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Amg investor presentation may 2012 Presentation Transcript

  • 1. Investor Presentation May 2012
  • 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 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
  • 3. 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: €193M ($252M) Shares outstanding: 27.5M 52 week range: €6.67–€15.38 Recent share price: €7.00 (May 11, 2012) AMG provides high value-added specialty metal alloys and engineering systems,related to CO2 reduction and conservation of natural resources to growing end markets3
  • 4. Business Units, Products, and End Markets Advanced Materials Engineering Systems Graphit Kropfmühl AMG Mining 67% of Q1 2012 revenue  21% of Q1 2012 revenue  12% of Q1 2012 revenue  Creating new reporting 62% of Q1 2012 EBITDA  14% of Q1 2012 EBITDA  24% of Q1 2012 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
  • 5. Why Invest in AMG Revenue EBITDA 2009 – 2011 2009 – 2011 Advancing 24.8% productivity 26.2% CAGR and CAGR technology 2011: 2011: $ 1,351.3 million $ 110.1 million + 36% over 2010 + 30% over 2010 Increase Shareholder Value Horizontal Vertical ROCE Consolidati EPS Integration on 2009 – 2011 Strong growth in 19.9% 2011 CAGR Adjusted 2011 EPS: 2011: $1.34 15.1% + 79% over 2010 + 27% over 20105
  • 6. 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 materials6
  • 7. 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, 5x more than a comparable airplane, the A340¹  Recycling  Ferrovanadium FeV is added Property  Ferro-nickel into high- strength Modification molybdenum light-weightInfrastructure steel as used in 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, November 2011 ³ iSuppli in August 2010
  • 8. 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 reduce weight  Heat Treatment and lower CO2 with high pressure emission¹ gas quenching  Technology  Solar silicon Property melting and Modification crystallisation Energy systems- DSS Solar power could – Solar furnaces achieve $1 per watt by  Mono2(TM) 2020, down from $4 technology 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
  • 9. 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  Conversion construction efficiency in buildings could provide ~19% of the total benefits thus increasing 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 Metals & batteries Li-iron batteries for  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
  • 10. Recent Developments AMG Mining Focus on improving mining operational efficiencies at AMGs existing antimony and tantalum mines ■ Appointed Mr. Hoy Frakes as President of AMG Mining AMG Aluminum Began the next phase in the coordination of global production sites and global customer service activities Increase ■ Appointed Mr. Julien Crisnaire as President of AMG Aluminum to Shareholder lead this initiative Value Graphit Kropfmühl AMG completed the public Voluntary Tender process ■ AMG acquired over 5.4% of the outstanding shares of GK through the voluntary tender offer completed on May 2, 2012 ■ AMG now owns 93.5% of GKs shares – more than the 90% threshold required to initiate a squeeze out10
  • 11. Financial Highlights11
  • 12. Financial Highlights Revenue 2011 Gross Profit LTM: $1,357.3 (in USD millions) LTM: $231.6 (in USD millions) $324.0 $53.4 $368.3 $69.0 $356.4 Up $59.8 $58.7 Down $318.0 $308.6 2% $50.5 11% YoY YoY - - - - - Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 EBITDA Adjusted EPS LTM: $105.8 (in USD millions) ■ Q1 2012 EPS: $0.26 (1) ■ Down 26% from Q1 2011 (1) ■ LTM EPS: $1.25 (1) $31.4 $21.9 $26.2 $27.7 $24.8 Down 16% YoY Q1 11 Q2 11 Q3 11 Q4 11 Q1 1212 (1) Adjusted to exclude non-recurring charges and Timminco Results
  • 13. Capital Base Cash and Debt Cash Debt ( in USD millions) ■ Net debt: $206.4 million ■ Debt to capitalization: 0.55x ■ Net Debt to LTM EBITDA: 1.95x ■ Revolver availability: $47.9 million ■ Total liquidity: $129.1 million $287.6 $267.1 $278.5 $274.9 $268.6 ■ AMG’s primary debt facility is a $377 million term loan and revolving credit $81.2 facility $66.1 $61.1 $71.3 $79.6 ■ 5 year term – until 2016 ■ Secured an additional $62 million for Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 its credit facility in Q1 2012 in conjunction with the Voluntary ROCE Tender Offering for GK 15.1% 11.9% 10.5%0 8.0% 2009 2010 201113
  • 14. Key ProductsRevenue Gross Profit ( in USD millions) ( in USD millions) Q1 2012: $324.0 Q1 2012: $53.4 $300 $60 $250 $50 $200 $40 $150 $30 $100 $20 $50 $10 $- $- YTD Q1 2011 YTD Q1 2012 YTD Q1 2011 YTD Q1 2012 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
  • 15. End MarketsRevenue Gross Profit ( in USD millions) ( in USD millions) Q1 2012: $324.0 Q1 2012: $53.4 Aerospace Aerospace 32.4% 33.5% Infrastructure 14.2% Energy Energy 19.6% Infrastructure 14.3% 17.8% Specialty Metals Specialty Metals & Chemicals & Chemicals 39.1% 29.1% Aerospace + 26% Infrastructure + 3% v. Q1 2011 v. Q1 201115
