Embed Size (px)
DESCRIPTION
Citation preview
2
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. FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF APPLICABLE SECURITIES LAWS.
This presentation does not constitute or form part of, and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company or any of its subsidiaries nor should it or any part of it, nor the fact of its distribution, form the basis of, or be relied on in connection with, any contract or commitment whatsoever.
This presentation has been prepared by, and is the sole responsibility of, the Company. This document, any presentation made in conjunction herewith and any accompanying materials are for information only and are not a prospectus, offering circular or admission document. This presentation does not form a part of, and should not be construed as, an offer, invitation or solicitation to subscribe for or purchase, or dispose of any of the securities of the companies mentioned in this presentation. These materials do not constitute an offer of securities for sale in the United States or an invitation or an offer to the public or form of application to subscribe for securities. Neither this presentation nor anything contained herein shall form the basis of, or be relied on in connection with, any offer or commitment whatsoever. The information contained in this presentation has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information or the opinions contained herein. The Company and its advisors are under no obligation to update or keep current the information contained in this presentation. To the extent allowed by law, none of the Company or its affiliates, advisors or representatives accept any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with the presentation.
Certain statements in this presentation constitute forward-looking statements, including statements regarding the Company's financial position, business strategy, plans and objectives of management for future operations. These statements, which contain the words "believe,” “expect,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “will,” “may,” “should” and similar expressions, reflect the beliefs and expectations of the management board of directors of the Company and are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, among other factors, the achievement of the anticipated levels of profitability, growth, cost and synergy of the Company’s recent acquisitions, the timely development and acceptance of new products, the impact of competitive pricing, the ability to obtain necessary regulatory approvals, and the impact of general business and global economic conditions. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein.
Neither the Company, nor any of its respective agents, employees or advisors intend or have any duty or obligation to supplement, amend, update or revise any of the forward-looking statements contained in this presentation.
The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice.
This document has not been approved by any competent regulatory or supervisory authority.
Cautionary Note
3
Overview
Listed: NYSE-Euronext Amsterdam: AMG
Founded: 2006
LTM Revenues: $1,249.1M
LTM EBITDA: $91.9M
Employees: 3,100
Facilities: Netherlands, Germany, UK, USA, Brazil, France, China, Belgium, Turkey, Poland, India, Sri Lanka, Czech Republic
Market cap: €170M ($220M)
Shares outstanding: 27.5M
52 week range: €5.81–€10.56
Recent share price: €6.18 (November 13, 2012)
AMG provides high value-added specialty metal alloys and engineering systems, related to CO2 reduction and conservation of natural resources to growing end markets
4
Antimony Tantalum
High-value alloys Critical raw materials
Capital equipment for high purity materials
Silicon metal Natural graphite
Advanced Materials Engineering Systems
Business Units, Products and End Markets
Infrastructure Aerospace Energy
Graphit Kropfmühl
