Magontec Limited · ASX:MGL
Magontec — Morgan Stanley Micro-Cap Conference 2022
27 slides from Magontec's conference presentation, Oct 24, 2022
Slide 1: Morgan Stanley 2022 Micro-Cap Conference Presentation (ASX announcement)
MAGONTEC Limited ABN 51 010 441 666 Registered office Suite 1.03, 46A Macleay Street Potts Point, Sydney NSW 2011 For personal use only T: +612 8084 7813 24 October 2022 Company Announcements Office Australian Securities Exchange Limited 20 Bridge Street Sydney, NSW, 2000 MORGAN STANLEY 2022 MICRO-C
Slide 2: Magontec Limited - Morgan Stanley Micro-Cap Conference
For personal use only Magontec Limited ASX:MGL Morgan Stanley Micro-Cap Conference 25 October 2022
Slide 3: Disclaimer
Disclaimer For personal use only 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
Slide 4: Two businesses: Metals and Anodes
Magontec Limited: ASX Code: MGL Two businesses For personal use only 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
Slide 5: Magontec is a manufacturing business
Magontec is a manufacturing business For personal use only 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
Slide 6: Magnesium (Mg) alloys
Magnesium (Mg) alloys For personal use only 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 5
Slide 7: Mg alloy recycling: Bottrop and Santana
Mg alloy recycling: At Bottrop (Germany) and Santana (Romania) An essential part of the European and North American die casting industry For personal use only 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
Slide 8: Cathodic Corrosion Protection (CCP)
Cathodic Corrosion Protection (CCP) Every water tank in every house requires corrosion protection For personal use only 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
Slide 9: Global Manufacturing & Distribution Platform
Global Manufacturing & Distribution Platform For personal use only 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
Slide 10: Qinghai electrolytic magnesium smelter complex
Qinghai electrolytic magnesium smelter complex 100,000 tonnes per annum > ~ 10% of global production For personal use only 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 sh
Slide 11: Magontec Qinghai magnesium alloy cast house
Magontec Qinghai magnesium alloy cast house For personal use only Revenue and profit Currently operating Cast house impact opportunity Delayed SOP at low levels 2021 Target Mg production mtpa 7k 56k Revenue A$ $30m $250m+* Cast house Contribution Loss Profit Industry CO2 output High Low SOP Timetabl
Slide 12: Magontec Qinghai will use the lowest CO2 Mg ever produced
Magontec Qinghai will use the lowest CO2 Mg ever produced* For personal use only 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 Institu
Slide 13: Magontec Limited Market Information
Magontec Limited Market Information ASX Code: MGL Total Per Share Shareholder Structure 30 June 2022 For personal use only Ordinary shares on issue 76,729,210 1 Market capitalisation $26.1 million 34.0 cents/share 42.0%, Other 28.7%, QSLM Book value of net assets – 30 June 2022 $51.8 million 67.6 ce
Slide 14: FY 2022 Half Year Result - Income statement
FY 2022 Half Year Result Income statement For personal use only (AUD ‘000) 6 months to 30 Jun 22 6 months to 30 Jun 21 Revenue 93,807 50,863 84.4% Cost of Sales (67,053) (43,161) 55.4% Gross Profit 26,753 7,702 247.4% Gross Profit margin (%) 28.5% 15.1% Other income 230 447 (48.6%) Other operating e
Slide 15: Reconciliation of significant items in earnings
FY 2022 Half Year Result Reconciliation of significant items in earnings For personal use only (AUD ‘000) 6 months to 30-Jun-22 6 months to 30 June-21 Reported Net Profit Before Tax, unrealised FX & Significant Items 19,611 1,792 Significant items before tax Less non-cash equity writeback / (expense
