Investor Presentation February 2011

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Oct 28, 2013 (4 years and 12 days ago)

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Investor Presentation

February 2011

2

THIS

DOCUMENT

IS

STRICTLY

CONFIDENTIAL

AND

IS

BEING

PROVIDED

TO

YOU

SOLELY

FOR

YOUR

INFORMATION

BY

AMG

ADVANCED

METALLURGICAL

GROUP

N
.
V
.

(THE

“COMPANY”)

AND

MAY

NOT

BE

REPRODUCED

IN

ANY

FORM

OR

FURTHER

DISTRIBUTED

TO

ANY

OTHER

PERSON

OR

PUBLISHED,

IN

WHOLE

OR

IN

PART,

FOR

ANY

PURPOSE
.

FAILURE

TO

COMPLY

WITH

THIS

RESTRICTION

MAY

CONSTITUTE

A

VIOLATION

OF

APPLICABLE

SECURITIES

LAWS
.

This

presentation

does

not

constitute

or

form

part

of,

and

should

not

be

construed

as,

an

offer

to

sell

or

issue

or

the

soli citation

of

an

offer

to

buy

or

acquire

securities

of

the

Company

or

any

of

its

subsidiaries

nor

should

it

or

any

part

of

it,

nor

the

fact

of

its

distribution,

form

the

basis

of,

or

be

reli ed

on

in

connection

with,

any

contract

or

commitment

whatsoever
.


This

presentation

has

been

prepared

by,

and

is

the

sole

responsibility

of,

the

Company
.

This

document,

any

presentation

made

in

conjunction

herewith

and

any

accompanying

materials

are

for

information

only

and

are

not

a

prospectus,

offering

circul ar

or

admission

document
.

This

presentation

does

not

form

a

part

of,

and

should

not

be

construed

as,

an

offer,

invitation

or

soli citation

to

subscribe

for

or

purchase,

or

dispose

of

any

of

the

securities

of

the

companies

mentioned

in

this

presentation
.

These

materi als

do

not

constitute

an

offer

of

securities

for

sale

in

the

United

States

or

an

invitation

or

an

offer

to

the

public

or

form

of

appli cation

to

subscribe

for

securities
.

Neither

this

presentation

nor

anything

contained

herein

shall

form

the

basis

of,

or

be

reli ed

on

in

connection

with,

any

offer

or

commitment

whatsoever
.

The

information

contained

in

this

presentation

has

not

been

independently

veri fied
.


No

representation

or

warranty,

express

or

implied,

is

made

as

to,

and

no

reli ance

should

be

placed

on,

the

fairness,

accuracy

or

completeness

of

the

information

or

the

opinions

contained

herein
.

The

Company

and

its

advisors

are

under

no

obligation

to

update

or

keep

current

the

information

contained

in

this

presentation
.

To

the

extent

allowed

by

law,

none

of

the

Company

or

its

affili ates,

advisors

or

representati ves

accept

any

liability

whatsoever

(in

negligence

or

otherwise)

for

any

loss

howsoever

arising

from

any

use

of

this

presentation

or

its

contents

or

otherwise

arising

in

connection

with

the

presentation
.

Certain

statements

in

this

presentation

constitute

forward
-
looking

statements,

including

statements

regarding

the

Company's

financial

position,

business

strategy,

plans

and

objectives

of

management

for

future

operations
.

These

statements,

whi ch

contain

the

words

"believe,”

“expect,”

“anti cipate,”

“intends,”

“estimate,”

“forecast,”

“project,”

“will,”

“may,”

“should”

and

similar

expressions,

reflect

the

beliefs

and

expectations

of

the

management

board

of

directors

of

the

Company

and

are

subject

to

risks

and

uncertainties

that

may

cause

actual

results

to

differ

materi ally
.

These

risks

and

uncertainties

include,

among

other

factors,

the

achievement

of

the

anti cipated

l evels

of

profitability,

growth,

cost

and

synergy

of

the

Company’s

recent

acquisitions,

the

timely

development

and

acceptance

of

new

products,

the

impact

of

competitive

pri cing,

the

ability

to

obtain

necessary

regulatory

approvals,

and

the

impact

of

general

business

and

global

economi c

conditions
.

