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 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.
2
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 markets
3
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 Chemicals
4
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 2010
5
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 materials
6
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-weight
Infrastructure 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 alloys
7 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. 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
technology¹
8 nuclear waste
¹ AMG Management
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 energy
Infrastructure 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.³
9 ¹ Resource Revolution: Meeting the world’s energy, materials, food, and water needs, McKinsey, November 2011
³ Solarbuzz
³ AMG Management
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 Value
10
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 reduction
11
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 2011
15
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 >$1M businesses under AMG
Materials’ products subdued level cost saving synergies in Mining
Demand for aerospace Global capital goods 2013 The Antimony mineral
alloys is stable spending is challenging Moderating demand processing facility is
AMG Aluminum affecting natural graphite operational
production optimization is and silicon metal Tantalum production
ongoing volumes volumes substantially
improved
Multiyear Ta contract
■ AMG is implementing operational initiatives to improve cash flow and significantly reduce debt
■ AMG expects trading conditions to continue to be challenging for the balance of 2012
■ AMG announces Q4 2012 financial results on March 19, 2013
22
24. Consolidated Balance Sheet
Balance Sheet ($’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 900.8 966.1
24
25. Consolidated Income Statement
Income Statement ($’000) Actual
For the three months ended 30-September-11 30-September-12
Revenue 356.4 296.9
Cost of sales 297.7 249.2
Gross profit 58.7 47.7
Selling, general & admin. 40.6 34.5
Asset impairment & restructuring - 0.5
Environmental 0.1 1.7
Other income (1.7) (0.2)
Operating profit 19.6 11.2
Net finance costs 6.5 4.3
Share of (loss) profit of associates (0.7) 0.2
Profit before income taxes 12.4 7.1
Income tax expense 3.8 2.1
Profit (loss) for the period 8.6 5.0
Attributable to:
Shareholders of the Company 8.0 5.1
Non-controlling interest 0.6 (0.1)
Adjusted EBITDA 27.8 21.6
25
26. Consolidated Statement of Cash Flows
Cash Flow Statement ($’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 71.3 111.4
26
