Amg Critical Materials N.v. · EURONEXT:AMG
Amg Critical Materials — AMG Advanced Metallurgical Group — Investor Presentation (March 2017)
39 slides from Amg Critical Materials's investor presentation, Mar 9, 2017
Slide 1: Leading the Critical Materials Revolution
LEADING THE CRITICAL MATERIALS REVOLUTION AMG Advanced Metallurgical Group N.V. Investor Presentation March 9, 2017 1
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
AMG IS A CRITICAL MATERIALS COMPANY GLOBAL TRENDS DEMAND SUPPLY: AMG CO2 emission reduction, Innovative new Sources, processes, population growth, products that are and supplies the critical increasing affluence, lighter, stronger, and materials the market and energy efficiency resistant to higher d
Slide 5: CO2 Reduction: Leader in Advanced Technologies
LEADER IN ADVANCED TECHNOLOGIES TO ADDRESS CO2 REDUCTION CO REDUCTION 2 A GLOBAL IMPERATIVE FOR THE 21ST CENTURY AMG: MITIGATING AMG: ENABLING TECHNOLOGIES TECHNOLOGIES Products and Processes saving Products and Processes saving raw materials, energy and CO2 CO2 emissions during use emissions during
Slide 6: Strong capital structure, free of net debt, positioned for growth
Strong capital structure, free of net debt, positioned for growth OPTIMIZED RETURN EXCESS CASH DISCIPLINED ORGANIC CAPITAL STRUCTURE TO SHAREHOLDERS GROWTH & ACQUISITIONS • Refinanced credit facility in 2016, • Initiated first dividend to • Rigorous process to review providing a stable capital base
Slide 7: Critical Raw Materials
Critical Raw Materials • The EU identified 20 critical Heavy REE raw materials* to the European economy in 2014, focusing on two determinants: economic importance and supply risk Light REE • The US identified 30 critical materials* which are vital to national defense, primarily Antimony SUPPLY RISK
Slide 8: Critical Materials Price Trends
Critical Materials Price Trends 100% 80% 10 Yr CAGR: The cumulative average 10 year 60% price appreciation of the AMG AMG: EU Critical Materials 2.5% Portfolio was 8.1 percentage 40% 10 Yr points higher than London Metal CAGR: Exchange metals and 4.5 points 20% 2.8% higher than oil, while the AMG EU
Slide 9: Critical Materials Prices: 10 Year Perspective
Critical Materials Prices: 10 Year Perspective • Metal prices are measured on a Dec 2016 Position Dec 2015 Position scale of 0 to 10, with 0 and 10 Highest representing the minimum and 10 Price in 10 years maximum average quarterly prices occurring during the past 10 years • The positions demonstrat
Slide 10: AMG Business Segments
AMG Business Segments AMG CRITICAL MATERIALS AMG ENGINEERING AMG’S CONVERSION, MINING, AMG’S VACUUM SYSTEMS AND AND RECYCLING BUSINESSES SERVICES BUSINESS • LITHIUM (H1 2018) • ENGINEERING • VANADIUM • HEAT TREATMENT SERVICES • SUPERALLOYS • TITANIUM ALLOYS & COATINGS • ALUMINUM ALLOYS • TANTALUM &
Slide 11: AMG Global Footprint – Critical Materials
AMG Global Footprint – Critical Materials 11
Slide 12: AMG Global Footprint – Engineering
AMG Global Footprint – Engineering Limbach, GERMANY Berlin, 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 LEADING SAFETY INDICATORS • The number of safety improvement items reported in 2016 increased by 16% compared to full year 2015. These are essential in order to avoid potential injuries. • Safety training hours increased 10% in 2016. • Lost time incident rate was essentially
