MP Materials Corp. · NYSE:MP
MP Materials — Gabelli Funds 45th Annual Auto Symposium (November 2021)
30 slides from MP Materials's conference presentation, Nov 1, 2021
Slide 1: Gabelli Funds 45th Annual Auto Symposium
Gabelli Funds 45 Annual th Auto Symposium Ryan Corbett – Chief Financial Officer November 1, 2021 1
Slide 2: Safe Harbor
Safe Harbor This presentation contains certain statements that are not historical facts and are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of t
Slide 3: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures This presentation contains certain non-GAAP financial measures, such as Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Total Value Realized, Production Costs, Free Cash Flow, Normalized Stage I Free Cash Flow, and Adjusted Operating Cash Flow, which
Slide 4: Industry Overview
Industry Overview
Slide 5: As the EV revolution gains momentum, demand for magnets accelerates
Biden announces a new national target for electric vehicles As the EV to make up half of all new vehicle sales by 2030. revolution gains P ub lis he d : Aug 5 2021 momentum, demand for P ub lis he d : J a n 28 2021 magnets, and the rare earths used to “Our tra ns forma tion will b e fa s t, it will
Slide 6: NdPr magnets are found in more than 90% of EV motors
While EV battery technology continues to evolve, NdPr magnets are found in more than 90% of EV motors Tesla, GM, Ford, VW, Hyundai, Toyota, Rivian and most other EV OEMs rely on NdPr magnet motors Industry Overview 6
Slide 7: EVs are driving explosive growth in magnet demand
$10.7B EVs are driving explosive growth— magnets for electric powertrains are 31% CAGR expected to grow 15x in the next decade $710M 2020E 2030E EV Motor Magnet Market (EV Powertrains Only, Value) Industry Overview 7 Source: Internal research, Adamas and Roskill
Slide 8: Strong growth across the electrification supply chain
109.8k Strong growth across the electrification supply chain has put the NdPr supply gap 47.7k in focus 2020A Supply 2030E Demand Estimated NdPr Volumes (MT) Industry Overview 8 Source: CRU Group
Slide 9: Sustainability is at the core of our operations
Sustainability is at the core of our operations, products, end markets and business strategy A dry tailings process eliminates the need for high risk wet-tailings ponds More than 1 billion liters of water are recycled into the production process annually to meet 95% of need Industry Overview 9
Slide 10: Focus on supply chains has dramatically increased
Focus on supply How Semiconductor Shortages Have Taken A Chip Out Of The Global Supply Chain chains has Published: July 13, 2021 dramatically increased over Six Days in Suez: The Inside Story of the Ship That Broke the last 18 Global Trade Published: June 23, 2021 months Cargo Ship Logjam in Los Ang
Slide 11: The supply chain demands a Western Hemisphere supplier
The supply chain demands a Western Hemisphere supplier Scaled Rare Earth Oxide Producer NdPr Magnet Producer MP Materials Industry Overview 11
Slide 12: Business Overview
Business Overview
Slide 13: MP Materials at-a-glance
Rich Rare Earths History 60+ years $1.7B Since Production Started at Mountain Pass Capital Invested Since 2011 MP Materials Vast, High-Grade Reserve at-a-glance 948k mt tREO Recoverable Resources and Reserves ~7% ore grade World-Class Reserve Stage I: Largest Ex-China Producer of REOs ~39,700 mt ~15
Slide 14: Stage I – Complete Rare Earth Concentrate Production
~39,700 Stage I – Complete Rare Earth Concentrate 3.3x REO Production • Mining, milling, and executing on optimized flotation process • We believe we are currently producing approximately 15% of global rare earth content ~12,000 • Annual production is ~3.3x that of predecessor • Substantial improvem
Slide 15: Continued operational execution
Comparable Operational Metrics—Sequential and Year-over-Year +137% YoY (4)% YoY +25% QoQ +1% QoQ $7,343 Continued 10,297 9,877 9,793 $5,891 operational $3,093 execution Q2 2020 Q1 2021 Q2 2021 Q2 2020 Q1 2021 Q2 2021 2020 2021 REO Sales Volumes (MT) Realized Price(1) ($/MT REO) +11% YoY +9% YoY Stag
Slide 16: Rapid revenue & earnings growth
Comparable Financial Metrics—Sequential and Year-over-Year(1) +141% YoY +491% YoY +22% QoQ +41% QoQ $73.1 $46.4 Rapid $60.0 $33.0 revenue & $30.4 earnings $7.9 growth Q2 2020 Q1 2021 Q2 2021 Q2 2020 Q1 2021 Q2 2021 Revenue Adjusted EBITDA(2) +36pts YoY 2020 2021 +7pts QoQ +583% YoY +44% QoQ 64% 57%