These

and

other

factors

could

adversely

affect

the

outcome

and

financial

effects

of

the

plans

and

events

described

herein
.

Neither

the

Company,

nor

any

of

its

respective

agents,

employees

or

advisors

intend

or

have

any

duty

or

obligation

to

supplement,

amend,

update

or

revise

any

of

the

forward
-
looking

statements

contained

in

this

presentation
.

The

information

and

opinions

contained

in

this

document

are

provided

as

at

the

date

of

this

presentation

and

are

subject

to

change

without

notice
.

This

document

has

not

been

approved

by

any

competent

regulatory

or

supervisory

authority
.


Cautionary Note

3

AMG Advanced Metallurgical Group N.V.

Listed:

NYSE
-
Euronext Amsterdam:

AMG

Founded:

2006

Revenues:

$951.1M TTM

Employees:

2,500

Facilities:

Netherlands, Germany, UK, USA, Brazil, France,
Turkey, Czech Republic, China, Mexico,

Belgium,
Sri Lanka

Market cap:


㌶㐮ㅍ

Shares outstanding:

27.5M


52 week range:


㘮㈵


13.74

Recent share

price:


13.24 (February 10, 2011)


Sustainable Metals Technology Products:


High purity raw materials, metals and complex metal products


Vacuum furnaces used to produce high purity metals


4


AMG participates in the macro economic trend of:


Growing demand for natural resources in context
of CO
2

reduction and sustainable
environmental demands
for:


Responsible energy production and use


Emerging
market infrastructure


Aerospace and light weight materials


Specialty metals and chemicals

Macroeconomic Trends and Markets

5


The EU identified 14 critical raw materials
(1)

to the European economy


focusing on two determinants


economic importance and supply risk


AMG currently produces 4 of those elements


Critical Raw
Materials

“Critical” raw
materials

(1) European Commission Annex V to the Report of the Ad
-
hoc Working Group on defining critical raw materials

6

Advanced Materials


High
-
value alloys


Essential raw materials

Engineering Systems


Capital equipment for high purity
materials

Products & Markets

Infrastructure

Aerospace

Energy

Specialty Metals &
Chemicals

7

Graphite


Primary producers of critical raw materials

Critical Raw Materials

Antimony Graphite

Lithium Magnesium

Silicon Titanium
Vanadium

Tantalum

Niobium

Chromium

Vanadium

Tantalum

Tantalum

Titanium

Vanadium

Magnesium

Titanium

Magnesium

Titanium

Lithium

Tantalum

Antimony

Graphite

Chromium

Magnesium

AMG raw material
mines

8

Advanced Materials
-

Market, Products and Customers

Products

Aerospace


Specialty alloys for titanium


Coatings for wear
resistance

Infrastructure
-

FeV


Ferro
-
vanadium


Ferro
-
nickel molybdenum


Specialty Metals

Competitors


Reading Alloys Inc.


Evraz Group S.A.
(Stratcor)


Evraz Group S.A. (Highveld
Steel & Vanadium)


Eramet S.A. (Gulf Chemical
& Metallurgical Corporation


Evraz Group S.A. (Stratcor)


Xstrata plc


Chengde Vanadium &
Titanium Stock Co. Ltd.


KBM Affilips B.V.


KB Alloys, Inc.


Delachaux S.A.


Campine S.A.


Chemtura Corporation

Sample Customers


Chromium Metals


Tantalum


Antimony


Aluminium master alloys


9

Advanced Materials
-

Specialty metals pricing

$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
2007
2008
2009
2010
2011
Price / Pound


V, Mo
, Ni

Ferro Vanadium
Molybdenum
Nickel
AMG IPO

Increase from 2009 lows:

FeV:

59%

Mo:

117%

Ni:

142%

Prices are still below pre
-
crisis levels;

tied to demand for carbon and stainless steel

10

Engineering Systems
-

Market, Products and Customers

Products

Energy
-

Solar


Solar silicon melting and
crystallisation systems
(DSS furnaces)

