Amg Critical Materials N.v. · EURONEXT:AMG
Amg Critical Materials — AMG Advanced Metallurgical Group — Investor Presentation (January 2018)
32 slides from Amg Critical Materials's investor presentation, January 2018
Slide 1: AMG Advanced Metallurgical Group N.V. January 2018 Investor Update
AMG Advanced Metallurgical Group N.V. January 2018 Investor Update
Slide 2: Table of Contents
TABLE OF CONTENTS AMG Overview 4 Financial Highlights 9 Lithium Project Update 17 Appendix 25 2
Slide 3: 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 4: AMG Overview
AMG Overview AMG Advanced Metallurgical Group N.V. 4
Slide 5: AMG is a critical materials company
GLOBAL VIEW Global Trends Demand Supply • Need to contain CO2 • Material science-based • AMG sources, processes, and emissions solutions for energy supplies the materials which efficiency (lighter, stronger, are critical because of market • Operation growth and temperature resistant) demands increas
Slide 6: CO2 Reduction: Leader in Advanced Technologies
LEADER IN ADVANCED TECHNOLOGIES AMG: MITIGATING TECHNOLOGIES TO ADDRESS CO2 REDUCTION Products and processes saving raw materials, energy and CO2 emissions during manufacturing CO REDUCTION 2 (i.e., recycling of Ferrovanadium) A GLOBAL IMPERATIVE FOR THE 21ST CENTURY AMG: ENABLING TECHNOLOGIES Produ
Slide 7: Excellent Platform for Organic and Acquisition Led Growth
EXCELLENT PLATFORM FOR ORGANIC AND ACQUISITION LED GROWTH 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
Slide 8: AMG's Core Know-How
PROCUREMENT Sourcing material from remote origins AMG’S CORE KNOW-HOW OPERATIONS World leader in advanced metallurgical & mineral processing MARKETS Operating in volatile oligopolistic niche markets CUSTOMERS Intense interaction with global industrial leaders 8
Slide 9: Financial Highlights
Financial Highlights AMG Advanced Metallurgical Group N.V. 9
Slide 10: AMG at a Glance
AMG AT A GLANCE Q3 2017 REVENUE BY SEGMENT: BY END MARKET: BY REGION: 42% Transportation 44% Europe 79% Critical Materials 21% Specialty Metals 34% North America & Chemicals 21% Engineering 27% Infrastructure 17% Asia 10% Energy 5% ROW AMG IS A GLOBAL SUPPLIER OF CRITICAL MATERIALS TO: ENERGY TRANSP
Slide 11: Q3 2017 at a Glance
Q3 2017 AT A GLANCE AMOUNTS IN $M • Q3 ‘17 EBITDA up 18% (EXCEPT EARNINGS PER SHARE) Q3 2017 Q3 2016 % CHANGE versus Q3 ‘16 due to Revenue $258.9 $247.5 5% improved profitability within AMG Critical Materials Gross Profit * $51.3 $46.3 11% • Annualized ROCE increased to 21.5% Gross Margin % 19.8% 18
Slide 12: Divisional Financial Highlights – Q3 2017 vs. Q3 2016
DIVISIONAL FINANCIAL HIGHLIGHTS – Q3 2017 VS. Q3 2016 REVENUE GROSS MARGIN * Q3 2017 REVENUE: $258.9 (IN MILLIONS OF US DOLLARS) Q3 2017 GROSS MARGIN: 19.8% $203.4 18.0% Q3 2017 AMG Critical AMG Critical Materials Q3 2016 Materials $177.5 18.0% $55.6 26.2% AMG Q3 2017 AMG Engineering Engineering $70
Slide 13: Financial Highlights
FINANCIAL HIGHLIGHTS REVENUE (IN MILLIONS OF US DOLLARS) GROSS PROFIT * (IN MILLIONS OF US DOLLARS) $258.0 $262.0 $258.9 $52.5 $54.3 $51.3 $247.5 $237.9 $46.3 $43.0 5% 11% YoY YoY Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 EBITDA (IN MILLIONS OF US DOLLARS) ORDER INTAKE (IN MILLIONS
Slide 14: 5 Year Trend – EBITDA & ROCE
5 YEAR TREND – EBITDA & ROCE EBITDA (IN MILLIONS OF US DOLLARS) • 2016 EBITDA is up 33% $100.7 due to product mix and $83.5 $85.7 operational improvements $72.6 $75.6 in Critical Materials as well FY ‘16 EBITDA as a very strong UP 33% VERSUS FY ‘15 performance by Engineering due to an increase in de
Slide 15: 5 Year Trend – Net Debt & Operating Cash Flow
5 YEAR TREND – NET DEBT & OPERATING CASH FLOW NET DEBT (CASH) (IN MILLIONS OF US DOLLARS) • Net debt: $7.3 million o $186.9 million reduction of net $194.2 debt since December 31, 2012 $160.5 o Net Debt to LTM EBITDA: 0.07x $187M $87.8 REDUCTION • AMG’s primary debt IN NET DEBT facility is a $400 mi
Slide 16: Outlook: 2017-2018
OUTLOOK: 2017-2018 OUTLOOK AMG expects full year 2017 EBITDA to improve by 10%, or more, relative to 2016. In 2018, AMG expects to continue its strong financial performance and improve profitability relative to 2017. AMG's management team is focused on delivering our highly accretive lithium project
Slide 17: Lithium Project Update
Lithium Project Update
Slide 18: AMG Lithium & Tantalum Business
