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Amg   investor presentation march 2012
 

Amg investor presentation march 2012

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    Amg   investor presentation march 2012 Amg investor presentation march 2012 Presentation Transcript

    • Investor Presentation March 2012
    • Cautionary Note 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 solicitation 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 relied 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 circular or admission document. This presentation does not form a part of, and should not be construed as, an offer, invitation or solicitation to subscribe for or purchase, or dispose of any of the securities of the companies mentioned in this presentation. These materials 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 application to subscribe for securities. Neither this presentation nor anything contained herein shall form the basis of, or be relied on in connection with, any offer or commitment whatsoever. The information contained in this presentation has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance 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 affiliates, advisors or representatives 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 Companys financial position, business strategy, plans and objectives of management for future operations. These statements, which contain the words "believe,” “expect,” “anticipate,” “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 materially. These risks and uncertainties include, among other factors, the achievement of the anticipated levels of profitability, growth, cost and synergy of the Company’s recent acquisitions, the timely development and acceptance of new products, the impact of competitive pricing, the ability to obtain necessary regulatory approvals, and the impact of general business and global economic 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.2
    • Overview Listed: NYSE-Euronext Amsterdam: AMG Founded: 2006 2011 Revenues: $1,351.3M 2011 EBITDA: $110.1M Employees: 3,154 Facilities: Netherlands, Germany, UK, USA, Brazil, France, China, Belgium, Turkey, Poland, India, Sri Lanka, Czech Republic Market cap: €245M ($320M) Shares outstanding: 27.5M 52 week range: €6.79–€16.92 Recent share price: €8.89 (March 13, 2012) Serve growing end markets with high value-added specialty metal alloys andengineering solutions, related to CO2 reduction and conservation of natural resources3
    • Business Units, Products, and End Markets Advanced Materials Engineering Systems Graphit Kropfmühl AMG Mining 65% of 2011 revenue  23% of 2011 revenue  12% of 2011 revenue  Creating new reporting 46% of EBITDA  31% of EBITDA  23% of EBITDA segment in 2012 High-value alloys  Capital equipment for high  Silicon metal  Antimony and tantalum Critical raw materials purity materials  Natural graphite Specialty Metals & Energy Aerospace Infrastructure Chemicals4
    • Why Invest in AMG Revenue EBITDA 2009 – 2011 2009 – 2011 24.8% Increase 26.2% CAGR Capital CAGR Efficiency 2011 2011 $ 1,351.3 million $ 110.1 million + 36% over 2010 + 30% over 2010 Increase Shareholder Value Invest in Drive Organic Vertical ROCE Growth Integration EPS 2009 – 2011 Strong growth in 19.9% 2011 CAGR Adjusted 2011 EPS 2011 $1.34 15.1% + 76% over 2010 + 27% over 20105
    • Critical Raw Materials Matrix■ USA, Germany, UK and EU have each identified critical materials – common factors include supply risks, economic importance and technology demand■ AMG currently has raw material sources for 4 of those elements6