Specialty Metals & Chemicals
AMG Mining
66% of YTD Q3 revenue 60% of YTD Q3 EBITDA
22% of YTD Q3 revenue 18% of YTD Q3 EBITDA
12% of YTD Q3 revenue 22% of YTD Q3 EBITDA
Creating new reporting segment in 2013
5
Advanced Metallurgical Technology
Vertical Integration
Operational Efficiency
Why Invest in AMG
Revenue 2009 – 2011
24.8% CAGR
2011:
$ 1,351.3 million + 36% over 2010
EBITDA
EPS
2009 – 2011 26.2% CAGR
2011:
$ 110.1 million + 30% over 2010
Strong growth in 2011
Adjusted 2011 EPS:
$1.34 + 79% over 2010
ROCE 2009 – 2011
19.9% CAGR
2011:
15.1% + 27% over 2010
Increase Shareholder
Value
6
Critical Raw Materials Matrix ■ USA, Germany, UK and EU have each identified critical materials – common factors
include supply risks, economic importance and technology demand ■ AMG mines or processes 13 of those critical materials
7
Advanced Materials Input & Critical Raw Materials
Key Products
Conversion
Recycling
Material Science
Aerospace
Infrastructure
Specialty Metals &
Chemicals
Specialty alloys for titanium Coatings for
wear resistance
Everyday Applications
Sample Customers
Recycling Ferrovanadium Ferro-nickel
molybdenum
Mining
Conversion
Tantalum concentrate and powder Antimony
trioxide Chromium
metals Aluminium
master alloys
End Markets
Surface Coating
Property Modification
Property Modification
Surface Coating
Property Modification
FeV is added into high-strength light-weight steel as used in the Shanghai World Financial Center²
A Boeing 787 Dreamliner requires ~250,000 lb titanium product purchased for manufacturing, 5x more than the A340 comparable airplane¹
An iPhone contains ~469 tantalum capacitors³
¹ Titanium Metal Industry Primer, by J.P. Morgan research, on January 23, 2012 and TIMET 2010 AR; Per Boeing, titanium constitutes 15% of its airframe weight ² Resource Revolution: Meeting the world’s energy, materials, food, and water needs, McKinsey, November 2011 ³ iSuppli in August 2010
8
Nearly 90% of all nuclear residues from reprocessing of Pu are processed into new fuels with AMG’s technology¹
Engineering Systems Input & Critical Raw Materials
Key Products
Technology
Material Science
Aerospace
Energy – Efficiency
Energy – Nuclear
Vacuum Melting and Remelting Systems Precision Casting
and Coating Systems Heat Treatment
with high pressure gas quenching
Everyday Applications
Sample Customers
Technology Heat Treatment Systems Heat Treatment
Services
Technology Vacuum Sintering and Annealing Systems for nuclear fuel Development
project for the safe storage of nuclear waste
End Markets
Surface Coating
Property Modification
Property Modification
Property Modification
All modern turbine engines use titanium compressor blades and discs to reduce weight and lower CO2 emission¹
33% of all new energy saving automotive gears are produced by using AMG’s heat treatment processes1
¹ AMG Management
9
Li-iron batteries for electric vehicles (EV) can use graphite as anode. One car battery requires ~24 Kg graphite.³
Graphit Kropfmühl Input & Critical Raw Materials
Key Products
Mining
Conversion
Material Science
Infrastructure
Energy – Solar
Specialty Metals &
Chemicals
Natural graphite for heat insulation materials for building construction
Everyday Applications
Sample Customers
Conversion Silicon metal for polycrystalline for solar cells
Mining
Conversion
Natural graphite for transportation and lithium-ion batteries Silicon metal
for aluminum and silicones
End Markets
Property Modification
Property Modification
Property Modification
Improving energy efficiency in buildings could provide ~19% of the total benefits thus increasing resource productivity¹
In 2010, ~ 87% of solar cells are silicon-based²
¹ Resource Revolution: Meeting the world’s energy, materials, food, and water needs, McKinsey, November 2011 ³ Solarbuzz ³ AMG Management
10
AMG is committed to improving operational performance and cash flow generation ■ Process begun in Q3 with implementation of a clear and direct management
