IMDEX Group to achieve the best results for the Company, clients and colleagues.
BEING DYNAMIC
Maintaining an efficient global Company with the flexibility to provide localised client solutions and the adaptability to react quickly to new opportunities and change.
CONTINUOUS IMPROVEMENT
Pursuing IMDEX's strategy of ongoing growth and reward for shareholders, clients and employees through continuous improvement of the Company's products, services and work practices.
INNOVATION
Leveraging IMDEX's advanced technologies and research and development capabilities to deliver innovative, leading edge products and services that optimise client operations.
32 | 33 |
Ethics & Integrity continued...
IMDEX LIMITED ANNUAL REPORT 2020
SUPPLIER CODE OF CONDUCT
We are committed to transparent, safe and ethical procurement practices. Our aim is to partner with like-minded suppliers to help us deliver leading solutions that enhance our clients' operations.
To achieve this, we have developed a Supplier Code of Conduct, which clearly sets out our minimum expectations of suppliers, their subsidiaries and subcontractors (suppliers).
The Supplier Code of Conduct aligns with our Corporate Governance Polices, company values and internal expected behaviours. Central to these polices, values and behaviours is:
- Safety for employees, contractors, clients, suppliers and the public
- Compliant and ethical business practices
- Diversity and human rights
- Protecting the environment and communities in which we operate
- Respect, transparency and support to speak-up.
We may choose not to work with, or cease to work with, suppliers who do not meet these minimum expectations.
CODE OF CONDUCT
Our Code of Conduct (the Code) provides an important framework for our decisions and actions at work and establishes the minimum standard of conduct required. The Code also highlights that all employees have a duty to act in the best interest of IMDEX.
Our Code is reviewed regularly by IMDEX Legal and is endorsed by our Board and Executive Leadership Team.
ANTI-BRIBERY AND CORRUPTION
Our Anti-Bribery and Corruption Policy builds on our Company Values and Code of Conduct. The Policy ensures we are committed to:
- Zero-tolerancefor bribery and other forms of corruption;
- Honest and ethical business practices; and
- Compliance with the laws of the countries where we operate.
The Policy also sets out requirements for business conduct and provides information on how to recognise and respond to bribery and corruption. Compliance with this Policy:
- Supports legitimate engagements;
- Promotes economic development and good governance; and
- Protects against significant legal, financial, safety and reputational risks.
To ensure ongoing compliance, all employees are required to complete annual Anti-Bribery and Anti- Corruption training.
CONFLICTS OF INTEREST
All employees and contractors are required to complete an annual conflict of interest declaration and manage this declaration if circumstances change. To do this most efficiently, we utilise ComplianceDesktop™ - our online compliance management system.
SPEAK-UP POLICY
Our Speak-Up Policy is designed to maintain the highest standards of corporate governance and ethical conduct across all our operations. It also ensures our Company is a safe, respectful and inclusive place to work.
All employees are encouraged to ask questions, query and report actual or suspected violations of our Code of Conduct or IMDEX Polices without fear of retribution.
Several methods can be used to make confidential and anonymous reports including IntegraCall® - a secure multilingual reporting platform that can be accessed via mobile or a desktop computer.
The user-friendly platform has an integrated case management system to ensure reports are stored, monitored and managed appropriately - including a function to prioritise and escalate reports if needed. IntegraCall® also allows reporters to receive updates via instant messaging and check on the progress of their report at any time.
ETHICS CERTIFICATION
To safeguard the ongoing ethical and compliant operation of our global business, all senior employees are required to complete Ethics & Compliance Certification every six months.
This certification is completed via ComplianceDesktop™ and confirms these employees:
- Have read and understand IMDEX's Speak Up Policy, Code of Conduct and the Anti-Bribery & Anti- Corruption Policy;
- Have been, to the best of their knowledge, compliant with the Code, the two Policies and all applicable laws and regulations; and
- Their teams, to the best of their knowledge, have been compliant with the Code, the two Policies and all applicable laws and regulations.
Regular Ethics & Compliance Certification will ensure all relevant risks are being adequately reported
and addressed. Importantly, the certification questionnaire also provides another confidential means of communicating potential breaches or concerns.
34 | 35 |
Sustainability
IMDEX LIMITED ANNUAL REPORT 2020
We are committed to enhancing disclosure and accessibility of information relating to our impacts on the economy, environment and society that indicate our contribution to sustainable development.
