Amg Critical Materials N.v. · EURONEXT:AMG
Amg Critical Materials — AMG Advanced Metallurgical Group — Investor Presentation (November 2017)
38 slides from Amg Critical Materials's investor presentation, November 2017
Slide 1: AMG Advanced Metallurgical Group N.V. Investor Presentation November 2017
The image part with relationship ID rId2 was not found in the file. AMG Advanced Metallurgical Group N.V. Investor Presentation November 2017
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 25 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 (i.e., 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 • Refinanced credit facility in 2016, • Initiated first dividend to • Rigorous process to review providing a stable capital bas
Slide 7: Critical Raw Materials: AMG Now in Supply Risk
CRITICAL RAW MATERIALS: AMG NOW IN 7 Light REE Heavy REE • The EU identified 27 critical raw materials* to the Antimony European economy in Bismuth Phosphorus Magnesium 2017, focusing on two determinants: economic Borate Niobium importance and supply risk Natural Scandium Graphite PGMs • The US iden
Slide 8: Critical Materials Price Trends
CRITICAL MATERIALS PRICE TRENDS The cumulative average 60% 10 year price appreciation of the AMG Portfolio was 8.3 40% percentage points higher than 10 Yr London Metal Exchange CAGR: 10 Yr (LME) metals and 9.2 points 20% 4.6% CAGR: higher than oil, while AMG AMG Portfolio 2.1% EU Critical Materials
Slide 9: Critical Materials Prices: 10 Year Perspective
CRITICAL MATERIALS PRICES: 10 YEAR PERSPECTIVE • Metal prices are Sep 2017 Position Sep 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 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 LEADING SAFETY INDICATORS • The number of safety improvement items reported in Q3 2017 was 18% higher than in Q3 2016. These are essential in order to avoid potential injuries. • Safety training hours increased 14% in Q3 2017 compared to Q3 2016. • At the end of Q3 2017, lost
Slide 14: Financial Highlights
Financial Highlights AMG Advanced Metallurgical Group N.V. 14
Slide 15: Q3 2017 at a Glance
Q3 2017 AT A GLANCE AMOUNTS IN $M • Q3 ‘17 EBITDA up 18% (EXCEPT EARNINGS PER SHARE) Q3 2017 Q3 2016 % CHANGE versus Q3 ‘16 due to Revenue $258.9 $247.5 5% improved profitability within AMG Critical Materials Gross Profit * $51.3 $46.3 11% • Annualized ROCE increased to 21.5% Gross Margin % 19.8% 18
Slide 16: Financial Highlights
FINANCIAL HIGHLIGHTS REVENUE (IN MILLIONS OF US DOLLARS) GROSS PROFIT * (IN MILLIONS OF US DOLLARS) $258.0 $262.0 $258.9 $52.5 $54.3 $51.3 $247.5 $237.9 $46.3 $43.0 5% 11% YoY YoY Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q3 16 Q4 16 Q1 17 Q2 17 Q3 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) $33.0 $31.9 • Q3 ‘17 EBITDA up 18% $30.0 versus Q3 ‘16 due to $27.6 improved profitability $23.4 within AMG Critical Q3 ‘17 EBITDA Materials UP 18% VERSUS Q3 ‘16 Q3 '16 Q4 '16 Q1 '17 Q2 '17 Q3 '17 Annualized ROCE 21.5% • Q3 2017 annual
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: $15.4 million o $178.8 million reduction of net $194.2 debt since December 31, 2012 $160.5 • AMG’s primary debt $179M facility is a $400 million $87.8 REDUCTION multicurrency term loan IN NET
Slide 19: Divisional Financial Highlights – Q3 2017 vs. Q3 2016
DIVISIONAL FINANCIAL HIGHLIGHTS – Q3 2017 VS. Q3 2016 REVENUE GROSS MARGIN * Q3 2017 REVENUE: $258.9 (IN MILLIONS OF US DOLLARS) Q3 2017 GROSS MARGIN: 19.8% $203.4 18.0% Q3 2017 AMG Critical AMG Critical Materials Q3 2016 Materials $177.5 18.0% $55.6 26.2% AMG Q3 2017 AMG Engineering Engineering $70
Slide 20: Working Capital Reduction
WORKING CAPITAL REDUCTION WORKING CAPITAL DAYS REDUCED BY 72% SINCE Q3’10 79 69 70 70 70 65 65 65 65 62 61 53 57 DAYS, OR 72% 47 47 REDUCTION 43 42 31 30 30 28 26 23 22 22 19 17 17 18 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 Q4 14 Q1 15
Slide 21: AMG Critical Materials
