Amg investor presentation Q2 2010

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Amg investor presentation Q2 2010

  1. 1. Investor Presentation 2nd Quarter 2010 AMG Advanced Metallurgical Group N.V.
  2. 2. Disclaimer 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. AMG ADVANCED METALLURGICAL GROUP N.V. 2
  3. 3. Introduction  Listed on NYSE-Euronext Amsterdam (Euronext: AMG)  Products  High purity metals and complex metal products  Vacuum furnaces used to produce high purity metals  2010 Q1 2010 March 31  Revenues - $235.8 million  EBITDA - $22.0 million  Net debt - $104.1 million  Capital Investment - $5.1 million  Global presence  Europe, North America, South America and Asia  2,300 employees Sustainable Metals Technology AMG ADVANCED METALLURGICAL GROUP N.V. 3
  4. 4. Financial Highlights - First Quarter 2010 ■ Revenue: $235.8 million ■ EBITDA: $22.0 million, 9.3% EBITDA margin ■ Increases in Advanced Materials sales prices ■ Advanced Materials profitability improved substantially in Q4 ■ Engineering Systems order intake remained low ■ EPS, excluding Timminco and restructuring charges, of $0.11 ■ Capital investment of $5.1 million in Q1 2010 ■ Cash: $98.9 million and debt of $203.0 million ■ Net debt of $104.1 million AMG ADVANCED METALLURGICAL GROUP N.V. 4
  5. 5. Macroeconomic Trends and Markets ■ AMG participates in the macro economic trend of: ■ Growing demand for natural resources in context of the need for sustainable environmental demands including: ■ CO2 reduction ■ Emerging market infrastructure ■ Aerospace and light weight materials ■ Specialty metals and chemicals AMG ADVANCED METALLURGICAL GROUP N.V. 5
  6. 6. Products & End Markets Advanced Materials Vacuum Furnaces  High-value alloys  Capital equipment for high purity  Essential raw materials materials Specialty Metals & Energy Chemicals Infrastructure Aerospace AMG ADVANCED METALLURGICAL GROUP N.V. 6
  7. 7. End Markets AMG Advanced Metallurgical Group N.V. Specialty Metals & Aerospace Infrastructure Energy Chemicals Titanium Alloys Structural Steel Solar Vacuum Furnaces Silicones Superalloys Specialty Steel Superalloys Paints & Pigments Turbine Coatings Building Materials Solar - Silicon Metal Glass, Tools & Optics Vacuum Furnaces Nuclear Fuel Vaccum Furnaces Capacitors Energy Storage Technologies AMG ADVANCED METALLURGICAL GROUP N.V. 7
  8. 8. End Products Aerospace Infrastructure – Recycling Ti alloys (includes VAl) Superalloys High purity stainless steel Typical aerospace jet engine Energy – Solar & Nuclear Specialty Metals & Chemicals Stackable Graphite Blocks Tantalum based capacitor Paints and pigments Vacuum furnaces for solar ingot production AMG ADVANCED METALLURGICAL GROUP N.V. 8
  9. 9. Markets & Products Q1 2010 Revenue by End Q1 2010 Revenue by Market Product FeV & FeNiMo Chromium 5% Metal 8% Antimony 10% Tantalum & Aerospace 26% Niobium Si metal 3% 11% Graphite 4% Energy - Solar & Nuclear 26% Infrastructure - Al Master Recycling 14% Alloys 14% Vacuum Furnaces Specialty 28% Metals & Ti Master Chemicals 34% Alloys and Coatings 18% AMG ADVANCED METALLURGICAL GROUP N.V. 9
  10. 10. Global Operations AMG Advanced Metallurgical Group N.V. (Netherlands) 79.5(2) 42.5%(1) Advanced Materials Division Engineering Systems Division Graphit Kropfmühl Timminco Germany US UK Brazil France Germany US/Mexico Germany Canada  Specialty alloys  Ferrovanadium  Aluminium  Tantalum oxide  Antimony  Vacuum furnace  Heat treatment  Silicon metal  Upgraded for titanium  Ferronickel- master alloys  Niobium oxide trioxide systems facilities  Natural metallurgical and superalloys molybdenum  Chromium  Aluminium  Own & Operate graphite silicon  Coating metal master alloys heat treatment  Silicon metal materials  Ferrotitanium facilities  Vanadium  Metals-based chemicals powders  Metals-based 2009 Revenue by Geography powders North America 21% Asia 18% Europe 56% South America 4% ROW 1% Note: This chart is a simplified depiction of AMG‟s organisational structure. (1) Timminco Limited is listed on the Toronto stock exchange (TIM CN / TIM.TO). (2) Graphit Kropfmühl AG (“GK”) is listed on the Frankfurt stock exchange (GKRG.DE / GKR GR). AMG ADVANCED METALLURGICAL GROUP N.V. 10
