Amg Critical Materials N.v. · EURONEXT:AMG
Amg Critical Materials — AMG Advanced Metallurgical Group — Investor Presentation (September 2017)
37 slides from Amg Critical Materials's investor presentation, September 2017
Slide 1: AMG Advanced Metallurgical Group N.V. September 2017
The image part with relationship ID rId2 was not found in the file. AMG Advanced Metallurgical Group N.V. September 2017
Slide 2: Table of Contents
TABLE OF CONTENTS AMG Overview 4 Financial Highlights 12 AMG Lithium 21 Appendix 29 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: Leveraging a stable portfolio of industry-leading businesses
LEVERAGING A STABLE PORTFOLIO OF INDUSTRY-LEADING BUSINESSES A B C Routine organic Non-routine Transformational growth of existing expansion of existing projects business lines business lines PORTFOLIO OF CRITICAL MATERIAL …TAKING ADVANTAGE OF SECULAR AND RELATED PROCESS GROWTH IN KEY END MARKETS TE
Slide 9: Opportunistic investments in non-routine expansion projects
OPPORTUNISTIC INVESTMENTS IN “NON-ROUTINE” EXPANSION PROJECTS A B C Routine organic Non-routine Transformational growth of existing expansion of existing projects business lines business lines “Non-routine” project characteristics: Capex intensive Stepping up growth across the portfolio Solidifying
Slide 10: Identifying and executing on transformational projects
IDENTIFYING AND EXECUTING ON TRANSFORMATIONAL PROJECTS A B C Routine organic Non-routine Transformational growth of existing expansion of existing projects business lines business lines C Projects High • Big impact Capital Investment • Long-cycle / long-lead- Medium time projects • Large investment,
Slide 11: 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 11
Slide 12: Financial Highlights
Financial Highlights AMG Advanced Metallurgical Group N.V. 12
Slide 13: AMG at a glance
AMG AT A GLANCE Q2 2017 REVENUE BY SEGMENT: BY END MARKET: BY REGION: 43% Transportation 45% Europe 77% Critical Materials 22% Specialty Metals 32% North America & Chemicals 23% Engineering 25% Infrastructure 18% Asia 10% Energy 5% ROW AMG IS A GLOBAL SUPPLIER OF CRITICAL MATERIALS TO: ENERGY TRANSP
Slide 14: Q2 2017 at a glance
Q2 2017 AT A GLANCE AMOUNTS IN $M • Q2 ‘17 EBITDA up 23% (EXCEPT EARNINGS PER SHARE) Q2 2017 Q2 2016 % CHANGE versus Q2 ‘16 due to Revenue $262.0 $248.3 6% improved profitability within both AMG Critical Materials and AMG Gross Profit * $54.3 $53.3 2% Engineering • Annualized ROCE Gross Margin % 20.