AMG CRITICAL MATERIALS REVENUE & EBITDA (IN MILLIONS OF US DOLLARS) • Q3 2017 revenue of $203.4 million was 15% $202.6 $203.4 higher than Q3 2016 $194.5 $177.5 $166.0 • EBITDA increased by $9.0 Q3 2017 EBITDA million over Q3 2016 to $23.5 INCREASED BY million in the third quarter of $25.7 $23.5 $9.0
Slide 22: AMG Critical Materials – Quarterly Revenue Drivers
AMG CRITICAL MATERIALS – QUARTERLY REVENUE DRIVERS • AMG Critical Materials’ revenue KEY PRODUCT Q3 ‘17 REV Q3 ‘16 REV VOLUME PRICE in the third quarter increased by ($M) ($M) $25.9 million, or 15%, to $203.4 million FeV & FeNiMo $36.9 $23.5 • This was driven by improved vanadium, aluminum, titanium
Slide 23: Critical Materials – Average Quarterly Prices
CRITICAL MATERIALS – AVERAGE QUARTERLY PRICES Q3 Q4 Q1 Q2 Q3 Q3 ‘17 VS. Q3 Q3 ‘17 VS. Q2 MATERIALS ‘17 % CHANGE 2016 2016 2017 2017 2017 ‘16 % CHANGE Ferrovanadium ($/lb) $9.99 $10.65 $12.35 $12.30 $17.75 78% 44% Molybdenum ($/lb) $7.01 $6.63 $7.90 $8.03 $8.21 17% 2% Nickel ($/MT) $10,262 $10,685 $1
Slide 24: AMG Engineering
AMG ENGINEERING • EBITDA decreased by REVENUE & EBITDA (IN MILLIONS OF US DOLLARS) $4.8 million in Q3 2017 $70.0 $71.9 versus Q3 2016 $63.5 $59.4 $55.6 • Revenue in the quarter was REVENUE adversely impacted due to DECLINED BY 21% a high proportion of early VS. Q3 2016 DUE TO stage, large contracts
Slide 25: Strategy & Outlook
Strategy & Outlook AMG Advanced Metallurgical Group N.V.
Slide 26: 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 27: 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 28: 2017 Outlook & Lithium Project Update
2017 OUTLOOK & LITHIUM PROJECT UPDATE OUTLOOK AMG expects full year 2017 EBITDA to improve by 10%, or more, relative to 2016. In 2018, AMG expects to continue its strong financial performance and improve profitability relative to 2017. AMG's management team is focused on delivering our highly accret
Slide 29: Key Products & End Markets
Key Products & End Markets AMG Advanced Metallurgical Group N.V. 29
Slide 30: Key Products
KEY PRODUCTS REVENUE (IN MILLIONS OF US DOLLARS) GROSS PROFIT * (IN MILLIONS OF US DOLLARS) $270 $258.9 $55 $51.5 $247.5 $46.5 $225 $44 $180 $33 $135 $22 $90 $11 $45 $- $- Q3 2016 Q3 2017 Q3 2016 Q3 2017 Vacuum Furnaces Ti Master Alloys & Coatings Al Master Alloys & Powders Vanadium & FeNiMo Chromiu
Slide 31: 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 32: 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 33: 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 34: AMG at a Glance
AMG AT A GLANCE Q3 2017 REVENUE BY SEGMENT: BY END MARKET: BY REGION: 42% Transportation 44% Europe 79% Critical Materials 21% Specialty Metals 34% North America & Chemicals 21% Engineering 27% Infrastructure 17% Asia 10% Energy 5% ROW AMG IS A GLOBAL SUPPLIER OF CRITICAL MATERIALS TO: ENERGY TRANSP
Slide 35: Appendix
Appendix AMG Advanced Metallurgical Group N.V. 35
Slide 36: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 2017 DECEMBER 31, 2016 IN MILLIONS OF US DOLLARS UNAUDITED Fixed assets 271.3 226.1 Goodwill and intangibles 37.1 33.2 Other non-current assets 81.9 91.7 Inventories 158.6 143.6 Receivables 149.2 129.2 Other current assets 49.2 35.8 Cash 171.8 160.7 TOT
Slide 37: Consolidated Income Statement
CONSOLIDATED INCOME STATEMENT FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 SEPTEMBER 30, 2016 IN MILLIONS OF US DOLLARS UNAUDITED UNAUDITED Revenue 778.9 733.3 Cost of sales 620.8 589.5 Gross profit * 158.1 143.8 Selling, general & administrative 97.3 100.8 Other income, net (0.6) (4.9) Operating pr
Slide 38: Consolidated Statement of Cash Flows
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 SEPTEMBER 30, 2016 IN MILLIONS OF US DOLLARS UNAUDITED UNAUDITED EBITDA 92.5 70.6 Change in working capital and deferred revenue (27.3) (2.0) Other operating cash flow (6.0) (18.1) Cash generated from operating activit
AMG Advanced Metallurgical Group — Investor Presentation (November 2017) on 6ix