  11. 11. Financial Highlights - by Business Unit In USD millions 2010 Q1 Revenues 2010 Q1 EBITDA $1.5 $30.0 $30.0 $8.5 $65 .3.3 $65 $12.0 $140.5 $140.5 Advanced Materials Advanced Materials Engineering Systems Engineering Systems GK GK Advanced Materials Engineering Systems GK 2010 Q1 Free Cash Flow ($2.5) $ in millions Q1 2010 Adjusted EBITDA 22.0 ($19.1) $25.7 + / - Change in working capital (16.5) - Maintenance capital (1.4) Advanced Materials Engineering Systems GK Free Cash Flow 4.1 AMG ADVANCED METALLURGICAL GROUP N.V. 11
  12. 12. Financial Highlights Revenue Highlights ($ in millions)  Q1 Revenue: $235.8 million  Up 9% from Q1 2009  Q1 EBITDA: $22.0 million $231.4 $235.8  Up 39% from Q1 2009 $215.7 $214.9 $205.4  Balance sheet highlights at Mar 31, 2010  Cash: $98.9 million Q1 09 Q2 09 Q3 09 Q4 09 Q1 10  Debt: $203.0 million  Net debt: $104.1 million EBITDA  Total liquidity: $190.9 million ($ in millions) $22.2 $22.0 $18.6 $15.9 $12.4 - - Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 AMG ADVANCED METALLURGICAL GROUP N.V. 12
  13. 13. Advanced Materials - Market, Products and Customers Aerospace Infrastructure - FeV Specialty Metals Products  Specialty alloys for titanium  Ferro-vanadium  Chromium Metals  Coatings for wear  Ferro-nickel molybdenum  Tantalum resistance  Antimony  Aluminium master alloys Competitors  Reading Alloys Inc.  Highveld Steel & Vanadium  KBM Affilips B.V.  Strategic Minerals  Gulf Chemical &  KB Alloys, Inc. Corporation Metallurgical Corporation  Delachaux S.A.  Strategic Minerals  Campine S.A. Corporation  Chemtura Corporation  Xstrata plc  Chengde Vanadium & Titanium Stock Co. Ltd. Sample Customers AMG ADVANCED METALLURGICAL GROUP N.V. 13
  14. 14. Infrastructure - Pricing Significant price trends – 10 years $60 $250 $50 Price / Pound – V, Mo, Ni $200 $40 $150 $30 $100 $20 $10 $50 $0 $0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Ferro Vanadium Molybdenum Nickel Prices are still below pre-crisis levels AMG ADVANCED METALLURGICAL GROUP N.V. 14
  15. 15. Advanced Materials Financial Summary Highlights ( in millions) Revenue EBITDA ■ Infrastructure - ferrovanadium ■ Reference prices increased 18% v. Q1 „09 $140.5 ■ Volumes declined 12% v. Q1 ‟09 $124.3 ■ Aerospace – master alloys volumes declined $110.1 51% compared to Q4 2009 $95.9 $96.5 ■ Year over year reduction in personnel expenses improved EBITDA margins ■ CAPEX limited to maintenance activities and expansion of ferrovanadium operations in the $5.3 $8.5 -$1.3 -$0.5 $5.0 United States Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 CAPEX $5.0 $3.3 $2.5 $2.1 $1.9 - - - Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 AMG ADVANCED METALLURGICAL GROUP N.V. 15
  16. 16. Engineering Systems - Market, Products and Customers Energy - Solar Aerospace Energy - Nuclear  Solar silicon melting and  Vacuum Melting and Re-  Vacuum Sintering Products crystallisation systems melting Systems Systems (DSS furnaces)  Precision Casting and Coating Systems  Heat Treatment with high pressure gas quenching Notable Successes  2001 – Secured furnace  2009 – Market Share leader  July 2008 – Secured first exclusivity with REC in Ti remelting in China, the nuclear engineering contract fastest growing Ti market with DOE, through Shaw-  2005 – Introduced single Areva crucible furnaces  2009 – 80% market share in turbine blade coating  Two strategic acquisitions  2009 – >$172 mm in completed to expand product revenue, 2nd largest portfolio market participant Sample Customers AMG ADVANCED METALLURGICAL GROUP N.V. 16
  17. 17. Engineering Systems Financial Summary Highlights ( in millions) Revenue EBITDA  Revenue: $65.3 million, 30% decrease QoQ  Solar silicon DSS furnace revenues $96.2 $91.2 decreased 47% in Q1 „10 v. Q1 „09  EBITDA: $12 million $73.8 $65.3  Backlog declined from $162 million at $61.6 December 31 2009 to $127 million at March 31, 2010  Order backlog is now primarily $23.4 $22.5 $11.0 $12.1 comprised of furnaces for aerospace - $5.9 - - Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 end market  2010 EBITDA is expected to be lower than CAPEX 2009 due to the decline in backlog $3.0 $1.7 $1.2 $0.8 $0.8 - - - - Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 AMG ADVANCED METALLURGICAL GROUP N.V. 17
