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
Revenues: $1,072M LTM March 2011
EBITDA: $89.0M LTM March 2011
Employees: 2,600
Facilities: Netherlands, Germany, UK, USA, Brazil, France,
Turkey, Canada, Czech Republic, China, Mexico,
Belgium, Poland, India, Sri Lanka
Market cap: €412M
Shares outstanding: 27.5M
52 week range: €6.25–€16.76
Recent share price: €14.99 (May 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. 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 chemicals
4
5. Products & Markets
Advanced Materials Engineering Systems
High-value alloys Capital equipment for high purity
Essential raw materials materials
Specialty Metals &
Energy Aerospace Infrastructure Chemicals
5
6. 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
(1) European Commission Annex V to the Report of the Ad-hoc Working Group on defining critical raw materials
6
7. Critical Raw Materials – AMG’s activities
1
AMG manufactures products with these elements 2
H AMG has development projects with these elements He
Hydrogen Helium
1.0 4.0
4 5 6 7 8 9 10
3
Li Be B C N O F Ne
Beryllium Boron Carbon Nitrogen Oxygen Fluorine Neon
Lithium
9.0 10.8 12.0 14.0 16.0 19.0 20.2
6.9
11 12 13 14 15 16 17 18
Na Mg Al Si P S Cl Ar
Sodium Magnesium Aluminum Silicon Phosphorus Sulfur Chlorine Argon
23.0 24.3 27.0 28.1 31.0 32.1 35.5 40.0
19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36
K Ca Sc Ti V Cr Mn Fe Co Ni Cu Zn Ga Ge As Se Br Kr
Potassium Calcium Scandium Titanium Vanadium Chromium Manganese Iron Cobalt Nickel Copper Zinc Gallium Germanium Arsenic Selenium Bromine Krypton
39.1 40.1 45.0 47.9 50.9 52.0 54.9 55.9 58.9 58.7 63.5 65.4 69.7 72.6 74.9 79.0 79.9 83.8
37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54
Rb Sr Y Zr Nb Mo Tc Ru Rh Pd Ag Cd In Sn Sb Te I Xe
Rubidium Strontium Yitrium Zirconium Niobium Molybdenum Technetium Ruthenium Rhodium Palladium Silver Cadmium Indium Tin Antimony Tellurium Iodine Xenon
85.5 87.6 88.9 91.2 92.9 95.9 99 101.0 102.9 106.4 107.9 112.4 114.8 118.7 121.8 127.6 126.9 131.3
55 56 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86
Cs Ba 57-71 Hf Ta W Re Os Ir Pt Au Hg Tl Pb Bi Po At Rn
Caesium Barium Hafnium Tantalum Tungsten Rhenium Osmium Iridium Platinum Gold Mercury Thallium Lead Bismuth Polonium Astatine Radon
132.9 137.4 178.5 181.0 183.9 186.2 190.2 192.2 195.1 197.0 200.6 204.4 207.2 209.0 210.0 210.0 222.0
87 88 104 105 106 107 108 109 110 111 112 113 114 115 116
Fr Ra 89-103 Rf Db Sg Bh Hs Mt Ds Rg Uum Uut Uuq Uup Uuh
Francium Radium Rutherfordlium Dubnium Seaborgium Bohrium Hassium Meitnerium Darmstadtium Roentgenium Ununbium Ununtrium Ununquadium Ununpentium Ununhexium
223.0 226.0 261 262 263 264 265 266 269 272 277 284 289 288 292
57 58 59 60 61 62 62 64 65 66 67 68 69 70 71
La Ce Pr Nd Pm Sm Eu Gd Tb Dy Ho Er Tm Yb Lu
Lanthanum Cerium Praseodymium Neodymium Promethium Samarium Europium Gadolinium Terbium Dysprosium Holmium Erbium Thallium Ytterbium Lutetium
138.9 140.1 140.9 144.2 147.0 150.4 152.0 157.3 158.9 162.5 164.9 167.3 168.9 173.0 175.0
89 90 91 92 93 94 95 96 97 98 99 100 101 102 103
Ac Th Pa U Np Pu Am Cm Bk Cf Es Fm Md No Lr
Actinium Thorium Protactinium Uranium Neptunium Plutonium Americium Curium Berkelium Californium Einsteinium Fermium Mendelevium Nobelium Lawrencium
132.9 232.0 231.0 238.0 237.0 242.0 243.0 247.0 247.0 251.0 254.0 253.0 256.0 254.0 257.0
7
8. Critical Raw Materials
Primary producers of selected critical raw materials
Titanium Vanadium
Chromium Magnesium
Chromium
Titanium Antimony Graphite
Antimony
Magnesium Lithium Magnesium
Silicon Titanium Titanium
Magnesium
Vanadium
Graphite
Graphite
Tantalum
Tantalum
Niobium
Tantalum
Graphite
Lithium
Chromium Tantalum
Vanadium
AMG raw material
mines
8
9. Recent Developments
■ Acquired aluminum master alloy producer KB Alloys, LLC for $23.5
million
■ Signed agreements to supply tantalum concentrate production through
the end of 2012
■ AMG installed a 200,000 kwh solar power facility at its Ferrovanadium
production facility
■ AMG completed a new $300 million term debt and revolving credit
facility that does not expire until April 2016
9
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
Titanium Stock Co. Ltd.
