Neo Performance Materials, Inc. · TSX:NEO
Neo Performance Materials — Investor Presentation (January 2024)
38 slides from Neo Performance Materials's investor presentation, January 2024
Slide 1: Fast forwarding the clean energy transition as a global leader in rare earth magnetics
a. Fast forwarding the clean energy transition as a global leader in rare earth magnetics & critical materials A Generational Opportunity
Slide 2: Disclaimer
Disclaimer Forward-Looking Information T h e following presentation contains “forward-looking information” within the meaning of applicable securities laws in Canada. Forward-looking information m a y relate to future events or future performance of Neo. All statements in this presentation, other th
Slide 3: Intro to Neo
ib 5 n Perform Intro to Neo
Slide 4: Neo at a Glance
Neo at a Glance Neo is an advanced materials science, engineering & manufacturing company, with a focus on rare earth magnetics and other critical materials. Global Leader in Rare Earth Magnetics Industry Business Unit Organization • Developing and manufacturing rare earth magnetics for 30+ years •
Slide 5: Neo at a Glance
Neo at a Glance Revenue by Segment (LTM) Revenue by Geography (LTM) Headquarters Toronto, Canada Magnequench North America Europe Publicly Traded Exchange Rare Metals 36% 26% 17% TSX: NEO.TO 25% Other South Korea 5% Canada, China, Estonia, Chemicals & 3% Thailand Japan, Germany, South Korea, Oxides
Slide 6: Globally Distributed & Parallel Supply Chain
Globally Distributed & Parallel Supply Chain Global manufacturing in low-cost jurisdictions. Global engineering centers at talent hubs: Singapore, UK, Estonia, Canada. Global sales offices that speak language of our customers – literally & technically. Magnequench (“MQ”) Chemicals & Oxides (“C&O”) R
Slide 7: Growth Drivers
Growth Drivers Neo’s products deliver magnetic, catalytic, luminescent, electrochemical, and enhanced thermal stability properties that enable technologies considered vital to each of these growth drivers. Electric Vehicles Municipal Water Treatment GHG Emissions Reduction Energy-Efficiency Resident
Slide 8: Macro Megatrends Paving our Growth Path
Macro Megatrends Paving our Growth Path Rare Earths are considered a Critical Material in all major Western economies • New electric vehicles globally increase from 11 million in 2023 to 63 million by 2030* Energy Transition 1 and Electric Vehicles • Rare earth magnets are present in 85% of EV motor
Slide 9: Strategic Initiatives in Current Period – Q4 2023
Strategic Initiatives in Current Period – Q4 2023 Creating laser focus and accountability Change in Internal Focus and Management: Short-term Accountabilities (H1 2024 Targets): • 1-3 MOUs with new, flagship customers for advanced • New Chief Executive Officer (former CFO & President) materials • Ne
Slide 10: Neo’s Value-Add Position in the Supply Chain
Neo’s Value-Add Position in the Supply Chain Non-captive midstream & downstream assets offer supply chain resiliency and optionality to our customers. Upstream Midstream Downstream: Advanced Materials Customers Rare Light Rare Earth Rare Earth High-purity Earths Rare Earths Magnetic Magnetic Hafnium
Slide 11: Laser Focus on Rare Earth Magnetics & Growth Outside of China
Laser Focus on Rare Earth Magnetics & Growth Outside of China
Slide 12: Why are Rare Earth Magnetics important for EVs/PHEVs
Why are Rare Earth Magnetics important for EVs/PHEVs Rare Earth Magnets are to EV Traction Motors, what Lithium & Cobalt are to Batteries EV Traction Motors • 1-2kg of rare earth magnet in EV traction motor • Majority of EV motor OEMs are deploying or designing rare-earth-magnet-based drivetrains –
Slide 13: Understanding the Rare Earth Magnet Growth Curve
Understanding the Rare Earth Magnet Growth Curve Where are rare earth magnetics used today? What does tomorrow look like? 500,000 535,006 Data Sources: 500,000 Adamas Intelligence, Mt of NdFeB Magnets Mt of NdFeB Magnets BAML Securities 400,000 400,000 + 340,000 Mt 300,000 300,000 200,000 200,000 19
Slide 14: Neo’s New Positioning in the EV Magnet Growth Curve
Neo’s New Positioning in the EV Magnet Growth Curve An example of Neo’s growth opportunities in rare earth magnetics. Consider Neo’s magnet offering for the EV traction motor market in Europe & North America. NdFeB Magnet Demand ex-China EV Magnet ex-China Market Opportunity: 160,000 Europe is ahead
Slide 15: How the ex-China EV motor magnet market unfolds
How the ex-China EV motor magnet market unfolds What does it take to win business in this market space? Integrated ex-China Supply Chain: operating dual supply chain – inside and outside of China – along the value chain of rare earth permanent magnets Proven Magnetics Competency: R&D, commercializat
Slide 16: Current commercialized rare earth value chain, ex-China
Current commercialized rare earth value chain, ex-China Neo is already the company with the most integrated presence in the value chain, with non-captive assets Mining Separation Metals & Alloys Magnets Magnet Customers Neo is not a mining company, Neo is the only company with Neo currently produces
Slide 17: Neo’s Proven Magnetics Competency
Neo’s Proven Magnetics Competency Neo has more rare earth advanced degrees and technical experts across processing, metallurgy, and magnetics than any other company outside of China or Japan. First-of-its-kind EV Motor-Magnet Customer Case: Complex Motor-Magnet Design Customer Case: Traction Motor M
Slide 18: Neo’s First ex-China Sintered Magnet Plant for EVs
Neo’s First ex-China Sintered Magnet Plant for EVs Construction is on budget, and on schedule “Just last year, I was in Narva announcing the Currently building an industrial-scale sintered NdFeB magnet first award decision by the European Union's manufacturing in Estonia that benefits from: Just Tra
