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AMG - Annual General Meeting of Shareholders - 2013

AMG - Annual General Meeting of Shareholders - 2013

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  • 1. Annual General MeetingMay 3, 2013Amsterdam, The Netherlands
  • 2. 2THIS DOCUMENT IS STRICTLY CONFIDENTIAL AND IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION BY AMGADVANCED METALLURGICAL GROUP N.V. (THE “COMPANY”) AND MAY NOT BE REPRODUCED IN ANY FORM OR FURTHERDISTRIBUTED TO ANY OTHER PERSON OR PUBLISHED, IN WHOLE OR IN PART, FOR ANY PURPOSE. FAILURE TO COMPLY WITHTHIS 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 acquiresecurities 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 connectionwith, 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 anyaccompanying 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 mentionedin 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 ofapplication to subscribe for securities. Neither this presentation nor anything contained herein shall form the basis of, or be relied on in connection with, anyoffer or commitment whatsoever. The information contained in this presentation has not been independently verified. No representation or warranty, expressor 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. TheCompany and its advisors are under no obligation to update or keep current the information contained in this presentation. To the extent allowed by law, noneof the Company or its affiliates, advisors or representatives accept any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from anyuse 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 theCompany 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 acceptanceof new products, the impact of competitive pricing, the ability to obtain necessary regulatory approvals, and the impact of general business and global economicconditions. 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 anyof 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. 3 Critical Raw Materials Organization Management Markets Operations Sustainability OutlookContents
  • 4. 4Critical Raw Materials
  • 5. 5FeCritical Raw Materials The EU identified 14 critical raw materials* to the European economy – focusing on twodeterminants – economic importance and supply riskNote: *European Commission Annex V to the Report of the Ad-hoc Working Group on defining critical raw materialsMaterials mined or processed by AMG,or melted by AMG vacuum systemsHighlighted materials meltedby AMG vacuum systemsREELiAlVSbCrNiCTaNbTiSiMo
  • 6. 6-40%-30%-20%-10%0%10%20%30%40%50%2011-Q1 2011-Q2 2011-Q3 2011-Q4 2012-Q1 2012-Q2 2012-Q3 2012-Q4 2013-Q1Antimony Chrome Graphite Molybdenum NickelSilicon Tantalum Vanadium TitaniumPrice Trends – Q1 2011 to Q1 2013Market Price 2012 vs. Q1 2013 vs.Materials 2011 Q4 2012Antimony -13% -10%Chrome -11% -7%Graphite -1% 0%Molybdenum -18% 2%Nickel -23% 2%Silicon -19% -2%Tantalum -9% -2%Vanadium 1% 5%Titanium -26% 3%Average -13% -1%
  • 7. 7Organization
  • 8. 8Three Business Units – Core CompetenciesAMGProcessingUpgrading andRecyclingAMGMiningMining andConcentratingAMGEngineeringVacuum Furnacesand Systems
  • 9. 9Processed MaterialsHighAlloyedSteelsAMGProcessingUpgrading andRecyclingAMGMiningMining andConcentratingAMGEngineeringVacuum Furnacesand SystemsRareEarthREEFeldsparGlasses
  • 10. 103,275 EmployeesAMG15 Countries5 Continents3 SegmentsOne Company
  • 11. 11AMG Global LocationsareaenlargedaboveOffices
  • 12. 12Management
