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Investor Presentation May 2011

Amg -_investor_presentation_may_2011

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Page 1: Amg  -_investor_presentation_may_2011

Investor Presentation

May 2011

Page 2: Amg  -_investor_presentation_may_2011

2

THIS DOCUMENT IS STRICTLY CONFIDENTIAL AND IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION BY AMGADVANCED METALLURGICAL GROUP N.V. (THE “COMPANY”) AND MAY NOT BE REPRODUCED IN ANY FORM OR FURTHERDISTRIBUTED TO ANY OTHER PERSON OR PUBLISHED, IN WHOLE OR IN PART, FOR ANY PURPOSE. FAILURE TO COMPLY WITHTHIS 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 acquiresecurities 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 connectionwith, 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 anyaccompanying 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 mentionedin 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 ofapplication 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, expressor 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. TheCompany and its advisors are under no obligation to update or keep current the information contained in this presentation. To the extent allowed by law, noneof the Company or its affiliates, advisors or representatives accept any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from anyuse 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 acceptanceof new products, the impact of competitive pricing, the ability to obtain necessary regulatory approvals, and the impact of general business and global economicconditions. 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 anyof 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

Page 3: Amg  -_investor_presentation_may_2011

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Overview

Listed: NYSE-Euronext Amsterdam: AMG

Founded: 2006

Revenues: $1,072M LTM March 2011

EBITDA: $89.0M LTM March 2011

Employees: 2,600

Facilities: Netherlands, Germany, UK, USA, Brazil, France,

Turkey, Canada, Czech Republic, China, Mexico,

Belgium, Poland, India, Sri Lanka

Market cap: €412M

Shares outstanding: 27.5M

52 week range: €6.25–€16.76

Recent share price: €14.99 (May 10, 2011)

Sustainable Metals Technology Products:

High purity raw materials, metals and complex metal products

Vacuum furnaces used to produce high purity metals

Page 4: Amg  -_investor_presentation_may_2011

4

■ Serve growing end markets with high value-added specialty metal

products and engineering solutions, related to CO2 reduction and

conservation of natural resources

■ Execute through a combination of:■ Vertical integration

■ Industry consolidation

■ Continuous investment in productivity and technology

■ Serve the end markets of:■ Responsible energy production and use

■ Emerging market infrastructure

■ Aerospace and light weight materials

■ Specialty metals and chemicals

Strategy

Page 5: Amg  -_investor_presentation_may_2011

5

Advanced Materials

High-value alloys

Essential raw materials

Engineering Systems

Capital equipment for high purity

materials

Products & Markets

InfrastructureAerospaceEnergySpecialty Metals &

Chemicals

Page 6: Amg  -_investor_presentation_may_2011

6

The EU identified 14 critical raw materials(1) to the European economy –

focusing on two determinants – economic importance and supply risk

AMG currently has raw material sources for 4 of those elements

Critical Raw Materials

“Critical” raw

materials

(1) European Commission Annex V to the Report of the Ad-hoc Working Group on defining critical raw materials

Page 7: Amg  -_investor_presentation_may_2011

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Critical Raw Materials – AMG’s activities

