Amg Critical Materials N.v. · EURONEXT:AMG
Amg Critical Materials — Q2 2024 Earnings Presentation
31 slides from Amg Critical Materials's earnings presentation, Jul 26, 2024
Slide 1: The Energy of Nature
THE ENERGY OF NATURE Investor Presentation | Second Quarter 2024 AMG CRITICAL MATERIALS N.V. 1
Slide 2: Cautionary Note
CAUTIONARY NOTE This document contains proprietary information and is being provided solely for information purposes by AMG Critical Materials 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, exc
Slide 3: Table of Contents
TABLE OF CONTENTS Growth Strategy Snapshot 4 Financial Performance 5 Operational Highlights 14 Appendix 17 Appendix: Lithium Market Update 22 Lithium Hydroxide battery-grade refinery - Bitterfeld, Germany 3
Slide 4: Growth Strategy Snapshot
GROWTH STRATEGY SNAPSHOT Expansion on Schedule: The expansion of the lithium concentrate plant in Brazil and the lithium hydroxide refinery in Germany remain on track, positioning AMG for recovery when prices stabilize. Strategic Developments: • AMG is advancing its vanadium strategy by implementing
Slide 5: Quarterly Financial Highlights
QUARTERLY FINANCIAL HIGHLIGHTS REVENUE (IN MILLIONS OF US DOLLARS) ADJUSTED EBITDA (IN MILLIONS OF US DOLLARS) $439.3 $107.5 $368.7 $367.2 $358.2 $364.3 $71.1 $53.8 17% 63% $39.5 YoY $30.8 YoY Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 NET INCOME (LOSS) ATTRIBUTABLE TO KEY
Slide 6: Quarterly Revenue Drivers
QUARTERLY REVENUE DRIVERS LITHIUM SEGMENT RESULTS KEY DRIVERS Q2 2024 Q2 2023 Price Volume Revenue $38.3 $133.5 Spodumene Gross Profit $3.8 $90.0 Tantalum VANADIUM SEGMENT RESULTS KEY DRIVERS Price Volume Q2 2024 Q2 2023 Vanadium Revenue $168.0 $180.9 Titanium Alloys Gross Profit $19.8 $17.2 Chrome
Slide 7: Financial Performance, Leverage & Valuation Dashboard
FINANCIAL PERFORMANCE, LEVERAGE & VALUATION DASHBOARD • AMG has invested $650 million in capital METRIC Q2 2024 FY 2023 expenditures since 2020 for its lithium and Return on Assets -1.1% 5.2% vanadium expansion projects Return on Equity -3.9% 16.9% • In Q2 2024, AMG Return on Capital Employed 7.0% 2
Slide 8: AMG Lithium Financial Highlights
AMG LITHIUM FINANCIAL HIGHLIGHTS REVENUE & ADJUSTED EBITDA (IN MILLIONS OF US DOLLARS) GROSS PROFIT (IN MILLIONS OF US DOLLARS) $133.5 $90.0 $86.3 $82.1 $62.3 Gross Revenue 67.4% profit $41.6 decreased $30.8 $38.3 decreased $29.6 71% vs. $26.8 $86 million Q2 ‘23 $20.6 $5.8 vs. Q2 ‘23 $1.7 42.9% 12.9
Slide 9: AMG Vanadium Financial Highlights
AMG VANADIUM FINANCIAL HIGHLIGHTS REVENUE & ADJUSTED EBITDA (IN MILLIONS OF US DOLLARS) GROSS PROFIT (IN MILLIONS OF US DOLLARS) $180.9 $174.4 $19.8 $161.7 $165.1 $168.0 $17.2 $17.2 $17.6 $16.2 $29.5 Revenue Gross $20.0 decreased vs. Q2 ‘23 profit $15.7 $15.1 $14.4 largely due 11.8% increased 9.5% 9
Slide 10: AMG Technologies Financial Highlights
AMG TECHNOLOGIES FINANCIAL HIGHLIGHTS REVENUE & ADJUSTED EBITDA (IN MILLIONS OF US DOLLARS) GROSS PROFIT (IN MILLIONS OF US DOLLARS) $151.4 $158.0 $31.8 $131.9 $125.0 $123.5 $24.3 $17.8 $22.9 Adjusted $20.3 Gross $18.4 EBITDA profit $10.9 $10.6 increased $9.1 more than 20.1% tripled vs. 16.2% 17.3%
Slide 11: Key Corporate Income Statement Items
