Amg Critical Materials N.v. · EURONEXT:AMG
Amg Critical Materials — AMG Advanced Metallurgical Group — Investor Presentation (March 2016)
45 slides from Amg Critical Materials's investor presentation, Mar 11, 2016
Slide 1: The Critical Materials Company
The Critical Materials Company Investor Presentation March 11, 2016
Slide 2: Table of Contents
Table of Contents About AMG 4 Global Trends 5 Critical Materials Expertise 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
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
AMG is a critical materials company Global Trends Demand Supply: AMG CO2 emission Innovative new Sources, processes, reduction, population products that are and supplies the growth, increasing lighter, stronger, and critical materials the affluence, and energy resistant to higher market demands effi
Slide 5: Global Trends Driving Critical Materials Demand
Global Trends Driving Critical Materials Demand Increased Global Trends & Industry requires demand for Changes in Regulatory Material-Science Environments based innovation Critical Raw Materials CASE STUDY – Titanium Aluminides Global CO2 Aerospace industry driven Aircraft engines require innovative
Slide 6: Critical Materials Expertise
Critical Materials Expertise Local Presence Complex Multi-stage Logistics Increased AMG is a global Legal demand for Regime leader in the Critical Raw Expertise management of Materials Product critical materials Working Capital & Process Management & supply chains Technology Trade Finance Risk Manag
Slide 7: Critical Raw Materials
Critical Raw Materials • The EU identified 20 critical Heavy REE raw materials* to the European economy in 2014, focusing on two determinants: economic importance and supply risk Light REE • The US identified 30 critical materials* which are vital to national defense, primarily Antimony through asse
Slide 8: Critical Materials Price Trends
Critical Materials Price Trends 250% The cumulative average 10 year 200% price appreciation of the AMG EU AMG: EU Critical Materials Critical Materials was 7.6 10 Yr percentage points higher than LME 150% 10 Yr CAGR: Metals and 8.8 points higher than CAGR: AMG Portfolio 3.8% oil, while the AMG Portf
Slide 9: Critical Materials Prices: 10 Year Perspective
Critical Materials Prices: 10 Year Perspective • Metal prices are measured on a Dec 2015 Position Dec 2014 Position scale of 0 to 10, with 0 and 10 Highest representing the minimum and 10 Price in 10 years maximum average quarterly prices occurring during the past 10 years • The positions demonstrat
Slide 10: AMG Business Segments
AMG Business Segments AMG Critical Materials AMG Engineering AMG’s conversion, mining, AMG’s vacuum systems and and recycling businesses services business • Vanadium • Engineering • Superalloys • Heat treatment services • Titanium Alloys & Coatings • Aluminum Alloys • Tantalum & Niobium • Antimony •
Slide 11: AMG Global Footprint – Critical Materials
AMG Global Footprint – Critical Materials UK Germany Czech Republic U.S.A. France China Sri Lanka Mozambique Brazil Zimbabwe Chromium Antimony Natural Silicon Titanium Aluminum FeV Tantalum Niobium Nickel Molybdenum Metal Graphite Metal Alloys & Master Alloys, Coatings Aluminum Powders 11
Slide 12: AMG Global Footprint – Engineering
AMG Global Footprint – Engineering Limbach, Germany Berlin, Moscow, Guildford, Russia UK Germany Hanau, Germany Krakow, Wixom (Head Office) Poland (MI), USA Grenoble, Tokyo, Port Huron France Japan (MI), USA East Windsor (CT), Suzhou, USA China Mexico City, Bangkok, Mexico Mumbai, Thailand India Sin
Slide 13: Health and Safety Focus
Health and Safety Focus Leading Safety Indicators • The number of safety improvement items reported increased by 3% compared to the 12 month period ending December 2014. These are essential in order to avoid potential injuries. • Incident severity rate over the 12 months ending December 2015 is down
Slide 14: Financial Highlights
Financial Highlights 14
Slide 15: Full Year 2015 at a Glance
Full Year 2015 at a Glance Amounts in $M FY 2015 FY 2014 % Change (except earnings per share) • Annualized ROCE increased to 12.0% versus 11.9% in FY 2014 Revenue $977.1 $1,093.9 (11%) • Net debt/(cash): ($1.0) million – $88.9 million reduction of net Gross profit $160.0 $184.3 (13%) debt since Q4 2
