Amg Critical Materials N.v. · EURONEXT:AMG
Amg Critical Materials — AMG Advanced Metallurgical Group — Investor Presentation (May 2018)
26 slides from Amg Critical Materials's investor presentation, May 17, 2018
Slide 1: AMG Advanced Metallurgical Group Houlihan Lokey Presentation
AMG ADVANCED METALLURGICAL GROUP N.V. HOULIHAN LOKEY PRESENTATION, May 17, 2018 1
Slide 2: Cautionary Note
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
Slide 3: AMG Is a Critical Materials Company
GLOBAL TRENDS CO2 emission reduction, population growth, increasing affluence, and energy efficiency DEMAND Innovative new products that are lighter, stronger, and resistant to higher temperatures AMG IS A SUPPLY AMG sources, processes, CRITICAL and supplies the critical materials that the market M
Slide 4: Leader in Advanced Technologies to Address CO2 Reduction
L E A D E R I N A D VA N C E D T E C H N O L O G I E S TO ADDRESS CO2 REDUCTION CO REDUCTION 2 A GLOBAL IMPERATIVE FOR THE 21ST CENTURY AMG: ENABLING TECHNOLOGIES AMG: MITIGATING TECHNOLOGIES Products and processes saving Products and processes saving raw CO2 emissions during use materials, energy a
Slide 5: AMG at a Glance
A M G AT A G L A N C E Q1 2018 REVENUE BY SEGMENT: BY END MARKET: BY REGION: 39% Transportation 46% Europe 81% Critical Materials 22% Specialty Metals 33% North America & Chemicals 19% Engineering 29% Infrastructure 16% Asia 10% Energy 5% ROW AMG IS A GLOBAL SUPPLIER OF CRITICAL MATERIALS TO: ENERGY
Slide 6: Health and Safety: Sustained Improvement
H E A LT H A N D S A F E T Y: S U S TA I N E D I M P R O V E M E N T LOST TIME INCIDENT RATE TOTAL INCIDENT RATE 2013 1.95 3.30 2014 1.19 2.23 2015 1.12 2.02 2016 1.04 1.68 2017 0.82 1.31 6
Slide 7: Strategic History
S T R AT E G I C H I S T O R Y 2012 2013 2014 2015 2016 - 2017 COST SUPPLY CHAIN SCALING PRODUCT MIX TARGETED W/C REDUCTION EXCELLENCE PROFITABLE OPTIMIZATION & DEBT LEVELS GROWTH Cost-reduction and Competitive advantage Properly positioned, Streamlined operations Further reduction capex discipline
Slide 8: Current Strategy
C U R R E N T S T R AT E G Y MISSION STATEMENT To increase long term value through industry leadership, operational expertise and efficient deployment of capital STRATEGIC OBJECTIVE Identifying long term trends and leveraging those trends through technological excellence and innovations in the indis
Slide 9: Lithium & Tantalum Buildout – May Status
L I T H I U M & TA N TA L U M B U I L D O U T – M AY 2 0 1 8 S TAT U S 2017 2018 2019 2020 2021 Tantalum PRODUCTION EXPANDED PRODUCTION CAPEX SPEND Spodumene SP I CAPEX SPEND PRODUCTION SP II CAPEX SPEND PRODUCTION Structured, sequenced approach to maximizing the value of our Mibra mine asset
Slide 10: Lithium Project Phases
LITHIUM PROJECT PHASES PHASE I & PHASE II PHASE III LITHIUM CHEMICAL LITHIUM CONCENTRATE PRODUCTION PRODUCTION LITHIUM CONCENTRATE LITHIUM CONCENTRATE LITHIUM CHEMICAL PLANT I PLANT II PLANTS Construction of a lithium Construction of second Construction of lithium concentrate plant to produce lithiu
Slide 11: Operating Costs for Spodumene Production
O P E R AT I N G C O S T S F O R S P O D U M E N E P R O D U C T I O N Operating costs for spodumene production, 2017 ($/mt) 300 Market price: ~$1,000/mt 250 200 150 AMG ($134/mt) 100 50 0 Talison - Greenbushes Pilbara - Pilgangoora Altura - Pilgangoora Galaxy Resources Process Minerals (Australia)
Slide 12: AMG Vanadium: Ohio Expansion
A M G - VA N A D I U M : O H I O E X PA N S I O N Summary • $35M investment to expand total spent catalyst roasting capacity by 9,000 ST in Cambridge, Ohio facility • 30% increase in roasting capacity to gold-standard recycling process – 99% of solids produced throughout process are saleable materia
Slide 13: AMG Vanadium: Going Global
A M G VA N A D I U M : G O I N G G L O B A L + Partnership between two market leaders to develop a sustainable 'cradle-to-grave' solution for catalyst supply and reclamation 13
Slide 14: Vanadium: Inventory vs Fe-V Price
