Magontec Limited · ASX:MGL
Magontec — FY2021 Earnings Presentation
25 slides from Magontec's earnings presentation, Feb 28, 2022
Slide 1: Magontec Limited FY 2021 Result
Magontec Limited ASX:MGL FY 2021 Result 28 February 2022
Slide 2: Disclaimer
Disclaimer This Presentation has been prepared by Magontec Limited (ABN 30 147 Past performance Investment Risk and other risks 131 977) (Magontec or the Company). This Presentation contains summary Past performance information given in this Presentation is given for Investment in Magontec shares is
Slide 3: FY 2021 Full Year Result: Income statement and Cashflow Overview
FY 2021 Full Year Result Income statement and Cashflow Overview (AUD ‘000) 12 months to 31 Dec 21 12 months to 31 Dec 20 Revenue 115,151 95,068 21.1% Cost of Sales (95,919) (82,872) 15.7% Gross Profit 19,232 12,195 57.7% Gross Profit margin (%) 16.7% 12.8% Other income 1,747 1,244 40.5% Other operat
Slide 4: Reconciliation of significant items in earnings
FY 2021 Full Year Result Reconciliation of significant items in earnings (AUD ‘000) 12 months to 31-Dec-21 12 months to 31-Dec-20 Reported Net Profit Before Tax & Significant Items 7,724 338 Significant items before tax Less non-cash equity writeback / (expense) (237) 118 Less MAQ depreciation (non-
Slide 5: Magontec Limited Market Information
Magontec Limited Market Information ASX Code: MGL Total Per Share Shareholder Structure 28 February 2022 Ordinary shares on issue following 15:1 consolidation in August 2021 76,729,210 Retail 18.7% Qinghai Salt 1 Market capitalisation $29.9 million 39.0 cents/share Lake 28.7% Book value of net asset
Slide 6: Gross Profit and EBITDA/EBIT trends
FY 2021 Full Year Result Sharp improvement in 4Q metals performance, strong CCP performance throughout FY2021 EBITDA and EBIT reflect favourable supply & pricing conditions Gross Profit ($M) and GP margin (%) Reported EBITDA and EBIT ($M) 16.7% $10.1 $19.2 12.8% 11.3% $7.3 9.6% 10.0% $14.8 $4.6 EBIT
Slide 7: Underlying Net Profit of $4.4m for the year
FY 2021 Full Year Result Underlying Net Profit* of $4.4m for the year to 31 December 2021 Underlying Net Profit After Tax * ($M) $4.43m $0.48m -$0.29m -$1.20m -$1.34m FY17 FY18 FY19 FY20 FY21 7 * Reported net profit/loss excluding the effects of unrealised foreign exchange
Slide 8: Strong cashflows lead to continuing reduction in net debt and gearing
FY 2021 Full Year Result Strong cashflows lead to continuing reduction in net debt and gearing Underlying Operating Cashflow($M)* Net Debt ($M) and Gearing** (%) 35.5% 33.0% $10.5 28.8% $18.0 $15.3 13.0% 16.0% $11.7 $5.0 $3.9 $2.9 $6.9 $5.2 $2.3 FY17 FY18 FY19 FY20 FY21 FY17 FY18 FY19 FY20 FY21 * Op
Slide 9: CCP business contributed 71% of Gross Profit in 2021
FY 2021 Full Year Result CCP business contributed 71% of Gross Profit in 2021 Both metals & anodes businesses strong despite delays at Magontec Qinghai Mg alloy cast house $ 25.0 m Anode (CCP) and Metal Gross Profit split ($M) Anodes Metals $ 20.0 m 29% $ 15.0 m 40% $ 10.0 m 43% 40% 33% 71% $ 5.0 m
Slide 10: FY 2021 Full Year Result – CCP / anodes
FY 2021 Full Year Result – CCP / anodes 89.8% sales growth in FY21 over 5 years since FY17 Global CCP revenues and gross profit (A$M) Global magnesium anode sales volumes $13.6 (metric tonnes) FY21 volumes + 8.4% on pcp 2021 1,639 1,656 $8.8 $8.2 $43 $7.9 2020 1,451 1,587 Gross profit $7.2 $31 $31 2
Slide 11: FY 2021 Full Year Result - Metals
FY 2021 Full Year Result - Metals Metals division GP up to $5.6 million in 2021 supported by strong pricing environment for pure Mg Global metals revenues and gross profit (A$M) Global Mg alloy and specialist metals sales volumes (metric tonnes) Gross profit $6.0 2021 10,736 9,103 FY21 volumes + 3.7
Slide 12: Global Manufacturing & Distribution Platform
Global Manufacturing & Distribution Platform Japan St Louis Bottrop, Ge Xi’an, PRC Rhode Is Qinghai, PRC Santana, Ro Sydney Production Technology Sales Head Melbourne Centre Office Office 4 manufacturing Mg Mg Sales distribution Research activities/ locations for: alloys anodes in all major markets
Slide 13: Qinghai electrolytic magnesium smelter complex
