Ampco-pittsburgh Corporation · NYSE:AP
Ampco-pittsburgh — Janney Montgomery Scott investor conference, New York, February 2016
45 slides from Ampco-pittsburgh's conference presentation, Feb 10, 2016
Slide 1: Ampco-Pittsburgh Corporation – Janney Montgomery Scott, New York
February11, 2016 New York Hosted by Janney Montgomery Scott LLP Ampco-Pittsburgh Corporation Exhibit 99.1
Slide 2: Forward-looking statements
The Private Securities Litigation Reform Act of 1995 (the “Act”) provides a safe harbor for forward-looking statements made by or on our behalf. This information may contain forward-looking statements that reflect our current views with respect to future events and financial performance. All stateme
Slide 3: Agenda
Agenda Introduction to Ampco-Pittsburgh Forged and Cast Engineered Products (Union Electric Steel) Air and Liquid Processing Strategies to improve Ampco-Pittsburgh’s Financial Performance Åkers Acquisition
Slide 4: Ampco-Pittsburgh Corporation Today
Ampco-Pittsburgh Corporation Today Ampco-Pittsburgh Corporation manufactures and sells highly engineered, high performance specialty metal products and customized equipment utilized by industry throughout the world.
Slide 5: Ampco-Pittsburgh Today (cont'd)
Ampco-Pittsburgh Today (cont’d) Headquarters – Carnegie, PA, U.S. Traded on NYSE. Symbol -- AP 2014 Revenue -- $272.8 M 1,000 employees Forged and Cast Engineered Products (66% of sales) A world leader in manufacture of steel rolls 90+ years of experience Four manufacturing facilities in U.S. (pre-Å
Slide 6: Two reported segments and 2014 revenue
Ampco-Pittsburgh Corporation Today (cont’d) Two Segments reported: 2014 Revenue Forged and Cast Engineered Products (Union Electric Steel) $179.3M Forged and Cast Rolls Open Die Forged Products Air and Liquid Processing $93.5M Aerofin-Heat Exchangers Buffalo Air Handling–Custom Air Handling Systems
Slide 7: Union Electric Steel (UES)
Union Electric Steel (UES)
Slide 8: Roll Products
Roll Products Pittsburgh
Slide 9: Global Roll Market
Global Roll Market Cast Rolls$1,400M/yr Forged Rolls$700M/yr Total$2,100M/yr
Slide 10: Manufacturing Process for Strip
3C(1) Manufacturing Process for Strip \i Slab Roughing mil =— Continuous reheating Scale breaker Finishing mill Coiler + Hot rolled coil L. @as ee = nat > Continuous pickling line Tandem cold mill ha) Oa Electrolytic cleaning line Cold rolled coil Batch annealing Tempering mill furnace of. Tetsu ga
Slide 11: Rolls Staged in Hot Strip Mill
Rolls Staged in Hot Strip Mill
Slide 12: UES Current Sales and Manufacturing Footprint
UES Locations Manufacturing Sales Office Current Sales and Manufacturing Footprint
Slide 13: Competing Companies in Roll Industry
Region Company Name Estimated Global Market Share EUR Åkers * 5% Coswig <2,5% ESW <2,5% GP <2,5% Innse <2% North America Åkers National Roll * <2% United <2% Whemco <2,5% S-AM Villares <2,5% Asia-Pacific Hitachi <2,5% Nippon Steel <2% China Gong Chang 5% Xingtai 10% Region Company Name Estimated Glo
Slide 14: Air and Liquid Processing Segment (A&LP)
Air and Liquid Processing Segment (A&LP)
Slide 15: Aerofin
Aerofin
Slide 16: Aerofin Products
Aerofin Products Copper spiral finned nuclear stamped coil Split-Fit® Steam heating coils
Slide 17: Aerofin Serves Four Markets
Aerofin Serves Four Markets Fossil fuel power generation Industrial Nuclear power generation OEM/Commercial
Slide 18: Buffalo Air Handling
Buffalo Air Handling
Slide 19: Buffalo Air Handling Custom Air Handling Systems
Buffalo Air Handling Custom Air Handling Systems Rooftop unit at a pharmaceutical manufacturing facility Triple stacked units being installed at a research facility in Illinois Air handling unit in our manufacturing plant for a medical center in New York
Slide 20: Buffalo Air Handling Serves Four Markets
Buffalo Air Handling Serves Four Markets Pharmaceutical Hospital University General Industries
Slide 21: Buffalo Pumps
Buffalo Pumps
Slide 22: Buffalo Pumps Products
Buffalo Pumps Products Specialized Centrifugal Pumps Vertical double suction pump for a United States Navy surface vessel Vertical submerged lube oil pump Seal-less pump
Slide 23: Buffalo Pumps Serves Three Markets
Buffalo Pumps Serves Three Markets
Slide 24: Strategies to Improve Ampco Performance
Strategies to Improve Ampco Performance
Slide 25: Ampco's Financial Performance has Deteriorated in Recent Years
Ampco’s Financial Performance has Deteriorated in Recent Years Primarily Due to UES Performance Global steel market depressed since 2011 UES’s sales, margins, and profits have declined Air and Liquid Processing profitable, consistent performer, but lacks growth
Slide 26: Key Strategies to Improve A&LP Performance
Key Strategies to Improve A&LP Performance Grow revenue (market share) Reduce costs, increase margins Strengthen engineering and manufacturing capabilities Revise sales and marketing approach