Slide 16: Key financial highlights
FY 2022 Half Year Result – Key financial highlights Equity, Borrowings, Cashflow For personal use only (AUD ‘000) 6 months to 30 Jun 22 6 months to 30 Jun 21 Equity EBITDA 21,269 3,381 529.2% Reported Net Profit After Tax 13,799 1,130 1,121.2% Earnings per share (cents) 18.0 1.5 Dividend per share (
Slide 17: Continuation of strong performance in Metals and Anodes
FY 2022 Half Year Result Continuation of strong performance in both Metals and Anodes segment For personal use only EBITDA and EBIT reflected favourable supply & pricing conditions Gross Profit ($M) and GP margin (%) Reported EBITDA and EBIT ($M) $21.3 28.5% $19.9 $26.8 15.1% 12.9% 11.1% 11.8% EBITD
Slide 18: Underlying Net Profit of $13.1m
FY 2022 Half Year Result Underlying Net Profit* of $13.1m for the 6 months to 30 June 2022 For personal use only Underlying Net Profit After Tax * ($M) $13.05m 2020 included impact of COVID pandemic $0.40m $0.68m -$0.14m -$0.04m 1H18 1H19 1H20 1H21 1H22 17 * Reported net profit/loss excluding the ef
Slide 19: Strong cashflows and net cash position
FY 2022 Half Year Result Strong cashflows and positive working capital swing produced a net cash position at 30 June 2022 For personal use only Underlying Operating Cashflow($M)* Net Debt ($M) and Gearing** (%) $21.3 $12.2 $10.2 $9.1 $9.5 27.9% 24.8% 21.3% 21.9% $2.7 $2.3 $2.7 $1.6 -2.3% -$1.2 1H18
Slide 20: Metal business contributed 57% of Gross Profit
FY 2022 Half Year Result Metal business contributed 57% of Gross Profit in 1H22 For personal use only $30 m Anode (CCP) and Metal Gross Profit split ($M) $25 m Metal Anodes 43.2% $20 m $15 m $10 m 56.8% $5 m 62.0% 65.3% 74.4% 61.2% 38.0% 34.7% 38.8% 25.6% - 1H18 1H19 1H20 1H21 1H22 Metals driven by
Slide 21: CCP / anodes
FY 2022 Half Year Result – CCP / anodes 67% sales growth in 1H22 over 5 years since 1H18 For personal use only Global CCP revenues and gross profit (A$M) Global magnesium anode sales volumes (metric tonnes) 1H22 volumes + 5.1% on pcp $ 11.5 m 2022 1,722 Gross profit 2021 1,639 1,656 $ 5.7 m $ 5.2 m
Slide 22: Metals
FY 2022 Half Year Result - Metals Metals division GP up to $15.2 million in 1H22 supported by strong pricing environment for pure Mg For personal use only Global metals revenues and gross profit (A$M) Global Mg alloy and specialist metals sales volumes $ 15.2 m (metric tonnes) 2022 7,359 1H22 Metal
Slide 23: Magontec's corporate transformation creates a platform for growth
Magontec’s corporate transformation creates an exceptional platform for growth For personal use only Mg Mg ASX Listed Capitalisation* $26.1m Strong financial fundamentals Primary Mg alloy production “Green” magnesium Profit “inflexion” point * Based on share price of $0.34 as of 24 October 2022 22
Slide 24: Thank You
Thank You For personal use only 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
Slide 25: Half Year 2022 Result by Region
Appendix Half Year 2022 Result by Region Segment P&L For personal use only 6 months to (AUD ‘000) EUR PRC Head office 30 June 2022 Gross Profit 24,143 2,610 - 26,753 Other income 125 104 - 230 Operating expenses (3,784) (1,781) (1,238) (6,804) Add back D&A in Cost of Sales 540 550 - 1,090 EBITDA 21,
Slide 26: Prior Half Year 2021 Result by Region
Appendix Prior Half Year 2021 Result by Region Segment P&L For personal use only 6 months to (AUD ‘000) EUR PRC Head office 30 June 21 Gross Profit 6,209 1,493 - 7,702 Other income 329 118 - 447 Operating expenses (3,465) (1,563) (820) (5,848) Add back D&A in Cost of Sales 531 549 - 1,079 EBITDA 3,6
Slide 27: Magontec Limited - Morgan Stanley Micro-Cap Conference
For personal use only Magontec Limited ASX:MGL Morgan Stanley Micro-Cap Conference 25 October 2022