Slide 16: AMG Share Price – Performance vs. Key Indices
AMG Share Price – Performance vs. Key Indices 33.5% AMG has outperformed key indices over the 9.7% 7.9% 5.7% 4.1% course of 2015, achieving share price -0.7% -2.1% -2.2% -2.5% appreciation of 33.5% -6.4% during the year -11.1% -48.6% -51.6% Notes * Bloomberg Metal refers to the Bloomberg World Metal
Slide 17: Financial Highlights
Financial FinancialHighlights Highlights Revenue (in millions of US dollars) Gross Profit (in millions of US dollars) $260.4 $257.0 $257.4 $44.9 $44.6 $241.9 $43.3 $220.8 $39.7 $32.4 15% 28% YoY YoY Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 EBITDA (in millions of US dollars) Order
Slide 18: Currency Translation Effect – USD to Euro
Currency FinancialTranslation Effect&–Operating Data: Net Debt USD to Euro Cash flow Revenue (in millions of US dollars) • AMG’s financial statements are $1,093.9 $1,086.6 prepared in US Dollars $977.1 • Large fluctuations in the -1% exchange rate between the US Dollar and other currencies have YoY
Slide 19: Strong Financial Performance; Executing on Strategy
Strong Financial Performance; Executing on Strategy Objectives Progress Update Strong • FY 2015 Profit Before Income Tax of $28.6 million, a 38% increase versus FY 2014 Financial • FY 2015 EBITDA of $75.6 million, a decline of 12% versus FY 2014 Performance • Net Debt decline of $88.9 million • FY 2
Slide 20: 2015 Financial Objectives Update
2015 Financial Objectives Update Financial Objective Description Progress Update Refinance • Complete syndicated bank debt refinancing • Completed May 2015 by end of Q2 2015 Maintain • Optimize capital structure for financial • Net cash position of $1.0 million at end of Conservative flexibility Q4
Slide 21: 2015 AMG Highlights
2015 AMG Highlights 2014 Objectives Update AMG Critical Materials • AMG Vanadium – increased Ferrovanadium sales volumes following successful capacity expansion completed in 2014 • AMG Graphite – project underway to restart operations at Ancuabe mine in Mozambique in Q2 2016 • AMG Graphite – product
Slide 22: Financial Data: ROCE & EBITDA
Financial Data: ROCE & EBITDA EBITDA (in millions of US dollars) • Q4 ‘15 EBITDA down 56% $25.1 versus Q4 ‘14 $21.9 $20.4 $20.4 • The appreciation of the US Q4 ‘15 EBITDA Dollar compared to the Euro in down 56% the fourth quarter of 2015 in $9.7 relation to the fourth quarter of versus Q4 ‘14 2014,
Slide 23: Financial Data: Net Debt & Operating Cash Flow
Financial FinancialData: Data:Net NetDebt Debt&&Operating OperatingCash Flow Cash flow • Net (cash) debt: ($1.0) million Net Debt (in millions of US dollars) – $161.5 million reduction on net $194.2 debt since December 31, 2013 – Net cash position $160.5 – Net Debt to LTM EBITDA: $195M -0.01x reduct
Slide 24: Financial Data: Free Cash Flow & Capital Expenditures
Financial FinancialData: Data:Free FreeCash CashFlow & Capital Expenditures Flows Free Cash Flow (in USD millions) • Second highest full year $50 free cash flow in 2015 of $55.8M, due to high cash generation in H2 ’15 $25 achieved through working Strong FY ‘15 capital reductions free cash flow • Con
Slide 25: Divisional Financial Highlights – Q4 2015 v Q4 2014
Divisional Financial Highlights – Q4 2015 v Q4 2014 Revenue Gross Margin Q4 2015 Revenue: $220.8 (in USD millions) Q4 2015 Gross Margin: 14.7% $166.3 AMG Critical 12.5% AMG Critical Materials Materials** 17.0% $199.5 Q4 2015 Q4 2015 Q4 2014 Q4 2014 AMG 21.4% AMG $54.6 Engineering 18.2% Engineering $
Slide 26: Working Capital Reduction
Working FinancialCapital Reduction Highlights Working Capital Days reduced by 76% since Q3’10 79 69 70 70 70 65 65 65 65 60 days, 62 61 or 76% Reduction 53 47 47 43 42 31 30 30 28 23 19 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 27: AMG Critical Materials Financial Data
AMG Critical Financial Materials Data: Net Debt & Operating Cash flow • Q4 2015 revenue down $33.2 Revenue & EBITDA (in millions of US dollars) million, or 17%, vs. Q4 2014 due to currency translation $199.5 $202.3 $201.2 effects and weak metal prices $187.7 Q4 2015 revenue $166.3 • Q4 2015 EBITDA d
Slide 28: AMG Critical Materials – Annual Revenue Drivers
AMG Critical Materials – Annual Revenue Drivers FY ‘15 FY ‘14 • Revenues were adversely Key Product Volume Price Currency Rev ($M) Rev ($M) impacted by falling metals prices during the year, with all FeV & FeNiMo $100.2 $130.5 of AMG’s 9 critical materials experiencing double digit market price decl