structure throughout the organization ■ Objectives
■ Reduce SG&A by 5% ■ Improve Gross Margin and lower cost structure ■ Increase Operating Cash flow ■ Reduce debt
■ Tying objectives directly to incentive compensation plans ■ Instituting a number of operational improvement initiatives companywide
Recent Developments – Operations Update
Increase Shareholder Value
11
■ AMG now owns 100% of Graphit Kropfmühl AG (“GK”) ■ Merged GK into AMG Mining AG in October ■ Acquired GK at an average €20 share price (€58M)
■ AMG is now consolidating all mining activities in AMG Mining ■ AMG Mining will report as a new segment in Q1 2013 ■ Consists of Antimony, Tantalum, Graphite, and Silicon businesses
■ In September the antimony oxidation furnace in Turkey entered operation ■ Completed construction of the mineral processing facility, currently in start
up phase
■ In October, AMG entered into a multiyear agreement to supply a substantial portion of the MIBRA tantalum mine output to an industry participant ■ Shipments commence in Q2 2013 ■ Achieved record production levels in Q3 which yielded a 14% cost reduction
Recent Developments – AMG Mining
12
AMG Mining Antimony Shaking Tables & Concentration Thickener
Recent Developments – AMG Mining
13
Financial Highlights
14
Revenue
- - - - - - - - - -
$27.7 $24.8 $21.9 $23.6
$21.6
Down 22% YoY
Q3 11 Q4 11 Q1 12 Q2 12 Q3 12
Financial Highlights
$356.4
$308.6 $324.0 $319.6
$296.9
Down 17% YoY
Q3 11 Q4 11 Q1 12 Q2 12 Q3 12
■ Q3 2012 EPS: $0.18
■ Down from $0.29 in Q3 2011
■ LTM EPS: $0.38 (1)
Gross Profit
EBITDA
(in USD millions)
Adjusted EPS
- - - - - - - - - -
$58.7 $50.5 $53.4 $54.0
$47.7
Down 19% YoY
Q3 11 Q4 11 Q1 12 Q2 12 Q3 12
LTM: $1,249.1
LTM: $91.9
(in USD millions) LTM: $205.6
(in USD millions)
(1) Adjusted to exclude Timminco
15
10.5% 11.9%
15.1%
8.0%02009 2010 2011
Capital Base
■ Net debt: $198.5 million ■ Debt to capitalization: 0.58x ■ Net Debt to LTM EBITDA: 2.16x
■ Revolver availability: $55.9 million ■ Total liquidity: $167.3 million ■ AMG’s primary debt facility is a $377
million term loan and revolving credit facility ■ 5 year term – until 2016 ■ Secured an additional $62 million for
its credit facility in 2012 in conjunction with the Voluntary Tender Offering for GK
$71.3 $79.6 $81.2 $93.6
$111.4
$274.9 $268.6 $287.6 $305.9 $309.9
Q3 11 Q4 11 Q1 12 Q2 12 Q3 12
Cash Debt ( in USD millions)
Cash and Debt
ROCE
16
Key Products
YTD Q3 2012: $940.4
Revenue Gross Profit
YTD Q3 2012: $155.1 ( in USD millions) ( in USD millions)
17
End Markets
Aerospace + 8% vs. Q3 2011
Energy - 42% vs. Q3 2011
YTD Q3 2012: $940.4
Revenue Gross Profit
YTD Q3 2012: $155.1 ( in USD millions) ( in USD millions)
Aerospace 32.6%
Infrastructure 14.3%
Energy 14.7%
Specialty Metals & Chemicals
38.4%
Aerospace 36.7%
Energy 17.9%
Specialty Metals & Chemicals
29.6%
Infrastructure 15.8%
18
■ Q3 ‘12 revenue down 17% from Q3 ‘11 ■ Tantalum up 28% ■ Antimony down 33% ■ Aluminium down 22%
■ Q3 ‘12 gross margin 14% of revenue, improved from 13% in Q3 ‘11 ■ Improved product mix ■ Increase in tantalum pricing
■ Q3 ‘12 EBITDA margin 6% of revenue, improved from 5% in Q3 ‘11 ■ 12% decrease in operating expenses
■ Q3 ‘12 CAPEX $7.0 million ■ $2.6 million for FeV expansion ■ $0.7 million for Tantalum expansion
$226.8
$198.7 $216.5 $211.7
$189.2
$12.3
$6.0
$13.7 $14.5
$12.1
$1.0
$6.0
$11.0
$16.0
$21.0
$-
$50.0
$100.0
$150.0
$200.0
$250.0
Q3 11 Q4 11 Q1 12 Q2 12 Q3 12
Revenue EBITDA
Advanced Materials
Financial Summary
- - - - -
$6.6
$10.7 $8.3
$6.2 $7.0
Q3 11 Q4 11 Q1 12 Q2 12 Q3 12
Capital Expenditure
( in USD millions)
( in USD millions)
19
Q3 ‘12 revenue down 18% from Q3 ‘11 Casting and sintering furnaces up 47% Remelting furnaces up 34% DSS furnaces down 92% Nuclear furnaces down 51%
Q3 ‘12 gross margin 21% of revenue down from 24% in Q3 ‘11 Unfavourable product mix
Q3 2012 EBITDA 7% of revenue SG&A down 16%