    • Advanced Materials End Input & Critical Material Key Everyday Sample Markets Raw Materials Science Products Applications Customers  Conversion  Specialty alloys Property for titanium Modification  Coatings for wear resistance A Boeing 787 Aerospace Surface Dreamliner contains  Recycling Coating ~250,000 lb titanium, 17% increased fuel efficiencies compared to Boeing 737¹  Recycling  Ferrovanadium FeV is added Property  Ferro-nickel into higher- strength Modification molybdenum light-weightInfrastructure steel adopted by the Shanghai World Financial Center²  Mining  Tantalum An iPhone Property concentrate installed Modification and powder ~469 Specialty  Antimony tantalum capacitors³ Metals & Surface trioxide Chemicals  Conversion Coating  Chromium metals  Aluminium master alloys7 ¹ Titanium Metal Industry Primer, by J.P. Morgan research on January 23, 2012 ² Resource Revolution: Meeting the world’s energy, materials, food, and water needs, by McKinsey in November 2011 ³ iSuppli in August 2010
    • Engineering Systems End Input & Critical Material Key Everyday Sample Markets Raw Materials Science Products Applications Customers  Technology  Vacuum Melting Property and Re-melting Modification Systems  Precision Casting All modern turbine Aerospace Surface and Coating engines use titanium Coating compressor blades and Systems discs to guarantee  Heat Treatment high-performance and with high pressure light-weight thus low gas quenching CO2 emission¹  Technology  Solar silicon Property melting and Modification crystallisation Energy systems- DSS Solar power capacity – Solar furnaces could become available  Mono2(TM) at around $1 per watt technology by 2020, down from $4 per watt in 2010²  Technology  Vacuum Property Sintering Modification Systems for Energy nuclear fuel Nearly 90 % of all  Development – Nuclear nuclear residues from project for the reprocessing of Pu are safe storage of processed into new nuclear waste fuels with AMG’s technology¹8 ¹ AMG Management ² Resource Revolution: Meeting the world’s energy, materials, food, and water needs, by McKinsey in November 2011
    • Graphit Kropfmühl End Input & Critical Material Key Everyday Sample Markets Raw Materials Science Products Applications Customers  Mining  Natural graphite Property for heat insulation Modification materials for building Improving energyInfrastructure construction efficiency in buildings  Conversion could deliver ~19% of the total benefits that could accrue from boosting resource productivity¹  Conversion  Silicon metal for Property polycrystalline Modification Energy for solar cells – Solar In 2010, ~ 87% of solar cells are silicon- based²  Mining  Natural Property graphite for Modification transportation Specialty and lithium-ion Li-iron batteries for Metals & batteries  Conversion electric vehicles (EV) Chemicals  Silicon metal typically use graphite for aluminum as anode. One car and silicones battery requires ~24 Kg graphite.³9 ¹ Resource Revolution: Meeting the world’s energy, materials, food, and water needs, by McKinsey in November 2011 ³ Solarbuzz ³ AMG Management
    • Voluntary Tender Offering for Graphit Kropfmühl ■ AMG currently owns 88.16% of GK’s shares ■ Commenced the preparation of a voluntary public tender offer on February 29 ■ Offering €31.75/share ■ Expected completion Q2 2012 ■ Securing ~ $62 million in incremental credit from its banking consortium ■ AMG intends to initiate a squeeze out of the remaining minority shareholders with a goal to own 100% of GK, upon getting above 90% ownership ■ Upon successful completion of the Voluntary Tender, AMG will begin segment reporting of AMG Minings financial results Expand Simplify Increase AMGs mine based businesses + AMG’s corporate structure + operational and financial flexibility + Eliminate redundancies Increase Shareholder Value10