Slide 15: Financial Highlights
FINANCIAL HIGHLIGHTS REVENUE (IN MILLIONS OF US DOLLARS) GROSS PROFIT * (IN MILLIONS OF US DOLLARS) $258.0 $262.0 $53.3 $54.3 $248.3 $247.5 $52.5 $237.9 $46.3 $43.0 6% 2% YoY YoY Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 EBITDA (IN MILLIONS OF US DOLLARS) ORDER INTAKE (IN MILLIONS
Slide 16: Financial Data: ROCE & EBITDA
FINANCIAL DATA: ROCE & EBITDA EBITDA (IN MILLIONS OF US DOLLARS) $33.0 • Q2 ‘17 EBITDA up 22% $31.9 $30.0 versus Q2 ‘16 due to $26.0 improved profitability $23.4 within both AMG Critical Q2 ‘17 EBITDA Materials and AMG UP 22% VERSUS Q2 ‘16 Engineering Q2 '16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Annualized RO
Slide 17: Financial Data: Net Debt & Net Cash from Operations
FINANCIAL DATA: NET DEBT & NET CASH FROM OPERATIONS 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 • AMG’s primary debt $187M facility is a $400 million $87.8 REDUCTION multicurrency term loan IN NET D
Slide 18: AMG Group Financial Performance – 2016 v 2015
AMG GROUP FINANCIAL PERFORMANCE – 2016 v 2015 ANNUAL 2016 2015 % CHANGE Gross Profit ($M) $186.8 $160.0 17% EBITDA ($M) $100.7 $75.6 33% Operating Cash Flow ($M) $79.2 $76.3 4% ROCE 18.8% 12.0% 57% Earnings per Share $1.32 $0.40 230% Dividend per Share €0.27 €0.21 29% Note: OCF metric is prior to on
Slide 19: 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 20: 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 $400 mi
Slide 21: AMG Lithium
AMG Lithium AMG Advanced Metallurgical Group N.V. 21
Slide 22: AMG's Integrated Lithium Strategy
AMG’S INTEGRATED LITHIUM STRATEGY Lithium I Lithium II Lithium III Upstream Downstream (Spodumene) (Lithium Chemicals) Spodumene Plant 1 Spodumene Plant 2 Lithium Chemical Plant 90k MT per annum of Increase spodumene Participation in lithium spodumene production to 180k MT value chain downstream pro
Slide 23: AMG Lithium – Project Strengths
AMG LITHIUM – PROJECT STRENGTHS 1) Existing management and mining infrastructure – not a new mine project 2) Strong understanding of the mine geology 3) Mining infrastructure already in place and operational 4) Ore extraction and crushing costs absorbed by profitable tantalum operation 5) Spodumene
Slide 24: AMG Lithium – Spodumene Project Overview
AMG LITHIUM – SPODUMENE PROJECT OVERVIEW Lithium Concentrate (Spodumene) Project OBJECTIVE Monetization of substantial lithium mineral deposits currently residing in AMG Mineração's tailings ponds and tailing stockpiles Production facility to be co-located with AMG Mineração's tantalum mine and upgr
Slide 25: Spodumene Project Status
SPODUMENE PROJECT STATUS Status Construction AMG approved construction of lithium concentrate plant at the AMG Approval Mibra mine, with annual production of 90,000 tons Complete EPC Contract AMG awarded EPC contract to Outotec (Finland) for turnkey delivery Awarded of lithium concentrate plant Comp
Slide 26: AMG Cost Position – Lithium Concentrate (Spodumene)
AMG COST POSITION – LITHIUM CONCENTRATE (SPODUMENE) 400 350 US$/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 27: 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 27
Slide 28: Lithium Resource Map
LITHIUM RESOURCE MAP Tailings Volta Grande A 17.7M tons Volta Grande C 6.6M tons 28
Slide 29: Appendix
Appendix AMG Advanced Metallurgical Group N.V. 29 30
Slide 30: Critical Raw Materials
CRITICAL RAW MATERIALS Heavy REE • The EU identified 20 critical raw materials* to the European economy in 2014, focusing on two determinants: economic Light REE importance and supply risk Antimony • The US identified 30 critical SUPPLY RISK Niobium Magnesium materials* which are vital Natural Magne
Slide 31: Critical Materials Prices: Year Perspective
CRITICAL MATERIALS PRICES: 10 YEAR PERSPECTIVE • Metal prices are Jun 2017 Position Jun 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 32: 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 33: 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 34: 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
Slide 35: 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 36: First Spodumene Plant – Layout
FIRST SPODUMENE PLANT – LAYOUT Grinding / Mag Separation Feed Flotation Filtration 36
Slide 37: Health and Safety Focus
HEALTH AND SAFETY FOCUS LEADING SAFETY INDICATORS • The number of safety improvement items reported in Q2 2017 was 3% lower than in Q2 2016. These are essential in order to avoid potential injuries. • Safety training hours increased 4% in Q2 2017 compared to Q2 2016. • At the end of Q2 2017, lost ti
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