Slide 1: Fast forwarding the clean energy transition
August 9, 2024 Fast forwarding the clean energy transition A Generational Opportunity
Slide 2: Disclaimer
Disclaimer Forward-Looking Information Non-IFRS Measures The following presentation contains “forward-looking information” within the This presentation refers to certain non-IFRS financial measures such as “Operating meaning of applicable securities laws in Canada. Forward-looking information may In
Slide 3: Navigating Neo's business units and applications
Navigating Neo’s business units and applications Magnequench (MQ) Chemicals & Oxides (C&O) • Rare earth magnetic • Rare earth midstream powders separation • Rare earth bonded • Specialty mixed magnets oxides • Rare earth sintered • Environmental magnets catalysts Rare Metals (RM) • Hafnium recycling
Slide 4: Navigating Neo's inflection point thesis: why invest now
Navigating Neo’s inflection point thesis: why invest now CLICK BUBBLE FOR SPECIFIC Progress on Why Neo is Initiatives Inflection in PAGE. positioned to the Industry Financial Major win? Results Highlights RE Magnetics Quarterly in EVs Performance Growth Shareholder Questions on Mega-Trend Valuation
Slide 5: NEO at a glance - Global Leadership
NEO at a glance - Global Leadership Neo is an advanced materials science, engineering & manufacturing company, with a focus on rare earth magnetics and other critical materials. Rare Earth Magnetics market outside of Global Leader in Rare Earth & Rare Metal China about to increase rapidly and sizeab
Slide 6: NEO at a glance
NEO at a glance Headquarters Publicly Traded Exchange Revenue by Revenue by Toronto, Canada TSX: NEO.TO Segment (LTM) % Geography (LTM) % Rare North Global Footprint Employees Magnequench Europe Metals America Canada, China, Estonia, Japan, ~1,800 23 16 Germany, South Korea, Thailand, Other 25 10 Si
Slide 7: Q2 2024 Major Highlights
Q2 2024 Major Highlights Top updates from the last quarter Tier 1 Motor Awards for EV Traction Motors Quapaw Rare Metals Facility Sale Commercial award peak year volume equivalent to 35% of Neo entered into an agreement to sell 80% of its equity completed Phase I capacity interest in Quapaw in consi
Slide 8: Update on Short-term Accountabilities - August 2024
Update on Short-term Accountabilities - August 2024 1-3 Sourcing Agreements 2-3 Changes in 1-2 MOUs for Magnetic Commitments to Diversify Supply and Manufacturing Strategy and Critical Materials Support Growth and Operational Footprint • Awarded next generation • Entered into an MOU with • Shutdown
Slide 9: Growth Drivers
Growth Drivers Neo’s products deliver critical properties that enable technologies vital to each of these growth drivers Energy EfÏcient & Environmental Footprint Advanced Microelectronics Electric Vehicles Powerful Motors Reduction & Aerospace Technologies NanoPowders 1-2kg of our magnets in an EV
Slide 10: Understanding the Global Rare Earth Magnet Growth Curve
Understanding the Global Rare Earth Magnet Growth Curve What is driving the global rare earth magnetics demand today? What will drive it tomorrow? 500,000 Source: Adamas Intelligence, BAML Securities NdFeB Magnet Demand for Product Mt of NdFeB Magnets 400,000 +340,000 mt* 280,289 Manufacturing Outsi
Slide 11: Why are Rare Earth Magnetics important for EVs/PHEVs
Why are Rare Earth Magnetics important for EVs/PHEVs Rare earth magnets are critical in all motors of EVs, including traction motors EV Traction Motors Rare earth magnetics Traction Motors • 1-2kg of rare earth magnets in EV traction motor save 20+% • 85% of EV motors use rare earth magnets of batte
Slide 12: Neo's Position in Parallel and Integrated Supply Chain
Neo’s Position in Parallel and Integrated Supply Chain Non-captive midstream & downstream assets offer supply chain resilience and optionality to our customers. End-of-Life & Upstream Rare Earths Miners Rare Metals Miners Scrap Sources Light Heavy Metal making JVs for Midstream Rare Earths Separatio
Slide 13: Focus on Rare Earth EV Magnetics Growth outside of China
Focus on Rare Earth EV Magnetics Growth outside of China 13
Slide 14: Neo's New Positioning in the EV Magnet Growth Curve
Neo’s New Positioning in the EV Magnet Growth Curve An example of Neo’s growth opportunities in rare earth magnetics: EV traction motors in Europe and North America EV Magnet Europe & North America Market First Outside of China Sintered Magnet Plant for EVs Opportunity in 2035 40M EV X 1.5KG/EV X $6
Slide 15: Why now? Inflection Point in Industry
Why now? Inflection Point in Industry Paradigm shifts creating major opportunity for Neo Performance Materials Energy Transition and Customers Requiring Supply Public Policy Tailwinds Electric Vehicles Chain Diversification EVs to grow from 11 million to 63 ~90% of rare earth magnets EU’s Critical R
Slide 16: How the outside of China EV motor magnet market unfolds
How the outside of China EV motor magnet market unfolds What does it take to win business in this market space? Neo wins with: Experience in Rare Earth Industry - operating dual supply chains inside and outside of China, along the value chain Its 25 years of RE magnet R&D, commercialization and manu
Slide 17: Current commercialized rare earth value chain, outside of China
Current commercialized rare earth value chain, outside of China Neo already has the most integrated presence in the value chain, with non-captive assets. Most integrated and only dual supply chain to serve customers: Mining Separation Metals & Alloys Magnets Specialty Oxides Recycling Source: The pi
Slide 18: Neo's Proven Magnetics Competency
Neo’s Proven Magnetics Competency Neo has more rare earth advanced degrees and technical experts across RE magnetics than any other company outside of China or Japan. First-of-its-kind EV Motor-Magnet Complex Motor-Magnet Design Customer Case: Customer Case: Ultra-High-Speed Motor, major cost Tracti
