2. 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 Company's 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
3. Overview
Listed: NYSE-Euronext Amsterdam: AMG
Founded: 2006
LTM Revenues: $1,215.6M
LTM EBITDA: $84.8M
Employees: 3,275
Facilities: Netherlands, Germany, France, Czech Republic, Poland,
UK, USA, Brazil, Mexico, China, India, Sri Lanka,
Turkey, Zimbabwe, Mozambique
Market cap: €182M ($235M)
Shares outstanding: 27.6M
52 week range: €5.81–€9.50
Recent share price: €6.62 (March 18, 2013)
AMG provides high value-added specialty metal alloys and engineering systems,
related to CO2 reduction and conservation of natural resources to growing end markets
3
4. New Business Units, Products and Markets
AMG Processing AMG Engineering AMG Mining
AMG’s conversion and Consistent with the New reporting segment effective on January 1, 2013
recycling based businesses segment in 2012 Integrated AMG’s mine based business
High-value metals & alloys Capital equipment for high Silicon metal Antimony
Coating materials purity materials Natural graphite Tantalum
Specialty Metals &
Energy Aerospace Infrastructure Chemicals
4
5. Recent Developments – Segment Realignment
■ AMG reorganized its specialty metals businesses into three operating units based
upon their core competency effective January 1 2013
■ More effective operational management and functional responsibility
■ Increased reporting transparency
■ AMG Processing - the conversion businesses of Advanced Materials
■ Aluminum alloys
■ Vanadium
■ Titanium alloys and coatings
■ Superalloys
■ AMG Mining - mine based rare metal & material value chains:
■ Tantalum
■ Antimony
■ Graphite and silicon businesses of Graphit Kropfmühl
■ AMG Engineering (formerly Engineering Systems Division)
5
6. Recent Developments – Operations Goals
AMG is committed to improving operational performance and cash flow
generation
■ Process begun in Q3 with implementation of a clear and direct management
structure throughout the organization
■ Objectives
■ Reduce SG&A by 5%
■ Improve Gross Margin by 2.5% and lower cost structure
■ Increase Operating Cash flow
■ Reduce net debt
■ Tying objectives directly to incentive compensation plans
■ Instituting a number of operational improvement initiatives companywide
Increase Shareholder Value
6
7. Recent Developments – Operations Update
AMG is focused on improving operational performance and increasing cash flow
■ Revised management structure in H2 2012
■ Implemented a number of operational improvement initiatives in Q4 ‘12
Objective Progress Update
Reduce SG&A ■ Q4 ‘12 SG&A decreased 20% compared to Q4 ’11
by 5% ■ Expect to reach the objective in 2013
■ Q4 ‘12 Gross Margin decreased 9%, less than revenue decrease of
Improve Gross
11%
Margin
■ AMD Q4 ‘12 Gross Margin improved to 13% from 10% in Q4 ’11
Increase ■ Reduced Working Capital by $9.9 mm in Q4 ‘12
Operating Cash ■ Reevaluated a number of CAPEX projects – spent $8 mm less
flow than forecast in Q4 ‘12
■ $65.6 mm cash from operations in 2012; $32.1 mm in Q4 ‘12
Reduce Net ■ Reduced net debt by $4 mm in Q4 2012
Debt
7
8. 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 mines or processes 13 of those critical materials
8
10. Financial Highlights
Revenue Gross Profit
2012: $1,215.6 (in USD millions)
2012: $196.5 (in USD millions)