AMG LITHIUM & TANTALUM BUSINESS AMG Lithium & Tantalum Division AMG Oxides AMG Tantalum AMG Lithium Location São João del Rei, Brazil Mibra Mine, Brazil Mibra Mine, Brazil • Tantalum Oxide Products Tantalum Concentrate Lithium Concentrate* • Niobium Oxide • 140k lbs tantalum oxide / year Current Pro
Slide 19: AMG Lithium – Project Strengths
AMG LITHIUM – PROJECT STRENGTHS Existing Strong Mining Ore extraction and management understanding infrastructure crushing costs and mining of the mine already in place absorbed by infrastructure – not geology and operational profitable tantalum a new mine project operation Spodumene plant will be f
Slide 20: Lithium Project Phases
20 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 lithium Construction of lithium concentrate plant to pro
Slide 21: Spodumene II Timeline
PROJECT TIMELINE SPODUMENE II TIMELINE Q4 17 Q1 18 Q2 18 H2 19 Engineering Engineering Construction Mechanical Start Complete Start Completion 21
Slide 22: Mibra Mine – Mineral Resources
MIBRA MINE – MINERAL RESOURCES Domain Quantity Grade AMG’s Mineral Resource Li Li2O Ta Ta2O5 Nb Sn Statement for the Mibra mine was updated in March 2017, ('000s tonnes) (ppm) (%) (ppm) (ppm) (ppm) (ppm) and states 20.3 million tonnes of Measured Mineral Resources measured and indicated resources, a
Slide 23: Operating Costs for Spodumene Production, 2017
OPERATING COSTS FOR SPODUMENE PRODUCTION, 2017 Operating costs for spodumene production ($/MT) AMG’s objective is to be 300 the low-cost producer of spodumene globally 250 • AMG’s spodumene operating costs benefit from the production of tantalum 200 concentrate, which absorb the costs of mining and
Slide 24: Lithium Carbonate Cost Curve, 2017
LITHIUM CARBONATE COST CURVE, 2017 Subject to the approval of Phase III of the lithium project, AMG’s fully integrated cost of production of lithium carbonate would be approximately $4,000/MT Lithium Carbonate Cost ($/mt) 10,000 9,000 Cash Cost Overheads 8,000 7,000 6,000 AMG Estimate 5,000 (approx.
Slide 25: Appendix
Appendix AMG Advanced Metallurgical Group N.V. 25
Slide 26: Critical Raw Materials: AMG Now In Supply Risk
CRITICAL RAW MATERIALS: AMG NOW IN 7 Light REE Heavy REE • The EU identified 27 critical raw materials* to the Antimony European economy in Bismuth Phosphorus Magnesium 2017, focusing on two determinants: economic Borate Niobium importance and supply risk Natural Scandium Graphite PGMs • The US iden
Slide 27: Critical Materials Prices: 10 Year Perspective
CRITICAL MATERIALS PRICES: 10 YEAR PERSPECTIVE • Metal prices are Sep 2017 Position Sep 2016 Position measured on a scale Highest 10 Price in of 0 to 10, with 0 and 10 10 years representing the minimum and maximum average quarterly prices occurring 7.5 during the past 10 years • The positions demons
Slide 28: Critical Materials – Average Quarterly Prices
CRITICAL MATERIALS – AVERAGE QUARTERLY PRICES Q3 Q4 Q1 Q2 Q3 Q3 ‘17 VS. Q3 Q3 ‘17 VS. Q2 MATERIALS ‘17 % CHANGE 2016 2016 2017 2017 2017 ‘16 % CHANGE Ferrovanadium ($/lb) $9.99 $10.65 $12.35 $12.30 $17.75 78% 44% Molybdenum ($/lb) $7.01 $6.63 $7.90 $8.03 $8.21 17% 2% Nickel ($/MT) $10,262 $10,685 $1
Slide 29: Lithium Industry Basics & Battery Value Chain
LITHIUM INDUSTRY BASICS & BATTERY VALUE CHAIN LITHIUM HARD ROCK CONCENTRATE (SPODUMENE) CATHODE CHEMICALS BATTERIES PASTE BRINE Note: LG Chem, BYD and Panasonic produce both cathode paste and batteries. 29
Slide 30: Critical Materials – Market Trends
CRITICAL MATERIALS – MARKET TRENDS CRITICAL MATERIALS MAJOR END MARKETS MARKET TRENDS MAJOR CUSTOMERS AMG ANTIMONY ANTIMONY TRIOXIDE FLAME RETARDANTS PLASTICS ANTIMONY MASTERBATCHES ANTIMONY PASTES COMMUNICATIONS & AMG BRAZIL MICRO CAPACITORS, ELECTRONICS TANTALUM & NIOBIUM SUPERALLOYS FUEL EFFICIEN
Slide 31: Critical Materials – Market Trends
CRITICAL MATERIALS – MARKET TRENDS CRITICAL MATERIALS MAJOR END MARKETS MARKET TRENDS MAJOR CUSTOMERS AMG ALUMINUM ALUMINUM MASTER AEROSPACE, FUEL EFFICIENCY ALLOYS AUTOMOTIVE ALUMINUM POWDERS AMG VANADIUM FERROVANADIUM INFRASTRUCTURE INFRASTRUCTURE FERRONICKEL- GROWTH MOLYBDENUM AMG TITANIUM ALLOYS
Slide 32: Engineering – Market Trends
ENGINEERING – MARKET TRENDS PRODUCTS & SERVICES MAJOR END MARKETS MARKET TRENDS MAJOR CUSTOMERS AMG ENGINEERING FUEL EFFICIENCY AEROSPACE, CAPITAL GOODS AUTOMOTIVE ELECTRONICS (VACUUM FURNACES) AMG ENGINEERING AEROSPACE, VACUUM HEAT TREATMENT FUEL EFFICIENCY AUTOMOTIVE SERVICES ENERGY TRANSPORTATION
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