KEY CORPORATE INCOME STATEMENT ITEMS SG&A EXPENSES (IN MILLIONS OF US DOLLARS) NET FINANCE COSTS (INCOME) (IN MILLIONS OF US DOLLARS) $49.4 $14.5 $45.6 $44.7 $45.0 $42.8 $9.9 $10.2 $12.6 $10.6 $10.9 $9.3 $20.3 $7.3 $7.5 $12.8 $13.8 $13.8 SG&A $13.5 decreased $4 million 3% vs. Q2 ‘23 YoY $19.2 $19.1
Slide 12: Cash Flow and Working Capital
CASH FLOW AND WORKING CAPITAL CASH FROM (USED IN) OPERATING ACTIVITIES (IN MILLIONS OF US DOLLARS) NET DEBT (IN MILLIONS OF US DOLLARS) $60.0 $453.1 $44.7 $381.4 $320.5 $322.8 $24.9 $279.9 $173M $69M YoY YoY ($14.9) ($9.3) Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 Q2 '23 Q3 '23 Q4 '23 Q1 '24 Q2 '24 ANNUALI
Slide 13: Outlook
OUTLOOK CAPITAL • AMG is targeting $125 million of capital expenditures EXPENDITURES for 2024. • We expect our adjusted EBITDA to exceed $130 million for 2024. ADJUSTED EBITDA • Regarding AMG’s 5-year guidance, utilizing a variety of price and quantity assumptions with a lithium carbonate equivalent
Slide 14: Operational Highlights
OPERATIONAL HIGHLIGHTS AMG Vanadium – Zanesville, Ohio, USA 14
Slide 15: Operational Highlights
OPERATIONAL HIGHLIGHTS AMG is effectively progressing in its strategic expansions and joint ventures, maintaining strong momentum across its lithium and vanadium operations while advancing key projects aimed at enhancing global resource recovery and market reach. LITHIUM VANADIUM PROJECT STRATEGIC J
Slide 16: Health and Safety Focus
HEALTH AND SAFETY FOCUS Safety Indicators AMG compares itself to the industry average for Primary Metal Manufacturing (NAICS 331). The most recent data provided in 2022 by the United States Bureau of Labor Statistics reports that the Primary Metal Manufacturing industry’s total recordable case rate
Slide 17: Appendix
APPENDIX AMG Mibra Mine – Brazil 17
Slide 18: AMG Provides Critical Materials to Advance a Less Carbon-Intensive World
AMG PROVIDES CRITICAL MATERIALS AND RELATED PROCESS TECHNOLOGIES TO ADVANCE A LESS CARBON-INTENSIVE WORLD A GLOBAL IMPERATIVE AMG’S ENABLED CO2 EMISSION REDUCTIONS FOR THE 21ST CENTURY (Million MT) AMG: 2023 110.3 ENABLING TECHNOLOGIES 2022 99.4 Products and processes saving CO2 emissions during use
Slide 19: Critical Materials — Average Quarterly Market Prices
CRITICAL MATERIALS — AVERAGE QUARTERLY MARKET PRICES Q2 Q2 JULY 24, 2024 Q2 ‘24 VS. Q2 ‘23 SPOT VS. Q2 ‘24 MATERIALS 2023 2024 SPOT % CHANGE % CHANGE Ferrovanadium ($/lb) $18.21 $12.98 $12.88 (29%) (1%) CRU Molybdenum ($/lb) $21.36 $21.86 $22.55 2% 3% S&P Global Platts Nickel ($/MT) $22,297 $18,410
Slide 20: Critical Materials — Full Year and Current Spot Prices
CRITICAL MATERIALS — FULL YEAR AND CURRENT SPOT PRICES AVG AVG JULY 24, 2024 AVG ‘23 VS. AVG SPOT VS. AVG MATERIALS 2022 2023 SPOT ‘22 % CHANGE ‘23 % CHANGE Ferrovanadium ($/lb) $23.89 $17.05 $12.88 (29%) (24%) CRU Molybdenum ($/lb) $18.91 $24.03 $22.55 27% (6%) S&P Global Platts Nickel ($/MT) $25,9
Slide 21: Loss/Profit for the Period to Adjusted EBITDA Reconciliation
(LOSS) PROFIT FOR THE PERIOD TO ADJUSTED EBITDA RECONCILIATION (000’s USD) Q2 2024 Q2 2023 (Loss) profit for the period ($9,332) $43,573 Income tax expense 11,080 26,552 Net finance cost 7,522 7,282 Equity-settled share-based payment transactions 1,586 1,495 Restructuring expense 2,073 626 Brazil’s
Slide 22: Appendix: Lithium Market Update
APPENDIX: LITHIUM MARKET UPDATE Lithium Hydroxide battery-grade refinery - Bitterfeld, Germany 22
