Amg investor presentation december 2010

Investor Presentation
December 2010

AMG Advanced Metallurgical Group N.V.

Disclaimer

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.

AMG ADVANCED METALLURGICAL GROUP N.V. 2

Introduction

 Listed on NYSE-Euronext Amsterdam (Euronext: AMG)
 Products
 High purity metals and complex metal products
 Vacuum furnaces used to produce high purity metals
 2010 YTD September 30 2010
 Revenues - $719.8 million
 EBITDA - $64.7 million, 9.0% margin
 EPS of $0.42 (1)
 Net debt - $144.6 million
 Capital Investment - $19.1 million
 Global presence
 Europe, North America, South America and Asia
 2,500 employees
Sustainable Metals Technology
(1) Excluding the equity losses from AMG’s 42.5% ownership in Timminco Limited AMG ADVANCED METALLURGICAL GROUP N.V. 3

Macroeconomic Trends and Markets

■ AMG participates in the macro economic trend of:
■ Growing demand for natural resources in context of CO2
reduction and sustainable environmental demands for:
■ Responsible energy production and use
■ Emerging market infrastructure
■ Aerospace and light weight materials
■ Specialty metals and chemicals


Products & Markets

Advanced Materials Engineering Systems
 High-value alloys  Capital equipment for high purity
 Essential raw materials materials

Specialty Metals &
Energy Aerospace Infrastructure Chemicals


Markets


Specialty Metals &
Aerospace Infrastructure Energy
Chemicals

Titanium Alloys Structural Steel Solar Vacuum Furnaces Silicones

Superalloys Specialty Steel Superalloys Paints & Pigments

Turbine Coatings Building Materials Silicon Metal Glass, Tools & Optics

Vacuum Furnaces Nuclear Fuel Vaccum Furnaces Capacitors

Energy Storage Technologies


Products
Aerospace Infrastructure – Recycling
Ti alloys
(includes VAl) Superalloys

High purity stainless steel

Typical aerospace jet engine

Energy – Solar & Nuclear Specialty Metals & Chemicals

Stackable
Graphite
Blocks

Tantalum based capacitor Paints and pigments
Vacuum furnaces for solar ingot
production

Markets & Products – by the Numbers

YTD 2010 Revenue by YTD 2010 Revenue by
End Market Product
Tantalum & Graphite 5%
Niobium
4%

Chromium
Metal 8%
Aerospace 26% Vacuum Furnaces
25%
Specialty Metals &
Chemicals 36%
Antimony 11%

FeV & FeNiMo
Energy - Solar & 8%
Nuclear 22% Al Master Alloys
14%

Si Metal 9%
Infrastructure 16%
Ti Master Alloys
and Coatings
16%


Advanced Materials - Market, Products and Customers
Aerospace Infrastructure - FeV Specialty Metals

Products  Specialty alloys for titanium  Ferro-vanadium  Chromium Metals

 Coatings for wear  Ferro-nickel molybdenum  Tantalum
resistance
 Antimony

 Aluminium master alloys

Competitors  Reading Alloys Inc.  Evraz Group S.A. (Highveld  KBM Affilips B.V.
Steel & Vanadium)
 Evraz Group S.A.  KB Alloys, Inc.
(Stratcor)  Eramet S.A. (Gulf Chemical
 Delachaux S.A.
& Metallurgical Corporation
 Campine S.A.
 Evraz Group S.A. (Stratcor)
 Chemtura Corporation
 Xstrata plc

 Chengde Vanadium &
Titanium Stock Co. Ltd.
Sample Customers


Advanced Materials – Specialty Metals Acquisition

Material  Antimony – AMG is the largest producer of antimony trioxide (a flame retardant) in
Europe
Transaction  In August 2010 AMG acquired antimony mining rights and an adjacent antimony metal
smelter in Turkey for a total investment of up to approximately $20 million
Strategic  Secure supply of antimony raw material used in AMG’s antimony trioxide operation
Rationale
 AMG uses approximately 10,000 mt of antimony metal per year

 Antimony metal prices have increased from $4,500/mt in 2009 to over $10,000/mt
in October 2010
 This will result in substantial raw material cost savings in 2011

Competitors  Campine S.A., Chemtura Corporation, Hsikwangshan Twinkling Star Antimony Co. Ltd

Antimony Metal Oxidation Antimony Dispersions, Pastes,
Purchase Process Trioxide Granules, Microgranules


