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: €245M ($320M)
Shares outstanding: 27.5M
52 week range: €6.79–€16.92
Recent share price: €8.89 (March 13, 2012)
Serve growing end markets with high value-added specialty metal alloys and
engineering solutions, related to CO2 reduction and conservation of natural resources
3
4. Business Units, Products, and End Markets
Advanced Materials Engineering Systems Graphit Kropfmühl AMG Mining
65% of 2011 revenue 23% of 2011 revenue 12% of 2011 revenue Creating new reporting
46% of EBITDA 31% of EBITDA 23% of 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
Invest in
Drive Organic
Vertical
ROCE Growth
Integration EPS
2009 – 2011
Strong growth in
19.9%
2011
CAGR
Adjusted 2011 EPS
2011
$1.34
15.1%
+ 76% 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 currently has raw material sources for 4 of those elements
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,
17% increased fuel
efficiencies compared
to Boeing 737¹
Recycling Ferrovanadium FeV is added
Property Ferro-nickel into higher-
strength
Modification molybdenum
light-weight
Infrastructure steel adopted
by 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 in 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 guarantee
Heat Treatment high-performance and
with high pressure light-weight thus low
gas quenching CO2 emission¹
Technology Solar silicon
Property melting and
Modification crystallisation
Energy systems- DSS
Solar power capacity
– Solar furnaces could become available
Mono2(TM) at around $1 per watt
technology by 2020, down from
$4 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 deliver ~19% of
the total benefits that
could accrue from
boosting 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. Voluntary Tender Offering for Graphit Kropfmühl
■ AMG currently owns 88.16% of GK’s shares
■ Commenced the preparation of a voluntary public tender offer on February 29
■ Offering €31.75/share
■ Expected completion Q2 2012
■ Securing ~ $62 million in incremental credit from its banking consortium
■ AMG intends to initiate a squeeze out of the remaining minority shareholders with
a goal to own 100% of GK, upon getting above 90% ownership
■ Upon successful completion of the Voluntary Tender, AMG will begin segment
reporting of AMG Mining's financial results
Expand Simplify Increase
AMG's mine
based
businesses
+ AMG’s
corporate
structure
+ operational
and financial
flexibility
+ Eliminate
redundancies
Increase Shareholder Value
10
12. Financial Highlights
Revenue Gross Profit
2011: $1,351.3 (in USD millions)
2011: $238.0 (in USD millions)
$308.6 $50.5
$368.3 $69.0
$356.4 $59.8
Up $58.7 Up
$318.0 $49.4
14% 2%
$270.7 YoY
YoY
- - - - -
Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
EBITDA EPS
2011: $110.1 (in USD millions)
■ Q4 2011 EPS: $0.26 (1)
■ Up 13% from Q4 2010 (1)
■ 2011 EPS: $1.34 (2)
$31.4
$24.8 ■ Up 76% from 2010 (2)
$26.2 $27.7
Up
$20.2 23%
YoY
Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
12 (1) Excluding Timminco Limited related charges
(2) Excluding Timminco Limited related charges and loss on debt extinguishment
13. Capital Base
Cash and Debt
Cash Debt
( in USD millions)
■ Net debt: $189.1 million
$268.6
■ Debt to capitalization: 0.55x
■ Net Debt to 2011 EBITDA: 1.72x
■ Revolver availability: $79.6 million
■ Total liquidity: $138.6 million
$267.1 $278.5 $274.9
$237.1 ■ AMG’s primary debt facility is a $315
million term loan and revolving credit
$79.6 facility
$89.3
$66.1 $61.1 $71.3 ■ 5 year term
■ Securing an additional $62 million for
Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 its credit facility in Q1 2012 in
conjunction with the Voluntary
ROCE
Tender Offering to 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)
2011: $1,351.3 2011: $238.0
$1,200
36% $200 33%
$1,000
$150
$800
$600
$100
$400
$50
$200
$- $-
YTD Q4 2010 YTD Q4 2011 YTD Q4 2010 YTD Q4 2011
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
2011: $1,351.3 ( in USD millions) 2011: $238.0 ( in USD millions)
Aerospace Aerospace
28.5% 33.5%
Infrastructure
14.5% Energy
Energy
26.2%
18.0% Infrastructure
14.4%
Specialty Metals Specialty Metals
& Chemicals & Chemicals
38.9% 25.9%
Aerospace + 48% Aerospace + 47%
Up 36% Up 33%
2010: $990.5 2010: $178.6
Aerospace Aerospace
26.1% 30.4%
Infrastructure Energy
Energy 16.4% 26.5%
21.3% Infrastructure
19.5%
Specialty Metals Specialty Metals
15 & Chemicals & Chemicals
36.1% 23.7%
16. Advanced Materials
Financial Summary
■ Q4 2011 revenue up 18% from Q4 2010
( in USD millions)
$250.0 Revenue EBITDA $235.6
$226.8
$210.8
$200.0
$198.7 $21.0 ■ KB Alloys contributed $19.5 million
$17.5
$168.9 ■ Titanium master alloys revenue up
