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Amg Critical Materials — AMG Advanced Metallurgical Group — RBS Investor Conference 2009
28 slides from Amg Critical Materials's conference presentation, December 2009
Slide 1: AMG Advanced Metallurgical Group N.V.
AMG Advanced Metallurgical Group N.V. RBS Investor Conference December 2009 AMG ADVANCED METALLURGICAL GROUP N.V. 1
Slide 2: Disclaimer
Disclaimer 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. FAI
Slide 3: Contents
Contents ■ Highlights and Operational Review ■ Financial Review ■ Market Overview and Outlook AMG ADVANCED METALLURGICAL GROUP N.V. 3
Slide 4: AMG Advanced Metallurgical Group
AMG Advanced Metallurgical Group …Global specialty metals and materials technology company Fuel Efficiency Proprietary alloys, superalloys and vacuum furnaces for aerospace applications Recycling Recycling of spent refinery catalysts and power plant residues used to produce ferrovanadium and fer
Slide 5: Global Operations
Global Operations AMG Advanced Metallurgical Group N.V. (Netherlands) 79.5(2) 46.0%(1) Advanced Materials Division Engineering Systems Division Graphit Kropfmühl Timminco Germany US UK Brazil France Germany US/Mexico Germany Canada Specialty alloys Ferrovanadium Aluminium Tantalum oxide An
Slide 6: Financial Highlights - Third Quarter 2009
Financial Highlights - Third Quarter 2009 ■ Revenue: $205.4 million ■ EBITDA: $18.6 million, 9.0 % EBITDA margin ■ Reduced sales prices ■ Low capacity utilizations ■ Advanced Materials profitability improved ■ Engineering Systems order intake remained low ■ Capital investment reduced to $3.6 million
Slide 7: Market Overview
Market Overview AMG ADVANCED METALLURGICAL GROUP N.V. 7
Slide 8: End Markets
End Markets (1) AMG Advanced Metallurgical Group N.V. Total Solar Fuel Efficiency Recycling Nuclear Other Group QTD Q3 09 Q3 08 Q3 09 Q3 08 Q3 09 Q3 08 Q3 09 Q3 08 Q3 09 Q3 08 Q3 09 Q3 08 Revenue 53 103 58 112 12 46 2 - 80 110 205 371 Gross Margin 17 31 7 24 5 18 (1) - 12 10 40 83 Margin % 31% 30% 1
Slide 9: Solar
Solar ■ Market continues to struggle ■ Oversupply still evident in the value chain ■ Production moving to Asia ■ Order intake for solar ingot furnaces remains subdued ■ Long term prospects for solar remain positive ■ Thin film – market bottoming, 2010 should Thin film solar sputtering process improv
Slide 10: Fuel Efficiency
Fuel Efficiency ■ Market demand moderating ■ Market adversely impacted by Boeing 787 and 747-8 delays ■ Significant inventory overhang in value chain ■ Prices have rebounded slightly from Q2 lows; Typical aerospace jet engine demand still lagging e.g. Ti-64 Ti-6246 Ti-834 Ni-based Titanium Operating
Slide 11: Fuel Efficiency – Market Trends
Fuel Efficiency – Market Trends Titanium sponge production by country 100 Titanium Sponge Production by Country 80 ■ China production has surpassed 60 other countries and will '000 tons 40 continue to lead in sponge 20 ■ Russia, Ukraine, Kazakhstan 0 have become major producers of titanium sponge Ru
Slide 12: Recycling
Recycling North American steel capacity utilization 100 ■ Market demand moderating 2,200 ■ AMG shut down operations Net ton of steel (000) / week 90 2,000 1,800 80 during Q3 2009 – 6 weeks ■ North American steel % Capacity 70 1,600 1,400 60 capacity utilization 1,200 50 approaching 60% in Q3 „09 1,0
Slide 13: Recycling - Pricing
Recycling - Pricing Significant price trends – 10 years $60 $250 $50 Price / Pound – V, Mo, Ni $200 $40 $150 $30 $100 $20 $10 $50 $0 $0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Ferro Vanadium Molybdenum Nickel Prices are still below pre-crisis levels AMG ADVANCED METALLURGICAL GROUP N.
