Investor Presentation   November 2012
Cautionary Note    THIS DOCUMENT IS STRICTLY CONFIDENTIAL AND IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION BY AMG ...
Overview                   Listed: NYSE-Euronext Amsterdam: AMG                Founded: 2006          LTM Revenues: $1,249...
Business Units, Products and End Markets    Advanced Materials     Engineering Systems              Graphit Kropfmühl     ...
Why Invest in AMG      Revenue                                                           EBITDA      2009 – 2011          ...
Critical Raw Materials Matrix■ USA, Germany, UK and EU have each identified critical materials – common factors  include s...
Advanced Materials      End                  Input & Critical                     Material                      Key       ...
Engineering Systems      End                 Input & Critical   Material              Key               Everyday          ...
Graphit Kropfmühl      End                  Input & Critical                    Material                         Key      ...
Recent Developments – Operations Update AMG is committed to improving operational performance and cash flow generation ■ P...
Recent Developments – AMG Mining ■   AMG now owns 100% of Graphit Kropfmühl AG (“GK”)      ■ Merged GK into AMG Mining AG ...
Recent Developments – AMG Mining     AMG Mining Antimony Shaking Tables & Concentration Thickener12
Financial Highlights13
Financial Highlights     Revenue                                                               Gross Profit     LTM: $1,24...
Capital Base     Cash and Debt       Cash       Debt                                                                      ...
Key ProductsRevenue                                              Gross Profit                                ( in USD mill...
End MarketsRevenue                                                          Gross Profit                                  ...
Advanced Materials      Financial Summary                                                      ■ Q3 ‘12 revenue down 17% f...
Engineering Systems      Financial Summary                                                                             Q3...
Graphit Kropfmühl      Financial Summary                                                                           Q3 ‘12...
Outlook
Outlook     Advanced Materials        Engineering Systems          Graphit Kropfmühl                AMG Mining  Global sl...
Appendix23
Consolidated Balance Sheet     Balance Sheet ($’000)                      Actual     As of                         31-Dec-...
Consolidated Income Statement     Income Statement ($’000)                              Actual     For the three months en...
Consolidated Statement of Cash Flows     Cash Flow Statement ($’000)                                 Actual     For the ni...
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Amg investor presentation nov 2012 v-f

  1. 1. Investor Presentation November 2012
  2. 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. 3. Overview Listed: NYSE-Euronext Amsterdam: AMG Founded: 2006 LTM Revenues: $1,249.1M LTM EBITDA: $91.9M Employees: 3,100 Facilities: Netherlands, Germany, UK, USA, Brazil, France, China, Belgium, Turkey, Poland, India, Sri Lanka, Czech Republic Market cap: €170M ($220M) Shares outstanding: 27.5M 52 week range: €5.81–€10.56 Recent share price: €6.18 (November 13, 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. 4. Business Units, Products and End Markets Advanced Materials Engineering Systems Graphit Kropfmühl AMG Mining 66% of YTD Q3 revenue  22% of YTD Q3 revenue  12% of YTD Q3 revenue  Creating new reporting 60% of YTD Q3 EBITDA  18% of YTD Q3 EBITDA  22% of YTD Q3 EBITDA segment in 2013 High-value alloys  Capital equipment for high  Silicon metal  Antimony Critical raw materials purity materials  Natural graphite  Tantalum Specialty Metals & Energy Aerospace Infrastructure Chemicals4