Advanced Materials - Infrastructure metals pricing

$60

$250
$50
Price / Pound – V, Mo, Ni

$200
$40

$150
$30

$100
$20

$10 $50

$0 $0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Ferro Vanadium Molybdenum Nickel

Prices are still below pre-crisis levels


Engineering Systems - Market, Products and Customers
Energy - Solar Aerospace Energy - Nuclear
 Solar silicon melting and  Vacuum Melting and Re-  Vacuum Sintering
Products
crystallisation systems melting Systems Systems
(DSS furnaces)
 Precision Casting and
Coating Systems
 Heat Treatment with high
pressure gas quenching
Notable Successes  2005 – Introduced single  2010 – Market Share leader  Secured first nuclear
crucible furnaces in Ti remelting in China, the engineering contract with
fastest growing Ti market DOE, through Shaw-Areva
 2005 –2009 – >$172 mm
in revenue, 2nd largest  2010 – Leading market share  Two strategic acquisitions
market participant in turbine blade coating completed to expand product
portfolio
 2010 – Introduced SCU
600+ DSS system

Sample Customers


Financial Overview


Financial Highlights – YTD September 2010
2010 YTD Revenue 2010 YTD EBITDA
$719.8 $64.7

$5.1
$94.4

$178.0 $27.5 $32.1
$447.4

Revenue by Geography
Advanced Materials Engineering Systems Advanced Materials Engineering Systems

Graphit Kropfmühl Graphit Kropfmühl
North
America
21%

Asia
18%
Europe
56%
South
America
4%
ROW
1%
Revenue and EBITDA in millions AMG ADVANCED METALLURGICAL GROUP N.V. 14

Financial Highlights
Revenue Highlights
(in millions)

 Q3 Revenue: $240.4 million
 Up 17% from Q3 2009

 Q3 EBITDA: $18.8 million
$243.5
$231.4 $235.8 $240.4  Up 1% from Q3 2009
$205.4
 Q3 EPS: $0.11
 Up from ($0.50) in Q3 2009
Q3 09 Q4 09 Q1 10 Q2 10 Q3 10

EBITDA
(in millions)
 YTD Revenue: $719.8 million
 Up 13% from YTD 2009

 YTD EBITDA: $64.7 million
$23.9  Up 14% from YTD 2009
$22.0
$18.6 $18.8
$12.4
 YTD EPS: $0.42 (1)
- - -  Up from ($0.65) YTD 2009 (1)
Q3 09 Q4 09 Q1 10 Q2 10 Q3 10

(1) Excluding the equity losses from AMG’s 42.5% ownership in Timminco Limited AMG ADVANCED METALLURGICAL GROUP N.V. 15

Advanced Materials

Financial Summary Highlights
( in millions)
Revenue EBITDA ■ Infrastructure - ferrovanadium
$152.0 $154.9
■ Reference prices increased 18% v. Q3
$140.5 2009
■ Volumes improved 32% v. Q3 2009
$124.3
■ Ferronickel-molybdenum demand
$95.9 decreased 43% v. Q3 2009
■ Aerospace – master alloys prices declined 23%
v. Q3 2009; volumes improved 165%
$8.5 $14.2 $9.4 ■ CAPEX
$5.0 $5.3
■ Expansion of ferrovanadium operations
Q3 09 Q4 09 Q1 10 Q2 10 Q3 10
in the United States
CAPEX

$5.0 $5.6
$4.2
$3.3
$1.9
- - - - -
Q3 09 Q4 09 Q1 10 Q2 10 Q3 10


Engineering Systems

( in millions)

Revenue EBITDA
 Q3 revenue decreased 14% v. Q3 2009
$73.8  Solar silicon DSS furnace revenues
$65.3
$61.6 decreased 44% in Q3 2010 v. Q3 2009
$59.5
$53.2  Q3 EBITDA decreased 33% v. Q3 2009
 September 30, 2010 Backlog improved to
$147.1 million from $121 million at June 30,
2010
 Order intake $66.9 million in Q3 2010
$11.0 $5.9
$12.1 $8.0 $7.4  1.26x book to bill ratio
- - - - -
Q3 09 Q4 09 Q1 10 Q2 10 Q3 10  Diversified backlog - solar, aerospace
and transportation
CAPEX