In December 2019, our Company established an ESG Committee that was endorsed by the Board and Executive Leadership Team. The Committee is taking a step-wise approach to ensure consistent, quality and relevant information is provided, however, its key objective is preparing a Sustainability Report in accordance with the Global Reporting Initiative within three years.
We will also consider our Company's climate risk against the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations. In FY20 we engaged Umwelt - environmental and social consultants - to undertake a TCFD gap analysis. This analysis, together with a materiality study, will be used to establish the ESG Committee's objectives and initiatives for FY21.
SUPPORTING THE SUSTAINABILITY OF OUR CLIENTS OPERATIONS
Our products and technologies are designed to enhance efficiency, productivity and safety while reducing costs and environmental impact.
Examples of positive contributions to sustainable operations include:
- Reduced water consumption
- Reduced site footprint and risk of environmental contamination
- Reduced energy consumption
- Reduced transportation to and from site
- Availability of biodegradable packaging
- Dust suppression
- Enhanced safety, for site personnel and wildlife
CASE STUDIES
Environmental benefits of AMC Heli-portable solids removal unit recognised in arctic tundra
Our AMC HP SRU™ reduced the risk of environmental contamination, reduced water consumption and increased efficiencies on an environmentally restricted site in the North West Territories, Canada.
Key Benefits
• | Reduced water consumption by 77% |
• | Reduced associated pump wear and tear and fuel |
costs | |
• | Improved drill cuttings management, limiting risk of |
spills | |
• | Reduced volume of landfill waste |
• | Reduced warm water flow back to the lake for |
minimal impact on the ice | |
• | Minimised transportation costs and runs |
• | Allowed drilling in an environmentally sensitive |
location, restricted by permits | |
• | Improved productivity by reducing frozen water |
pipes and overflowing tanks |
SUPPORTING POLICIES AND DOCUMENTS
- Anti-Bribery& Anti-Corruption Policy
- Audit Risk and Compliance Committee Charter
- Board Charter
- Compliance Framework
- Continuous Disclosure Policy
- Corporate Governance Statement
- Procedure for Evaluation of the Board Committees and Directors
- Remuneration Policy
- Remuneration and Nomination Committee Charter
- Diversity Policy
- Risk Management Policy
- Securities Trading Policy
- Shareholder Communications Policy
- Speak-UpPolicy
- Supplier Code of Conduct
- Sustainability Policy
• Environmental benefits recognized by government |
environmental inspectors. |
"The SRU™ has substantially lowered our water content; this both reduces the volume of material transported from the rig and reduces the potential of suspended solids to run off in fresh surface waters"
Dave Cox, Site Geologist - Aurora Geoscience
AMC SRU™ saves 147,000L of water in 20 days in Chile
An exploration drilling project located on a mountainous site in Chile was hindered by limited water supply and high logistical costs. Water had to be carted by trucks 240km to the project site. Our AMC SRU™ assisted by reducing water, mud and cartage costs.
Key Benefits
- US $36,120 minimum saving (20 day trial period)
- 60% reduction in water usage (147,500L in 20 days)
- 65% reduction in cartage costs
- 70% reduction in mud usage
- Enhanced operational efficiency and productivity
"IMDEX is proud of its role in improving the ESG position of its clients within the mining industry.
We are committed to both our disclosure of ESG related risks and opportunities.
We continue to support the sustainability of our clients' operations."
PAUL HOUSE
IMDEX CEO
36 | 37 |
Safety & Employee Wellbeing
IMDEX LIMITED ANNUAL REPORT 2020
SAFETY & EMPLOYEE WELLBEING
Our HSE team partners with all stakeholders to provide trusted advice, support regional needs and uphold global standards to eliminate work-related injuries and illness.
Further information regarding our commitment to safety can be found in our Health, Safety and Environment Policy at the About US > QHSE section of our website.
Key safety initiatives for FY20
- Implementing safety target engagement scores
- Enhancing safety communication
- Progressing an integrated management system (IMS) incorporating all support functions
- Regional IMS compliance audits
- Additional iAuditor templates to enhance the efficiency of safety compliance and reporting
- Enhance existing HSE employee training modules
OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT SYSTEM
QHSE 18001:2007 Standards are central to our IMDEX Management System. These Standards form a robust framework to minimise operational risk, provide a safe working environment and protect the health and wellbeing of our team.