  5. 5. Why Invest in AMG Revenue EBITDA 2009 – 2011 2009 – 2011 24.8% Advanced 26.2% CAGR Metallurgical CAGR Technology 2011: 2011: $ 1,351.3 million $ 110.1 million + 36% over 2010 + 30% over 2010 Increase Shareholder Value Operational Vertical ROCE Efficiency Integration EPS 2009 – 2011 Strong growth in 19.9% 2011 CAGR Adjusted 2011 EPS: 2011: $1.34 15.1% + 79% over 2010 + 27% over 20105
  6. 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. 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 A Boeing 787 wear resistance Dreamliner requires Aerospace Surface  Recycling ~250,000 lb titanium Coating product purchased for manufacturing, 5x more than the A340 comparable airplane¹  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 contains 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 and TIMET 2010 AR; Per Boeing, titanium constitutes 15% of its airframe weight ² Resource Revolution: Meeting the world’s energy, materials, food, and water needs, McKinsey, November 2011 ³ iSuppli in August 2010
  8. 8. Engineering Systems End Input & Critical Material Key Everyday Sample Markets Raw Materials Science Products Applications Customers  Technology  Vacuum Melting Property and Remelting Modification Systems  Precision Casting All modern turbine Aerospace Surface and Coating engines use titanium Coating Systems compressor blades and  Heat Treatment discs to reduce weight with high pressure and lower CO2 gas quenching emission¹  Technology  Heat Treatment Property Systems Modification  Heat Treatment Energy Services 33% of all new energy – Efficiency saving automotive gears are produced by using AMG’s heat treatment processes1  Technology  Vacuum Property Sintering and Modification Annealing Energy Systems for Nearly 90% of all – Nuclear nuclear fuel nuclear residues from  Development reprocessing of Pu are project for the processed into new safe storage of fuels with AMG’s technology¹8 nuclear waste ¹ AMG Management
  9. 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 can use graphite as for aluminum anode. One car battery and silicones requires ~24 Kg graphite.³9 ¹ Resource Revolution: Meeting the world’s energy, materials, food, and water needs, McKinsey, November 2011 ³ Solarbuzz ³ AMG Management
  10. 10. Recent Developments – Operations Update 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 and lower cost structure ■ Increase Operating Cash flow ■ Reduce debt ■ Tying objectives directly to incentive compensation plans ■ Instituting a number of operational improvement initiatives companywide Increase Shareholder Value10
  11. 11. Recent Developments – AMG Mining ■ AMG now owns 100% of Graphit Kropfmühl AG (“GK”) ■ Merged GK into AMG Mining AG in October ■ Acquired GK at an average €20 share price (€58M) ■ AMG is now consolidating all mining activities in AMG Mining ■ AMG Mining will report as a new segment in Q1 2013 ■ Consists of Antimony, Tantalum, Graphite, and Silicon businesses ■ In September the antimony oxidation furnace in Turkey entered operation ■ Completed construction of the mineral processing facility, currently in start up phase ■ In October, AMG entered into a multiyear agreement to supply a substantial portion of the MIBRA tantalum mine output to an industry participant ■ Shipments commence in Q2 2013 ■ Achieved record production levels in Q3 which yielded a 14% cost reduction11
