Investor Presentation    August 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: $1,308...
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 – Graphit Kropfmühl Squeeze-out          ■   Q2 2012             ■   AMG credit facility extension fo...
Financial Highlights11
Financial Highlights     Revenue                                                               Gross Profit     LTM: $1,30...
Capital Base     Cash and Debt       Cash       Debt                                                                      ...
Key ProductsRevenue                                              Gross Profit                                ( in USD mill...
End MarketsRevenue                                                          Gross Profit                                  ...
Advanced Materials       Financial Summary                                                   ■ Q2 2012 revenue down 10% fr...
Engineering Systems       Financial Summary                                                                         Q2 20...
Graphit Kropfmühl      Financial Summary                                                                           Q2 201...
Outlook
Outlook     Advanced Materials   Engineering Systems        Graphit Kropfmühl           AMG Mining  The slowdown in      ...
Appendix21
Consolidated Balance Sheet     Balance Sheet ($’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 six...
Amg   investor presentation aug  2012 2
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AMG - Investor Presentation Aug 2012

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Amg investor presentation aug 2012 2

  1. 1. Investor Presentation August 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: $1,308.6M LTM EBITDA: $98.0M Employees: 3,100 Facilities: Netherlands, Germany, UK, USA, Brazil, France, China, Belgium, Turkey, Poland, India, Sri Lanka, Czech Republic Market cap: €200M ($248M) Shares outstanding: 27.5M 52 week range: €5.81–€10.56 Recent share price: €7.31 (August 8, 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 67% of H1 2012 revenue  21% of H1 2012 revenue  12% of H1 2012 revenue  Creating new reporting 62% of H1 2012 EBITDA  15% of H1 2012 EBITDA  23% of H1 2012 EBITDA segment in 2012 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% 26.2% CAGR Advanced 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 construction efficiency in buildings  Conversion 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 Li-iron batteries for Metals & batteries  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 – Graphit Kropfmühl Squeeze-out ■ Q2 2012  ■ AMG credit facility extension for additional $62 million  ■ Provides GK simplified and secured long-term debt financing with lower costs  ■ Independent valuation of GK by auditor  ■ GK Supervisory Board meeting approved the merger ■ Q3 2012On Plan ■ GK AGM to approve the merger squeeze-out Increase Shareholder Value10
  11. 11. Financial Highlights11
  12. 12. Financial Highlights Revenue Gross Profit LTM: $1,308.6 (in USD millions) LTM: $216.6 (in USD millions) $319.6 $54.0 $368.3 $69.0 $356.4 Down $324.0 Down $58.7 $53.4 $308.6 13% $50.5 22% YoY YoY - - - - - Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 EBITDA Adjusted EPS LTM: $98.0 (in USD millions) ■ Q2 2012 EPS: ($0.10) (1) ■ Down from $0.12 in Q2 2011 (1) ■ LTM EPS: $0.64 (1) $31.4 $23.6 $27.7 $24.8 Down $21.9 25% YoY Q2 11 Q3 11 Q4 11 Q1 12 Q2 1212 (1) Adjusted to exclude Timminco
  13. 13. Capital Base Cash and Debt Cash Debt ( in USD millions) ■ Net debt: $212.3 million ■ Debt to capitalization: 0.59x ■ Net Debt to LTM EBITDA: 2.17x ■ Revolver availability: $62.6 million ■ Total liquidity: $156.2 million $305.9 $287.6 $278.5 $274.9 $268.6 ■ AMG’s primary debt facility is a $377 million term loan and revolving credit $93.6 facility $61.1 $71.3 $79.6 $81.2 ■ 5 year term – until 2016 ■ Secured an additional $62 million for Q2 11 Q3 11 Q4 11 Q1 12 Q2 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. 14. Key ProductsRevenue Gross Profit ( in USD millions) ( in USD millions) YTD Q2 2012: $643.6 YTD Q2 2012: $107.414
  15. 15. End MarketsRevenue Gross Profit ( in USD millions) ( in USD millions) YTD Q2 2012: $643.6 YTD Q2 2012: $107.4 Aerospace Aerospace 31.5% 35.2% Infrastructure 14.5% Energy Energy 19.7% Infrastructure 15.3% 16.3% Specialty Metals Specialty Metals & Chemicals & Chemicals 38.7% 28.8% Specialty Metals & Aerospace + 9% Chemicals - 22% vs. Q2 2011 vs. Q2 201115
