Amg Critical Materials N.v. · EURONEXT:AMG
Amg Critical Materials — AMG Advanced Metallurgical Group — Investor Presentation (March 2018)
39 slides from Amg Critical Materials's investor presentation, March 2018
Slide 1: AMG Advanced Metallurgical Group N.V. Investor Presentation March 2018
AMG Advanced Metallurgical Group N.V. Investor Presentation March 2018
Slide 2: Table of Contents
TABLE OF CONTENTS About AMG 4 CO2 Reduction 5 Strong Capital Structure 6 Critical Raw Materials 7 Critical Materials Price Trends 8 Critical Materials Prices: 10 Year Perspective 9 AMG Business Segments 10 Global Footprint 11 Health and Safety Focus 13 Financial Highlights 14 Strategy & Outlook 26 K
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 is a Critical Materials Company
GLOBAL TRENDS AMG IS A CRITICAL CO2 emission reduction, MATERIALS COMPANY population growth, increasing affluence, and energy efficiency DEMAND Innovative new products that are lighter, stronger, and resistant to higher temperatures SUPPLY AMG sources, processes, and supplies the critical materials
Slide 5: 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 (e.g., recycling of Ferrovanadium) A GLOBAL IMPERATIVE FOR THE 21ST CENTURY AMG: ENABLING TECHNOLOGIES Produ
Slide 6: Strong Capital Structure, Free of Net Debt, Positioned for Growth
STRONG CAPITAL STRUCTURE, FREE OF NET DEBT, POSITIONED FOR GROWTH Optimized Disciplined organic Return excess cash capital structure growth and to shareholders acquisitions • $650 million credit facility provides • Initiated first dividend to • Rigorous process to review a stable capital base and am
Slide 7: Critical Raw Materials: AMG Presence
CRITICAL RAW MATERIALS: AMG PRESENCE Light REE • The EU identified 27 critical Heavy REE raw materials* to the Antimony European economy in Phosphorus 2017, focusing on two Bismuth Magnesium*** determinants: economic Borate Niobium importance and supply risk Natural Graphite Scandium • The US identi
Slide 8: Critical Materials Price Trends
CRITICAL MATERIALS PRICE TRENDS The cumulative average 100% 10 year price appreciation 80% of the AMG Portfolio was 7.0 percentage points higher than 60% London Metal Exchange 10 Yr (LME) metals and 8.8 points 40% CAGR: higher than oil, while AMG 20% AMG Portfolio 1.3% EU Critical Materials outperfo
Slide 9: Critical Materials Prices: 10 Year Perspective
CRITICAL MATERIALS PRICES: 10 YEAR PERSPECTIVE • Metal prices are Dec 2017 Position Dec 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 6.4 • The positions de
Slide 10: AMG Business Segments
AMG BUSINESS SEGMENTS AMG CRITICAL AMG ENGINEERING MATERIALS AMG’s conversion, mining, AMG’s vacuum systems and and recycling businesses services business • Vanadium • Furnaces • Superalloys • Heat treatment services • Titanium Alloys & Coatings • Aluminum Alloys • Tantalum & Niobium & Lithium • Ant
Slide 11: AMG Global Footprint – Critical Materials
AMG GLOBAL FOOTPRINT – CRITICAL MATERIALS 11
Slide 12: AMG Global Footprint – AMG Engineering
AMG GLOBAL FOOTPRINT – AMG ENGINEERING Limbach, GERMANY Hanau, Wixom GERMANY (MI), USA Head Office Grenoble, Port Huron FRANCE (MI), USA Suzhou, CHINA Mexico City, MEXICO Mumbai, INDIA Headquarters Production Facility Heat Treatment Services 12
Slide 13: Health and Safety Focus
HEALTH AND SAFETY FOCUS SAFETY INDICATORS • Safety training hours increased 17% in Q4 2017 compared to Q4 2016. • At the end of Q4 2017, lost time incident rate and total incident rate were down 23% and 22%, respectively, from Q4 2016. LOST TIME 12 MONTH 12 MONTH INCIDENTS AVERAGE AVERAGE IN THE LAS
Slide 14: Financial Highlights
Financial Highlights AMG Advanced Metallurgical Group N.V. 14
Slide 15: FY 2017 at a Glance