  • 13. 13AMG ManagementAMG AluminumChairman &Chief Executive OfficerDr. Heinz SchimmelbuschAMG VanadiumAMG TitaniumAlloys & CoatingsAMG SuperalloysChief Financial OfficerMrs. Amy ArdAMG AntimonyAMG SiliconAMG GraphiteGlobal TreasuryCompliance & LegalControllingRisk ManagementInternal AuditHuman ResourcesCorporate Development &Investor RelationsSafety, Health &Environmental (SHE)Chief Operating OfficerMr. Eric JacksonAMG LeadershipAMG MineraçãoAMG Reporting Segments AMG UnitsAMG Processing AMG Mining AMG EngineeringPlanning&Analysis
  • 14. 14Markets
  • 15. 15Markets – AMG Processing■ AMG Processing - the conversion businesses of Advanced Materials■ Aluminum master alloys■ Ferrovanadium and alloys■ Titanium alloys and coatings■ SuperalloysMarkets
  • 16. 16Markets – AMG Mining■ AMG Mining - mine based rare metal & material value chains:■ Tantalum■ Antimony■ Graphite and silicon businesses of Graphit KropfmühlMarkets
  • 17. 17Markets – AMG Engineering■ AMG Engineering■ Metallurgy■ Heat Treatment Systems and ServicesMarkets
  • 18. 18Markets – AMG Engineering Globally Installed CustomersChinaU.S.A.IndiaBrazilMexicoRussiaJapanEgyptKazakhstanTaiwanAustraliaSouth KoreaAsia > 650 systems installedEurope > 750 systems installedNorth America > 130 systems installedArgentinaCanadaIndonesiaSouth AfricaThailandTurkeyVacuum Systems for Metals & Alloys as well asNon-Metallic Materials such as Ceramics and Glasses
  • 19. 19Markets – Serving The Big Trends Mobility – Aerospace and Automobile Thermal Barrier Coatings (TBC) Clean Energy and Energy Savings Ti-Alloys, Al master alloys, and V alloysfor light-weight materials Communications Ta mining and concentrate for Tacapacitor critical to portable electronicsServing long-term high growth trendsHighAlloyedSteelsAMGProcessingUpgrading andRecyclingAMGMiningMining andConcentratingAMGEngineeringVacuum Furnacesand SystemsRareEarthREEFeldsparGlasses
  • 20. 20Markets – AMG’s Selective World No.1 PositionsAMG Processing AMG EngineeringAMG MiningWorld’s largest Vanadium recyclingfacility in the U.S. High purity ChromeMetal supplier forAerospace superalloys Aluminum MasterAlloys supplierWorld’s largest Thermal BarrierCoatings (TBC)furnaces for turbineblade Vacuum furnaces for Titanium Tantalum &niobium High performancesteel and alloys Modular vacuum heattreatment furnace withgas quenchingWorld’s largest Tantalum miningcomplex in Brazil#1 #1 #1
  • 21. 21Operations
  • 22. 22Operations UpdateAMG is focused on improving operational performance and increasing cash flowObjective Progress Update■ Q1‘13 SG&A decreased 8% compared to Q1‘12Reduce SG&A■ AMG Engineering Q1‘13 Gross Margin improved to 25%,from 22% in Q1’12■ AMG Mining Q1‘13 Gross Margin improved to 16%, from15% in Q1‘12Improve GrossMarginIncreaseOperatingCash Flow■ Q1‘13 cash from operations improved by $3.7 mm, fromQ1’12■ Q1‘13 Working Capital Days reduced to 61 days, from 65 daysin Q1‘12
  • 23. 23Operating Cash Flow$(5,000)$5,000$15,000$25,000$35,000$45,000$55,000$65,0002009 2010 2011 2012Cash from Operating ActivitiesAMG has improved Operating Cash Flow in each of the last 4 years
  • 24. 24Sustainability
  • 25. 25Sustainability – AMG ApproachEconomic GrowthEnvironmentalStewardshipSocial ProgressSustainabilityEco EfficiencySocio-EconomicSocio-Environmental
  • 26. 26Sustainability – 2012 HighlightsSAFETY■ No Fatalities■ Continued LTI Rate & Severity ImprovementSCOPE■ Increased from 23 to 33 locations■ Successfully integrated GK facilitiesGREENHOUSE GAS EMISSIONS■ Absolute increase due to significantly expanded scope■ Including unaudited data for GK in 2011, total GHGemissions for AMG were 5% lower in 2012*■ Internal GHG reductions focus on targeted energyefficiency initiatives■ Like for Like Comparison – AdvancedMaterials & Engineering Systems4.23.33.02.32009 2010 2011 2012AMG Lost Time Incident Rate2011 2012146,000 141,0004%Reduction* Excluding the former KB Alloys sites for which 2011 data is unavailable.Many factors including productivity and product mix contribute to this reduction.