  16. 16. Advanced Materials Financial Summary ■ Q2 2012 revenue down 10% from Q2 $280.0 Revenue EBITDA ( in USD millions) 2011 $235.6 $230.0 $226.8 $216.5 $211.7 $21.0 ■ Titanium master alloys up 12% $17.5 $198.7 ■ Aluminium down 18% $180.0 $14.5 $13.7 $16.0 ■ Antimony down 16% $12.3 $130.0 $11.0 $80.0 $6.0 ■ Q2 2012 gross margin 15% of revenue $30.0 $6.0 ■ Aluminium margin up 21% ■ Higher raw material costs for antimony $(20.0) Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 $1.0 Capital Expenditure ■ Q2 2012 EBITDA margin 7% of revenue ( in USD millions) ■ SG&A down 14% vs. Q2 2011 $10.7 ■ Q2 2012 CAPEX $6.2 million $8.3 $6.2 $6.6 $6.2 ■ $1.4 million for FeV expansion - - - - - ■ $1.3 million for Tantalum expansion Q2 11 Q3 11 Q4 11 Q1 12 Q2 1216
  17. 17. Engineering Systems Financial Summary  Q2 2012 revenue down 27% from Q2 $105.0 Revenue EBITDA ( in USD millions) $20.0 2011 $89.8 $86.3 $85.0  Heat Treatment Services up 16% $72.9 $68.0 $65.4 $15.0  DSS furnace down 71% $65.0 $11.8  Sintering furnaces down 38% $9.3 $45.0 $7.7 $10.0  Q2 2012 gross margin 23% of revenue $25.0  Increasing end market pricing pressure $3.0 $3.7 $5.0  Favourable product mix $5.0  Q2 2012 EBITDA 6% of revenue Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 $(15.0) $-  SG&A down 19% Order Intake ( in USD millions)  Order backlog decreased 15% to $150 million at June 30, 2012  Order intake $36.4 million in Q2 2012 $88.6 $68.5 $69.5 $80.6  Heat treatment systems accounted for $36.4 29% of total order intake - Q2 11 - Q3 11 - Q4 11 - Q1 12 - Q2 12  0.56x book to bill ratio17
  18. 18. Graphit Kropfmühl Financial Summary  Q2 2012 revenue down 1% from Q2 2011 ( in USD millions) $50.0 Revenue EBITDA  Silicon metal up 1% $45.0 $42.9 $43.3 $42.5 $40.0 $37.0 $39.5  Natural graphite down 5% $35.0 $11.0 $30.0  Q2 2012 gross margin 18% of revenue $25.0 $7.0 $6.2 $6.2  Unfavourable product mix for natural $20.0 $5.4 $15.0 $5.2 $6.0 graphite and silicon metal $10.0  Natural graphite average pricing $5.0 down 6%  Silicon metal volume up 7% $- $1.0 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Capital Expenditure ( in USD millions)  Q2 2012 EBITDA 13% of revenue  SG&A down 7% $3.2 ■ Q2 2012 CAPEX $2.8 million $2.5 $2.7 $2.8 $2.2  Upgrading silicon metal electric arc - - - - - furnace Q2 11 Q3 11 Q4 11 Q1 12 Q2 1218
  19. 19. Outlook
  20. 20. Outlook Advanced Materials Engineering Systems Graphit Kropfmühl AMG Mining  The slowdown in  Delayed orders  Silicon metal prices  New management Europe impacting should be realized in locked in for 2012 team operationally Advanced Materials H2  Graphite demand is focused European centric  Heat Treatment impacted by  Antimony mineral businesses Services provides Eurozone weakness processing facility to  Aerospace remains stable recurring  Kropfmühl mine be operational in Q3 strong revenues opened to secure  Tantalum production  Market visibility is  Capital goods supply stabilizing at normal limited spending stable at  AGM in August to levels lower level approve the merger ■ Previously anticipated growth in H2 2012 is not expected to materialize ■ AMG announces Q3 2012 financial results on November 14, 201220
  21. 21. Appendix21
  22. 22. Consolidated Balance Sheet Balance Sheet ($’000) Actual As of 31-Dec-11 30-June-12 Fixed assets 263.6 261.4 Goodwill and intangibles 38.1 37.4 Other non-current assets 63.4 57.2 Inventories 228.9 223.7 Receivables 188.1 201.1 Other current assets 39.1 46.9 Cash 79.6 93.6 TOTAL ASSETS 900.8 921.3 TOTAL EQUITY 220.6 209.2 Long-term debt 210.4 259.5 Pension liabilities 90.1 88.4 Other long-term liabilities 71.6 73.6 Current debt 58.2 46.4 Accounts payable 128.5 136.1 Advance payments 30.2 32.1 Accruals 51.7 48.9 Other current liabilities 39.5 27.1 TOTAL LIABILITIES 680.2 712.1 TOTAL LIABILITIES & EQUITY 900.8 921.322
  23. 23. Consolidated Income Statement Income Statement ($’000) Actual For the three months ended 30-June-11 30-June-12 Revenue 368.3 319.6 Cost of sales 299.3 265.6 Gross profit 69.0 54.0 Selling, general & admin. 44.8 38.0 Asset impairment & restructuring 2.2 7.8 Environmental 0.1 0.6 Other income (0.9) (0.2) Operating profit 22.8 7.8 Net finance costs 9.1 5.9 Share of (loss) profit of associates (1.7) 0.1 Profit before income taxes 12.0 2.0 Income tax expense 7.8 5.5 Profit (loss) for the period 4.2 (3.4) Attributable to: Shareholders of the Company 3.4 (2.6) Non-controlling interest 0.9 (0.8) Adjusted EBITDA 31.4 23.623
  24. 24. Consolidated Statement of Cash Flows Cash Flow Statement ($’000) Actual For the six months ended 30-June-11 30-June-12 EBITDA 57.6 45.5 +/- Change in operating assets/liabilities (51.2) (22.2) -Interest paid, net (5.1) (9.0) Other operating cash flow 8.2 (1.8) Cash flows from operations before taxes 9.6 12.5 Income tax paid (21.6) (9.3) Total cash flows (used in) from operations (12.1) 3.1 Capital expenditures (19.9) (23.4) Other investing activities (24.0) (1.4) Cash flows from investing activities (43.9) (24.8) Cash flows from financing activities 23.9 36.1 Net (decrease) increase in cash (32.1) 14.4 Beginning cash 89.3 79.6 Effects of exchange rates on cash 3.9 (0.4) Ending cash 61.1 93.624

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