Qinghai electrolytic magnesium smelter complex 100,000 tonnes per annum > ~ 10% of global production Dehydration* Reduction* Cast house# Agreements Lease Agreement 10 + 10 Year option 56,000 mtpa supply Mg alloys exclusivity Off Take Price formula *QSLM assets # Cast House shared by QSLM & Magonte
Slide 14: Magontec Qinghai magnesium alloy cast house
Magontec Qinghai magnesium alloy cast house Revenue and profit Currently operating Cast house impact opportunity Delayed SOP at low levels 2021 Target Mg production mtpa 7k 56k Revenue A$ $30m $500m+* Cast house Contribution Loss Profit Industry CO2 output High Low SOP Timetable Production restart 2
Slide 15: Magontec Qinghai will use the lowest CO2 Mg ever produced
Magontec Qinghai will use the lowest CO2 Mg ever produced* Qinghai 35 Future Present 30 Kg CO2eq / kg Mg Includes credits for 25 use of waste gas 20 15 Includes credits for by-products 10 5 0 Golmud, China 2020 Qinghai 2020 Electrolysis Pidgeon process *German Aerospace Institute of Vehicle Concepts
Slide 16: Two businesses: Metals and Anodes
Magontec Limited: ASX Code: MGL Two businesses Metals Anodes Primary & recycled Magnesium and magnesium alloys electronic anodes Pure Mg & Scrap Electronic Mg alloy & other alloying returns components components elements Mg alloy Cathodic ingots Corrosion Generic Protection CCP Specialist 16
Slide 17: Magontec is a manufacturing business
Magontec is a manufacturing business Higher margin lower volume - Hot water appliances Electronic anodes Cathodic Corrosion Protection for steel tanks CCP Magnesium anodes Lower margin higher volume - Die casting industry Specialist metals Aerospace Defence Automotive Mg alloys Power tool Electronic
Slide 18: Magnesium (Mg) alloys
Magnesium (Mg) alloys Light and strong Unique Specific Low density properties applications structural metal Stress resistance Aluminium 2.70g/cm3 Mg 36% lighter Thermal conductivity Iron 7.87g/cm3 Mg 78% lighter Corrosion Magnesium 1.74g/cm3 18
Slide 19: Mg alloy recycling: At Bottrop and Santana
Mg alloy recycling: At Bottrop (Germany) and Santana (Romania) An essential part of the European and North American die casting industry Recycling adds Mg is 100% Installed capacity Europe’s largest just 0.59 kg CO2 recyclable 24k mtpa Mg recycler equivalent/kg of Mg* Magontec Customer Mg alloy recy
Slide 20: Cathodic Corrosion Protection (CCP)
Cathodic Corrosion Protection (CCP) Every water tank in every house requires corrosion protection New Buildings 20% CCP 80% Replacement Magnesium Electronic anodes Industry drivers Climate change Urbanisation (water heater installation) Switch from oil/gas to electric heat pump 80% replacement (5 to
Slide 21: Magontec's corporate transformation creates an exceptional platform for growth
Magontec’s corporate transformation creates an exceptional platform for growth Mg Mg ASX Listed Capitalisation $29.9m Improving financial fundamentals Primary Mg alloy production growth “Green” magnesium Profit “inflexion” point 1 Based on share price of $0.39 as of 25 February 2022 21
Slide 22: Thank You
Thank You MAGONTEC MAGONTEC GmbH MAGONTEC Xian Co., Ltd Head Office, Sydney Industriestraße 61 No. 40, Feng Cheng 3 Road, Suite 1.03 46a Macleay St 46240 Bottrop Xian Economic and Potts Point Sydney NSW Germany Development Zone AUSTRALIA 2011 Xian, China, 710021 Tel +61 2 8084 7813 Tel +49 (0) 20 41
Slide 23: Appendix Current Year FY 2021 Result by Region
Appendix Current Year FY 2021 Result by Region Segment P&L 12 months to (AUD ‘000) EUR PRC Head office 31 Dec 21 Gross Profit 16,021 3,211 - 19,232 Other income 974 773 - 1,747 Operating expenses (7,841) (3,318) (1,924) (13,082) Add back D&A in Cost of Sales 1,077 1,104 - 2,180 EBITDA 10,231 1,770 (
Slide 24: Appendix Prior Year FY 2020 Result by Region
Appendix Prior Year FY 2020 Result by Region Segment P&L 12 months to (AUD ‘000) EUR PRC Head office 31 Dec 20 Gross Profit 10,153 2,043 - 12,195 Other income 282 882 80 1,244 Operating expenses (7,720) (2,757) (1,890) (12,366) Add back D&A in Cost of Sales 1,210 1,190 - 2,400 EBITDA 3,925 1,358 (1,
Slide 25: Magontec Limited
Magontec Limited ASX:MGL FY 2021 Result 28 February 2022