Slide 14: Financial Highlights
FINANCIAL HIGHLIGHTS AMG Advanced Metallurgical Group N.V. 14
Slide 15: FY 2016 at a Glance
FY 2016 at a Glance AMOUNTS IN $M % FY 2016 FY 2015 • FY ‘16 EBITDA up 33% versus (EXCEPT EARNINGS PER SHARE) CHANGE FY ‘15 due to improved profitability within AMG REVENUE $971.1 $977.1 (1%) Engineering • Annualized ROCE increased to GROSS PROFIT $186.8 $156.9 19% 18.8% in 2016 versus 12.0% for 201
Slide 16: Financial Highlights
Financial FinancialHighlights Highlights REVENUE (IN MILLIONS OF US DOLLARS) GROSS PROFIT * (IN MILLIONS OF US DOLLARS) $53.3 $237.4 $248.3 $247.5 $237.9 $46.3 $220.8 $44.2 $43.0 8% 21% YoY $35.4 YoY Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 EBITDA (IN MILLIONS OF US DOLLARS) ORDER
Slide 17: 2016 Financial Objectives
2016 Financial Objectives FINANCIAL OBJECTIVE DESCRIPTION PROGRESS UPDATE MAINTAIN • Optimize capital structure for financial • Net debt of $7.3 million CONSERVATIVE flexibility • Completed enlargement and extension of BALANCE syndicated credit facility - from $320 million SHEET to $400 million with
Slide 18: Financial Data: ROCE & EBITDA
Financial Data: ROCE & EBITDA EBITDA (IN MILLIONS OF US DOLLARS) • Q4 ‘16 EBITDA up 209% $30.0 versus Q4 ‘15 due to improved $26.0 profitability within AMG $23.4 $21.2 Engineering Q4 ‘16 EBITDA UP 209% $9.7 VERSUS Q4 ‘15 Q4 '15 Q1 '16 Q2 '16 Q3 '16 Q4 '16 ANNUALIZED ROCE 18.8% • FY 2016 annualized R
Slide 19: Financial Data: Net Debt & Cash from Operations
Financial FinancialData: Data:Net NetDebt Debt&&Net Cash from Operating Operations Cash flow NET DEBT (CASH) (IN MILLIONS OF US DOLLARS) • Net debt: $7.3 million – $186.9 million reduction of net debt since December 31, 2012 $194.2 – Net Debt to LTM EBITDA: 0.07x $160.5 • AMG’s primary debt facility
Slide 20: Divisional Financial Highlights – Q4 2016 vs. Q4 2015
Divisional Financial Highlights – Q4 2016 vs. Q4 2015 REVENUE GROSS MARGIN * Q4 2016 REVENUE: $237.9 (IN MILLIONS OF US DOLLARS) Q4 2016 GROSS MARGIN: 18.1% $166.0 AMG Critical 17.9% AMG Critical Materials Materials 14.0% $166.2 Q4 2016 Q4 2016 Q4 2015 Q4 2015 AMG 18.6% AMG $71.9 Engineering 22.1% E
Slide 21: Working Capital Reduction
Working FinancialCapital Reduction Highlights WORKING CAPITAL DAYS REDUCED BY 81% SINCE Q3’10 79 69 70 70 70 65 65 65 65 62 61 64 DAYS, 53 OR 81% REDUCTION 47 47 43 42 31 30 30 28 26 23 19 17 17 15 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
Slide 22: AMG Critical Materials Financial Data
AMG Critical Financial Materials Data: Net Debt & Operating Cash flow REVENUE & EBITDA (IN MILLIONS OF US DOLLARS) • Q4 2016 revenue of $166.0 $181.6 million was in-line with prior year $176.6 $177.5 • EBITDA increased by $15.1 million to $22.1 million in the $22.1 Q4 2016 REVENUE fourth quarter of
Slide 23: AMG Critical Materials – Quarterly Revenue Drivers
AMG Critical Materials – Quarterly Revenue Drivers • AMG Critical Materials Q4 2016 Q4 ‘16 Q4 ‘15 Key Product Volume Price Currency revenue of $166.0 million was Rev ($M) Rev ($M) in-line with prior year • Strong sales volumes in AMG FeV & FeNiMo $21.7 $16.9 Vanadium, AMG Titanium Alloys & Coatings,
Slide 24: Critical Materials – Average Quarterly Prices