Aerospace


Vacuum
Melting and Re
-
melting Systems


Precision Casting and
Coating
Systems


Heat Treatment with high
pressure gas quenching


Energy
-

Nuclear


Vacuum Sintering
Systems

Notable Successes


2005


Introduced single
crucible furnaces


2005

2009


>$172 mm
in revenue, 2
nd

largest
market participant


2010


Introduced SCU
600+ DSS system


2010


Market Share leader
in Ti remelting in China, the
fastest growing Ti market


2010


Leading market share
in turbine blade coating


Secured first nuclear
engineering contract with
DOE, through Shaw
-
Areva


Two strategic acquisitions
completed to expand product
portfolio

Sample Customers

11

Financial Overview

12

Markets & Products


by the Numbers

YTD 2010 Revenue by
Product

YTD 2010 Revenue by
End Market

Aerospace 26%

Energy
-

Solar &
Nuclear 22%

Infrastructure 16%

Specialty Metals &
Chemicals 36%

Vacuum Furnaces
25%

Al Master Alloys
14%

Ti Master Alloys
and Coatings

16%

Si Metal 9%

FeV & FeNiMo
8%

Antimony 11%

Chromium
Metal 8%

Tantalum &
Niobium

4%

Graphite 5%

13


Financial Highlights


YTD September 2010

2010 YTD Revenue
$719.8

2010 YTD EBITDA
$64.7

Europe

56%

Nor th
America

21%

Asia

18%

South
America

4%

ROW

1%

Revenue by Geography

Revenue and EBITDA in millions


447.4


178.0


94.4

Advanced Materials
Engineering Systems
Graphit Kropfmühl

32.1


27.5


5.1

Advanced Materials
Engineering Systems
Graphit Kropfmühl
14


-



-



-



-



-



-


$18.6

$12.4

$22.0

$23.9

$18.8

Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Financial Highlights

$205.4

$231.4

$235.8

$243.5

$240.4

Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
(
in
millions)

(in
millions)


Q3 Revenue: $240.4 million


Up 17% from Q3 2009



Q3 EBITDA: $18.8
million


Up 1% from Q3 2009



Q3 EPS: $0.11


Up from ($0.50) in Q3 2009



YTD Revenue: $719.8 million


Up 13% from YTD 2009



YTD EBITDA: $64.7 million


Up 14% from YTD 2009



YTD EPS: $0.42

(1)



Up from ($0.65) YTD 2009
(1)






Highlights

Revenue

EBITDA

(1) Excluding the equity losses from AMG’s 42.5% ownership in Timminco Limited

15

Advanced Materials

Financial
Summary

Highlights

( in millions)

$5.0

$5.3

$8.5

$14.2

$9.4

$95.9

$124.3

$140.5

$152.0

$154.9

Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Revenue
EBITDA

Infrastructure
-

ferrovanadium


Reference
prices
increased 18% v. Q3
2009


Volumes improved 32% v. Q3 2009


Ferronickel
-
molybdenum demand
decreased 43% v. Q3 2009


Aerospace


master alloys prices declined 23%
v. Q3 2009; volumes improved 165%


CAPEX


Expansion of ferrovanadium operations
in the United States


-



-



-



-



-


$1.9

$5.0

$3.3

$4.2

$5.6

Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
CAPEX
16

Engineering Systems

Financial
Summary

Highlights

( in millions)


-



-



-



-



-


$11.0

$5.9

$12.1

$8.0

$7.4

$61.6

$73.8

$65.3

$59.5

$53.2

Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Revenue
EBITDA

-



-



-



-



-


$1.2

$3.0

$0.8

$1.3

$0.8

Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
CAPEX

Q3 revenue decreased 14% v. Q3 2009


Solar silicon DSS furnace revenues
decreased 44%
in
Q3 2010 v. Q3 2009


Q3 EBITDA decreased 33% v. Q3 2009


September 30, 2010 Backlog improved to
$147.1 million from $121 million at June 30,
2010


Order intake $66.9 million in Q3 2010


1.26x book to bill ratio


Diversified backlog
-

solar, aerospace
and transportation

17

Graphit Kropfmühl

Financial
Summary

Highlights

( in millions)