FY 2017 AT A GLANCE AMOUNTS IN $M • 2017 EBITDA up 25% (EXCEPT EARNINGS PER SHARE) FY 2017 FY 2016 % CHANGE versus 2016 due to Revenue $1,059.7 $971.1 9% improved profitability within AMG Critical Materials Gross Profit $214.6 $186.8 15% • Annualized ROCE increased to 21.2% Gross Margin % 20.3% 19.2
Slide 16: Financial Highlights
FINANCIAL HIGHLIGHTS REVENUE (IN MILLIONS OF US DOLLARS) GROSS PROFIT (IN MILLIONS OF US DOLLARS) $280.7 $56.5 $258.0 $262.0 $258.9 $52.5 $54.3 $51.3 $237.9 18% $43.0 32% YoY YoY Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 EBITDA (IN MILLIONS OF US DOLLARS) ORDER INTAKE (IN MILLIONS
Slide 17: Financial Data: ROCE & EBITDA
FINANCIAL DATA: ROCE & EBITDA EBITDA (IN MILLIONS OF US DOLLARS) • Q4 ‘17 EBITDA up 10% $33.0 $33.0 $30.0 $31.9 versus Q4 ‘16 due to $27.6 improved profitability within AMG Critical Q4 ‘17 EBITDA Materials UP 10% VERSUS Q4 ‘16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Q4 '17 Annualized ROCE 21.2% • 2017 annualize
Slide 18: 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: $10.3 million o $183.9 million reduction of net $194.2 debt since December 31, 2012 $160.5 • AMG’s primary debt $184M facility is a $650 million $87.8 REDUCTION multicurrency term loan IN NET
Slide 19: Divisional Financial Highlights – Q4 2017 vs. Q4 2016
DIVISIONAL FINANCIAL HIGHLIGHTS – Q4 2017 VS. Q4 2016 REVENUE GROSS MARGIN Q4 2017 REVENUE: $280.7 (IN MILLIONS OF US DOLLARS) Q4 2017 GROSS MARGIN: 20.1% $214.0 18.4% Q4 2017 AMG Critical AMG Critical Materials Q4 2016 Materials $166.0 17.9% $66.7 25.7% AMG Q4 2017 AMG Engineering Engineering $71.9
Slide 20: Working Capital Reduction
WORKING CAPITAL REDUCTION WORKING CAPITAL DAYS REDUCED BY 80% SINCE Q3’10 79 69 70 70 70 65 65 65 65 62 61 53 63 DAYS, OR 80% 47 47 REDUCTION 43 42 31 30 30 28 26 23 22 22 19 17 17 18 15 16 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1
Slide 21: AMG Critical Materials
AMG CRITICAL MATERIALS REVENUE & EBITDA (IN MILLIONS OF US DOLLARS) • Q4 2017 revenue of $214.0 $214.0 million was 29% $202.6 $203.4 higher than Q4 2016 $194.5 $166.0 • EBITDA increased by $4.8 Q4 2017 EBITDA million over Q4 2016 to $26.9 INCREASED BY million in Q4 2017, driven $25.7 $26.9 $4.8M OVE
Slide 22: AMG Critical Materials – Quarterly Revenue Drivers
AMG CRITICAL MATERIALS – QUARTERLY REVENUE DRIVERS • AMG Critical Materials’ revenue KEY PRODUCT Q4 ‘17 REV Q4 ‘16 REV VOLUME PRICE in the fourth quarter increased by ($M) ($M) $48.0 million, or 29%, to $214.0 million FeV & FeNiMo $36.7 $21.7 • This was driven by improved vanadium, aluminum, antimon
Slide 23: Critical Materials – Average Quarterly Prices
CRITICAL MATERIALS – AVERAGE QUARTERLY PRICES Q4 Q1 Q2 Q3 Q4 Q4 ‘17 VS. Q4 Q4 ‘17 VS. Q3 MATERIALS ‘17 % CHANGE 2016 2017 2017 2017 2017 ‘16 % CHANGE Ferrovanadium ($/lb) $10.65 $12.35 $12.30 $17.75 $19.24 81% 8% Molybdenum ($/lb) $6.63 $7.90 $8.03 $8.21 $8.86 34% 8% Nickel ($/MT) $10,685 $10,267 $9
Slide 24: Critical Materials – Full Year and Current Spot Prices
CRITICAL MATERIALS – FULL YEAR AND CURRENT SPOT PRICES AVG AVG MAR 2, 2018 AVG ‘17 VS. AVG SPOT VS. AVG MATERIALS ‘17 % CHANGE 2016 2017 SPOT ‘16 % CHANGE Ferrovanadium ($/lb) $9.37 $15.30 $29.88 63% 95% Molybdenum ($/lb) $6.71 $8.25 $13.00 23% 58% Nickel ($/MT) $9,515 $10,408 $13,448 9% 29% Aluminu
Slide 25: AMG Engineering
AMG ENGINEERING • EBITDA decreased by REVENUE & EBITDA (IN MILLIONS OF US DOLLARS) $1.8 million in Q4 2017 $71.9 versus Q4 2016 $66.7 $63.5 $59.4 $55.6 • Revenue in the quarter was REVENUE adversely impacted due to DECLINED BY 7% lower sales of re-melting, VS. Q4 2016 DUE TO vacuum induction and hea
Slide 26: Strategy & Outlook
Strategy & Outlook AMG Advanced Metallurgical Group N.V.