Order backlog up 8% to $162.2 million at Sep. 30, 2012 Order intake $79.7 million in Q3 ‘12 1.12x book to bill ratio
$86.3
$72.9 $68.0 $65.4
$71.1
$9.3
$11.8
$3.0 $3.7 $5.3
$-
$5.0
$10.0
$15.0
$20.0
$25.0
$-
$20.0
$40.0
$60.0
$80.0
$100.0
Q3 11 Q4 11 Q1 12 Q2 12 Q3 12
Revenue EBITDA
Engineering Systems
Financial Summary
- - - - -
$68.5 $69.5 $80.6
$36.4
$79.7
Q3 11 Q4 11 Q1 12 Q2 12 Q3 12
Order Intake
( in USD millions)
( in USD millions)
20
Q3 ‘12 revenue down 16% from Q3 ‘11 Silicon metal down 17% Natural graphite down 13%
Q3 ‘12 gross margin 17% of revenue Unfavourable product mix for natural
graphite and silicon metal
Q3 ‘12 EBITDA 11% of revenue SG&A down 13%
■ Q3 ‘12 CAPEX $2.2 million Upgrading silicon metal electric arc
furnace
$43.3
$37.0 $39.5
$42.5
$36.5
$6.2 $7.0
$5.2 $5.4 $4.2
$1.0
$6.0
$11.0
$-
$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
$35.0
$40.0
$45.0
$50.0
Q3 11 Q4 11 Q1 12 Q2 12 Q3 12
Revenue EBITDA
Graphit Kropfmühl
Financial Summary
- - - - -
$2.7 $3.2
$2.2 $2.8
$2.2
Q3 11 Q4 11 Q1 12 Q2 12 Q3 12
Capital Expenditure
( in USD millions)
( in USD millions)
Outlook
22
Outlook
■ AMG is implementing operational initiatives to improve cash flow and significantly reduce debt ■ AMG expects trading conditions to continue to be challenging for the balance of 2012 ■ AMG announces Q4 2012 financial results on March 19, 2013
Consolidating mining businesses under AMG Mining
The Antimony mineral processing facility is operational
Tantalum production volumes substantially improved
Multiyear Ta contract
Global slowdown impacting most Advanced Materials’ products
Demand for aerospace alloys is stable
AMG Aluminum production optimization is ongoing
Generating consistent order intake, but at a subdued level
Global capital goods spending is challenging
Completion of merger should realize >$1M cost saving synergies in 2013
Moderating demand affecting natural graphite and silicon metal volumes
Advanced Materials Engineering Systems Graphit Kropfmühl AMG Mining
23
Appendix
24
Consolidated Balance Sheet Balance Sheet ($’000) Actual As of 31-Dec-11 30-Sep-12 Fixed assets 263.6 278.1 Goodwill and intangibles 38.1 40.9 Other non-current assets 63.4 65.5 Inventories 228.9 218.6 Receivables 188.1 201.3 Other current assets 39.1 50.3 Cash 79.6 111.4 TOTAL ASSETS 900.8 966.1 TOTAL EQUITY 220.6 222.9 Long-term debt 210.4 267.0 Pension liabilities 90.1 90.9 Other long-term liabilities 71.6 75.7 Current debt 58.2 42.9 Accounts payable 128.5 139.2 Advance payments 30.2 34.3 Accruals 51.7 58.3 Other current liabilities 39.5 34.8 TOTAL LIABILITIES 680.2 743.2 TOTAL LIABILITIES & EQUITY 900.8 966.1
25
Consolidated Income Statement Income Statement ($’000) Actual For the three months ended 30-September-11 30-September-12 Revenue 356.4 296.9 Cost of sales 297.7 249.2 Gross profit 58.7 47.7 Selling, general & admin. 40.6 34.5 Asset impairment & restructuring - 0.5 Environmental 0.1 1.7 Other income (1.7) (0.2) Operating profit 19.6 11.2 Net finance costs 6.5 4.3 Share of (loss) profit of associates (0.7) 0.2 Profit before income taxes 12.4 7.1 Income tax expense 3.8 2.1 Profit (loss) for the period 8.6 5.0 Attributable to: Shareholders of the Company 8.0 5.1 Non-controlling interest 0.6 (0.1) Adjusted EBITDA 27.8 21.6
26
Consolidated Statement of Cash Flows
Cash Flow Statement ($’000) Actual For the nine months ended 30-September-11 30-September-12 EBITDA 85.4 67.1 +/- Change in operating assets/liabilities (48.8) (11.4) -Interest paid, net (5.5) (10.0) Other operating cash flow 5.2 (0.6) Cash flows from operations before taxes 36.3 45.1 Income tax paid (25.9) (11.6) Total cash flows (used in) from operations 10.4 33.5 Capital expenditures (31.7) (33.9) Other investing activities (26.3) (0.1) Cash flows from investing activities (58.0) (34.0) Cash flows from financing activities 28.0 32.2 Net (decrease) increase in cash (19.6) 31.7 Beginning cash 89.3 79.6 Effects of exchange rates on cash 1.6 0.1 Ending cash 71.3 111.4
