Investor Presentation   September 2011
Cautionary Note    THIS DOCUMENT IS STRICTLY CONFIDENTIAL AND IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION BY AMG ...
Overview                     Listed: NYSE-Euronext Amsterdam: AMG                  Founded: 2006                  Revenues...
Strategy    ■   Serve growing end markets with high value-added specialty metal        products and engineering solutions,...
Products & Markets       Advanced Materials          Engineering Systems               Graphit Kropfmühl     High-value a...
End Markets – by the Numbers              2011 H1 Revenue                           2011 H1 Gross Profit               $68...
Critical Raw Materials     The EU identified 14 critical raw materials(1) to the European economy –      focusing on two ...
Aerospace End Market: a growing market     27% of H1 2011 revenue; 45% growth over 2010     Titanium in commercial aircr...
Business Units9
Advanced Materials - Market, Products and Customers                                Aerospace                    Infrastruc...
Significant Metals Prices       Spot Prices as of September 1       Ferrovandium           $15.38/lb       Molybdenum     ...
Advanced Materials     Financial Summary                                                   Highlights     ( in millions)  ...
Engineering Systems – Market, Products and Customers                                Energy - Solar                Aerospac...
Engineering Systems     Financial Summary                                                   Highlights     ( in millions) ...
Graphit Kropfmühl – Market, Products and Customers                                   Energy - Solar            Specialty M...
Graphit Kropfmühl     Financial Summary                                           Highlights        ( in millions)        ...
Consolidated Financial Overview
Revenue by Geography       2011 H1 Revenue                        2010 Full Year Revenue           North                  ...
Financial Highlights     Revenue      (in millions)                                                            Highlights ...
Financial Highlights                   2011 Q2 Revenue   2011 Q2 Gross Profit                    $368.3 million       $69....
Capital Base     Cash and Debt – June 30, 2011                                                          Summary      ( in ...
Recent Developments     ■ AMG is accelerating the expansion of antimony mining activities:        ■ Began antimony mining ...
Outlook     ■ Advanced Materials         ■ Stable demand; strong prices for chromium, antimony and tantalum         ■ Anti...
Appendix24
Consolidated Balance Sheet       Balance Sheet                                Actual       As of                         D...
Consolidated Income Statement         Income Statement                             Actual         Quarter-to-date June    ...
Consolidated Statement of Cash Flows        Cash Flow Statement                                          Actual        For...
Amg    investor presentation q2 2011 september-opp
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Amg investor presentation q2 2011 september-opp

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Amg investor presentation q2 2011 september-opp

  1. 1. Investor Presentation September 2011