Slide 19: Business Units in Focus
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Slide 20: Business Unit Focus: Magnequench
Business Unit Focus: Magnequench Neo’s Magnequench is currently the #1 market leader for rare earth magnetic powders for bonded and hot deformed NdFeB magnets Applications Original founder of the NdFeB magnet, 37 years ago: Founded of Products within General Motors in 1986, it was spun-out in the mi
Slide 21: Business Unit Focus: Magnequench
Business Unit Focus: Magnequench Strategic M&A in growth areas with thoughtful post-merger integration Acquisition of AsiaMag in 2019 Acquisition of SGTec in 2023 (Chuzhou, China) (Essex, United Kingdom) • The acquisition of AsiaMag (Chu Zhou, China) in • The acquisition of SGTec (Essex, United King
Slide 22: Business Unit Focus: Chemicals & Oxides
Business Unit Focus: Chemicals & Oxides Parallel supply chain, with focus on rare earth separation and rare-earth-based advanced products. Only company to have rare earth separation Advanced material formulation and value-add capabilities both inside and outside of China focus, not commoditized rare
Slide 23: Business Unit Focus: Chemicals & Oxides
Business Unit Focus: Chemicals & Oxides Critical midstream assets and know-how that supplies our magnet business with oxides and commercialized specialty chemicals for environmental and microelectronic applications. Environmental Catalysts Advanced Rare Earth Products New Product Development Municip
Slide 24: Business Unit Focus: Rare Metals
Business Unit Focus: Rare Metals Neo is the owner and operator of strategic assets in the recycling and high-purity refining value-add steps of critical minerals for growth industries, like semiconductors Industries Depending on our RM Products 300+ staff in a very niche industry that has high barri
Slide 25: Business Unit Focus: Rare Metals
Business Unit Focus: Rare Metals The only semiconductor-grade Gallium producer in North America – one of handful outside of China. Neo’s commercially-operating production is in Canada. Operating Facility Ultra-High Purity for Semiconductors • Location: Ontario (Canada) ▪ 4N Ga from recycling is upgr
Slide 26: Sustainability at our Core
Sustainability at our Core
Slide 27: Sustainability in our Products
Sustainability in our Products Neo’s products truly fast-forward our world’s transition to green technologies, by supporting the management of energy reduction/generation and water/air quality. CO2-e Abatement via EVs Protection of Freshwater Aviation Emissions Reduction Empower the annual abatement
Slide 28: Annual, Transparent ESG Reporting at our Customer Standards
Annual, Transparent ESG Reporting at our Customer Standards Neo’s quantitative and qualitative performance of its environmental, social, and governance impact and practices undergoes an annual review & publication process. Sillamäe, Korat, Zibo, Estonia Thailand China Tianjin, Jiangyin, China China
Slide 29: Corporate & Financial Summary
Corporate & Financial Summary
Slide 30: Consolidated Financial Statements
Consolidated Financial Statements Healthy EBITDA, strong cash flow generation, and financial capacity to grow. Q-over-Q Comparison Year-over-Year Comparison US$ 000s (excl. Volume & EPS) Q3 2023 Q3 2022 YTD 2023 YTD 2022 Revenue $136,917 $146,627 $442,877 $481,130 Adjusted net income (loss) $4,013 (
Slide 31: Financial Performance by Business Unit
Financial Performance by Business Unit Quarter Highlights: Q-over-Q Year-over-Year Magnequench • Volumes remain lower than expected and traditional Comparison Comparison run-rate due to economic activity in China and US$ 000s (excl. Volume) Q3 2023 Q3 2022 YTD 2023 YTD 2022 selective de-stocking in
Slide 32: Executive Management
Executive Management Neo’s Executive team is comprised by experienced executives in general management, finance, operations, sales & marketing, law, and engineering. Rahim Suleman Jonathan Baksh* Kevin Morris CEO & President CFO & EVP CSO & EVP • Former CFO of Neo for 6 • Former Divisional CFO at •
Slide 33: Board of Directors: Non-Executive Directors
Board of Directors: Non-Executive Directors Neo’s Board is comprised by current & former senior executives, with backgrounds in law, government, accounting, finance, material science, and rare earth industry management. Claire Kennedy Eric Noyrez Chair of Board Lead Director • Former senior partner
Slide 34: Building Trust by Addressing Concerns
Building Trust by Addressing Concerns
Slide 35: Addressing Investor Concerns
Addressing Investor Concerns Concern 1: Commercial Activities in China Concern 2: RE Price Volatility & Impact on Neo’s Earnings Concern: Neo has too much concentration of business in Concern: Quarterly results are too volatile, unpredictable and China and that is too risky. highly correlated with R
Slide 36: Addressing Investor Concerns
Addressing Investor Concerns Concern 3: Upstream Strategy Concern 4: MQ Volumes have not been growing Concern: Neo’s growth prospects seem limited by access to Concern: The story around RE Magnetics is clearly compelling Rare Earth carbonate feedstock. Neo is not a mining and indeed generational. Bu
Slide 37: Addressing Investor Concerns
Addressing Investor Concerns Concern 5: North American Magnet Strategy Concern 6: Shareholder and Public Awareness of Neo’s Story Concern: Others have announced their RE Magnets for Concern: Neo’s story sounds great and the opportunity is North America strategies (and received funding awards) – imme
Slide 38: Neo Performance Materials
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