The QHSE Standards cover anyone who performs work at any of our locations, across a range of activities including: research and development, manufacture and repair, sales, corporate services, consultancy and training.
HAZARD IDENTIFICATION,
RISK ASSESSMENT AND INCIDENT INVESTIGATION
The identification of workplace hazards during routine and non-routine tasks is supported by online applications, for example Take 5 and Safety Observations, together with detailed workplace inspections and job safety analysis.
All hazards and incidents are managed via our IMDEX Quality Alert system. We have also adopted the Incident Cause Analysis Method (ICAM) to investigate incidents, identify causal factors and implement improvement opportunities.
WORKERS COVERED BY AN OCCUPATIONAL HEALTH AND SAFETY MANAGEMENT SYSTEM
The QHSE Standards cover all employees and workers at any of our locations globally and everyone is required to adhere to our IMDEX QHSE Management System. To enhance the effectiveness of this System, an internal audit program is in place to target higher risk activities.
Our seven largest sites around the world are independently certified to ISO 9001:2015 and OHSAS 18001:2007. Our objective in FY21 is to transition to ISO 45001:2018.
WORK-RELATED INJURIES
During FY20 there were no fatalities and the most common injuries were strains.
- Providing a HSE IMS fundamentals course
- Regional incident investigation training - incident cause analysis method
- Regional lead auditors training
- A global manual handling initiative
A notable achievement throughout the year included the success of iAuditor to enhance safety engagement. Accumulative participation of 100% exceeded our target of 75%. Our engagement score of 19 also exceeded our target of 6.
Leadership is a key part of our safety culture. Leaders perform physical and virtual Safety Walkthroughs, engage with team members and promote safe work practices.
Insights from Safety Walkthroughs are discussed in team meetings, communicated to our global group via Safety Alerts and form part of regular management reviews.
Managers are accountable for the risk assessments and registers that relate to their teams. All workers are responsible for workplace safety and are encouraged to stop if the job is unsafe.
38 | 39 |
Safety & Employee Wellbeing continued...
OCCUPATIONAL HEALTH SERVICES AND TRAINING
During the year we complemented our confidential Employee Assistance Program with an IMDEX Wellness Series and other courses on our online training platform IMDEX Academy. Courses include Safe Driving, Manual Handling, and Mental Health Awareness for Managers.
Other opportunities for safety participation and training include:
- Monthly Health & Safety meetings
- Our online Quality Alert System
- Our Digital Workplace, which provides mobile access to all resources and business applications.
"Everyone at IMDEX is a safety leader and our behaviours are critical to achieving zero harm. To work safely everyone must speak up,
be accountable, demonstrate respect and engage in decision making."
SHAUN SOUTHWELL IMDEX CHIEF OPERATING OFFICER
ABOUT IAUDITOR
iAuditor is an inspection App that will help us raise safety and quality standards across our global business. The highly-customisable App and web platform will enable us to collect consistent data, standardise operations, send digital reports, identify failed areas and get problems resolved - from anywhere on any device at any time.
Our ability to drive and measure HSE engagement across all facets of our business, tailored for their work environment, has never been greater.
Key benefits and features of iAuditor include:
- A user-friendly design;
- Real-timehazard reporting;
- Elimination of paper-based checklists, inspections and forms;
- Simplified processes, greater efficiency and actions automatically linked to our Quality Alert System;
- Multiple languages including English, German, Portuguese and Spanish; and
- Flexibility to customise for region-specific needs.
40 | 41 |
Quality
IMDEX LIMITED ANNUAL REPORT 2020
Our QHSE Management System has been developed in line with the ISO 45001, ISO 3100 and ISO 9000 series of management system standards and best practices.
These standards and audits ensure legal compliance and an overarching commitment to managing safety, health, quality and environmental matters.
ISO 9001:
2015 standard (Quality Management System)
OHSAS 18001: (Occupational Health and Safety Management System)
ISO/IEC 27001: 2013 (Information Security)
ISO/IEC 27001:2013
CERTIFICATION
During FY20 we achieved ISO/IEC 27001:2013 certification through SGS - a globally renowned inspection, verification, testing and certification company.
ISO/IEC 27001:2013 is an international information security standard, which is recognised in 161 countries. Our certification demonstrates we operate an Information Security Management System that is compliant with its mandatory requirements, have systematic processes for managing information security risks, and have implemented controls mandated by the standard.