$3.0

$1.2 $1.3
$0.8 $0.8
- - - - -
Q3 09 Q4 09 Q1 10 Q2 10 Q3 10


Graphit Kropfmühl

( in millions)
Revenue EBITDA  Q3 revenue decreased 4% v. Q3 2009
$33.7  Decrease in silicon metal revenues due to
$33.3 $32.1 $32.4
$29.9 production issues
 Silicon metal down 7%
 Natural graphite up 37%
 Q3 EBITDA decreased 23% v. Q3 2009
 Lower revenues and higher costs in
silicon metal
$2.6 $1.5 $1.7 $2.0
- $1.2
- - - -  Silicon metal down $1.0 million
Q3 09 Q4 09 Q1 10 Q2 10 Q3 10
 Natural graphite up $0.5 million
 CAPEX for graphite milling expansion
CAPEX

$1.3
$1.0
$0.8 $0.7
$0.4
- - - - -
Q3 09 Q4 09 Q1 10 Q2 10 Q3 10


Capital Base

Cash and Debt Highlights – September 30, 2010
( in millions)

■ Cash: $90.2 million
Cash Debt
■ Total debt: $234.8 million
$234.8

$204.3
■ Net debt: $144.6 million
$202.3 $203.8 $203.0

■ Revolver availability: $61.3 million

■ Total liquidity $151.5 million
$124.4
$117.0
$98.9 $90.2
$84.6

Q3 09 Q4 09 Q1 10 Q2 10 Q3 10

Note: Cash includes short term investments


Outlook
■ Advanced Materials
■ Markets are improving but remain volatile
■ Antimony, tantalum and aerospace alloys and coatings will drive growth in 2011
■ Engineering Systems
■ Backlog is increasing; renewed interest in solar silicon furnaces
■ Order intake driven by Chinese and Indian markets
■ Graphit Kropfmühl
■ High purity natural graphite demand and pricing is improving
■ Timminco
■ AMG owns 42.5% of Timminco; not consolidated
■ Timminco sold 49% of its silicon metal operations for C$40.3 million; up to
C$10.0 million more based upon meeting performance metrics
■ Repaid all of its senior bank debt (non-recourse to AMG)


Appendix


Consolidated Balance Sheet
December 31, 2009 September 30, 2010

Fixed assets 211,022 212,440
Goodwill and intangibles 28,253 38,924
Other non-current assets 78,209 54,848

Inventories 193,378 202,318
Receivables 147,787 177,586
Other current assets 35,313 48,903
Cash 117,016 90,213
TOTAL ASSETS 810,978 825,232

TOTAL EQUITY 228,423 219,427

Long-term debt 168,319 184,499
Pension liabilities 91,358 88,500
Other long-term liabilities 51,249 34,896

Current debt 35,477 50,295
Accounts payable 69,791 84,450
Advance payments 54,764 44,556
Accruals 46,179 48,061
Other current liabilities 65,418 70,548
TOTAL LIABILITIES 582,555 605,805

TOTAL LIABILITIES AND EQUITY 810,978 825,232

in thousands AMG ADVANCED METALLURGICAL GROUP N.V. 22

Consolidated Income Statement
Q3 2009 Q3 2010

Revenue 205,406 240,427
Cost of sales 165,457 198,325
Gross profit 39,949 42,102

Selling, general and admin. 31,876 31,682
Asset impairment and restructuring 5,302 -
Environmental 4,075 257
Other income (1,194) (270)

Operating profit (110) 10,433

Net finance costs 5,465 2,921

Share of loss of associates (1,285) (17,554)

Profit before income taxes (6,860) (10,042)

Income tax expense 5,694 325

Profit for the year from continuing operations (12,554) (10,367)

Loss after tax for the year from discontinued operations (14,240) -

Loss for the year (26,794) (10,367)

Attributable to:
Shareholders of the Company (20,302) (11,170)
Minority interest (6,492) 803

Consolidated Cash Flows

Nine months ended Nine months ended
September 30, 2009 September 30, 2010

Cash Flows from Operations (6,033) (13,903)

Capital Expenditures (20,755) (19,054)
Other Investing Activities (55,796) (26,622)
Cash Flows from Investing Activities (76,551) (45,676)

Cash Flows from Financing Activities 59,247 36,812

Net increase (decrease) in cash (23,337) (22,767)

Beginning Cash 143,473 117,016
Effects of exchange rates on cash 4,255 (4,036)
Ending Cash 124,391 90,213

Approximate availability under AMG lines of credit 97,708 61,300

Total Liquidity 222,099 151,513


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