Slide 27: AMG: Ready for Growth
AMG: READY FOR GROWTH COST REDUCTION SUPPLY CHAIN EXCELLENCE SCALING PROFITABLE GROWTH Cost-reduction and capex Competitive advantage through Properly positioned, financially discipline in response to manufacturing and supply and operationally, to pursue global economic slowdown chain excellence, ac
Slide 28: Strategy
STRATEGY AMG’s strategy is to build its critical materials business through industry consolidation, process innovation and product development PROCESS INNOVATION Continue to focus on process innovation and product development to & PRODUCT improve the market position of AMG’s businesses DEVELOPMENT I
Slide 29: 2018 Outlook & Lithium Project Update
2018 OUTLOOK & LITHIUM PROJECT UPDATE OUTLOOK We believe we can achieve our goals earlier than previously expected and can commit to turning the present EBITDA level into $200 million, or more, in the fiscal year ending December 31, 2020. 2018 has started very well. For the year, we expect our finan
Slide 30: Key Products & End Markets
Key Products & End Markets AMG Advanced Metallurgical Group N.V. 30
Slide 31: Key Products
KEY PRODUCTS REVENUE (IN MILLIONS OF US DOLLARS) GROSS PROFIT * (IN MILLIONS OF US DOLLARS) $300 $60 $57.6 $280.7 $237.9 $50 $48.4 $240 $40 $180 $30 $120 $20 $60 $10 $- $- Q4 2016 Q4 2017 Q4 2016 Q4 2017 Vacuum Furnaces Ti Master Alloys & Coatings Al Master Alloys & Powders Vanadium & FeNiMo Chromiu
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: AMG at a Glance
AMG AT A GLANCE FY 2017 REVENUE BY SEGMENT: BY END MARKET: BY REGION: 42% Transportation 43% Europe 77% Critical Materials 22% Specialty Metals 33% North America & Chemicals 23% Engineering 25% Infrastructure 18% Asia 11% Energy 6% ROW AMG IS A GLOBAL SUPPLIER OF CRITICAL MATERIALS TO: ENERGY TRANSP
Slide 36: Appendix
Appendix AMG Advanced Metallurgical Group N.V. 36
Slide 37: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2017 DECEMBER 31, 2016 IN MILLIONS OF US DOLLARS UNAUDITED Fixed assets 298.5 226.1 Goodwill and intangibles 38.1 33.2 Other non-current assets 92.4 91.7 Inventories 162.5 143.6 Receivables 137.2 129.2 Other current assets 49.1 35.8 Cash 178.8 160.7 TOTA
Slide 38: Consolidated Income Statement
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017 DECEMBER 31, 2016 IN MILLIONS OF US DOLLARS UNAUDITED Revenue 1,059.7 971.1 Cost of sales 845.1 784.3 Gross profit 214.6 186.8 Selling, general & administrative 132.3 130.7 Other income, net 2.5 (3.8) Operating profit 79.8 59.9 Net f
Slide 39: Consolidated Statement of Cash Flows
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2017 DECEMBER 31, 2016 IN MILLIONS OF US DOLLARS UNAUDITED EBITDA 125.5 100.7 Change in working capital and deferred revenue (21.3) (7.7) Other operating cash flow (7.9) (23.5) Cash generated from operating activities 96.3 69.5 Fin
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