Neo Performance Materials, Inc. · TSX:NEO
Neo Performance Materials — Investor Presentation (November 2024)
37 slides from Neo Performance Materials's investor presentation, Nov 14, 2024
Slide 1: Rare earth magnetics & critical materials
November 14, 2024 Rare earth magnetics & critical materials Fast-forwarding the clean energy transition A Generational Opportunity
Slide 2: Disclaimer
Disclaimer Forward-Looking Information Non-IFRS Measures The following presentation contains “forward-looking information” within the This presentation refers to certain non-IFRS financial measures such as “Operating meaning of applicable securities laws in Canada. Forward-looking information may In
Slide 3: Navigating Neo's business units and applications
Navigating Neo’s business units and applications Magnequench (MQ) Chemicals & Oxides (C&O) • Rare earth magnetic • Rare earth midstream powders separation • Rare earth bonded • Specialty mixed magnets oxides • Rare earth sintered • Environmental magnets catalysts Rare Metals (RM) • Hafnium recycling
Slide 4: Table of Contents
Table of Contents INTRO TO NEO QUARTERLY PROGRESS & FINANCIAL RESULTS 5 Neo at a Glance 26 Consolidated Financial Statements 6 Global Leadership 27 Financial Performance by Business Unit 7 Q3 2024 Major Highlights 28 Impact of RE Pricing on Gross Margins 8 Portfolio Transformation 29 Strategic CAPEX
Slide 5: NEO at a glance
NEO at a glance Headquarters Publicly Traded Exchange Revenue by Revenue by Toronto, Canada TSX: NEO.TO Segment (LTM) % Geography (LTM) % Rare North Global Footprint Employees Magnequench Europe Metals America Canada, China, Estonia, Japan, ~1,800 27 17 Germany, South Korea, Thailand, Other 11 Singa
Slide 6: NEO at a glance - Global Leadership
NEO at a glance - Global Leadership Neo is an advanced materials science, engineering & manufacturing company, with a focus on rare earth magnetics and other critical materials Rare Earth Magnetics market outside of Global Leader in Rare Earth & Rare Metal China about to increase rapidly and sizeabl
Slide 7: Q3 2024 Major Highlights
Q3 2024 Major Highlights Strong Results and Outlook Strategically Rebalancing the Portfolio ~$20 million Adjusted EBITDA in Q3 2024 (~ 50% YoY increase), and Neo entered into agreements to sell 86% and 100% of its equity $44 million Adjusted EBITDA in YTD 2024 (~30% higher than YTD interests in JAMR
Slide 8: Neo's Portfolio Transformation: Promise Made, Promise Kept
Neo’s Portfolio Transformation: Promise Made, Promise Kept Initiatives to simplify and streamline its portfolio will enable improved earnings quality and expanded EBITDA margins Commitment Delivery Expected Outcomes shutdown light rare earth solvent extraction • improving ROCE Manufacturing in China
Slide 9: Growth Drivers
Growth Drivers Neo’s products are vital to key techologies in growth industries Energy EfÏcient & Environmental Footprint Advanced Microelectronics Electric Vehicles Powerful Motors Reduction & Aerospace Technologies NanoPowders 1-2kg of our magnets in an EV motor reduces battery Wastewater size by
Slide 10: Understanding the Global Rare Earth Magnet Growth Curve
Understanding the Global Rare Earth Magnet Growth Curve Growing Demand for HEVs & PHEVs: A Net Positive for NdFeB Magnet Growth Despite Slower BEV Adoption NdFeB Magnet Total Global Demand NdFeB Magnet Demand for Product Manufacturing Outside of China (all applications) Europe is ahead of other juri
Slide 11: Focus on Rare Earth EV Magnetics Growth in Europe & North America
Focus on Rare Earth EV Magnetics Growth in Europe & North America 11
Slide 12: Neo's New Positioning in the EV Magnet Growth Curve
Neo’s New Positioning in the EV Magnet Growth Curve An example of Neo’s growth opportunities in rare earth magnetics: EV traction motors in Europe and North America EV Magnet Europe & North America Market First Outside of China Sintered Magnet Plant for EVs Opportunity in 2035 40M EV X 1.5KG/EV X $6
Slide 13: Why now? Inflection Point in Industry
Why now? Inflection Point in Industry Paradigm shifts creating major opportunity for Neo Performance Materials Energy Transition and Electric Vehicles EVs to grow globally from 11 million to 63 million by 2030* 85% of EV motors today use RE magnets Net neutral 2050 targets require energy-efÏcient mo
Slide 14: Current commercialized rare earth value chain, outside of China
Current commercialized rare earth value chain, outside of China Neo already has the most integrated presence in the value chain, with non-captive assets Most integrated and only dual supply chain to serve customers: Note: For value-add Mining Separation Metals & Alloys Magnets operations, these are
Slide 15: Neo's Proven Magnetics Competency
Neo’s Proven Magnetics Competency Neo has more rare earth advanced degrees and technical experts across RE magnetics than any other company outside of China or Japan First-of-its-kind EV Motor-Magnet Complex Motor-Magnet Design Customer Case: Customer Case: Ultra-High-Speed Motor, major cost Tractio
Slide 16: Business Units in Focus
Business Units in Focus 16
Slide 17: Business Unit Focus: Magnequench
Business Unit Focus: Magnequench Neo’s Magnequench is currently the #1 market leader for rare earth magnetic powders for bonded and hot deformed NdFeB magnets Original founder of the NdFeB Applications of Products magnet, 37 years ago: Founded within General Motors in 1986, it was spun out in the mi
Slide 18: Business Unit Focus: Magnequench
Business Unit Focus: Magnequench Strategic M&A in growth areas with thoughtful post-merger integration Acquisition of AsiaMag in 2019 Acquisition of SGTec in 2023 (Chuzhou, China) (Essex, United Kingdom) The acquisition of AsiaMag (Chuzhou, China) The acquisition of SGTec advances Neo’s Customers in
