Slide 1: Investor Presentation 2016 Interim Results
For personal use only Magontec GmbH recycling facility, Bottrop, NRW, Germany Investor Presentation 2016 Interim Results Magontec Limited (MGL) September 2016
Slide 2: Disclaimer
DISCLAIMER This Presentation has been prepared by Magontec Limited (ABN 30 147 131 977) (Magontec or the Company). This Presentation contains summary information about Magontec and its activities current as at the date of this Presentation. The information in this Presentation is of a general backgr
Slide 3: First Half 2016 - Review
First Half – 30 June 2016 First Half 2016 - Review For personal use only 2
Slide 4: Revenue & Volume
First Half – 30 June 2016 Revenue & Volume For personal use only • Volume -5.5% and revenue -2% on previous corresponding period Volume (‘000 mt) • PRC primary Mg alloy (revenue -18%) 19.6mt 19.3mt 19.8mt 20.3mt 18.7mt Focus on profitable customers Closure of Chinese recycling plant Revenue Ma
Slide 5: Pure magnesium price chart
First Half – 30 June 2016 Pure magnesium price chart Magnesium v Aluminium - 1 January 2010 to 15 August 2016 For personal use only • Pure Mg broken 4-year down trend (reflects broader metals market) • Price volatility largely neutral for MGL ¥19,500 • Global demand volumes continue to grow 8-9% pa
Slide 6: Gross Profit & Gross Profit Margin
First Half – 30 June 2016 Gross Profit & Gross Profit Margin For personal use only Gross Profit improvements across the business 11.2% 9.8% Product 1H16 1H15 8.2% 8.7% 6.3% PRC 8.1% 5.9% 5.1% 6.4% Europe 11.6% 10.0% • Anode volume growth and productivity improvements in Asia & EU • Production cost a
Slide 7: General & Administration
First Half – 30 June 2016 General & Administration (costs not included in Gross Profit) For personal use only G & A costs stable Product 1H16 1H15 $6.15 Travel accommodation etc $375.2 $383.6 A$m $5.59 $5.69 R&D $134.0 $198.8 $5.25 $4.95 Promotional activity $29.4 $20.3 $4.78 $4.60 Information techn
Slide 8: Cash Flow from Underlying Operations
First Half – 30 June 2016 Cash Flow from Underlying Operations For personal use only A$4.8 million cash flow from underlying operations over the last 12 months $2.40 $2.40 A$m • Excludes movements in working capital $1.20 $1.20 • Support additional funding for future (Qinghai) working capital requir
Slide 9: EBIT & EBIT Margin
First Half – 30 June 2016 EBIT & EBIT Margin (Underlying EBIT - excluding unrealised foreign exchange effects) For personal use only EBIT margins are also improving 2.23% 1.29% • Anode market share growing in EU, Asia & N America 0.42% 0.39% • Continuing to build sales and marketing -0.29% support f
Slide 10: Profit & Loss
First Half – 30 June 2016 Profit & Loss For personal use only % Compared with the 1H16 1H15 $ Change Change previous corresponding period EBITDA $1,917,174 $1,212,842 58% + $704,332 • On-going improvements in operating efficiency Depreciation & ($863,419) ($809,447) 7% ($53,972) amortisation • Tax e
Slide 11: Magontec Limited – Overview
MGL – Overview Magontec Limited – Overview For personal use only 10
Slide 12: Magnesium alloy production
MGL – Overview Magnesium alloy production For personal use only Raw material Inputs Production of Mg alloy ingots Pure Mg Mg scrap 40 – 70% scrap Die cast manufacturer (customer) Powertool Automotive End user industries Electronics Other 11
Slide 13: Mg anode production
MGL – Overview Mg anode production (+ electronic) For personal use only Raw material Inputs Magontec Mg anode cast / extrusion process Mg alloy / Mg scrap Global water heater industry 12
Slide 14: Manufacturing, marketing and technical services located close to supply and customers
MGL – Overview Magontec manufacturing, marketing and technical services located close to supply sources and customers For personal use only Tokyo Annual Magnesium Alloy Production Capacity 59,000 mt 25,000 mt 22,000 mt Primary Mg alloy Primary Mg alloy Global recycling (2016) (with Qinghai) Melbourn