$41.4
$275.2
$50.5 $53.4 $54.0
$324.0 $319.6 $47.7 Down
$308.6 $296.9 Down 18%
11% YoY
YoY
- - - - -
Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12
EBITDA Adjusted EPS
2012: $84.8 (in USD millions)
■ Q4 2012 EPS: ($0.13)
■ Up from ($0.47) in Q4 2011
■ 2012 full year EPS: $0.09
$17.7
$24.8 $23.6
$21.9 $21.6
Down
29%
YoY
- - - - -
Q4 11 Q1 12 Q2 12 Q3 12 Q4 12
10
11. Capital Base
Cash and Debt
Cash Debt
( in USD millions)
■ Net debt: $194.2 million
■ Debt to capitalization: 0.59x
■ Net Debt to LTM EBITDA: 2.29x
■ Revolver availability: $50.8 million
■ Total liquidity: $172.4 million
$309.9 $315.8
$305.9
$287.6
$268.6
$121.6 ■ AMG’s primary debt facility is a $377
million term loan and revolving credit
$111.4
$79.6 $81.2 $93.6 facility
■ 5 year term – until 2016
Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 ■ Secured an additional $62 million for
its credit facility in 2012 in
Cash Flow from Operations
conjunction with the Voluntary
( in USD millions)
Tender Offering for GK
$65.6
$45.0
-$2.1 -$1.6
- - - -
11 2009 2010 2011 2012
12. Key Products
Revenue Gross Profit
( in USD millions) ( in USD millions)
2012: $1,215.6 2012: $196.5
12
13. End Markets
Revenue Gross Profit
( in USD millions) ( in USD millions)
2012: $1,215.6 2012: $196.5
Aerospace Aerospace
32.7% 38.2%
Infrastructure
14.1% Energy Infrastructure
Energy 15.8% 15.0%
14.1%
Specialty Metals Specialty Metals
& Chemicals & Chemicals
39.1% 31.0%
Aerospace + 3% Energy - 50%
vs. Q4 2011 vs. Q4 2011
13
14. Advanced Materials
Financial Summary ■ Q4 ‘12 revenue down 12% from Q4 ‘11
Revenue EBITDA
■ Tantalum up 61%
( in USD millions)
$250.0
$216.5 $211.7
$200.0
$198.7
$189.2
$21.0
■ Ferrovanadium down 30%
$174.0
$14.5 $16.0
■ Chrome down 26%
$13.7
$150.0
$12.1
$10.0 $11.0
■ Q4 ‘12 gross margin 13% of revenue,
$100.0
improved from 10% in Q4 ‘11
$6.0
$50.0 $6.0 ■ Improved costs
■ Increase in tantalum pricing
$- $1.0
Q4 11 Q1 12 Q2 12 Q3 12 Q4 12
■ Q4 ‘12 EBITDA margin 6% of revenue,
Capital Expenditure improved from 3% in Q4 ‘11
( in USD millions)
■ $1.2 million decrease in personnel costs
$10.7
■ Q4 ‘12 CAPEX $10.8 million
$10.8
$8.3
$6.2 $7.0 ■ $3.7 million for FeV expansion
■ $1.0 million for Tantalum expansion
- - - - -
Q4 11 Q1 12 Q2 12 Q3 12 Q4 12
14
15. Engineering Systems
Financial Summary
Q4 ‘12 revenue down 5% from Q4 ‘11
$90.0 ( in USD millions)
Casting and sintering furnaces up 32%
$20.0
Revenue EBITDA
$80.0
$72.9
$68.0
$71.1 $69.2 Remelting furnaces up 1%
$70.0 $65.4 $15.0
$60.0 $11.8 DSS furnaces down 91%
$50.0 Heat Treatment furnaces down 27%
$10.0
$40.0 $7.2
$30.0 $5.3 Q4 ‘12 gross margin 23% of revenue,
$3.7
$3.0 down from 30% in Q4 ‘11
$5.0
$20.0
Unfavourable product mix
$10.0
$- $-
Q4 11 Q1 12 Q2 12 Q3 12 Q4 12
Q4 12 EBITDA 10% of revenue, down
Order Intake
( in USD millions)
from 16% of revenue in Q4 ’11
Order backlog up 2% to $165.3 million at
$80.6 $79.7
Dec. 30, 2012
$69.5 $67.8
Order intake $67.8 million in Q4 ‘12
$36.4
0.98x book to bill ratio
- - - - -
Q4 11 Q1 12 Q2 12 Q3 12 Q4 12
15
16. Graphit Kropfmühl
Financial Summary
Q4 ‘12 revenue down 14% from Q4 ‘11
( in USD millions)
Silicon metal down 20%
$50.0 Revenue EBITDA
$45.0 $42.5
$40.0 $37.0
$39.5 $10.0 Natural graphite down 2%
$36.5
$35.0 $31.9
$7.0
$30.0 Q4 ‘12 gross margin 6% of revenue