Sample Customers
10
11. Significant Metals Prices
Year over
2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011 Q1 year change
Ferrovanadium $ 29,652 $ 35,759 $ 31,989 $ 30,027 $ 30,865 4.1%
Molybdenum 34,678 36,177 33,025 34,700 38,007 9.6%
Nickel 20,072 22,376 21,184 23,594 26,863 33.8%
Tantalum Oxide 87,435 111,708 160,276 206,463 260,145 197.5%
Chrome Metal 10,337 11,618 11,728 12,412 14,065 36.1%
Antimony Metal 6,518 8,771 9,603 11,273 14,243 118.5%
Silicon Metal 2,771 3,012 3,328 3,439 3,615 30.5%
■ Tantalum price movements are driven by demand for smart
phones
■ Antimony and silicon metal price movements are driven by supply
11
restrictions in China
price per metric ton
12. 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
PVA TePla AG Consarc Corporation
Chinese producers Aichelin GmbH
Sample Customers
12
13. 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 Customers
13
15. End Markets – by the Numbers
2011 Q1 Revenue by End 2011 Q1 Gross Margin by
Market End Market
Aerospace Aerospace
26.1% 29.9%
Infrastructure
15.3%
Energy 24.4%
Energy 18.3% Infrastructure
15.5%
Specialty
Metals & Specialty
Chemicals Metals &
40.3% Chemicals
30.3%
15
16. Revenue by Geography
2011 Q1 Revenue 2010 Full Year Revenue
North North
America America
23% 20%
Asia 22%
Asia 19%
Europe Europe 51%
52%
South
South America 5%
America
5% ROW 2%
ROW 1%
16 AMG generated less than 3% of revenue from Japan
17. Financial Highlights
2011 Q1 Revenue 2011 Q1 Gross Profit
$318.0 $59.8
17 in millions
18. Financial Highlights
Revenue
(in millions) Highlights
(in millions)
Q1 Revenue: $318.0 million
Up 35% from Q1 2010
$318.0 Q1 EBITDA: $26.2 million
$270.7 Up 19% from Q1 2010
$235.8 $243.5 $240.4
Q1 EPS: $0.41 (1)
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11
Up from $0.11 in Q1 2010 (1)
EBITDA TTM Q1 2011
Revenue: $1072.7 million
EBITDA: $89.0 million
Operating Income: $48.9 million
$23.9
$26.2 EPS: $0.82 (1)
$22.0
$18.8 $20.2
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11
18
(1) Excluding the equity losses from AMG’s 42.5% ownership in Timminco Limited
19. Advanced Materials
Financial Summary Highlights
( in millions)
Revenue EBITDA ■ Q1 2011 revenue up 50% over Q1 2010
$210.8 ■ KB Alloys acquisition contributed $11.0
million
$154.9
$168.9 ■ Antimony trioxide revenue up 74%
$152.0 ■ Q1 2011 Gross Margin 15% of revenue
$95.9
■ Q1 2011 EBITDA up 71% over Q1 2010
■ 7% of revenue
■ CAPEX
$14.6
$8.5 $14.2 $9.4 $7.7 ■ $1.1 million investment in hydropower
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11
facility in Brazil
CAPEX
$7.3
$5.6 $5.6
$4.2
$3.3
- - - - -
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11
19
20. Engineering Systems
Financial Summary Highlights
( in millions)
Revenue EBITDA
Q1 2011 revenue was flat compared to Q1
2010
$65.3 $67.7
$64.9 Solar furnaces 27% of revenue
$59.5
$53.2 Own and Operate 15% of revenue
Order backlog increased 7% to $195.9
million at March 31, 2011
Order intake $65.7 million in Q1 2011
1.01x book to bill ratio
$12.1 $10.0
-
$8.0
-
$7.4
- -
$5.3
-
Q1 2011 Gross Margin 28% of revenue
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q1 2011 EBITDA down 56% from Q1 2010
8% of revenue
CAPEX
$4.9
$0.8 $1.3 $0.8 $1.5
- - - - -
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11
20
21. Graphit Kropfmühl
Financial Summary Highlights
( in millions)
