Amg Critical Materials N.v. · EURONEXT:AMG
Amg Critical Materials — AMG Advanced Metallurgical Group — Investor Presentation (November 2017)
33 slides from Amg Critical Materials's investor presentation, November 2017
Slide 1: AMG Advanced Metallurgical Group N.V. November 2017 Investor Update
AMG Advanced Metallurgical Group N.V. November 2017 Investor Update
Slide 2: Table of Contents
TABLE OF CONTENTS AMG Overview 4 Financial Highlights 9 AMG Lithium 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: Leader in advanced technologies to address CO2 reduction
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 $400 mi
Slide 16: Outlook: 2017-2018
OUTLOOK: 2017-2018 OUTLOOK AMG expects full year 2017 EBITDA to improve by 10%, or more, relative to 2016. In 2018, AMG expects to continue its strong financial performance and improve profitability relative to 2017. AMG's management team is focused on delivering our highly accretive lithium project
Slide 17: AMG Lithium
AMG Lithium AMG Advanced Metallurgical Group N.V. 17
Slide 18: AMG's integrated lithium strategy
AMG’S INTEGRATED LITHIUM STRATEGY Lithium I Lithium II Lithium III Upstream Downstream (Spodumene) (Lithium Chemicals) Spodumene Plant 1 Spodumene Plant 2 Lithium Chemical Plant 90k MT per annum of Increase spodumene Participation in lithium spodumene production to 180k MT per value chain downstream
Slide 19: AMG Lithium – project strengths
AMG LITHIUM – PROJECT STRENGTHS 1) Existing management and mining infrastructure – not a new mine project 2) Strong understanding of the mine geology 3) Mining infrastructure already in place and operational 4) Ore extraction and crushing costs absorbed by profitable tantalum operation 5) Spodumene
Slide 20: AMG Lithium – spodumene project overview
AMG LITHIUM – SPODUMENE PROJECT OVERVIEW Lithium Concentrate (Spodumene) Project OBJECTIVE Monetization of substantial lithium mineral deposits currently residing in AMG Mineração's tailings ponds and tailing stockpiles Production facility to be co-located with AMG Mineração's tantalum mine and upgr
Slide 21: Spodumene project status
SPODUMENE PROJECT STATUS Status Construction AMG approved construction of lithium concentrate plant at the AMG Approval Mibra mine, with annual production of 90,000 tons Complete EPC Contract AMG awarded EPC contract to Outotec (Finland) for turnkey delivery of lithium concentrate plant Complete Awa
Slide 22: AMG cost position – lithium concentrate (spodumene)
AMG COST POSITION – LITHIUM CONCENTRATE (SPODUMENE) 400 350 US$/MT LITHIUM CONCENTRATE 300 250 200 150 Estimate of AMG operating cost of $127/MT 100 (excl. transportation) 50 0 GREENBUSHES WHABOUCHI PILGANGOORA MT. CATTLIN MT. MARION PILGANGOORA ROSE TIANQI LITHIUM1 NEMASKA PILBARA MINERALS2 GENERAL
Slide 23: Lithium: capturing the value downstream
LITHIUM: CAPTURING THE VALUE DOWNSTREAM AMG MINERAÇÃO CONVERTCO JV LCE BUYER AMG Mibra Mine, Lithium Chemical Plant Cathode Producer Brazil Conversion of Spodumene to Purchase of LiOH Raw Material Spodumene Lithium Hydroxide 23
Slide 24: Lithium resource map
LITHIUM RESOURCE MAP Tailings Volta Grande A 17.7M tons Volta Grande C 6.6M tons 24
Slide 25: Appendix
Appendix AMG Advanced Metallurgical Group N.V. 25
Slide 26: Critical raw materials: AMG now in supply risk
CRITICAL RAW MATERIALS: AMG NOW IN 7 Light REE Heavy REE • The EU identified 27 critical raw materials* to the Antimony European economy in Bismuth Phosphorus Magnesium 2017, focusing on two determinants: economic Borate Niobium importance and supply risk Natural Scandium Graphite PGMs • The US iden
Slide 27: Critical materials prices: 10 year perspective
CRITICAL MATERIALS PRICES: 10 YEAR PERSPECTIVE • Metal prices are Sep 2017 Position Sep 2016 Position measured on a scale Highest 10 Price in of 0 to 10, with 0 and 10 10 years representing the minimum and maximum average quarterly prices occurring 7.5 during the past 10 years • The positions demons
Slide 28: Critical materials – average quarterly prices
CRITICAL MATERIALS – AVERAGE QUARTERLY PRICES Q3 Q4 Q1 Q2 Q3 Q3 ‘17 VS. Q3 Q3 ‘17 VS. Q2 MATERIALS ‘17 % CHANGE 2016 2016 2017 2017 2017 ‘16 % CHANGE Ferrovanadium ($/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: Spodumene production process overview
SPODUMENE PRODUCTION PROCESS OVERVIEW AMG MINERAÇÃO PRODUCTS AND MARKETS PRODUCTS CRUSHING, PEGMATITE ORE GRINDING, Ta2O5 Concentrate & Tin AMG Mibra Mine SEPARATION AND CONCENTRATION MARKETS Electronics PRODUCTS Lithium Concentrate (Spodumene) MARKETS FLOTATION Energy Storage Ceramics MIBRA MINE IS
Slide 30: First spodumene plant – layout
FIRST SPODUMENE PLANT – LAYOUT Grinding / Mag Separation Feed Flotation Filtration 30
Slide 31: 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 32: 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 33: 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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