  • 16. Advanced Materials Financial Summary ■ Q1 2012 revenue up 3% from Q1 2011 ( in USD millions) $280.0 Revenue EBITDA $235.6 $230.0 $210.8 $226.8 $216.5 $21.0 ■ Titanium master alloys revenue up $198.7 $17.5 83% $180.0 $14.6 $13.7 $16.0 ■ Antimony revenue down 6% $12.3 $130.0 $11.0 ■ FeV revenue down 5% $80.0 ■ Q1 2012 gross margin 14% of revenue $6.0 $30.0 $6.0 ■ Lower gross margin due to an increase in Aluminium alloy revenue $(20.0) Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 $1.0 Capital Expenditure ■ Q1 2012 EBITDA margin 6% of ( in USD millions) revenue ■ SG&A costs down 8% v. Q1 2011 $10.7 $8.3 ■ Q1 2012 CAPEX $8.3 million $5.6 $6.2 $6.6 ■ $3.5 million for FeV expansion - - - - - Q1 11 Q2 11 Q3 11 Q4 11 Q1 1216
  • 17. Engineering Systems Financial Summary Q1 2012 revenue up 5% from Q1 2011 ( in USD millions) $105.0 Revenue EBITDA $20.0  $89.8 $86.3 $85.0  Heat treatment revenue up 128% $72.9 $64.9 $68.0 $15.0  Remelting furnace revenue up 45% $65.0 $11.8  Solar DSS revenue down 88% $9.3 $45.0 $7.7 $10.0  Q1 2012 gross margin 22% of revenue $25.0 $5.3  Increasing price pressure $3.0 $5.0  Cost overruns impacted gross $5.0 margin Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 $(15.0) $-  Q1 2012 EBITDA 5% of revenue Order Intake  SG&A costs down 11% Order backlog increased 11% to $176.2 ( in USD millions)  million at March 31, 2012  Order intake $80.6 million in Q1 $65.7 $88.6 $68.5 $69.5 $80.6 2012  1.19x book to bill ratio - - - - - Q1 11 Q2 11 Q3 11 Q4 11 Q1 1217
  • 18. Graphit Kropfmühl Financial Summary Q1 2012 revenue down 7% from Q1 ( in USD millions) $50.0 Revenue EBITDA  $42.3 $42.9 $43.3 $45.0 $39.5 2011 $40.0 $37.0 $35.0 $11.0  Natural graphite revenue down 11% $30.0  Silicon metal revenue down 4% $25.0 $7.0 $6.3 $6.2 $6.2 $20.0 $5.2 $15.0 $6.0  Q1 2012 gross margin 19% of revenue $10.0  Lower sales prices for silicon metal  Lower volumes for natural graphite $5.0 $- $1.0 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Capital Expenditure  Q1 2012 EBITDA 13% of revenue ( in USD millions)  SG&A costs down 11% ■ Q1 2012 CAPEX $2.2 million $2.5 $2.7 $3.2  Upgrading silicon metal electric arc $2.2 $1.2 furnace - - - - - Q1 11 Q2 11 Q3 11 Q4 11 Q1 1218
  • 19. Outlook
  • 20. Outlook Advanced Materials Engineering Systems Graphit Kropfmühl AMG Mining  Challenging start to  Heat Treatment  Voluntary Tender  Antimony expansion 2012 Services business completed is progressing on plan  Aerospace is strong providing more stable  Silicon metal prices  Tantalum demand is  Market is slowly recurring revenues locked in for 2012 moderating improving  Result will be  Graphite demand is consistent with 2011 rebounding ■ AMG expects Revenue and EBITDA growth in 2012 ■ AMG announces Q2 2012 financial results on August 8, 201220
  • 21. Appendix21
  • 22. Consolidated Balance Sheet Balance Sheet ($’000) Actual As of 31-Dec-11 31-Mar-12 Fixed assets 263.6 273.8 Goodwill and intangibles 38.1 38.9 Other non-current assets 63.4 65.4 Inventories 228.9 232.5 Receivables 188.1 223.0 Other current assets 39.1 47.1 Cash 79.6 81.2 TOTAL ASSETS 900.8 961.9 TOTAL EQUITY 220.6 232.0 Long-term debt 210.4 222.2 Pension liabilities 90.1 92.9 Other long-term liabilities 71.6 75.9 Current debt 58.2 65.4 Accounts payable 128.5 145.6 Advance payments 30.2 39.5 Accruals 51.7 54.8 Other current liabilities 39.5 33.6 TOTAL LIABILITIES 680.2 729.9 TOTAL LIABILITIES & EQUITY 900.8 961.922
  • 23. Consolidated Income Statement Income Statement ($’000) Actual For the three months ended 31-Mar-11 31-Mar-12 Revenue 318.0 324.0 Cost of sales 258.2 270.6 Gross profit 59.8 53.4 Selling, general & admin. 42.9 39.1 Asset impairment & restructuring 0.3 2.8 Environmental 0.1 0.7 Other income (0.9) (0.5) Operating profit 17.4 11.2 Net finance costs 0.5 6.9 Share of (loss) profit of associates (4.4) 0.2 Profit before income taxes 12.5 4.5 Income tax expense 5.0 1.2 Profit for the period 7.6 3.2 Attributable to: Shareholders of the Company 7.0 3.5 Non-controlling interest 0.6 (0.3) Adjusted EBITDA 26.2 21.923
  • 24. Consolidated Statement of Cash Flows Cash Flow Statement ($’000) Actual For the three months ended 31-Mar-11 31-Mar-12 EBITDA 26.2 21.9 +/- Change in operating assets/liabilities (22.1) (19.4) -Interest paid, net (1.2) (3.1) Other operating cash flow (0.3) 0.8 Cash flows from operations before taxes 2.6 0.2 Income tax paid (16.3) (3.2) Total cash flows from operations (13.7) (3.0) Capital expenditures (8.2) (11.5) Other investing activities (24.7) 0.0 Cash flows from investing activities (32.9) (11.5) Cash flows from financing activities 19.4 14.7 Net increase (decrease) in cash (27.2) 0.2 Beginning cash 89.3 79.6 Effects of exchange rates on cash 4.0 1.4 Ending cash 66.1 81.224