Slide 29: AMG Critical Materials – Quarterly Revenue Drivers
AMG Critical Materials – Quarterly Revenue Drivers Q4 ‘15 Q4 ‘14 • Revenues were adversely Key Product Volume Price Currency Rev ($M) Rev ($M) impacted by falling metals prices during the year, with 7 of FeV & FeNiMo $16.9 $33.2 AMG’s 9 critical materials experiencing double digit market price decli
Slide 30: Critical Materials – Average Quarterly Prices
Critical Materials – Average Quarterly Prices Q4 Q1 Q2 Q3 Q4 Q4 ‘15 vs. Q4 Q4 ‘15 vs. Q3 Materials ‘14 % Change ‘15 % Change 2014 2015 2015 2015 2015 Ferrovanadium ($/lb) $12.80 $11.32 $9.76 $8.90 $6.79 (47%) (24%) Molybdenum ($/lb) $9.34 $8.47 $7.50 $5.83 $4.85 (48%) (17%) Nickel ($/MT) $15,786 $14
Slide 31: AMG Engineering Financial Data
AMG Engineering Financial Data: Net Debt & Operating Cash flow Revenue & EBITDA (in millions of US dollars) $60.9 • Q4 2015 revenue down 10% vs. Q4 2014, due entirely to $56.3 EBITDA foreign currency translation $54.7 $54.1 $54.6 effects improvement due to higher • EBITDA stayed in line Q4 2015 with
Slide 32: Strategy & Outlook
Strategy & Outlook 32
Slide 33: Strategy
Strategy AMG’s strategy is to build its critical materials business through industry consolidation, process innovation and product development Industry Pursue opportunities for horizontal and vertical industry consolidation Consolidation across AMG’s critical materials portfolio Expansion of Pursue
Slide 34: 2016 Outlook
2016 Outlook In this challenging environment, AMG will continue to reduce cost, optimize its product portfolio and maintain a conservative balance sheet AMG In this challenging environment, AMG’s management target is to maintain 2015 levels of profitability in 2016 and continue to generate strong op
Slide 35: Key Products & End Markets
Key Products & End Markets 35
Slide 36: Key Products
Key Products Revenue Gross Profit (in millions of US dollars) (in millions of US dollars) $280 Q4 2014 Q4 2014 $260.4 $44.9 $45 $240 Q4 2015 $220.8 Q4 2015 $32.4 $35 $200 $160 $25 $120 $15 $80 $5 $40 $- $(5) Q4 2014 Q4 2015 Q4 2014 Q4 2015* Vacuum Furnaces Ti Master Alloys & Coatings Al Master Alloy
Slide 37: 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 38: Critical Materials – Market Trends
Critical Materials – Market Trends Critical Materials Major End Markets Market Trends Major Customers AMG Aluminum Aerospace, Aluminum Master Alloys Fuel Efficiency Automotive Aluminum Powders AMG Vanadium Ferrovanadium Infrastructure Infrastructure Growth Ferronickel-molybdenum AMG Titanium Alloys
Slide 39: Engineering – Market Trends
Engineering – Market Trends Critical Materials 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 40: AMG – A Global Supplier of Critical Materials
A Global AMG – ASupplier of Criticalof Global Supplier Materials Critical Materials FY 2015 Revenues by End Market 20% Infrastructure 22% Specialty Metals & Chemicals Approx. 3,000 $977 million* employees annual revenues 18% Energy 40% Transportation FY 2015 Revenue by Region** AMG is a global suppl
Slide 41: Appendix
Appendix 41
Slide 42: Consolidated Balance Sheet
Consolidated Balance Sheet As at December 31, 2015 December 31, 2014 In millions of US Dollars Unaudited Fixed assets 215.8 237.4 Goodwill and intangibles 28.9 31.7 Other non-current assets 70.2 68.9 Inventories 126.4 145.4 Receivables 124.3 135.3 Other current assets 29.3 51.6 Cash 127.8 108.0 TOTA
Slide 43: Consolidated Income Statement
Consolidated Income Statement For the twelve months ended December 31, 2015 December 31, 2014 In millions of US Dollars Unaudited Revenue 977.1 1,093.9 Cost of sales 817.2 909.6 Gross profit 159.9 184.3 Selling, general & administrative 122.3 133.5 Restructuring & environmental 2.3 10.4 Asset impair
Slide 44: Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows For the twelve months ended December 31, 2015 December 31, 2014 In millions of US Dollars Unaudited EBITDA 75.6 85.7 Change in working capital and deferred revenue 21.6 39.0 Finance costs paid, net (11.4) (13.8) Other operating cash flow (3.8) (9.5) Cash flows fr
Slide 45: Investor Presentation March 2016
Investor Presentation March 2016
AMG Advanced Metallurgical Group — Investor Presentation (March 2016) on 6ix