-



-



-



-



-


$2.6

$1.2

$1.5

$1.7

$2.0

$33.7

$33.3

$29.9

$32.1

$32.4

Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Revenue
EBITDA

-



-



-



-



-


$0.4

$0.8

$1.0

$1.3

$0.7

Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
CAPEX

Q3 revenue decreased 4% v. Q3 2009


Decrease in silicon metal revenues due to
production issues


Silicon metal down 7%


Natural graphite up 37%


Q3 EBITDA decreased 23% v. Q3 2009


Lower revenues and higher costs in
silicon metal


Silicon metal down $1.0 million


Natural graphite up $0.5 million


CAPEX for graphite milling expansion



18

Capital Base


Cash: $90.2 million



Total
debt: $234.8 million



Net debt: $144.6 million



Revolver availability: $61.3 million



Total liquidity $151.5 million

Note: Cash includes short term investments

$124.4

$117.0

$98.9

$84.6

$90.2

$202.3

$203.8

$203.0

$204.3

$234.8

Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Cash
Debt
( in millions)

Cash and Debt


September 30, 2010

Summary

19

Outlook


Advanced Materials


Markets are improving


Antimony, tantalum and titanium alloys and coatings will drive growth in 2011


Engineering
Systems


Backlog is increasing; renewed interest in solar silicon furnaces


Order intake driven by titanium, solar and specialty steel markets


Graphit Kropfm
ü
hl


AMG owns 88% of GK


Silicon metal pricing is improving


Timminco


AMG owns 42.5% of Timminco; not consolidated


Timminco sold 49% of its silicon metal operations for C$40.3 million; up to
C$10.0 million more based upon meeting performance metrics

20

Appendix

21

Consolidated Balance Sheet

December 31, 2009

September

30
, 2010

Fixed
assets

211,022

212,440

Goodwill and
intangibles

28,253

38,924

Other
non
-
current
a
ssets

78,209

54,848

Inventories

193,378

202,318

Receivables

147,787

177,586

Other
current
a
ssets

35,313

48,903

Cash

117,016

90,213

TOTAL ASSETS

810,978

825,232

TOTAL EQUITY

228,423

219,427

Long
-
term
debt

168,319

184,499

Pension
liabilities

91,358

88,500

Other
long
-
term liabilities

51,249

34,896

Current
debt

35,477

50,295

Accounts
payable

69,791

84,450

Advance
payments

54,764

44,556

Accruals

46,179

48,061

Other
current
l
iabilities

65,418

70,548

TOTAL LIABILITIES

582,555

605,805

TOTAL LIABILITIES AND EQUITY

810,978

825,232


in thousands

22

Consolidated Income Statement

Q3

2009

Q3 2010

Revenue

205,406

240,427

Cost of
sales

165,457

198,325

Gross
profit

39,949

42,102

Selling,
general
and
admin
.

31,876

31,682

Asset
impairment
and
restructuring

5,302

-

Environmental

4,075

257

Other
income

(1,194)

(270)

Operating
profit

(110)

10,433

Net
finance
c
osts

5,465

2,921

Share of loss of associates

(1,285)

(17,554)

Profit

before
i
ncome taxes

(6,860)

(10,042)

Income

tax expense

5,694

325

Profit
for
the
year from continuing operations

(12,554)

(10,367)

Loss

after tax for the year from discontinued operations

(14,240)

-

Loss

for the year

(26,794)

(10,367)

Attributable to:

Shareholders of the Company

(20,302)

(11,170)

Minority
interest

(6,492)

803


in thousands

23

Consolidated Cash Flows

Nine months ended
September 30, 2009

Nine months ended
September 30, 2010

Cash Flows from Operations

(6,033)

(13,903)

Capital Expenditures

(20,755)

(19,054)

Other Investing Activities

(55,796)

(26,622)

Cash Flows from Investing Activities

(76,551)

(45,676)

Cash Flows from Financing Activities

59,247

36,812



Net increase (decrease) in cash

(23,337)

(22,767)

Beginning Cash

143,473

117,016

Effects of exchange rates on cash

4,255

(4,036)

Ending Cash

124,391

90,213

Approximate availability under AMG lines of credit

97,708

61,300

Total Liquidity

222,099

151,513


in thousands