Revenue EBITDA Q1 2011 revenue up 41% over Q1 2010
$42.3 34% increase in silicon metal revenue due
to lower contract prices
$32.4
$34.2 Natural graphite revenue up 57%
$32.1
$29.9
Q1 2011 Gross Margin 21% of revenue
Q1 2011 EBITDA up 332% over Q1 2010
15% of revenue
CAPEX
$6.3
$1.5 $1.7 $2.0 $2.5
- - - - - $1.2 million primarily for high purity
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11
graphite milling expansion
CAPEX
$1.7
$1.3 $1.2
$1.0
$0.7
- - - - -
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11
21
22. Capital Base
Cash and Debt – March 31, 2011 Summary
( in millions)
■ Cash: $66.1 million
Cash Debt
■ Total debt: $267.1 million
$267.1
$234.8 $237.1 ■ Net debt: $201.0 million
■ Debt to capitalization: 0.52x
$203.0 $204.3
■ Net Debt to TTM EBITDA:
2.26x
■ Revolver availability: $37.1 million
$98.9 ■ Total liquidity $103.2 million
$90.2 $89.3
$84.6 $66.1
Q1 10 Q2 10 Q3 10 Q4 10 Q1 11
Note: Cash includes short term investments
22
23. Outlook
■ Advanced Materials
■ Increasing demand and pricing for chromium, antimony and tantalum
■ Antimony mine ramp up is on schedule for H2 2011
■ Engineering Systems
■ Backlog is gradually improving
■ Own and Operate business is growing and will be a significant contributor
■ Graphit Kropfmühl
■ Improved silicon metal pricing; strong demand and pricing for natural graphite
■ AMG EBITDA growth in 2011 in excess of 20%
23
25. Consolidated Balance Sheet
Balance Sheet Actual
FYE in December 31, 2010 March 31, 2011
Fixed assets 228.6 244.7
Goodwill and intangibles 27.0 36.6
Other non-current assets 80.7 81.9
Inventories 207.2 244.9
Receivables 175.4 206.2
Other current assets 46.9 50.9
Cash 89.3 66.1
TOTAL ASSETS 855.1 931.3
TOTAL EQUITY 234.0 248.3
Long-term debt 187.8 211.0
Pension liabilities 88.4 95.0
Other long-term liabilities 52.9 56.0
Current debt 49.3 56.0
Accounts payable 102.3 115.9
Advance payments 49.6 53.5
Accruals 43.3 55.7
Other current liabilities 47.5 39.9
TOTAL LIABILITIES 621.1 683.0
TOTAL LIABILITIES & EQUITY 855.1 931.3
25
in thousands
26. Consolidated Income Statement
Summary Financials Actual
For the three months ended March 31 2010 2011
Revenue 235.8 318.0
Cost of sales 193.2 258.2
Gross profit 42.6 59.8
Selling, general & admin. 30.6 42.9
Asset impairment & restructuring - 0.3
Environmental 0.3 0.1
Other income (0.1) (0.9)
Operating profit 11.8 17.4
Net finance costs 3.6 0.5
Share of loss of associates 4.4 4.4
Profit before income taxes 3.8 12.5
Income tax expense 3.9 5.0
(Loss) profit for the period (0.1) 7.6
Attributable to:
Shareholders of the Company (0.1) 7.0
Non-controlling interest (0.0) 0.6
Adjusted EBITDA 22.0 26.2
26
in thousands
27. Consolidated Statement of Cash Flows
Cash Flow Statement Actual
For the three months ended March 31, 2010 March 31, 2011
EBITDA 22.0 26.2
+/- Change in operating assets/liabilities (23.6) (22.1)
-Interest paid, net (1.6) (1.2)
Other operating cash flow 0.4 (0.3)
Cash flows from operations before taxes (2.8) 2.6
Income tax paid (12.1) (16.3)
(14.9) (13.7)
Total cash flows from operations
(5.1) (8.2)
Capital expenditures
(0.8) (24.7)
Other investing activities
(5.9) (32.9)
Cash flows from investing activities
7.6 19.4
Cash flows from financing activities
Net increase (decrease) in cash (13.2) (27.2)
117.0 89.3
Beginning cash
Effects of exchange rates on cash (4.9) 4.0
98.9 66.1
Ending cash
27
in thousands
