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. AMG Advanced Metallurgical Group N.V.
Listed: NYSE-Euronext Amsterdam: AMG
Founded: 2006
Revenues: $951.1M TTM
Employees: 2,500
Facilities: Netherlands, Germany, UK, USA, Brazil, France,
Turkey, Czech Republic, China, Mexico, Belgium,
Sri Lanka
Market cap: €364.1M
Shares outstanding: 27.5M
52 week range: €6.25–€13.74
Recent share price: €13.24 (February 10, 2011)
Sustainable Metals Technology Products:
High purity raw materials, metals and complex metal products
Vacuum furnaces used to produce high purity metals
3
4. 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
4
5. Critical Raw Materials
The EU identified 14 critical raw materials(1) to the European economy –
focusing on two determinants – economic importance and supply risk
AMG currently produces 4 of those elements
“Critical” raw
materials
(1) European Commission Annex V to the Report of the Ad-hoc Working Group on defining critical raw materials
5
6. Products & Markets
Advanced Materials Engineering Systems
High-value alloys Capital equipment for high purity
Essential raw materials materials
Specialty Metals &
Energy Aerospace Infrastructure Chemicals
6
7. Critical Raw Materials
Primary producers of critical raw materials
Titanium
Vanadium
Magnesium
Chromium
Titanium Antimony Graphite
Antimony
Magnesium Lithium Magnesium
Silicon Titanium Titanium
Magnesium
Vanadium
Graphite
Graphite
Tantalum
Tantalum
Niobium
Tantalum
Lithium
Chromium Tantalum
Vanadium
AMG raw material
mines
7
9. Advanced Materials - Specialty metals pricing
$45
Increase from 2009 lows:
$40
FeV: 59%
Mo: 117%
Ni: 142%
$35
Price / Pound – V, Mo, Ni
$30
$25
$20
$15
$10
AMG IPO
$5
$0
2007 2008 2009 2010 2011
Ferro Vanadium Molybdenum Nickel
Prices are still below pre-crisis levels;
9 tied to demand for carbon and stainless steel
10. 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
10
12. 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%
12
13. 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
13 Revenue and EBITDA in millions 1%
14. Financial Highlights
Revenue
(in millions) Highlights
Q3 Revenue: $240.4 million
Up 17% from Q3 2009
$243.5 $240.4
Q3 EBITDA: $18.8 million
$231.4 $235.8
Up 1% from Q3 2009
$205.4
Q3 EPS: $0.11
Q3 09 Q4 09 Q1 10 Q2 10 Q3 10
Up from ($0.50) in Q3 2009
EBITDA YTD Revenue: $719.8 million
(in millions) Up 13% from YTD 2009
YTD EBITDA: $64.7 million
$22.0 $23.9 Up 14% from YTD 2009
$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
14
(1) Excluding the equity losses from AMG’s 42.5% ownership in Timminco Limited
16. Engineering Systems
Financial Summary Highlights
( 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
16
17. Graphit Kropfmühl
Financial Summary Highlights
( 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
17
18. Capital Base
Cash and Debt – September 30, 2010 Summary
( in millions)
■ Cash: $90.2 million
Cash Debt
$234.8 ■ Total debt: $234.8 million
$202.3 $203.8 $203.0 $204.3
■ Net debt: $144.6 million
■ Revolver availability: $61.3 million
$124.4
■ Total liquidity $151.5 million
$117.0
$98.9 $90.2
$84.6
Q3 09 Q4 09 Q1 10 Q2 10 Q3 10
Note: Cash includes short term investments
18
19. Outlook
■ Advanced Materials
■ Markets are improving
■ Antimony, tantalum and titanium alloys and coatings will drive growth in 2011
■ Engineering Systems
■ Backlog is increasing; renewed interest in solar silicon furnaces
■ Order intake driven by titanium, solar and specialty steel markets
■ Graphit Kropfmühl
■ AMG owns 88% of GK
■ Silicon metal 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
19
21. 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
21
in thousands
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)
22 Minority interest (6,492) 803
in thousands
23. 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
23
in thousands
