ALS Limited (ASX:ALQ) reported record FY26 underlying Earnings alongside higher revenue, stronger cash generation and lower net debt. Underlying net profit after tax increased to A$381.2 million, while financial Leverage declined to 1.5 times. Together, the results provide ALS with greater balance-sheet capacity as it continues investing in laboratory capacity and targets further organic growth during FY27.

What the Company Does

ALS is a global testing company providing laboratory and analytical services across multiple industries. Its operations include mineral and Commodity testing as well as environmental, food, pharmaceutical and other scientific testing services.

The company operates through Commodities and Life Sciences, giving it exposure to mineral exploration activity as well as Demand associated with environmental regulation, food safety and pharmaceutical testing.

FY26 Earnings Reach Record Levels

ALS reported FY26 Revenue of A$3,320.1 million, an increase of 10.7% from A$2,999.4 million in FY25. Underlying EBIT increased 19.3% to A$599.0 million, while the underlying EBIT Margin expanded to 18.0% from 16.7%.

Underlying NPAT increased 25.8% to A$381.2 million from A$303.0 million. Statutory NPAT rose 24.4% to A$318.7 million from A$256.2 million.

Basic underlying Earnings Per Share increased 21.2% to 75.7 cents, while underlying return on Capital employed improved to 21.5% from 18.4%.

Lower Debt Improves Financial Flexibility

Free Cash Flow increased 14.1% to A$674.1 million during FY26. Net debt declined to A$1,069.5 million from A$1,424.1 million, helping reduce ALS's Leverage Ratio from 2.3 times to 1.5 times.

The leverage ratio finished below the company's targeted range of 1.7 to 2.3 times. Group Liquidity was above A$580 million at 31 March 2026, while EBITDA cash conversion reached 92%.

Around 90% of drawn debt was fixed at an average rate of 3.69%, while the weighted average cost of drawn debt was 3.64%.

Commodities Drives Growth

Commodities revenue increased 18.8% to A$1,294.2 million, while underlying EBIT increased 25.9% to A$381.5 million. The divisional EBIT margin expanded to 29.5% from 27.8%.

Minerals organic revenue increased 20.2%, supported by higher sample volumes and improved pricing conditions. Its EBIT margin reached 33.0%.

ALS expects Minerals organic revenue growth of 13% to 15% in FY27, including anticipated growth of 15% to 17% during the first half. ASX Announcements

Life Sciences Records Further Earnings Growth

Life Sciences revenue increased 6.0% to A$2,025.9 million, while underlying EBIT rose 10.2% to A$296.5 million. Its reported EBIT margin increased to 14.6% from 14.1%.

Food delivered organic revenue growth of 7.2%, while Environmental reported organic growth of 2.8%. Pharmaceutical organic revenue declined 1.6%.

For FY27, ALS is targeting improved mid-single-digit organic revenue growth in Life Sciences and incremental margin expansion of 30 to 50 basis points. Environmental growth is expected to benefit from improving performance in the Americas. ASX Announcements

Laboratory Investment Supports Expansion

ALS incurred total FY26 gross Capital Expenditure of A$263 million, excluding acquisitions. Around A$230.1 million represented growth investment, including A$93.7 million spent during FY26 on four major hub laboratory projects.

The overall hub laboratory expansion program is approximately A$230 million and covers facilities in Lima, Sydney, Bangkok and Prague.

The Lima Minerals Facility and Sydney Environmental facility are expected to be commissioned during the second half of FY27, adding new testing capacity in their respective markets. ASX Announcements

FY27 Outlook Points to Continued Growth

ALS is targeting mid- to high-single-digit organic revenue growth across the group in FY27, together with margin expansion broadly similar to the improvement achieved during FY26.

The company expects Minerals to remain supported by exploration activity, while Life Sciences is targeting improved mid-single-digit organic revenue growth.

ALS also expects laboratory automation, digital infrastructure and artificial intelligence initiatives to begin producing initial operational benefits during FY27, with a larger impact anticipated over subsequent periods. ASX Announcements

Risks Remain Across Operations

Commodity testing demand remains exposed to changes in mineral exploration activity and project spending. Supply-chain disruption associated with geopolitical uncertainty represents another consideration, with ALS estimating potential earnings exposure of approximately A$5 million to A$10 million.

Currency movements could also influence earnings. ALS estimates that each 1% movement in average major-currency exchange rates against the Australian dollar could affect annualised underlying NPAT by approximately A$2 million.