  • 27. 27Sustainability – Life Cycle Assessment‡ Estimated. Exact amount varies depending on ore body characteristics and processing technology.EnhancedTechnologyPrimary Mining and Processing ‡Spent Refinery Catalyst RecyclingReduced to 28 kgCO2 /kg VPyrometallurgical RecyclingEnables 90,000 mtCO2 Savings/Year, ContributingSavings of Almost Twice of OwnEmissionsBaseTechnologyFeVProductionGenerates 78 kg CO2/kg V50,000 mt CO2/year140,000 mt CO2/year
  • 28. 28Outlook
  • 29. 29Outlook■ AMG’s markets, particularly for the European centric businesses,remain challenging■ Cost reductions and operational improvements targeted toincrease EBITDA and cash flow in 2013AMG Processing AMG EngineeringAMG Mining
  • 30. Annual General MeetingFinancial PresentationMay 3, 2013Amsterdam, The Netherlands
  • 31. 2THIS DOCUMENT IS STRICTLY CONFIDENTIAL AND IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION BY AMGADVANCED METALLURGICAL GROUP N.V. (THE “COMPANY”) AND MAY NOT BE REPRODUCED IN ANY FORM OR FURTHERDISTRIBUTED TO ANY OTHER PERSON OR PUBLISHED, IN WHOLE OR IN PART, FOR ANY PURPOSE. FAILURE TO COMPLY WITHTHIS 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 acquiresecurities 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 connectionwith, 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 anyaccompanying 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 mentionedin 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 ofapplication to subscribe for securities. Neither this presentation nor anything contained herein shall form the basis of, or be relied on in connection with, anyoffer or commitment whatsoever. The information contained in this presentation has not been independently verified. No representation or warranty, expressor 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. TheCompany and its advisors are under no obligation to update or keep current the information contained in this presentation. To the extent allowed by law, noneof the Company or its affiliates, advisors or representatives accept any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from anyuse 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 theCompany 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 acceptanceof new products, the impact of competitive pricing, the ability to obtain necessary regulatory approvals, and the impact of general business and global economicconditions. 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 anyof 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
  • 32. 3■ 2012 Financial Review■ Consolidated Results■ Capital Base■ Key Products and End Markets■ Segment Results■ Q1 2013 Financial ReviewAgenda
  • 33. 42012 Financial Review
  • 34. 5Revenue- - - -- - - -$69.1$84.9$110.1$84.82009 2010 2011 2012Financial Highlights- - - -- - - -$867.4$990.5$1,351.3$1,215.62009 2010 2011 2012■ 2012 full year EPS: $0.09Gross ProfitEBITDA(in USD millions)Adjusted EPS- - - -- - - -$165.6 $178.6$238.0$196.52009 2010 2011 20122012: $1,215.62012: $84.8(in USD millions)2012: $196.5(in USD millions)
  • 35. 6Capital Base■ 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■ AMG’s primary debt facility is a $377million term loan and revolving creditfacility■ 5 year term – until 2016■ Secured an additional $62 million forits credit facility in 2012 inconjunction with the VoluntaryTender Offering for GK$117.0$89.3 $79.6$121.6$203.8$237.1$268.6$315.82009 2010 2011 2012Cash Debt( in USD millions)Cash and DebtCash Flow from Operations- - - -- - - --$2.1 -$1.6[VALUE]$65.62009 2010 2011 2012( in USD millions)
  • 36. 7Key Products2012: $1,215.6Revenue Gross Profit2012: $196.5( in USD millions) ( in USD millions)