Slide 19: Business Units in Focus
neo Business Units in Focus
Slide 20: Business Unit Focus: Magnequench
Business Unit Focus: Magnequench Neo’s Magnequench is currently the #1 market leader for rare earth magnetic powders for bonded and hot deformed NdFeB magnets Original founder of the NdFeB Applications of Products magnet, 37 years ago: Founded within General Motors in 1986, it was spun-out in the mi
Slide 21: Business Unit Focus: Magnequench
Business Unit Focus: Magnequench Strategic M&A in growth areas with thoughtful post-merger integration Acquisition of AsiaMag in 2019 Acquisition of SGTec in 2023 (Chuzhou, China) (Essex, United Kingdom) The acquisition of AsiaMag (Chuzhou, China) The acquisition of SGTec advances Neo’s Customers in
Slide 22: Business Unit Focus: Chemicals & Oxides
Business Unit Focus: Chemicals & Oxides Parallel supply chain, with focus on rare earth separation and rare-earth-based advanced products. Three decades of experience in rare Commercialized Water Treatment earth production product from non-magnetic rare earths Only company to have rare earth separat
Slide 23: Business Unit Focus: Chemicals & Oxides
Business Unit Focus: Chemicals & Oxides Critical midstream assets and know-how that supplies our magnet business with oxides and commercialized specialty chemicals for environmental and microelectronic applications. Environmental Catalysts Advanced Rare Earth Products New Product Development Municip
Slide 24: Business Unit Focus: Rare Metals
Business Unit Focus: Rare Metals Recycling and high-purity refining value-add steps of critical minerals for growth industries High barriers to entry due to significant capital investment requirements and technical requirements. Industries Depending on our RM Products Diversified salesforce, R&D and
Slide 25: Business Unit Focus: Rare Metals
Business Unit Focus: Rare Metals The only LED and semiconductor-grade gallium producer in North America Operating Facility Proprietary Recycling Technology Neo’s commercially- Location: Ontario (Canada) Electro-winning of metallic liquid gallium in customized cells, from sodium gallate operating pro
Slide 26: Quarterly Progress & Financial Results
Quarterly Progress & Financial Results
Slide 27: Consolidated Financial Statements
Consolidated Financial Statements Healthy EBITDA, strong cash flow generation, and financial capacity to grow. Income Statement Selected Data Cash Flow Statement Selected Data Q-over-Q Year-over-Year Quarter Comparison Comparison Comparison US$ 000s Q2 2024 Q2 2023 YTD 2024 YTD 2023 US$ 000s June 30
Slide 28: Financial Performance by Business Unit
Financial Performance by Business Unit Year-over-Year Quarter Highlights: Q-over-Q Comparison Magnequench Comparison • Volumes up due to recovery in magnetic powder for traction US$ 000s motor applications and growth in magnet volumes Q2 2024 Q2 2023 YTD 2024 YTD 2023 (excl. volume) • Continued head
Slide 29: Impact of Rare Earth Pricing on Gross Margins
Impact of Rare Earth Pricing on Gross Margins • Volatility in rare earth prices can negatively or positively impact gross margins due lead-lag (the selling of C&O Rare Earth Separation Gross Margin higher or lower cost inventory purchased In Relation to Consolidated Gross Margin months earlier) $160
Slide 30: Strategic Capital Projects Funding Plan
Strategic Capital Projects Funding Plan Capital Spend Requirements Source of Cash Cash On Hand NAMCO Relocation Some of this cash, approx. $40M, would be needed Site commissioning 2H’24; run-rate production in 1H’25 $101M to fund regular operations Incremental Debt $25M for NAMCO plus anticipated de
Slide 31: Changes in Operating Strategy & Asset Base
Changes in Operating Strategy & Asset Base Shutdown of Light Rare Earth Hydromet Shutdown & Operational Separation in Zibo, China Transformation in Estonia Discontinuing Solvent Extraction Operations Rare Metals midstream facility in Europe halted expected to improve ROCE and ieduce Earnings Volatil
Slide 32: Governance & Management
Performance Materials Governance & Management
Slide 33: Sustainability in our Products
Sustainability in our Products Neo’s products truly fast-forward our world’s transition to green technologies, by supporting the management of energy reduction/generation and water/air quality. CO2-e Abatement via EVs Protection of Freshwater Aviation Emissions Reduction Empower the annual abatement
Slide 34: Annual, Transparent ESG Reporting at our Customer Standards
Annual, Transparent ESG Reporting at our Customer Standards Neo’s quantitative and qualitative performance of its environmental, social, and governance impact and practices undergoes an annual review & publication process. Tianjin, Sillamäe, Korat, China Estonia Thailand Zibo, Jiangyi, China China •
Slide 35: Executive Management
Executive Management Neo’s Executive team is comprised by experienced executives in general management, finance, operations, sales & marketing, law, and engineering. Rahim Suleman Jonathan Baksh Kevin Morris CEO & President CFO & EVP CSO & EVP • Former CFO of Neo for 6 • Former Divisional CFO at • 1
Slide 36: Board of Directors: Independent Directors
Board of Directors: Independent Directors Neo’s Board is comprised by current & former senior executives, with backgrounds in law, government, accounting, finance, material science, and rare earth industry management. Claire Kennedy Eric Noyrez Chair of Board Lead Director • Former senior partner at
Slide 37: Corporate Headquarters
Performance Materials Corporate Headquarters Suite 1740, 121 King Street West Toronto, Ontario, Canada, M5H 3T9 Phone: (416) 367 8588