Our certification comprises a comprehensive range of activities including:
- Software development processes;
- The product development life-cycle for its real-time subsurface intelligent solutions;
- Manufacturing and deployment of products and technologies;
- Client support processes; and
- Information technology systems for supporting these activities and digital functions.
This was a significant milestone for our Company and provides additional assurance to clients regarding the end-to-end security of their information - for example, ordering and dispatch using our Global Digital Rentals platform, critical data collection and transfer with our award-winning cloud solution IMDEXHUB-IQ™ and ongoing support via our 24/7 Customer Care portal.
"All our stakeholders can be confident we have robust systems and processes
in place - which meet the highest industry standards
- to protect their data and sensitive information.
Everyone should be very proud of this achievement, particularly given the rigorous nature of the auditing process."
MAT REGAN
IMDEX CHIEF OF CORPORATE SHARED SERVICES
42 | 43 |
OUR COMPANY HISTORY
COMPANY HISTORY | Australian company Pilbara Gold NL incorporated |
December 1980 | Australian company Pilbara Gold NL incorporated |
July 1985 | Pilbara Gold NL changed name to IMDEX Limited |
September 1987 | IMDEX Limited listed on the ASX |
1988 | Formation of Australian Mud Company |
1997 | Acquisition of Surtron Technologies Pty Ltd and Ace Drilling Supplies |
2001 | Joint venture formed with IMDEX and Rashid Trading Establishment (RTE) in Saudi |
Arabia July | |
2005 | Sale of IMDEX Minerals August |
2005 | Acquisition of African based company Samchem |
August 2006 | Acquisition of Swedish based REFLEX Group of Companies and United Kingdom |
based company Chardec | |
May 2007 | Acquisition of Swedish based company Flexit |
July 2007 | Ace merged with REFLEX. IMDEX finalised the sale of its interest in IMDEX Arabia |
to RTE Acquisition of Canadian based Poly-Drill and a 75% interest in Kazakhstan | |
based Suay Energy Services | |
October 2007 | Sale of Surtron Technologies |
November 2007 | Acquisition of Chilean based company Southernland |
January 2008 | Acquisition of German based company System Entwicklungs |
July 2008 | Acquisition of the remaining 25% of Kazakhstan based Suay Energy Services |
September 2008 | Acquisition of Australian based company Wildcat Chemicals Australia |
July 2010 | New regional structure implemented and business reporting streamlined into |
Minerals and Oil & Gas Divisions | |
September 2010 | Acquisition of Australian based companies Fluidstar and Ecospin March 2011 |
Acquisition of German based company Mud-Data | |
July 2011 | Formation of DHS Services joint venture Acquisition of Australian based company |
Australian Drilling Specialties Pty Ltd | |
August 2011 | Acquisition of Brazilian based company System Mud Indústria e Comércio Ltda |
January 2012 | Acquisition of Vaughn Energy Services (VES) by IMDEX's DHS Services joint venture |
November 2012 | Acquisition of ioGlobal Pty Ltd, ioAnalytics Pty Ltd and ioGlobal Solutions Inc. |
(together ioGlobal) | |
December 2012 | DHS Services and Vaughn Energy Services rebranded as VES International |
September 2014 | Acquisition of 2iC |
June 2015 | Divestment of Suay Energy Services |
2016 | Divestment of AMC Oil & Gas |
January 2018 | Option to acquire Flexidrill Limited and Flexidrill Construction Limited (together |
Flexidrill) | |
January 2020 | Completed acquisition of Flexidrill |
July 2020 | Completed acquisition of AusSpec International |
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IMDEX LIMITED (IMDEX) ABN: 78 008 947 813
AUSTRALIAN SECURITIES EXCHANGE (ASX) LISTING DATE: 24 SEPTEMBER 1987
ASX CODE: IMD
REGISTERED & HEAD OFFICE: 216 BALCATTA ROAD,
BALCATTA
WESTERN AUSTRALIA 6021
REGISTERED PO BOX:
PO BOX 1262
OSBORNE PARK
WESTERN AUSTRALIA 6916
T +61 (8) 9445 4010
IMDEX@IMDEXLIMITED.COM
WWW.IMDEXLIMITED.COM
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Imdex Limited published this content on 16 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 August 2020 22:47:15 UTC