  12. 12. Recent Developments – AMG Mining AMG Mining Antimony Shaking Tables & Concentration Thickener12
  13. 13. Financial Highlights13
  14. 14. Financial Highlights Revenue Gross Profit LTM: $1,249.1 (in USD millions) LTM: $205.6 (in USD millions) $47.7 $296.9 $356.4 $58.7 $50.5 $53.4 $54.0 Down $324.0 $319.6 Down $308.6 19% 17% YoY YoY - - - - - Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 EBITDA Adjusted EPS LTM: $91.9 (in USD millions) ■ Q3 2012 EPS: $0.18 ■ Down from $0.29 in Q3 2011 $21.6 ■ LTM EPS: $0.38 (1) $27.7 $24.8 $23.6 $21.9 Down 22% YoY - - - - - Q3 11 Q4 11 Q1 12 Q2 12 Q3 1214 (1) Adjusted to exclude Timminco
  15. 15. Capital Base Cash and Debt Cash Debt ( in USD millions) ■ Net debt: $198.5 million ■ Debt to capitalization: 0.58x ■ Net Debt to LTM EBITDA: 2.16x ■ Revolver availability: $55.9 million ■ Total liquidity: $167.3 million $305.9 $309.9 $274.9 $287.6 $268.6 $111.4 ■ AMG’s primary debt facility is a $377 million term loan and revolving credit $71.3 $79.6 $81.2 $93.6 facility ■ 5 year term – until 2016 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 ■ Secured an additional $62 million for its credit facility in 2012 in ROCE conjunction with the Voluntary 15.1% Tender Offering for GK 11.9% 10.5%0 8.0% 2009 2010 201115
  16. 16. Key ProductsRevenue Gross Profit ( in USD millions) ( in USD millions) YTD Q3 2012: $940.4 YTD Q3 2012: $155.116
  17. 17. End MarketsRevenue Gross Profit ( in USD millions) ( in USD millions) YTD Q3 2012: $940.4 YTD Q3 2012: $155.1 Aerospace Aerospace 32.6% 36.7% Infrastructure 14.3% Energy Energy 17.9% Infrastructure 14.7% 15.8% Specialty Metals Specialty Metals & Chemicals & Chemicals 38.4% 29.6% Aerospace + 8% Energy - 42% vs. Q3 2011 vs. Q3 201117
  18. 18. Advanced Materials Financial Summary ■ Q3 ‘12 revenue down 17% from Q3 ‘11 Revenue EBITDA ■ Tantalum up 28% ( in USD millions) $250.0 $226.8 $216.5 $211.7 $200.0 $198.7 $189.2 $21.0 ■ Antimony down 33% $14.5 $16.0 ■ Aluminium down 22% $13.7 $150.0 $12.3 $12.1 $11.0 ■ Q3 ‘12 gross margin 14% of revenue, $100.0 improved from 13% in Q3 ‘11 $6.0 $50.0 $6.0 ■ Improved product mix ■ Increase in tantalum pricing $- $1.0 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 ■ Q3 ‘12 EBITDA margin 6% of revenue, Capital Expenditure improved from 5% in Q3 ‘11 ( in USD millions) ■ 12% decrease in operating expenses $10.7 ■ Q3 ‘12 CAPEX $7.0 million $8.3 $6.6 $6.2 $7.0 ■ $2.6 million for FeV expansion ■ $0.7 million for Tantalum expansion - - - - - Q3 11 Q4 11 Q1 12 Q2 12 Q3 1218
  19. 19. Engineering Systems Financial Summary  Q3 ‘12 revenue down 18% from Q3 ‘11 ( in USD millions)  Casting and sintering furnaces up 47% $25.0 Revenue EBITDA $100.0 $86.3 $20.0  Remelting furnaces up 34% $80.0 $72.9 $71.1 $68.0 $65.4  DSS furnaces down 92%  Nuclear furnaces down 51% $15.0 $60.0 $11.8 $9.3 $40.0 $10.0  Q3 ‘12 gross margin 21% of revenue $5.3 $20.0 $3.0 $3.7 $5.0 down from 24% in Q3 ‘11  Unfavourable product mix $- $- Q3 11 Q4 11 Q1 12 Q2 12 Q3 12  Q3 2012 EBITDA 7% of revenue Order Intake ( in USD millions)  SG&A down 16%  Order backlog up 8% to $162.2 million at $80.6 $79.7 Sep. 30, 2012 $68.5 $69.5 $36.4  Order intake $79.7 million in Q3 ‘12 - - - - -  1.12x book to bill ratio Q3 11 Q4 11 Q1 12 Q2 12 Q3 1219