$5.4
$25.0 $5.2
Lower shipments of silicon metal
$20.0 $4.2 $5.0
$15.0
Lower prices for natural graphite
$10.0
$5.0 $0.5 Q4 ‘12 EBITDA 2% of revenue
$- $-
SG&A up 39% related to merger
Q4 11 Q1 12 Q2 12 Q3 12 Q4 12
expenses
Capital Expenditure
■ Q4 ‘12 CAPEX $3.3 million
( in USD millions)
Upgrading silicon metal electric arc
furnace
$3.2 $3.3
$2.2
$2.8
$2.2 Upgrading high purity natural graphite
processing capacity
- - - - -
Q4 11 Q1 12 Q2 12 Q3 12 Q4 12
16
18. Outlook
AMG Processing AMG Engineering AMG Mining
Improved margins and Slight growth expected in Long term tantalum supply
earnings through cost 2013 contract will drive growth
reductions Backlog will be stable Silicon metal and natural
Aerospace alloys demand is Heat Treatment Services graphite volumes should
stable operating near capacity improve slightly in 2013
AMG Vanadium’s new Alternative energy and Antimony market prices
roaster is online specialty steel markets remain under pressure
AMG Aluminum is expected to remain soft in SG&A reductions from
rationalizing production near-term GK integration
■ AMG will increase operating profit and net income and reduce net debt in 2013
■ AMG announces Q1 2013 financial results on May 3, 2013
■ AMG will provide proforma historical Q1 2012 segment data in connection with Q1 release
18
20. Consolidated Balance Sheet
Balance Sheet ($’000) Actual
As of 31-December-11 31-December-12
Fixed assets 263.6 288.3
Goodwill and intangibles 38.1 38.7
Other non-current assets 63.4 67.2
Inventories 228.9 211.5
Receivables 188.1 177.2
Other current assets 39.1 43.4
Cash 79.6 121.6
TOTAL ASSETS 900.8 947.9
TOTAL EQUITY 220.6 217.5
Long-term debt 210.4 265.6
Pension liabilities 90.1 92.8
Other long-term liabilities 71.6 80.9
Current debt 58.2 50.3
Accounts payable 128.5 125.3
Advance payments 30.2 27.0
Accruals 51.7 58.9
Other current liabilities 39.5 29.6
TOTAL LIABILITIES 680.2 730.4
20 TOTAL LIABILITIES & EQUITY 900.8 947.9
21. Consolidated Income Statement
Income Statement ($’000) Actual
For the three months ended 31-December-11 31-December-12
Revenue 308.6 275.2
Cost of sales 258.1 233.8
Gross profit 50.5 41.4
Selling, general & admin. 42.5 34.0
Asset impairment & restructuring (1.9) 4.9
Environmental 5.5 1.2
Other income (5.3) (0.3)
Operating profit 19.6 4.0
Net finance costs 6.2 8.6
Share of (loss) profit of associates (13.5) 1.9
Profit before income taxes (10.0) (2.7)
Income tax expense 2.1 2.0
Profit (loss) for the period (12.1) (4.7)
Attributable to:
Shareholders of the Company (13.2) (3.5)
Non-controlling interest 1.1 (1.2)
Adjusted EBITDA 24.8 17.7
21
22. Consolidated Statement of Cash Flows
Cash Flow Statement ($’000) Actual
For the year ended 31-December-11 31-December-12
EBITDA 110.1 84.8
+/- Change in operating assets/liabilities (13.8) 8.8
-Interest paid, net (12.1) (18.6)
Other operating cash flow (5.0) 3.2
Cash flows from operations before taxes 79.2 78.2
Income tax paid (34.2) 3.2
Total cash flows (used in) from operations 45.0 65.6
Capital expenditures (51.9) (48.1)
Other investing activities (30.8) (0.4)
Cash flows from investing activities (82.7) (48.5)
Cash flows from financing activities 27.8 21.7
Net (decrease) increase in cash (9.9) 31.7
Beginning cash 89.3 79.6
Effects of exchange rates on cash 0.2 0.1
Ending cash 79.6 111.4
22