$14.6
$150.0
$16.0
458%
$12.3
$11.0
■ Tantalum revenue up 400%
$100.0
$7.7 ■ Q4 2011 gross margin 10% of revenue
$6.0
$50.0 $6.0
■ Q4 2011 EBITDA margin 3% of
revenue
$- $1.0
Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
Capital Expenditure
■ Q4 2011 CAPEX $10.7 million
( in USD millions)
■ $2.6 million for tantalum mine
$10.7 ■ $1.2 million for aerospace coatings
$7.3
$5.6 $6.2 $6.6 and master alloy expansion
- - - - -
Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
16
17. Engineering Systems
Financial Summary
Q4 2011 revenue up 8% from Q4 2010
( in USD millions)
$95.0 Revenue EBITDA $89.8
$86.3
$85.0
$72.9 $21.0 Heat treatment revenue up 130%
$75.0 $67.7 $64.9
$65.0 Remelting systems revenue up 49%
Solar DSS revenue down 70%
$16.0
$55.0
$45.0 $11.8
$10.0
$9.3 $11.0
Q4 2011 gross margin 30% of revenue
$35.0
$7.7
$25.0 Increasing price pressure
$5.3
$15.0
Q4 2011 EBITDA up 18%
$6.0
$5.0
16% of revenue
$(5.0) Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 $1.0
Order Intake
Order backlog decreased 8% to $158.5
( in USD millions)
million at December 31, 2011
Order intake $69.5 million in Q4
$107.6
$65.7
$88.6
$68.5 $69.5
2011
0.95x book to bill ratio
- - - - -
Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
17
18. Graphit Kropfmühl
Financial Summary
Q4 2011 revenue up 8% from Q4 2010
( in USD millions)
$50.0 Revenue EBITDA
$45.0 $42.3 $42.9 $43.3
Natural graphite revenue up 16%
$40.0 $37.0
$35.0
$34.2 $11.0 Silicon metal revenue up 4%
$30.0
Q4 2011 gross margin 26% of revenue
$25.0 $7.0
$6.3 $6.2 $6.2 Higher sales prices for natural
$20.0
$15.0
$6.0
graphite and silicon metal
$10.0
$2.5 Q4 2011 EBITDA up 183% over Q4
$5.0 2010
$-
19% of revenue
$1.0
Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
Capital Expenditure
■ Q4 2011 CAPEX – $3.2 million
( in USD millions)
Graphite milling expansion
Upgrading silicon metal facility
$2.7 $3.2
$2.5
$1.7
$1.2
- - - - -
Q4 10 Q1 11 Q2 11 Q3 11 Q4 11
18
20. Outlook
Advanced Materials Engineering Systems Graphit Kropfmühl AMG Mining
Challenging start to Heat Treatment Voluntary Tender Antimony expansion
2012 Services business launched is progressing
Aerospace is strong providing more stable Silicon metal prices Tantalum mine
Financial market recurring revenues locked in for 2012 impacted by Brazil
uncertainty is Aerospace and Graphite demand is floods
reducing visibility nuclear is strong; strong
solar is challenging
■ AMG expects Revenue and EBITDA growth in 2012
■ AMG announces Q1 2012 financial results on May 15, 2012
20
22. Consolidated Balance Sheet
Balance Sheet Actual
FYE in December 2010 2011
Fixed assets 228.6 263.6
Goodwill and intangibles 27.0 38.1
Other non-current assets 80.8 63.4
Inventories 207.2 228.9
Receivables 175.4 188.1
Other current assets 46.8 39.1
Cash 89.3 79.6
TOTAL ASSETS 855.1 900.8
TOTAL EQUITY 234.0 220.6
Long-term debt 187.8 210.4
Pension liabilities 88.4 90.1
Other long-term liabilities 52.9 71.6
Current debt 49.3 58.2
Accounts payable 102.3 128.5
Advance payments 49.6 30.2
Accruals 43.3 51.7
Other current liabilities 47.5 39.5
TOTAL LIABILITIES 621.1 680.2
TOTAL LIABILITIES & EQUITY 855.1 900.8
22
in thousands
23. Consolidated Income Statement
Summary Financials Actual 2010 Actual 2011
Quarter to date December Q4 Q4
Revenue 270.7 308.6
Cost of sales 221.3 258.1
Gross profit 49.4 50.5
Selling, general & administrative 36.8 34.9
Timminco receivables write-off - 7.5
Asset impairment & restructuring 1.0 (1.9)
Environmental 5.7 5.5
Other income (0.4) (1.0)
One Time Expenses - (4.3)
Operating profit 6.3 9.8
Net finance costs 2.0 6.2
Share of income (loss) of associates 7.6 (13.5)
Profit (loss) before income taxes 11.9 (10.0)
Income tax (benefit) expense (0.1) 2.2
Profit (Loss) for the quarter 12.0 (12.1)
Attributable to:
Shareholders of the Company 12.5 (13.2)
Minority interest (0.5) 1.1
Adjusted EBITDA 20.2 24.8
23
in thousands
24. Consolidated Statement of Cash Flows
Cash Flow Statement Actual
FYE in December 2010 2011
EBITDA 84.9 110.1
+/- Change in operating assets/liabilities (45.2) (13.8)
-Interest paid, net (13.8) (12.1)
Other operating cash flow 7.9 (4.7)
Dividend income (0.3)
Cash flows from operations before taxes 33.8 79.2
Income tax paid (35.4) (34.2)
Total cash flows from operations (1.6) 45.0
Capital expenditures (33.0) (51.9)
Acquisitions (20.2) (29.5)
Other investing activities (9.4) (1.4)
Cash flows from investing activities (62.6) (82.8)
Cash flows from financing activities 42.4 27.9
Net increase (decrease) in cash (21.8) (9.9)
Beginning cash 117.0 89.3
Effects of exchange rates on cash (5.9) 0.1
Ending cash 89.3 79.6
Ending Liquidity 138.6
24
in thousands