  20. 20. Graphit Kropfmühl Financial Summary  Q3 ‘12 revenue down 16% from Q3 ‘11 ( in USD millions)  Silicon metal down 17% $50.0 Revenue EBITDA $45.0 $43.3 $42.5 $40.0 $37.0 $39.5  Natural graphite down 13% $36.5 $35.0 $11.0 $30.0  Q3 ‘12 gross margin 17% of revenue $25.0 $6.2 $7.0  Unfavourable product mix for natural $20.0 $5.2 $5.4 $6.0 graphite and silicon metal $15.0 $4.2 $10.0 $5.0  Q3 ‘12 EBITDA 11% of revenue $- $1.0  SG&A down 13% Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Capital Expenditure ■ Q3 ‘12 CAPEX $2.2 million  Upgrading silicon metal electric arc ( in USD millions) furnace $3.2 $2.7 $2.8 $2.2 $2.2 - - - - - Q3 11 Q4 11 Q1 12 Q2 12 Q3 1220
  21. 21. Outlook
  22. 22. Outlook Advanced Materials Engineering Systems Graphit Kropfmühl AMG Mining  Global slowdown  Generating consistent  Completion of merger  Consolidating mining impacting most Advanced order intake, but at a should realize >$1M businesses under AMG Materials’ products subdued level cost saving synergies in Mining  Demand for aerospace  Global capital goods 2013  The Antimony mineral alloys is stable spending is challenging  Moderating demand processing facility is  AMG Aluminum affecting natural graphite operational production optimization is and silicon metal  Tantalum production ongoing volumes volumes substantially improved  Multiyear Ta contract ■ AMG is implementing operational initiatives to improve cash flow and significantly reduce debt ■ AMG expects trading conditions to continue to be challenging for the balance of 2012 ■ AMG announces Q4 2012 financial results on March 19, 201322
  23. 23. Appendix23
  24. 24. Consolidated Balance Sheet Balance Sheet ($’000) Actual As of 31-Dec-11 30-Sep-12 Fixed assets 263.6 278.1 Goodwill and intangibles 38.1 40.9 Other non-current assets 63.4 65.5 Inventories 228.9 218.6 Receivables 188.1 201.3 Other current assets 39.1 50.3 Cash 79.6 111.4 TOTAL ASSETS 900.8 966.1 TOTAL EQUITY 220.6 222.9 Long-term debt 210.4 267.0 Pension liabilities 90.1 90.9 Other long-term liabilities 71.6 75.7 Current debt 58.2 42.9 Accounts payable 128.5 139.2 Advance payments 30.2 34.3 Accruals 51.7 58.3 Other current liabilities 39.5 34.8 TOTAL LIABILITIES 680.2 743.2 TOTAL LIABILITIES & EQUITY 900.8 966.124
  25. 25. Consolidated Income Statement Income Statement ($’000) Actual For the three months ended 30-September-11 30-September-12 Revenue 356.4 296.9 Cost of sales 297.7 249.2 Gross profit 58.7 47.7 Selling, general & admin. 40.6 34.5 Asset impairment & restructuring - 0.5 Environmental 0.1 1.7 Other income (1.7) (0.2) Operating profit 19.6 11.2 Net finance costs 6.5 4.3 Share of (loss) profit of associates (0.7) 0.2 Profit before income taxes 12.4 7.1 Income tax expense 3.8 2.1 Profit (loss) for the period 8.6 5.0 Attributable to: Shareholders of the Company 8.0 5.1 Non-controlling interest 0.6 (0.1) Adjusted EBITDA 27.8 21.625
  26. 26. Consolidated Statement of Cash Flows Cash Flow Statement ($’000) Actual For the nine months ended 30-September-11 30-September-12 EBITDA 85.4 67.1 +/- Change in operating assets/liabilities (48.8) (11.4) -Interest paid, net (5.5) (10.0) Other operating cash flow 5.2 (0.6) Cash flows from operations before taxes 36.3 45.1 Income tax paid (25.9) (11.6) Total cash flows (used in) from operations 10.4 33.5 Capital expenditures (31.7) (33.9) Other investing activities (26.3) (0.1) Cash flows from investing activities (58.0) (34.0) Cash flows from financing activities 28.0 32.2 Net (decrease) increase in cash (19.6) 31.7 Beginning cash 89.3 79.6 Effects of exchange rates on cash 1.6 0.1 Ending cash 71.3 111.426

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