Slide 23: NEV Sales H1 YoY Growth +20%, Europe Flat
NEV SALES H1 YOY GROWTH +20%, EUROPE FLAT Quarterly electric car sales by region, 2021-2024 5.0 5.0 4.5 4.5 4.0 4.0 3.5 3.5 Million EVs 3.0 3.0 2.5 2.5 2.0 2.0 1.5 1.5 1.0 1.0 0.5 0.5 0.0 0.0 Rest of the world United States Europe China Sources: IEA. Licence: CC BY 4.0. Quarterly electric car sales
Slide 24: EV Market Development 2020–2024: China
EV MARKET DEVELOPMENT 2020–2024: CHINA New Electric Vehicle NEV / BEV / PHEV New Electric Vehicle Sales in China (incl. market penetration (incl. Exports) Exports) 10,000 NEV 50% 140 40% 120 100 30% 80 20% 60 10% 40 0% 20 Oct Oct Oct Oct Oct Apr Apr Apr Apr Apr Jul Jul Jul Jul Jul Jan Jan Jan Jan Ja
Slide 25: Tesla Sales Figures – EV and BESS
TESLA SALES FIGURES – EV AND BESS Tesla – Total EV deliveries vs deployed Tesla – Total deployed storage systems storage systems (BESS) (BESS) 40 10 35 9 30 8 7 25 6 GWh GWh 20 5 15 4 3 10 2 5 1 0 0 Qrtl1 Qrtl2 Qrtl3 Qrtl4 Qrtl1 Qrtl2 Qrtl3 Qrtl4 Qrtl1 Qrtl2 Qrtl1 Qrtl2 Qrtl3 Qrtl4 Qrtl1 Qrtl2 Qrtl3
Slide 26: Battery Market Development 2024 – China (GWh)
BATTERY MARKET DEVELOPMENT 2024 – CHINA (GWH) Battery Production China per Quarter (GWh) Battery Sold + Exported China per Quarter (GWh) 300 300 49% 63% 250 250 200 200 150 150 100 100 50 50 - 0 Qrtl1 Qrtl2 Qrtl3 Qrtl4 Qrtl1 Qrtl2 Qrtl3 Qrtl4 2022 2023 2024 2022 2023 2024 Source: CAAM, CABIA - China
Slide 27: Prices in 2024: Export Prices vs. Spot Indices
PRICES IN 2024: EXPORT PRICES VS. SPOT INDICES LiOH - Export Statistics Price US$/kg FOB China vs. FM CIF Asia Spot Price 60 LiOH BG Export Price FOB (China) to Korea US$/kg 40 LiOH BG Export Price FOB (China) to Japan US$/kg 20 LiOH BG, Fastmarkets spot price CIF China, Japan & - Korea, $/kg Li2CO3
Slide 28: Supply View: Number of Projects Needed to Come Online
SUPPLY VIEW: NUMBER OF PROJECTS NEEDED TO COME ONLINE TO FULFILL DEMAND Number of projects to fulfill demand ( 1 project = 20 kt LCE) 160 • By 2030, 40 to 50 140 new projects need to come online (not 120 supported by current prices). Number of projects 100 • By 2030, 20 to 30 80 projects can be Oper
Slide 29: AMG View: Supply of Lithium Equivalents
AMG VIEW: SUPPLY OF LITHIUM EQUIVALENTS Benchmark Supply AMG Supply View Benchmark Demand 3,500 2,886 3,000 2,599 2,500 2,297 '000 Mt LCE 2,019 2,000 1,730 1,411 1,500 1,147 1,000 500 2024 2025 2026 2027 2028 2029 2030 Benchmark view Surplus/(Deficit) AMG view Surplus/(Deficit) 250 125 '000 Mt LCE 0
Slide 30: Over Supply? Benchmark Estimated Cost Structure of Operating Mines
OVER SUPPLY? BENCHMARK ESTIMATED COST STRUCTURE OF OPERATING MINES Cost Curve Operating Mines in 2024 (Yellow) vs in 2030 (Blue) in USD/MT 45,000 40,000 Mines will not cover their cost with a LC Mines will not cover their price below USD 15,000 MT in 2030 35,000 cost with a LC price below USD 15,000
Slide 31: Everything that can be recycled will be recycled
LITHIUM HYDROXIDE – BITTERFELD, GERMANY LIVA BATTERY LITHIUM LAB MINAS GERAIS – BRAZIL LITHIUM TAILINGS This announcement appears as a matter of record. ENGINEERING – HANAU, GERMANY AMG’s LAW: “Everything that can be recycled will be recycled.” MELTSHOP – ZANESVILLE, OHIO AMG Critical Materials N.V.
AMG Critical Materials — Q2 2024 Earnings Presentation on 6ix