  2. 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 Companys 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. 3. Overview Listed: NYSE-Euronext Amsterdam: AMG Founded: 2006 Revenues: $1,197.5M LTM June 2011 EBITDA: $96.6M LTM June 2011 Employees: 3,000 Facilities: Netherlands, Germany, UK, USA, Brazil, France, Turkey, Canada, Czech Republic, China, Mexico, Belgium, Poland, India, Sri Lanka Market cap: €245.9M ($346.6M) Shares outstanding: 27.5M 52 week range: €6.25–€16.76 Recent share price: €8.94 (September 7, 2011)  Sustainable Metals Technology Products:  High purity raw materials, metals and complex metal products  Vacuum furnaces used to produce high purity metals3
  4. 4. Strategy ■ Serve growing end markets with high value-added specialty metal products and engineering solutions, related to CO2 reduction and conservation of natural resources ■ Execute through a combination of: ■ Vertical integration ■ Industry consolidation ■ Continuous investment in productivity and technology ■ Serve the end markets of: ■ Responsible energy production and use ■ Emerging market infrastructure ■ Aerospace and light weight materials ■ Specialty metals and chemicals4
  5. 5. Products & Markets Advanced Materials Engineering Systems Graphit Kropfmühl  High-value alloys  Capital equipment for  Silicon metal  Critical raw materials high purity materials  Natural graphite Specialty Metals & Energy Aerospace Infrastructure Chemicals5
  6. 6. End Markets – by the Numbers 2011 H1 Revenue 2011 H1 Gross Profit $686.3 million $128.8 million Aerospace Aerospace 27.1% 29.9% Infrastructure 14.4% Energy 24.9% Energy 19.0% Infrastructure 14.2% Specialty Metals & Specialty Chemicals Metals & 39.4% Chemicals 31.0%6
  7. 7. 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 has raw material sources for 4 of those elements “Critical” raw materials (Brazil) (Turkey) (Sri Lanka) (Brazil) (1) European Commission Annex V to the Report of the Ad-hoc Working Group on defining critical raw materials7
  8. 8. Aerospace End Market: a growing market  27% of H1 2011 revenue; 45% growth over 2010  Titanium in commercial aircraft is expected to grow over 25%(1) in 2012  Increases in Airbus and Boeing production rates  Light weight materials used to improve fuel efficiency  Master alloy demand expected to double by 2018 (B787, A350) Commercial Aircraft Delivery Forecast % of Titanium in Airframes (No. of planes) (‘% of total weight) 12.0 11.0 B 787 1,829 10.0 11% CAGR 1,704 9.0 B 777 A 350 8.0 1,514 7.0 1,384 6.0 5.0 B 757 A 318 1,246 A 320 A380 4.0 B 747 SP 1,097 3.0 A 300 A 340 B 747 A 330 2.0 B 737 B 767 A 321 1.0 B 727 B 707 0.0 2010 2011e 2012e 2013e 2014e 2015e 1950 1960 1970 1980 1990 2000 2010 2020 Source: Davenport & Company Source: Airbus, Boeing and Company estimates8 (1) Davenport & Company
  9. 9. Business Units9
  10. 10. Advanced Materials - Market, Products and Customers Aerospace Infrastructure - FeV Specialty Metals Products  Specialty alloys for titanium  Ferrovanadium  Chromium Metals  Coatings for wear  Ferro-nickel molybdenum  Tantalum resistance  Antimony Trioxide  Aluminium master alloys Competitors  Reading Alloys Inc.  Evraz Group S.A. (Highveld  KBM Affilips B.V. Steel & Vanadium)  Evraz Group S.A.  Sunxing Chemical and (Stratcor)  Eramet S.A. (Gulf Chemical Metallurgical Materials Co & Metallurgical Corporation)  Delachaux S.A.  Evraz Group S.A. (Stratcor)  Campine S.A.  Xstrata plc  Chemtura Corporation  Chengde Vanadium &  Twinkling Star Co., Ltd. Titanium Stock Co. Ltd. Sample Customers10
  11. 11. Significant Metals Prices Spot Prices as of September 1 Ferrovandium $15.38/lb Molybdenum $32,022/mt Nickel $21,155/mt Tantalum $129/lb Antimony $15,450/mt Chromium Metal $14,605/mt Silicon Metal $1.59/lb11
