November 10 2010

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November 10 2010

  1. 1. AMG Advanced Metallurgical Group N.V. Investor Presentation November 2010
  2. 2. 2AMG ADVANCED METALLURGICAL GROUP N.V. 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.
  3. 3. 3AMG ADVANCED METALLURGICAL GROUP N.V.  Listed on NYSE-Euronext Amsterdam (Euronext: AMG)  Products  High purity metals and complex metal products  Vacuum furnaces used to produce high purity metals  2010 YTD September 30 2010  Revenues - $719.8 million  EBITDA - $64.7 million, 9.0% margin  EPS of $0.42 (1)  Net debt - $144.6 million  Capital Investment - $19.1 million  Global presence  Europe, North America, South America and Asia  2,500 employees Sustainable Metals Technology Introduction (1) Excluding the equity losses from AMG’s 42.5% ownership in Timminco Limited
  4. 4. 4AMG ADVANCED METALLURGICAL GROUP N.V. ■ AMG participates in the macro economic trend of: ■ Growing demand for natural resources in context of CO2 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. 5. 5AMG ADVANCED METALLURGICAL GROUP N.V. Advanced Materials  High-value alloys  Essential raw materials Engineering Systems  Capital equipment for high purity materials Products & Markets InfrastructureAerospaceEnergy Specialty Metals & Chemicals
  6. 6. 6AMG ADVANCED METALLURGICAL GROUP N.V. Markets AMG Advanced Metallurgical Group N.V. Aerospace Infrastructure Energy Specialty Metals & Chemicals Titanium Alloys Structural Steel Solar Vacuum Furnaces Silicones Superalloys Specialty Steel Superalloys Paints & Pigments Turbine Coatings Building Materials Silicon Metal Glass, Tools & Optics Vacuum Furnaces Nuclear Fuel Vaccum Furnaces Capacitors Energy Storage Technologies
  7. 7. 7AMG ADVANCED METALLURGICAL GROUP N.V. Products Vacuum furnaces for solar ingot production Stackable Graphite Blocks Energy – Solar & Nuclear Tantalum based capacitor Paints and pigments Specialty Metals & Chemicals High purity stainless steel Infrastructure – Recycling Typical aerospace jet engine Superalloys Ti alloys (includes VAl) Aerospace
  8. 8. 8AMG ADVANCED METALLURGICAL GROUP N.V. 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%
  9. 9. 9AMG ADVANCED METALLURGICAL GROUP N.V. 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
  10. 10. 10AMG ADVANCED METALLURGICAL GROUP N.V. Advanced Materials – Specialty Metals Acquisition Material Competitors  Antimony – AMG is the largest producer of antimony trioxide (a flame retardant) in Europe  In August 2010 AMG acquired antimony mining rights and an adjacent antimony metal smelter in Turkey for a total investment of up to approximately $20 million  Secure supply of antimony raw material used in AMG’s antimony trioxide operation  AMG uses approximately 10,000 mt of antimony metal per year  Antimony metal prices have increased from $4,500/mt in 2009 to over $10,000/mt in October 2010  This will result in substantial raw material cost savings in 2011  Campine S.A., Chemtura Corporation, Hsikwangshan Twinkling Star Antimony Co. Ltd Transaction Strategic Rationale Antimony Metal Purchase Oxidation Process Antimony Trioxide Dispersions, Pastes, Granules, Microgranules
  11. 11. 11AMG ADVANCED METALLURGICAL GROUP N.V. Advanced Materials - Infrastructure metals pricing $0 $50 $100 $150 $200 $250 $0 $10 $20 $30 $40 $50 $60 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Price/Pound–V,Mo,Ni Ferro Vanadium Molybdenum Nickel Prices are still below pre-crisis levels 2010
  12. 12. 12AMG ADVANCED METALLURGICAL GROUP N.V. 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, 2nd 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
  13. 13. 13AMG ADVANCED METALLURGICAL GROUP N.V. Financial Overview
  14. 14. 14AMG ADVANCED METALLURGICAL GROUP N.V. Financial Highlights – YTD September 2010 2010 YTD Revenue $719.8 2010 YTD EBITDA $64.7 Europe 56% North America 21% Asia 18% South America 4% ROW 1% Revenue by Geography Revenue and EBITDA in millions 447.4178.0 94.4 Advanced Materials Engineering Systems Graphit Kropfmühl 32.127.5 5.1 Advanced Materials Engineering Systems Graphit Kropfmühl
  15. 15. 15AMG ADVANCED METALLURGICAL GROUP N.V. - - -- - - $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) HighlightsRevenue EBITDA (1) Excluding the equity losses from AMG’s 42.5% ownership in Timminco Limited
  16. 16. 16AMG ADVANCED METALLURGICAL GROUP N.V. 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
  17. 17. 17AMG ADVANCED METALLURGICAL GROUP N.V. 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
  18. 18. 18AMG ADVANCED METALLURGICAL GROUP N.V. 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
  19. 19. 19AMG ADVANCED METALLURGICAL GROUP N.V. 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 Cash and Debt ( in millions) Highlights – September 30, 2010
  20. 20. 20AMG ADVANCED METALLURGICAL GROUP N.V. Outlook ■ Advanced Materials ■ Markets are improving but remain volatile ■ Antimony, tantalum and aerospace alloys and coatings will drive growth in 2011 ■ Engineering Systems ■ Backlog is increasing; renewed interest in solar silicon furnaces ■ Order intake driven by Chinese and Indian markets ■ Graphit Kropfmühl ■ High purity natural graphite demand and 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 ■ Repaid all of its senior bank debt (non-recourse to AMG)
  21. 21. 21AMG ADVANCED METALLURGICAL GROUP N.V. Appendix
  22. 22. 22AMG ADVANCED METALLURGICAL GROUP N.V. 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 assets 78,209 54,848 Inventories 193,378 202,318 Receivables 147,787 177,586 Other current assets 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 liabilities 65,418 70,548 TOTAL LIABILITIES 582,555 605,805 TOTAL LIABILITIES AND EQUITY 810,978 825,232 in thousands
  23. 23. 23AMG ADVANCED METALLURGICAL GROUP N.V. 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 costs 5,465 2,921 Share of loss of associates (1,285) (17,554) Profit before income 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
  24. 24. 24AMG ADVANCED METALLURGICAL GROUP N.V. 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
  25. 25. AMG Advanced Metallurgical Group N.V.

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