Slide 14: Nuclear
Nuclear ■ Market development ongoing ■ U.S. DOE engineering project on schedule ■ Impermeable graphite glass matrix (IGM) achieved development milestone ■ Business development projects are long term ■ New business opportunities in Russia and U.S. Stackable ■ Operations Graphite Blocks ■ Engineering
Slide 15: Financial Review
Financial Review AMG ADVANCED METALLURGICAL GROUP N.V. 15
Slide 16: Financial Highlights
Financial Highlights Revenue Highlights ($ in millions) ■ Q3 Revenue: $205.4 million ■ YTD 2009 revenue: $636.1 million $371.0 $341.2 ■ Q3 EBITDA: $18.6 million $215.7 $214.9 $205.4 ■ YTD 2009 EBITDA: $56.7 million - - Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 ■ Balance Sheet highlights at September 30, 2009 EB
Slide 17: Advanced Materials - Market, Products and Customers
Advanced Materials - Market, Products and Customers Fuel Efficiency Recycling - FeV Other Products Specialty alloys for titanium Ferro-vanadium Chromium Metals Coatings for wear Ferro-nickel molybdenum Tantalum resistance Antimony Aluminium master alloys Competitors Reading Alloys
Slide 18: Advanced Materials
Advanced Materials Financial Summary Highlights ( in millions) Revenue ■ Recycling - ferrovanadium EBITDA (excl write downs) ■ Reference prices declined 62% v. Q3 „08 ■ Volumes declined 43% v. Q3 „08 $146.5 ■ Demand remained soft due to lower structural steel production levels $110.1 $95.9 $96.5 ■ F
Slide 19: Engineering Systems - Market, Products and Customers
Engineering Systems - Market, Products and Customers Solar Fuel Efficiency Nuclear Solar silicon melting and Vacuum Melting and Re- Vacuum Sintering Products crystallisation systems melting Systems Systems (DSS furnaces) Precision Casting and Coating Systems Heat Treatment with high pressu
Slide 20: Engineering Systems
Engineering Systems Financial Summary Highlights Revenue: $61.6 million, 54% decrease YoY ( in millions) Revenue EBITDA $135.2 Solar silicon DSS furnace revenues decreased 66% in Q3 „09 v. Q3 „08 $106.7 $96.2 EBITDA: $11 million $91.2 Backlog declined from $332 million at December 31 2008 to
Slide 21: Graphit Kropfmühl
Graphit Kropfmühl Financial Summary Highlights ( in millions) Revenue EBITDA Revenue: $33.7 million; 8% decrease YoY $36.4 30% reduction in natural graphite in $33.7 revenue; stable silicon metal revenue $27.3 EBITDA: $2.6 million $26.9 $23.6 Improved from Q2 „09 due to cost containment meas
Slide 22: Capital Base
Capital Base Cash and Debt Highlights – September 30 2009 ( in millions) ■ Cash: $124.4 million Cash Debt ■ Total debt: $202.3 million $203.7 $202.3 $183.4 $180.3 $193.9 ■ Net debt: $77.9 million ■ Revolver availability: $98 million $151.8 $139.8 $124.4 ■ Total liquidity $222.4 million $117.5 $108.8
Slide 23: Outlook
Outlook ■ Advanced Materials ■ Prices have rebounded slightly from historic lows; remain well below normal market levels ■ Return to historical levels will take some time ■ Engineering Systems ■ Order intake continues to be sluggish ■ Lower order backlog entering Q4 2009 will result in lower 2010 re
Slide 24: Appendix
Appendix AMG ADVANCED METALLURGICAL GROUP N.V. 24
Slide 25: Consolidated Balance Sheet
Consolidated Balance Sheet $ in thousands December 31, 2008 September 30, 2009 Fixed Assets 206,596 220,308 Goodwill and Intangibles 28,557 27,877 Other non-current assets 103,564 106,403 Inventories 240,426 197,886 Receivables 145,534 149,277 Other current assets 56,527 41,114 Cash 139,786 124,391
Slide 26: Consolidated Income Statement
Consolidated Income Statement $ in thousands Q3 2008 Q3 2009 Total Revenue 370,982 205,406 Cost of Goods Sold 288,177 165,457 Gross Margin 82,805 39,949 Selling, General and Admin. 39,069 31,876 Asset impairment and restructuring - 5,302 Environmental 10 4,075 Other Expense (Income) (1,883) (1,194)
Slide 27: Consolidated Cash Flows
Consolidated Cash Flows $ in thousands Q3 2008 Q3 2009 Cash Flows from Operations 76,038 (6,033) Capital Expenditures (42,060) (20,755) Other Investing Activities (116,695) (31,964) Cash Flows from Investing Activities (158,755) (52,719) Cash Flows from Financing Activities 73,123 35,415 Net increas
Slide 28: AMG Advanced Metallurgical Group N.V.
AMG Advanced Metallurgical Group N.V. AMG ADVANCED METALLURGICAL GROUP N.V. 28
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