  12. 12. Advanced Materials Financial Summary Highlights ( in millions) Revenue EBITDA ■ Q2 2011 revenue up 55% from Q2 2010 $235.6 ■ KB Alloys acquisition contributed $25.0 $210.8 million ■ Antimony trioxide revenue up 38% $168.9 ■ Q2 2011 Gross Margin 16% of revenue $154.9 $152.0 ■ Q2 2011 EBITDA up 24% over Q2 2010 ■ 7% of revenue ■ CAPEX $17.5 $14.2 $9.4 $7.7 $14.6 ■ $6.2 million Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 ■ $1.6 million for tantalum mine Capital Expenditure ■ $1.0 million for aerospace alloy CAPEX expansion $7.3 $5.6 $5.6 $6.2 $4.2 - - - - -12 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11
  13. 13. 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 for nuclear fuel DSS furnaces  Precision Casting and  Development project for  Mono2™ technology Coating Systems the safe storage of nuclear waste  Heat Treatment with high pressure gas quenching Competitors  GT Solar International,  Inteco Specialty Melting  No significant competition Inc. Technologies GmbH  Beijing Jingyuntong  Consarc Corporation Technology Co. Ltd  Aichelin GmbH  Zhejiang Jinggong S&T  In house producers Sample Customers13
  14. 14. Engineering Systems Financial Summary Highlights ( in millions) Revenue EBITDA  Q2 2011 revenue up 51% from Q2 2010  Solar furnaces 29% of revenue $89.8  Own and Operate 12% of revenue $67.7  Order backlog increased 2% to $200.6 $59.5 $64.9 million at June 30, 2011 $53.2  Order intake $88.6 million in Q2 2011  1.0x book to bill ratio  Q2 2011 Gross Margin 25% of revenue $8.0 $7.4 $10.0 $7.7 - - - $5.3 - -  Increased due to economies of scale Q2 10 Q3 10 Q4 10 Q1 11 Q2 11  Q2 2011 EBITDA 9% of revenue Order Intake Order Intake $107.6 $88.6 $65.0 $66.9 $65.7 - - - - - Q2 10 Q3 10 Q4 10 Q1 11 Q2 1114
  15. 15. Graphit Kropfmühl – Market, Products and Customers Energy - Solar Specialty Metals & Chemicals Products  Silicon metal for  Natural graphite for polycrystalline for solar insulation, transportation cells and lithium-ion batteries  Silicon metal for aluminium and silicones Competitors  Bluestar Silicone Materials Ltd.  Asbury Graphite Mills, Inc.  Globe Specialty Metals Inc.  SGL Carbon SE  Grupo FerroAtlantica, S.L.  Qingdao Graphite Company, Ltd  Timminco Limited  Dow Corning Corporation  Wacker Chemie AG Sample Customers15
  16. 16. Graphit Kropfmühl Financial Summary Highlights ( in millions) Revenue EBITDA  Q2 2011 revenue up 34% from Q2 2010 $42.3 $42.9  37% increase in silicon metal revenue due to higher contract prices $32.4 $34.2  Natural graphite revenue up 28% $32.1  Q2 2011 Gross Margin 20% of revenue  Q2 2011 EBITDA up 269% over Q2 2010  15% of revenue  CAPEX $6.3 $6.2 $1.7 $2.0 $2.5 - Q2 10 - Q3 10 - Q4 10 - Q1 11 - Q2 11  $2.5 million primarily for graphite milling expansion and maintenance silicon metal Capital Expenditures capacity CAPEX $2.5 $1.7 $1.3 $1.2 $0.7 - - - - - Q2 10 Q3 10 Q4 10 Q1 11 Q2 1116
  17. 17. Consolidated Financial Overview
  18. 18. Revenue by Geography 2011 H1 Revenue 2010 Full Year Revenue North North America America 23% 20% Asia 21% Asia 22% Europe 51% Europe 50% South South America 5% America 5% ROW 2% ROW 1%18
  19. 19. Financial Highlights Revenue (in millions) Highlights (in millions) ■ Q2 Revenue: $368.3 million ■ Up 51% from Q2 2010 $368.3 ■ Q2 Gross Profit: $69.0 million $318.0 $270.7 $243.5 $240.4 ■ Q2 EBITDA: $31.4 million ■ Up 32% from Q2 2010 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 ■ Q2 EPS: $0.29 (1) EBITDA ■ Up from $0.20 in Q2 2010 (1) ■ LTM Q2 2011 ■ Revenue: $1,197.5 million $31.4 ■ EBITDA: $96.6 million $26.2 $23.9 ■ Operating Profit: $57.0 million $18.8 $20.2 ■ EPS: $0.91 (1) Q2 10 Q3 10 Q4 10 Q1 11 Q2 1119 (1) Excluding the equity losses from AMG’s 41.9% ownership in Timminco Limited and loss on debt extinguishment