Slide 27: Air and Liquid Processing Estimated Organic Growth 2015-2018
Air and Liquid Processing Estimated Organic Growth 2015-2018 * Based on successful implementation of 3-year STRATEGIC PLAN
Slide 28: Ampco's Performance Historically Driven by UES
Ampco’s Performance Historically Driven by UES UES primarily serves the steel and aluminum industries Current steel industry market conditions: 2015 global capacity utilization 65%-75% Idled capacity in North America and Europe Excess global steelmaking capacity impacting customer financial performa
Slide 29: Strategies to Improve Ampco's Financial Performance
Strategies to Improve Ampco’s Financial Performance and Status: Stabilize and Optimize UES: in progress Reduce costs: completed stage 1, stage 2 in progress Achieve product diversification: initiated, revenue growing Identify and complete strategic acquisitions: in progress Revive R&D (new high perf
Slide 30: Cost Reduction Strategy is Underway
Cost Reduction Strategy is Underway Initiated $10M corporate-wide cost reduction program in 2015 Centralized overhead functions to increase efficiency Implemented approximately 10% reduction in force (approximately 100 employees) Froze defined benefit pension plan for salaried employees Froze define
Slide 31: Strategies to Diversify UES Product Portfolio for Growth
Strategies to Diversify UES Product Portfolio for Growth Utilize flexible manufacturing assets to diversify and offset roll/steel industry cyclicality Optimize market pull into fracking industry and others Capitalize on opportunity to diversify into broader markets beyond fracking Research M&A oppor
Slide 32: North America Open Die Market is 10X Larger than Roll Market
In North America Open Die Sales Market is 10X Larger than Roll Market Source: FIA
Slide 33: Diversification through Open Die Forged Engineered Products
Diversification through Open Die Forged Engineered Products (FEP) Fracking pump unit Mud Pump Fluid end Multiple fracking pump units on-site
Slide 34: FEP Products - Bars
FEP Products - Bars Pittsburgh
Slide 35: Annual Fracking Block Market is $200-300M
Annual Fracking Block Market is $200-300M Lowered in September Integrated shop = supply chain advantage
Slide 36: Union Electric Steel Estimated Organic Growth 2015-2018
Union Electric Steel Estimated Organic Growth 2015-2018 Revenue * Based on successful implementation of 3-year STRATEGIC PLAN *
Slide 37: Ampco-Pittsburgh Estimated Organic Growth 2015-2018
Ampco-Pittsburgh Corporation Estimated Organic Growth 2015-2018 Average CAGR > 10% * * Based on successful implementation of 3-year STRATEGIC PLAN
Slide 38: Strategies to Return Ampco Profitability Include Strategic Acquisitions
Strategies to Return Ampco Profitability Include Strategic Acquisitions Acquired Alloys Unlimited & Processing Company in 2015 Forged and cast product distribution center Includes short turnaround and emergency supply Acquisition of Åkers AB from Altor Fund II GP Limited expected to be completed by
Slide 39: Åkers Acquisition
Akers Acquisition Ampco-Pittsburgh Moving forward. ‘)
Slide 40: Why Acquire Åkers?
Why Acquire Åkers? Combines the two top competitors in the roll industry, both recognized for product performance, technology, and customer service Manufacturing Adds four roll production facilities, including two low-cost producers Sweden U.S. Slovenia China J-V Adds cast roll production in U.S. Ad
Slide 41: Why Acquire Åkers? (cont'd)
Why Acquire Åkers? (cont’d) Sales/Marketing Joins complementary product lines (Ampco’s strength in forged rolls; Åkers strength in cast rolls) Creates complete product line Fills gaps in UES’s product portfolio Increases potential customer base to include all steel and aluminum mills Provides both h
Slide 42: Global Footprint – Post Transaction
UES Locations Manufacturing Sales Office Global Footprint – Post Transaction Åkers Locations Manufacturing Sales Office
Slide 43: Financial Benefits of Åkers Acquisition
Financial Benefits of Åkers Acquisition Should contribute to stabilizing UES and improving performance of Ampco Revenue from roll business should essentially double Acquisition should be accretive in 2016 (excluding “costs”) Cost reduction and other synergies estimated to be $15M Synergies estimated
Slide 44: Terms of Definitive Agreement to Purchase Åkers AB
Terms of Definitive Agreement to Purchase Åkers AB Purchase price ~$80M $30M cash/borrowings -payable at closing $20M Ampco stock- estimated dilution 15% to 17% $30M notes – payable three years from closing 6.5% compound interest rate $36M to $37M at maturity
Slide 45: Thank you – Questions
Thank you Questions Ampco-Pittsburgh Corporation
Ampco-Pittsburgh — Janney Montgomery Scott investor conference, New York, February 2016 on 6ix