Slide 15: China – The World's principal source of magnesium metal
MGL – Overview China – The World’s principal source of magnesium metal For personal use only Pure Mg annual global production ~ 850ktpa of which Mg alloy for die casting applications is about 260ktpa Iron & Steel 15% Other 18% Israel RoW China Russia Automotive 26% Die 16% 84% USA Other 5% Casting B
Slide 16: Qinghai project will make Magontec the World's largest supplier of electrolytic Mg alloy
MGL – Overview The Qinghai project will make Magontec the World’s largest supplier of electrolytic Mg alloy For personal use only Global primary Mg alloy sales Global annual primary Mg alloy sales 260k mtpa in 2015 (est) – post Qinghai commencement (est) RoW 234,500 mt Magontec RoW 25,500 mt Magonte
Slide 17: Magnesium Alloy Recycling in Europe
MGL – Overview Magnesium Alloy Recycling in Europe For personal use only Recycling critical for wider Mg acceptance / adoption Magontec is the largest magnesium recycler in Europe by capacity & volume Magontec European Volumes 2015 European Recycling Market Shares (est) 15,000 Recycled Magnesium
Slide 18: A strong strategic position
MGL – Overview A strong strategic position For personal use only Only global magnesium alloy producer with Own Chinese primary Mg alloy manufacturing base Own Mg alloy recycling facilities in Europe & Asia Global logistics and sales capabilities Comprehensive Mg alloy product portfolio Act
Slide 19: Magnesium industry – key drivers
MGL – Overview Magnesium industry – key drivers For personal use only 1. Global auto volumes (87m in 2015) 25 Positive outlook for global automotive 7% 8% 7% volumes 20 5% 5% 5% 3% Million autos pa • Chinese automotive growth remains 15 robust 10 -10% • US economic recovery sustained and 5 growth st
Slide 20: Magontec Qinghai
Magontec Qinghai Qinghai Salt Lake Magnesium Project Magontec Qinghai cast house 100,000 mtpa capacity electrolytic 56,000 mtpa Mg alloy supply agreement magnesium smelter Exclusive Mg alloy manufacturer For personal use only Environmental project Off-take Price Agreement 10 + 10 year op
Slide 21: Magontec Qinghai - the lowest CO2 Mg alloy ever produced
Magontec Qinghai Magontec Qinghai - the lowest CO2 Mg alloy ever produced For personal use only 45 40 Magontec Qinghai 35 kg CO2eq / kg Mg 30 incl. use incl. credits for use of SF6 of waste gas w/o credit for 25 CO2 uptake incl.credits for 20 by-products 15 incl.credits for by-products 10 5 0 Golmud
Slide 22: Magontec Qinghai Project
Magontec Qinghai Magontec Qinghai Project 3 Magontec casting lines installed by June 2016 (44k mtpa capacity) For personal use only 4th casting line in 4Q 2016 Magnesium alloy casting lines 2, 3 & 4 Alloying furnaces 21
Slide 23: Qinghai project – QSLM assets & commissioning progress
Magontec Qinghai Qinghai project – QSLM assets & commissioning progress For personal use only Brine purification, dehydration unit #1 and reduction cell house completed Reduction cell house • Brine purifications and electrolytic cell house now hot commissioned • Dehydration unit #1 hot commissioning
Slide 24: Magontec Qinghai – Magontec assets
Magontec Qinghai Magontec Qinghai – Magontec assets For personal use only Phase A completed and commissioned, full installation by end November • Phase A hot commissioning now completed. • Phase B ingot casting lines and cooling devices installed • Phase B stacking and packaging lines installation b
Slide 25: Thank you for your time
Thank you for your time For personal use only MAGONTEC Group MAGONTEC MAGONTEC GmbH MAGONTEC Xian Co., Ltd Head Office, Sydney Industriestraße 61 No. 40, Feng Cheng 3 Road, Suite 1.03 46a Macleay St 46240 Bottrop Xian Economic and Technological Potts Point Sydney NSW 2011 Germany Development Zone AU