    • Financial Highlights11
    • Financial Highlights Revenue Gross Profit 2011: $1,351.3 (in USD millions) 2011: $238.0 (in USD millions) $308.6 $50.5 $368.3 $69.0 $356.4 $59.8 Up $58.7 Up $318.0 $49.4 14% 2% $270.7 YoY YoY - - - - - Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 EBITDA EPS 2011: $110.1 (in USD millions) ■ Q4 2011 EPS: $0.26 (1) ■ Up 13% from Q4 2010 (1) ■ 2011 EPS: $1.34 (2) $31.4 $24.8 ■ Up 76% from 2010 (2) $26.2 $27.7 Up $20.2 23% YoY Q4 10 Q1 11 Q2 11 Q3 11 Q4 1112 (1) Excluding Timminco Limited related charges (2) Excluding Timminco Limited related charges and loss on debt extinguishment
    • Capital Base Cash and Debt Cash Debt ( in USD millions) ■ Net debt: $189.1 million $268.6 ■ Debt to capitalization: 0.55x ■ Net Debt to 2011 EBITDA: 1.72x ■ Revolver availability: $79.6 million ■ Total liquidity: $138.6 million $267.1 $278.5 $274.9 $237.1 ■ AMG’s primary debt facility is a $315 million term loan and revolving credit $79.6 facility $89.3 $66.1 $61.1 $71.3 ■ 5 year term ■ Securing an additional $62 million for Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 its credit facility in Q1 2012 in conjunction with the Voluntary ROCE Tender Offering to GK 15.1% 11.9% 10.5%0 8.0% 2009 2010 201113
    • Key Products Revenue Gross Profit ( in USD millions) ( in USD millions) 2011: $1,351.3 2011: $238.0$1,200 36% $200 33%$1,000 $150 $800 $600 $100 $400 $50 $200 $- $- YTD Q4 2010 YTD Q4 2011 YTD Q4 2010 YTD Q4 2011 Vacuum Furnaces Ti Master Alloys and Coatings Vacuum Furnaces Ti Master Alloys and Coatings Al Master Alloys and Powders FeV & FeNiMo Al Master Alloys and Powders FeV & FeNiMo Antimony Chromium Metal Antimony Chromium Metal Tantalum & Niobium Graphite Tantalum & Niobium Graphite Si Metal Si Metal14
    • End MarketsRevenue Gross Profit 2011: $1,351.3 ( in USD millions) 2011: $238.0 ( in USD millions) Aerospace Aerospace 28.5% 33.5% Infrastructure 14.5% Energy Energy 26.2% 18.0% Infrastructure 14.4% Specialty Metals Specialty Metals & Chemicals & Chemicals 38.9% 25.9% Aerospace + 48% Aerospace + 47% Up 36% Up 33% 2010: $990.5 2010: $178.6 Aerospace Aerospace 26.1% 30.4% Infrastructure Energy Energy 16.4% 26.5% 21.3% Infrastructure 19.5% Specialty Metals Specialty Metals15 & Chemicals & Chemicals 36.1% 23.7%
    • Advanced Materials Financial Summary ■ Q4 2011 revenue up 18% from Q4 2010 ( in USD millions) $250.0 Revenue EBITDA $235.6 $226.8 $210.8 $200.0 $198.7 $21.0 ■ KB Alloys contributed $19.5 million $17.5 $168.9 ■ Titanium master alloys revenue up $14.6 $150.0 $16.0 458% $12.3 $11.0 ■ Tantalum revenue up 400% $100.0 $7.7 ■ Q4 2011 gross margin 10% of revenue $6.0 $50.0 $6.0 ■ Q4 2011 EBITDA margin 3% of revenue $- $1.0 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Capital Expenditure ■ Q4 2011 CAPEX $10.7 million ( in USD millions) ■ $2.6 million for tantalum mine $10.7 ■ $1.2 million for aerospace coatings $7.3 $5.6 $6.2 $6.6 and master alloy expansion - - - - - Q4 10 Q1 11 Q2 11 Q3 11 Q4 1116
    • Engineering Systems Financial Summary Q4 2011 revenue up 8% from Q4 2010 ( in USD millions) $95.0 Revenue EBITDA $89.8  $86.3 $85.0 $72.9 $21.0  Heat treatment revenue up 130% $75.0 $67.7 $64.9 $65.0  Remelting systems revenue up 49%  Solar DSS revenue down 70% $16.0 $55.0 $45.0 $11.8 $10.0 $9.3 $11.0  Q4 2011 gross margin 30% of revenue $35.0 $7.7 $25.0  Increasing price pressure $5.3 $15.0  Q4 2011 EBITDA up 18% $6.0 $5.0  16% of revenue $(5.0) Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 $1.0 Order Intake Order backlog decreased 8% to $158.5 ( in USD millions)  million at December 31, 2011  Order intake $69.5 million in Q4 $107.6 $65.7 $88.6 $68.5 $69.5 2011  0.95x book to bill ratio - - - - - Q4 10 Q1 11 Q2 11 Q3 11 Q4 1117