Slide 17: Significant Stage I normalized free cash flow
YTD 2Q 2021 Reported FCF to Normalized Stage I FCF Bridge Significant Stage I ($M) normalized free cash flow • Normalized Stage I Free Cash Flow of $70.3M or 52.8% of YTD sales(1) • $22.9M of YTD Offtake Paydown reflected as reduction of GAAP operating cash flows(2) • Growth capex is primarily Stage
Slide 18: Stage II – In Process Separated Rare Earth Oxides
Stage II – In Process Selective Separated Rare rejection of cerium Earth Oxides 3.6x NdPr (estimated) • Optimization project adds back roasting into the refining process, which previously drove decades of success at Mountain Pass • Roasting leverages the inherent benefits of the ore body, significan
Slide 19: MP Materials expects to be the lowest cost rare earth producer
MP Materials Operational ordered cost curve ($/kg REO) for major producers (real 2020$)1 expects to be the lowest cost rare earth materials producer in the world 19 1 CRU Updated Rare Earths Market Study, January 2021
Slide 20: Strategy to become a fully-integrated market champion
MP has a strategy to become a fully-integrated market champion Stage II Stage III Stage I Pulling forward from 2025 * Complete 2023 Mining Refining Metal Making Magnet End Products Processing Separation Alloying Making Business Overview 20
Slide 21: MP Materials' mission to restore the full rare earth supply chain
MP Materials’ Mission is to restore the full rare earth supply chain to the United States RESOURCE CAPITAL ALIGNMENT EXPERTISE MP Materials has one of the With approximately $1.7B of MP Materials is led by owner- Our engineering and operations highest-grade rare earth ore capital invested in state-o
Slide 22: Appendix
la~N MP materiacs Appendix
Slide 23: Summary P&L
Summary P&L MP MATERIALS CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the three For the three months ended June months ended 30, March 31, (in thousands, unaudited) 2021 2020 2021 Product sales $ 73,118 $ 30,391 $ 59,971 Operating costs and expenses: Cost of sales (excl
Slide 24: Reconciliation Net Income (Loss) to Adjusted EBITDA
Reconciliation Net Income (Loss) to Adjusted EBITDA For the three For the three months ended months ended June 30, March 31, (in thousands, unaudited) 2021 2020 2021 Net income (loss) $ 27,166 $ (62,491) $ 16,119 Adjusted for: Depreciation, depletion and amortization 6,666 1,382 6,150 Interest expen
Slide 25: Reconciliation Net Income (Loss) to Adjusted Net Income
Reconciliation Net Income (Loss) to Adjusted Net Income For the three For the three months ended months ended June 30, March 31, (in thousands, unaudited) 2021 2020 2021 Net income (loss) $ 27,166 $ (62,491) $ 16,119 Adjusted for: Depletion(1) 4,686 28 4,531 Stock-based compensation expense(2) 4,498
Slide 26: YTD 2021 Cash Flow Bridge
YTD 2021 Cash Flow Bridge(1) (3) (2) 26 1. All figures in millions 2. See “Use of Non-GAAP Financial Measures” for definition and further information. See Slide 21 for a reconciliation to the most comparable metric prepared in accordance with U.S. GAAP. 3. Deal Costs & One-Time Items consists primar
Slide 27: Net Cash Provided by Operating Activities to Non-GAAP Measures
Reconciliations Net Cash Provided by Operating Activities to Non-GAAP Financial Measures For the six months ended June 30, (in thousands, unaudited) 2021 Net cash provided by operating activities $ 47,969 Additions of property, plant and equipment (44,691) Free Cash Flow 3,278 Adjusted for: Revenue
Slide 28: KPI – Realized Price Reconciliation and Calculation
KPI – Realized Price Reconciliation and Calculation For the three For the three months ended months ended June 30, March 31, (in thousands, unless otherwise stated, unaudited) 2021 2020 2021 Product sales $ 73,118 $ 30,391 $ 59,971 Adjusted for: Shenghe Implied Discount(1) — 3,023 — Other(2) (596) (
Slide 29: KPI – Production Cost Reconciliation and Calculation
KPI – Production Cost Reconciliation and Calculation For the three For the three months ended months ended June 30, March 31, (in thousands, unless otherwise stated, unaudited) 2021 2020 2021 Cost of sales(1) $ 17,955 $ 16,865 $ 17,936 Adjusted for: Cost attributable to sales of stockpiles (6) (112)
Slide 30: Thank You
la~N MP materiacs Thank You
MP Materials — Gabelli Funds 45th Annual Auto Symposium (November 2021) on 6ix