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
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 markets
3
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 Chemicals
4
5. Why Invest in AMG
Revenue EBITDA
2009 – 2011 2009 – 2011
24.8% Increase 26.2%
CAGR Capital CAGR
Efficiency
2011: 2011:
$ 1,351.3 million $ 110.1 million
+ 36% over 2010 + 30% over 2010
Increase
Shareholder
Value
Drive Invest in
ROCE Organic Vertical EPS
Growth Integration
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
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-weight
Infrastructure 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 alloys
7 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
technology¹
8
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 energy
Infrastructure 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 typically use graphite
for aluminum as anode. One car
and silicones battery requires ~24
Kg graphite.³
9 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 AMG's 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 GK's shares – more than the 90%
threshold required to initiate a squeeze out
10
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 2011
13
14. Key Products
Revenue 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 Metal
14
15. End Markets
Revenue 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 2011
15
16. Advanced Materials
Financial Summary
■ Q1 2012 revenue up 3% from Q1 2011
( in USD millions)
$280.0 Revenue EBITDA
$235.6
$226.8
$230.0 $210.8 $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 12
16
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 12
17
18. Graphit Kropfmühl
Financial Summary
Q1 2012 revenue down 7% from Q1
( in USD millions)
$50.0 Revenue EBITDA
$45.0 $42.3 $42.9 $43.3
$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
$5.0
Lower volumes for natural graphite
$- $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
$1.2 furnace
- - - - -
Q1 11 Q2 11 Q3 11 Q4 11 Q1 12
18
20. Outlook
Advanced Materials Engineering Systems Graphit Kropfmühl AMG Mining
Challenging start to Heat Treatment Voluntary Tender Antimony expansion
2012 Services business completed is progressing on plan
Aerospace is strong providing more stable Silicon metal prices Tantalum demand is
Market is slowly recurring revenues locked in for 2012 moderating
improving Result will be Graphite demand is
consistent with 2011 rebounding
■ AMG expects Revenue and EBITDA growth in 2012
■ AMG announces Q2 2012 financial results on August 8, 2012
20
22. Consolidated Balance Sheet
Balance Sheet ($’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 900.8 961.9
22
23. Consolidated Income Statement
Income Statement ($’000) Actual
For the three months ended 31-Mar-11 31-Mar-12
Revenue 318.0 324.0
Cost of sales 258.2 270.6
Gross profit 59.8 53.4
Selling, general & admin. 42.9 39.1
Asset impairment & restructuring 0.3 2.8
Environmental 0.1 0.7
Other income (0.9) (0.5)
Operating profit 17.4 11.2
Net finance costs 0.5 6.9
Share of (loss) profit of associates (4.4) 0.2
Profit before income taxes 12.5 4.5
Income tax expense 5.0 1.2
Profit for the period 7.6 3.2
Attributable to:
Shareholders of the Company 7.0 3.5
Non-controlling interest 0.6 (0.3)
Adjusted EBITDA 26.2 21.9
23
24. Consolidated Statement of Cash Flows
Cash Flow Statement ($’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 81.2
24