  18. 18. Graphit Kropfmühl Financial Summary Highlights ( in millions) Revenue EBITDA  Revenue: $29.9 million; 27% increase QoQ $33.7  increases in natural graphite revenue $33.3 $29.9 $27.3  EBITDA: $1.5 million $23.6  Improved from Q1 „09 due to cost containment measures in graphite and increased revenue  CAPEX only for graphite milling expansion  Silicon metal prices have rebounded from $0.8 $1.7 - $2.6 - $1.2 - $1.5 - Q1 ‟09. Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 CAPEX $4.7 $1.4 $0.8 $1.0 $0.4 - - - - Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 AMG ADVANCED METALLURGICAL GROUP N.V. 18
  19. 19. Capital Base Cash and Debt Highlights – March 31 2010 ( in millions) ■ Cash: $98.9 million Cash Debt ■ Total debt: $203.0 million $202.3 $203.8 $203.0 $193.9 ■ Net debt: $104.1 million $180.3 ■ Revolver availability: $92.0 million ■ Total liquidity $190.9 million $117.5 $124.4 $117.0 $108.8 $98.9 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Note: Cash includes short term investments AMG ADVANCED METALLURGICAL GROUP N.V. 19
  20. 20. Outlook ■ Advanced Materials ■ Prices have rebounded from historic lows and demand is beginning to improve; 2010 revenues and EBITDA will improve significantly ■ Engineering Systems ■ Order intake continues to be sluggish; ■ Lower order backlog will result in lower 2010 revenues and EBITDA ■ Graphit Kropfmühl ■ Natural graphite demand and pricing is improving ■ Timminco ■ AMG owns 42.3% of Timminco; AMG supports Timminco‟s focus on its core silicon metal business AMG ADVANCED METALLURGICAL GROUP N.V. 20
  21. 21. Appendix AMG ADVANCED METALLURGICAL GROUP N.V. 21
  22. 22. Consolidated Balance Sheet $ in thousands December 31, 2009 March 31, 2010 Fixed Assets 211,022 204,977 Goodwill and Intangibles 28,253 26,351 Other Non-current Assets 78,209 67,526 Inventories 193,378 180,630 Receivables 147,787 175,078 Other Current Assets 35,313 37,182 Cash 117,016 98,857 TOTAL ASSETS 810,978 790,601 TOTAL EQUITY 228,423 224,147 Long-term Debt 168,319 159,800 Pension Liabilities 91,358 86,917 Other Long-term Liabilities 51,249 37,507 Current Debt 35,477 43,179 Accounts Payable 69,791 80,658 Advance Payments 54,764 39,807 Unearned Revenue - - Accruals 46,179 43,843 Other Current Liabilities 65,418 74,743 TOTAL LIABILITIES 582,555 566,454 TOTAL LIABILITIES AND EQUITY 810,978 790,601 AMG ADVANCED METALLURGICAL GROUP N.V. 22
  23. 23. Consolidated Income Statement $ in thousands Q1 2009 Q1 2010 Revenue 215,719 235,793 Cost of sales 181,859 193,209 Gross profit 33,860 42,584 Selling, general and admin. 29,039 30,614 Asset impairment and restructuring 198 7 Environmental 5 257 Other income (1,691) (81) Operating profit 6,309 11,787 Net finance costs 2,831 3,609 Share of loss of associates 787 4,395 Profit before income taxes 2,691 3,783 Income tax expense 7,938 3,867 Loss for the year from continuing operations (5,247) (84) Loss after tax for the year from discontinued operations (18,487) - Loss for the year (23,734) (84) Attributable to: Shareholders of the Company (15,394) (64) Minority interest (8,340) (20) AMG ADVANCED METALLURGICAL GROUP N.V. 23
  24. 24. Consolidated Cash Flows $ in thousands Q1 2009 Q1 2010 Cash Flows from Operations (1,062) (14,921) Capital Expenditures (11,967) (5,146) Other Investing Activities (25,982) (791) Cash Flows from Investing Activities (37,949) (5,937) Cash Flows from Financing Activities 24,437 7,643 Net increase (decrease) in cash (14,574) (13,215) Beginning Cash 143,473 117,016 Effects of exchange rates on cash (6,126) (4,944) Ending Cash 122,773 98,857 Approximate availability under AMG lines of credit 71,000 92,040 Total Liquidity 193,773 190,897 AMG ADVANCED METALLURGICAL GROUP N.V. 24
  25. 25. AMG Advanced Metallurgical Group N.V.
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