VA N A D I U M : I N V E N T O R Y V S F E - V P R I C E 9.0 $40 Vanadium Inventory 8.0 $35 Fe-V Price (US$/pound Fe-V) (Months of Consumption) 7.0 Vanadium Inventory $30 6.0 Ryan’s Notes Fe-V Price $25 5.0 $20 4.0 $15 3.0 $10 2.0 1.0 $5 0.0 $0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Slide 15: Vanadium Demand: Chinese Rebar
VA N A D I U M D E M A N D : C H I N E S E R E B A R 50,000 350 Vanadium Consumption in China Rebar (mt-V) 45,000 300 HS Rebars Production (millions of tons) 40,000 New standard enacted 250 35,000 30,000 200 25,000 150 20,000 15,000 100 10,000 50 5,000 0 0 2005 2006 2007 2008 2009 2010 2011 2012 201
Slide 16: Ferrovanadium: Price Trend
F E R R O VA N A D I U M : 5 - Y E A R P R I C E T R E N D $35 $30 Ferrovanadium ($ per lb) $25 $20 Ferrovanadium $15 $10 $5 $0 Source: CRU Ryan’s Notes – average monthly US FeV 80% V Mid 16
Slide 17: Financial Highlights
FINANCIAL HIGHLIGHTS REVENUE (IN MILLIONS OF US DOLLARS) GROSS PROFIT (IN MILLIONS OF US DOLLARS) $308.4 $70.1 $280.7 $258.0 $262.0 $258.9 $54.3 $56.5 $52.5 $51.3 20% 34% YoY YoY Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 EBITDA (IN MILLIONS OF US DOLLARS) ORDER INTAKE (IN MILLIONS
Slide 18: Financial Data: ROCE & EBITDA
F I N A N C I A L D ATA : R O C E & E B I T D A EBITDA (IN MILLIONS OF US DOLLARS) • Q1 ‘18 EBITDA up 35% versus Q1 ‘17 due to $44.5 improved profitability $33.0 $31.9 $33.0 Q1 ‘18 EBITDA within AMG Critical $27.6 UP 35% Materials VERSUS Q1 ‘17 • Q1 2018 annualized ROCE improved to 28.4% from Q1 '17
Slide 19: Financial Data: Net Debt & Cash from Operations
F I N A N C I A L D ATA : N E T D E B T & N E T C A S H F R O M O P E R AT I O N S NET DEBT (CASH) (IN MILLIONS OF US DOLLARS) • Net debt: $9.4 million $194.2 o $184.8 million reduction of net $160.5 $185M debt since December 31, 2012 REDUCTION $87.8 • AMG’s primary debt IN NET DEBT facility is a $6
Slide 20: AMG Critical Materials
A M G C R I T I C A L M AT E R I A L S REVENUE & EBITDA (IN MILLIONS OF US DOLLARS) • Q1 2018 revenue of $248.4 $248.4 million was 28% higher than Q1 2017 $214.0 $194.5 $202.6 $203.4 • EBITDA increased by $11.4 $37.1 Q1 2018 EBITDA million over Q1 2017 to $37.1 $25.7 $23.9 $23.5 $26.9 million in Q1
Slide 21: AMG Critical Materials – Quarterly Revenue Drivers
A M G C R I T I C A L M AT E R I A L S – Q U A R T E R LY R E V E N U E DRIVERS KEY PRODUCT Q1 ‘18 REV Q1 ‘17 REV VOLUME PRICE ($M) ($M) • AMG Critical Materials revenue in the first quarter FeV & FeNiMo $55.2 $27.0 increased by $53.8 million, or 28%, to $248.4 million Al Master Alloys & Powders $51
Slide 22: Critical Materials Prices: Historical Pricing
C R I T I C A L M AT E R I A L S P R I C E S : H I S T O R I C A L P R I C I N G Mar 2018 Position Mar 2017 Position • Metal prices are measured 10 Highest Price on a scale of 0 to 10, with 0 and 10 representing the 8.7 8.6 minimum and maximum 7.7 7.9 average quarterly prices 7.5 occurring since the
Slide 23: AMG Engineering
AMG ENGINEERING REVENUE & EBITDA (IN MILLIONS OF US DOLLARS) • EBITDA increased by $63.5 $66.7 $0.1 million in Q1 2018 $59.4 $60.1 $55.6 versus Q1 2017 REVENUE DECLINED • Revenue in the quarter was $8.0 BY 5% VS. Q1 2017 adversely impacted by $7.3 $7.4 $6.1 DUE TO TIMING timing effects, namely early
Slide 24: Aerospace: Driving Growth in the Core Business
A E R O S PA C E : D R I V I N G G R O W T H I N T H E C O R E B U S I N E S S Development of Order Backlog Forecasted Production Levels of Commercial Aircraft Number of aircraft produced OB Airbus in thousand Aircrafts OB Boeing in billions of USD Underlying fundamentals point to continued growth i
Slide 25: Working Capital Reduction
W O R K I N G C A P I TA L R E D U C T I O N WORKING CAPITAL DAYS REDUCED BY 80% SINCE Q3’10 79 69 70 70 70 65 65 65 65 62 61 54 DAYS, OR 68% 53 REDUCTION 47 47 43 42 31 30 30 28 26 25 23 22 22 19 17 17 18 16 15 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 26: 2018 Outlook & Lithium Project Update
2 0 1 8 O U T L O O K & L I T H I U M P R O J E C T U P D AT E OUTLOOK L I T H I U M P R O J E C T U P D AT E We believe we can achieve our goals earlier Project is progressing in-line with expectations – commissioning than previously expected and can commit to has commenced as of May 15, 2018. turn
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