Slide 19: Business Unit Focus: Chemicals & Oxides
Business Unit Focus: Chemicals & Oxides Parallel supply chain, with focus on rare earth separation and rare-earth-based advanced products Three decades of experience in rare Commercialized Water Treatment earth production product from non-magnetic rare earths Only company to have rare earth Most adv
Slide 20: Business Unit Focus: Chemicals & Oxides
Business Unit Focus: Chemicals & Oxides Critical midstream assets and know-how that supplies our magnet business with oxides and commercialized specialty chemicals for environmental and microelectronic applications Environmental Catalysts Advanced Rare Earth Products New Product Development Municipa
Slide 21: Business Unit Focus: Rare Metals
Business Unit Focus: Rare Metals Recycling and high-purity refining value-add steps of critical minerals for growth industries High barriers to entry due to significant capital investment requirements and technical requirements. Industries Depending on our RM Products Diversified salesforce, R&D and
Slide 22: Business Unit Focus: Rare Metals
Business Unit Focus: Rare Metals The only LED and semiconductor-grade gallium producer in North America Operating Facility Proprietary Recycling Technology Neo’s commercially- Location: Ontario (Canada) Electro-winning of metallic liquid gallium in customized cells, from sodium gallate operating pro
Slide 23: Sustainability in our Products
Sustainability in our Products Neo’s products truly fast-forward our world’s transition to green technologies, by supporting the management of energy reduction/generation and water/air quality CO2-e Abatement via EVs Protection of Freshwater Aviation Emissions Reduction Empower the annual abatement
Slide 24: Annual, Transparent ESG Reporting at our Customer Standards
Annual, Transparent ESG Reporting at our Customer Standards Neo’s quantitative and qualitative performance of its environmental, social, and governance impact and practices undergoes an annual review & publication process Tianjin, Sillamäe, Korat, China Estonia Thailand Zibo, Jiangyi, China China •
Slide 25: Quarterly Progress & Financial Results
Quarterly Progress & Financial Results
Slide 26: Consolidated Financial Statements
Consolidated Financial Statements Healthy EBITDA, strong cash flow generation, and financial capacity to grow Income Statement Selected Data Shareholder Related Selected Data Q-over-Q Year-over-Year Q-over-Q Year-over-Year Comparison Comparison Comparison Comparison US$ 000s Q3 2024 Q3 2023 YTD 2024
Slide 27: Financial Performance by Business Unit
Financial Performance by Business Unit Year-over-Year Quarter Highlights: Q-over-Q Comparison Magnequench Comparison • YTD volumes have risen 10% year-over-year, driven by strength US$ 000s in bonded magnets, bonded powder spot sales and traction Q3 2024 Q3 2023 YTD 2024 YTD 2023 motor applications,
Slide 28: Impact of Rare Earth Pricing on Gross Margins
Impact of Rare Earth Pricing on Gross Margins • Volatility in rare earth prices can negatively or positively impact gross margins due to lead-lag (the selling of C&O Rare Earth Separation Gross Margin higher or lower cost inventory purchased In Relation to Consolidated Gross Margin months earlier) $
Slide 29: Strategic Capital Projects Funding Plan
Strategic Capital Projects Funding Plan Capital Spend Requirements Source of Cash NAMCO Relocation Cash On Hand Grand opening Sept 2024; run-rate production in 4Q’24 Some of this cash would be needed to fund regular $65M operations $47.8M $22.2M $5.0M Capitalized to date* Remaining Capital* Budget S
Slide 30: Governance & Management
ei Governance & Management
Slide 31: Executive Management
Executive Management Neo’s Executive team is comprised by experienced executives in general management, finance, operations, sales & marketing, law, and engineering Rahim Suleman Jonathan Baksh Kevin Morris CEO & President CFO & EVP CSO & EVP • Former CFO of Neo for 6 • Former Divisional CFO at • 13
Slide 32: Board of Directors: Independent Directors
Board of Directors: Independent Directors Neo’s Board is comprised of current & former senior executives, with backgrounds in law, government, accounting, finance, material science, and rare earth industry management Claire Kennedy Eric Noyrez Chair of Board Lead Director • Former senior partner at
Slide 33: Appendices
ce Appendices
Slide 34: Why are Rare Earth Magnetics important for EVs/PHEVs
Why are Rare Earth Magnetics important for EVs/PHEVs Rare earth magnets are critical in all motors of EVs, including traction motors EV Traction Motors Rare earth magnetics Traction Motors • 1-2kg of rare earth magnets in EV traction motor save 20+% • 85% of EV motors use rare earth magnets of batte
Slide 35: How the outside of China EV motor magnet market unfolds
How the outside of China EV motor magnet market unfolds What does it take to win business in this market space? Neo wins with: Experience in the Rare Earth Industry - operating dual supply chains inside and outside of China, along the value chain Its 25 years of RE magnet R&D, commercialization and
Slide 36: Neo's Position in Parallel and Integrated Supply Chain
Neo’s Position in Parallel and Integrated Supply Chain Non-captive midstream & downstream assets offer supply chain resilience and optionality to our customers End-of-Life & Upstream Rare Earths Miners Rare Metals Miners Scrap Sources Light Heavy Metal making JVs for Midstream Rare Earths Separation
Slide 37: Corporate Headquarters
Performance Materials Corporate Headquarters Suite 1740, 121 King Street West Toronto, Ontario, Canada, M5H 3T9 Phone: (416) 367 8588
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