    • Graphit Kropfmühl Financial Summary Q4 2011 revenue up 8% from Q4 2010 ( in USD millions) $50.0 Revenue EBITDA  $45.0 $42.3 $42.9 $43.3  Natural graphite revenue up 16% $40.0 $37.0 $35.0 $34.2 $11.0  Silicon metal revenue up 4% $30.0  Q4 2011 gross margin 26% of revenue $25.0 $7.0 $6.3 $6.2 $6.2  Higher sales prices for natural $20.0 $15.0 $6.0 graphite and silicon metal $10.0 $2.5  Q4 2011 EBITDA up 183% over Q4 $5.0 2010 $-  19% of revenue $1.0 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Capital Expenditure ■ Q4 2011 CAPEX – $3.2 million ( in USD millions)  Graphite milling expansion  Upgrading silicon metal facility $2.7 $3.2 $2.5 $1.7 $1.2 - - - - - Q4 10 Q1 11 Q2 11 Q3 11 Q4 1118
    • Outlook
    • Outlook Advanced Materials Engineering Systems Graphit Kropfmühl AMG Mining  Challenging start to  Heat Treatment  Voluntary Tender  Antimony expansion 2012 Services business launched is progressing  Aerospace is strong providing more stable  Silicon metal prices  Tantalum mine  Financial market recurring revenues locked in for 2012 impacted by Brazil uncertainty is  Aerospace and  Graphite demand is floods reducing visibility nuclear is strong; strong solar is challenging ■ AMG expects Revenue and EBITDA growth in 2012 ■ AMG announces Q1 2012 financial results on May 15, 201220
    • Appendix21
    • Consolidated Balance Sheet Balance Sheet Actual FYE in December 2010 2011 Fixed assets 228.6 263.6 Goodwill and intangibles 27.0 38.1 Other non-current assets 80.8 63.4 Inventories 207.2 228.9 Receivables 175.4 188.1 Other current assets 46.8 39.1 Cash 89.3 79.6 TOTAL ASSETS 855.1 900.8 TOTAL EQUITY 234.0 220.6 Long-term debt 187.8 210.4 Pension liabilities 88.4 90.1 Other long-term liabilities 52.9 71.6 Current debt 49.3 58.2 Accounts payable 102.3 128.5 Advance payments 49.6 30.2 Accruals 43.3 51.7 Other current liabilities 47.5 39.5 TOTAL LIABILITIES 621.1 680.2 TOTAL LIABILITIES & EQUITY 855.1 900.822 in thousands
    • Consolidated Income Statement Summary Financials Actual 2010 Actual 2011 Quarter to date December Q4 Q4 Revenue 270.7 308.6 Cost of sales 221.3 258.1 Gross profit 49.4 50.5 Selling, general & administrative 36.8 34.9 Timminco receivables write-off - 7.5 Asset impairment & restructuring 1.0 (1.9) Environmental 5.7 5.5 Other income (0.4) (1.0) One Time Expenses - (4.3) Operating profit 6.3 9.8 Net finance costs 2.0 6.2 Share of income (loss) of associates 7.6 (13.5) Profit (loss) before income taxes 11.9 (10.0) Income tax (benefit) expense (0.1) 2.2 Profit (Loss) for the quarter 12.0 (12.1) Attributable to: Shareholders of the Company 12.5 (13.2) Minority interest (0.5) 1.1 Adjusted EBITDA 20.2 24.823 in thousands
    • Consolidated Statement of Cash Flows Cash Flow Statement Actual FYE in December 2010 2011 EBITDA 84.9 110.1 +/- Change in operating assets/liabilities (45.2) (13.8) -Interest paid, net (13.8) (12.1) Other operating cash flow 7.9 (4.7) Dividend income (0.3) Cash flows from operations before taxes 33.8 79.2 Income tax paid (35.4) (34.2) Total cash flows from operations (1.6) 45.0 Capital expenditures (33.0) (51.9) Acquisitions (20.2) (29.5) Other investing activities (9.4) (1.4) Cash flows from investing activities (62.6) (82.8) Cash flows from financing activities 42.4 27.9 Net increase (decrease) in cash (21.8) (9.9) Beginning cash 117.0 89.3 Effects of exchange rates on cash (5.9) 0.1 Ending cash 89.3 79.6 Ending Liquidity 138.624 in thousands