  20. 20. Financial Highlights 2011 Q2 Revenue 2011 Q2 Gross Profit $368.3 million $69.0 million20 in millions
  21. 21. Capital Base Cash and Debt – June 30, 2011 Summary ( in millions) Cash Debt ■ Cash: $61.1 million $267.1 ■ Total debt: $278.5 million $234.8 $237.1 ■ Net debt: $217.3 million $204.3 ■ Debt to capitalization: 0.52x ■ Net Debt to TTM EBITDA: 2.25x ■ Revolver availability: $44.8 million $84.6 $90.2 $89.3 ■ Total liquidity $105.9 million $61.1 $66.1 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 ■ AMG’s primary debt is a $300 million term loan and revolving credit facility ■ 5 year term21
  22. 22. Recent Developments ■ AMG is accelerating the expansion of antimony mining activities: ■ Began antimony mining operations in Turkey in Q2 2011 ■ Expects to produce 50 MT of crude oxide per month in Q3 2011 ■ Expanding capacity to over 5,000/MT of antimony metal per annum by Q2 2012, subject to completion of the detailed mine plan ■ AMG is expanding the tantalum mining and concentration capacity to 400,000/lb tantalum oxide per annum by Q1 2012 ■ AMG began a three-year JV with ENRESA and CIEMAT to develop technologies enabling safe final disposal of nuclear contaminated graphite22
  23. 23. Outlook ■ Advanced Materials ■ Stable demand; strong prices for chromium, antimony and tantalum ■ Antimony mine ramp up ongoing; production beginning in H2 2011 ■ Engineering Systems ■ Backlog is stable ■ Own and Operate business is growing to meet demand ■ Graphit Kropfmühl ■ Improved silicon metal and natural graphite pricing; 2011e revenue >$150M ■ AMG targets EBITDA growth greater than 25% in 201123
  24. 24. Appendix24
  25. 25. Consolidated Balance Sheet Balance Sheet Actual As of December 31, 2010 June 30, 2011 Fixed assets 228.6 262.0 Goodwill and intangibles 27.0 33.6 Other non-current assets 80.7 80.7 Inventories 207.2 258.2 Receivables 175.4 216.9 Other current assets 46.8 53.2 Cash 89.3 61.1 TOTAL ASSETS 855.1 965.7 TOTAL EQUITY 234.0 254.4 Long-term debt 187.8 219.8 Pension liabilities 88.4 98.2 Other long-term liabilities 52.9 65.5 Current debt 49.3 58.7 Accounts payable 102.3 117.5 Advance payments 49.6 45.7 Accruals 43.3 57.0 Other current liabilities 47.5 48.9 TOTAL LIABILITIES 621.1 711.3 TOTAL LIABILITIES & EQUITY 855.1 965.725 in millions
  26. 26. Consolidated Income Statement Income Statement Actual Quarter-to-date June Q2 2010 Q2 2011 Revenue 243.5 368.3 Cost of sales 199.1 299.3 Gross profit 44.5 69.0 Selling, general & admin. 29.9 44.8 Asset impairment & restructuring - 2.2 Environmental 0.2 0.1 Other income (0.3) (0.9) Operating profit 14.7 22.8 Net finance costs 1.9 9.1 Share of loss of associates (5.0) (1.7) Profit before income taxes 7.8 12.0 Income tax expense 7.1 7.8 Profit for the period 0.6 4.2 Attributable to: Shareholders of the Company 1.2 3.4 Non-controlling interest (0.5) 0.9 Adjusted EBITDA 23.9 31.426 in millions
  27. 27. Consolidated Statement of Cash Flows Cash Flow Statement Actual For the six months ended June 30, 2010 June 30, 2011 EBITDA 45.9 57.6 +/- Change in operating assets/liabilities (35.7) (46.7) -Interest paid, net (7.4) (5.1) Other operating cash flow (1.7) 3.7 Cash flows from operations before taxes 1.1 9.5 Income tax paid (21.4) (21.6) Total cash flows used in operations (20.3) (12.1) Capital expenditures (12.0) (19.9) Other investing activities (10.0) (24.0) Cash flows used in investing activities (22.0) (43.9) Cash flows from financing activities 21.2 23.9 Net decrease in cash (21.1) (32.1) Beginning cash 117.0 89.3 Effects of exchange rates on cash (11.3) 3.9 Ending cash 84.6 61.127 in millions

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