  • 37. 8End Markets2012: $1,215.6Revenue Gross Profit2012: $196.5( in USD millions) ( in USD millions)Aerospace32.7%Infrastructure14.1%Energy14.1%Specialty Metals& Chemicals39.1%Aerospace38.2%Energy15.8%Specialty Metals& Chemicals31.0%Infrastructure15.0%Aerospace is AMG’s highest margin Market
  • 38. 9■ 2012 revenue down 9% from 2011■ Decreases in average selling prices andvolumes for antimony and aluminiummaster alloys■ Decreases in volumes forferrovanadium and coatings■ 2012 gross margin 14% of revenue,constant from 2011■ Improved product mix and reduction inoperating costs■ 2012 EBITDA margin 6% of revenue■ $9.4 million, or 11%, decrease inSG&A■ 2012 CAPEX $32.3 million■ Ferrovanadium, Antimony, andTantalum expansionsAdvanced MaterialsFinancial SummaryCapital Expenditure( in USD millions)( in USD millions)$872.0$791.3$50.4 $50.3$10.0$15.0$20.0$25.0$30.0$35.0$40.0$45.0$50.0$55.0$60.0$65.0$70.0$75.0$80.0$85.0$90.0$95.0$100.0$-$200.0$400.0$600.0$800.0$1,000.02011 2012Revenue EBITDA- -$29.1 $32.32011 2012
  • 39. 10 2012 revenue down 13% from 2011 Remelting furnaces up 16% Heat Treatment Services up 8% DSS furnaces down 83% 2012 gross margin 22% of revenue,down from 27% in 2011 Unfavourable product mix Decline in economies of scale 2012 EBITDA 7% of revenue $8.7 million, or 15%, decrease inSG&A expenses Order backlog up 4% to $165.3 million atDec. 31, 2012 Order intake $276.0 million in 2012 1.00x book to bill ratioEngineering SystemsFinancial SummaryOrder Intake( in USD millions)( in USD millions)$313.8$273.8$34.0$19.3$1.0$6.0$11.0$16.0$21.0$26.0$31.0$36.0$41.0$46.0$51.0$56.0$61.0$66.0$71.0$76.0$-$50.0$100.0$150.0$200.0$250.0$300.0$350.0$400.02011 2012Revenue EBITDA- -$292.4 $276.02011 2012
  • 40. 11 2012 revenue down 9% from 2011 Lower silicon metal and naturalgraphite pricing and volume 2012 gross margin 15% of revenue Lower pricing Lower economies of scale 2012 EBITDA 10% of revenue SG&A up 3% related to mergerexpenses■ 2012 CAPEX $10.4 million Upgrading silicon metal electric arcfurnace Upgrading high purity natural graphiteprocessing capacityGraphit KropfmühlFinancial SummaryCapital Expenditure( in USD millions)( in USD millions)$165.5$150.5$25.8$15.2$1.0$6.0$11.0$16.0$21.0$26.0$31.0$36.0$41.0$46.0$-$20.0$40.0$60.0$80.0$100.0$120.0$140.0$160.0$180.0$200.02011 2012Revenue EBITDA- -$9.5 $10.42011 2012
  • 41. 12Q1 2013 Financial Review
  • 42. 13New Business Units, Products and Markets High-value metals & alloys Coating materials Capital equipment & servicefor high purity materials Critical raw materialsAMG Processing AMG EngineeringInfrastructureAerospaceEnergyAMG MiningSpecialty Metals &Chemicals AMG’s conversion andrecycling based businesses AMG’s vacuum systemsand services business Integrated AMG’s minebased businessesServing the Technology Trends in Energy, Aerospace, Infrastructure,and Specialty Metals & Chemicals
  • 43. 14Q1 2013 Financial Highlights■ Revenue: $296.5 million■ 8% decrease from the same period in 2012■ LTM revenue: was $1,188.1 million■ EBITDA: $22.2 million■ 1% increase over the same period in 2012■ LTM EBITDA: $85.1 million■ EPS: $0.09■ 31% decrease from the same period in 2012■ Cash Flow from Operating Activities: $0.7 million■ $3.8 million improvement from the same period in 2012■ SG&A: $36.0 million■ 8% decrease from the same period in 2012
  • 44. 15Q1 2013 Financial Highlights■ AMG Processing:■ Revenue: $153.1 million■ EBITDA: $8.7 million■ AMG Engineering■ Revenue: $60.5 million■ EBITDA $5.6 million■ AMG Mining■ Revenue: $82.9 million■ EBITDA: $7.9 million■ As of March 31, 2013■ Cash: $106.7 million■ Net debt: $200.7 million■ Debt to capitalization: 0.64x■ Net Debt to LTM EBITDA: 2.34x■ Total liquidity: $172.9 million