Critical Materials – Average Quarterly Prices Q3 Q4 Q1 Q2 Q3 Q4 Q4 ‘16 VS. Q4 Q4 ‘16 VS. Q3 MATERIALS ‘15 % CHANGE ‘16 % CHANGE 2015 2015 2016 2016 2016 2016 FERROVANADIUM $8.90 $6.79 $6.59 $10.03 $9.99 $10.65 57% 7% ($/LB) MOLYBDENUM 37% (5%) $5.83 $4.85 $5.33 $7.42 $7.01 $6.63 ($/LB) NICKEL ($/MT)
Slide 25: AMG Engineering Financial Data
AMG Engineering Financial Data: Net Debt & Operating Cash flow REVENUE & EBITDA (IN MILLIONS OF US DOLLARS) • Q4 2016 revenue increased by $70.0 $71.9 $17.3 million, or 32%, vs. Q4 $66.7 $60.8 2015, the highest quarterly $54.6 revenue in 5 years, due to EBITDA strong sales of plasma IMPROVEMENT DUE
Slide 26: Strategy & Outlook
STRATEGY & OUTLOOK AMG Advanced Metallurgical Group N.V. 26
Slide 27: AMG: Ready for Growth
AMG: Ready for Growth Cost Reduction Supply Chain Excellence Scaling Profitable Growth Cost-reduction and Competitive advantage Properly positioned, capex discipline in through manufacturing financially and response to global and supply chain operationally, to pursue economic slowdown 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 Continue to focus on process innovation and product development to INNOVATION improve the market position of AMG’s businesses & PRODUCT DEVELOPMENT I
Slide 29: 2017 Outlook & Lithium Project Update
2017 Outlook & Lithium Project Update OUTLOOK AMG is well positioned to maintain full year 2016 levels of profitability in 2017, subject to a high degree of global uncertainty. In addition to delivering our highly accretive lithium project and executing our long term, transformational lithium strate
Slide 30: Key Products & End Markets
KEY PRODUCTS & END MARKETS AMG Advanced Metallurgical Group N.V. 30
Slide 31: Key Products
Key Products REVENUE GROSS PROFIT * (IN MILLIONS OF US DOLLARS) (IN MILLIONS OF US DOLLARS) Q4 2016 $250 $55 $237.9 Q4 2016 Q4 2015 $48.4 $220.8 $45 $200 Q4 2015 $32.4 $35 $150 $25 $100 $15 $50 $5 $- $(5) Q4 2015 Q4 2016 Q4 2015 Q4 2016 Vacuum Furnaces Ti Master Alloys & Coatings Al Master Alloys &
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 2016 REVENUE BY SEGMENT: BY END MARKET: BY REGION: 40% Transportation 43% Europe 72% Critical Materials 22% Specialty Metals 33% North America & Chemicals 28% Engineering 23% Infrastructure 20% Asia 15% Energy 4% 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 AT DECEMBER 31, 2016 DECEMBER 31, 2015 IN MILLIONS OF US DOLLARS UNAUDITED Fixed assets 226.1 215.8 Goodwill and intangibles 33.2 28.9 Other non-current assets 91.7 70.2 Inventories 143.6 126.4 Receivables 129.2 124.3 Other current assets 35.8 29.3 Cash 160.7 127.8 TOTA
Slide 38: Consolidated Income Statement
Consolidated Income Statement FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2016 DECEMBER 31, 2015 IN MILLIONS OF US DOLLARS UNAUDITED UNAUDITED Revenue 971.1 977.1 Cost of sales * 784.3 820.3 Gross profit 186.8 156.9 Selling, general & administrative 130.8 122.3 Environmental 1.9 (0.8) Other income, net
Slide 39: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows FOR THE YEAR ENDED DECEMBER 31, 2016 DECEMBER 31, 2015 IN MILLIONS OF US DOLLARS UNAUDITED UNAUDITED EBITDA 100.7 75.6 Change in working capital and deferred revenue (7.7) 21.6 Finance costs paid, net (6.7) (11.4) Other operating cash flow (23.5) (3.8) Cash gener
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