1

HHydrogen

1.0

3

LiLithium

6.9

11

NaSodium

23.0

19

KPotassium

39.1

37

RbRubidium

85.5

55

CsCaesium

132.9

87

FrFrancium

223.0

88

RaRadium

226.0

4

BeBeryllium

9.0

20

CaCalcium40.1

38

SrStrontium

87.6

56

BaBarium

137.4

39

YYitrium

88.9

57-71

89-103

21

ScScandium

45.0

22

TiTitanium

47.9

40

ZrZirconium

91.2

72

HfHafnium

178.5

104

RfRutherfordlium

261

23

VVanadium

50.9

41

NbNiobium

92.9

73

TaTantalum

181.0

105

DbDubnium

262

24

CrChromium

52.0

42

MoMolybdenum

95.9

74

WTungsten

183.9

106

SgSeaborgium

263

25

MnManganese

54.9

43

TcTechnetium

99

75

ReRhenium

186.2

107

BhBohrium

264

26

FeIron

55.9

44

RuRuthenium

101.0

76

OsOsmium

190.2

108

HsHassium

265

27

CoCobalt

58.9

45

RhRhodium

102.9

77

IrIridium

192.2

109

MtMeitnerium

266

28

NiNickel

58.7

46

PdPalladium

106.4

78

PtPlatinum

195.1

110

DsDarmstadtium

269

29

CuCopper

63.5

47

AgSilver

107.9

79

AuGold

197.0

111

RgRoentgenium

272

30

ZnZinc

65.4

48

CdCadmium

112.4

80

HgMercury

200.6

112

UumUnunbium

277

5

BBoron

10.8

13

AlAluminum

27.0

31

GaGallium

69.7

49

InIndium

114.8

81

TlThallium

204.4

113

UutUnuntrium

284

6

CCarbon

12.0

14

SiSilicon

28.1

32

GeGermanium

72.6

50

SnTin

118.7

82

PbLead

207.2

114

UuqUnunquadium

289

7

NNitrogen

14.0

15

PPhosphorus

31.0

33

AsArsenic

74.9

51

SbAntimony

121.8

83

BiBismuth

209.0

115

UupUnunpentium

288

8

OOxygen

16.0

16

SSulfur

32.1

34

SeSelenium

79.0

52

TeTellurium

127.6

84

PoPolonium

210.0

116

UuhUnunhexium

292

9

FFluorine

19.0

17

ClChlorine

35.5

35

BrBromine

79.9

53

IIodine

126.9

85

AtAstatine

210.0

2

HeHelium

4.0

10

NeNeon

20.2

18

ArArgon

40.0

36

KrKrypton

83.8

54

XeXenon

131.3

86

RnRadon

222.0

57

LaLanthanum

138.9

89

AcActinium

132.9

90

ThThorium

232.0

58

CeCerium

140.1

59

PrPraseodymium

140.9

91

PaProtactinium

231.0

60

NdNeodymium

144.2

92

UUranium

238.0

61

PmPromethium

147.0

93

NpNeptunium

237.0

62

SmSamarium

150.4

94

PuPlutonium

242.0

62

EuEuropium

152.0

95

AmAmericium

243.0

64

GdGadolinium

157.3

96

CmCurium

247.0

65

TbTerbium

158.9

97

BkBerkelium

247.0

66

DyDysprosium

162.5

98

CfCalifornium

251.0

67

HoHolmium

164.9

99

EsEinsteinium

254.0

68

ErErbium

167.3

100

FmFermium

253.0

69

TmThallium

168.9

101

MdMendelevium

256.0

70

YbYtterbium

173.0

102

NoNobelium

254.0

71

LuLutetium

175.0

103

LrLawrencium

257.0

12

MgMagnesium

24.3

AMG manufactures products with these elements

AMG has development projects with these elements

Page 8: Amg  -_investor_presentation_may_2011

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Graphite

Primary producers of selected critical raw materials

Critical Raw Materials

Antimony Graphite

Lithium Magnesium

Silicon Titanium

Vanadium

Tantalum

Niobium

Chromium

Vanadium

Tantalum

Tantalum

Titanium Vanadium

Chromium Magnesium

Titanium

MagnesiumTitanium

Lithium

Tantalum

Antimony

Graphite

Chromium

Magnesium

AMG raw material

mines

Page 9: Amg  -_investor_presentation_may_2011

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■ Acquired aluminum master alloy producer KB Alloys, LLC for $23.5

million

■ Signed agreements to supply tantalum concentrate production through

the end of 2012

■ AMG installed a 200,000 kwh solar power facility at its Vanadium

production facility

■ AMG completed a new $300 million term debt and revolving credit

facility that does not expire until April 2016

Recent Developments

Page 10: Amg  -_investor_presentation_may_2011

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Advanced Materials - Market, Products and Customers

Products

Aerospace

Specialty alloys for titanium

Coatings for wear

resistance

Infrastructure - FeV

Ferro-vanadium

Ferro-nickel molybdenum

Specialty Metals

Competitors Reading Alloys Inc.

Evraz Group S.A.

(Stratcor)

Evraz Group S.A. (Highveld

Steel & Vanadium)

Eramet S.A. (Gulf Chemical

& Metallurgical Corporation)

Evraz Group S.A. (Stratcor)

Xstrata plc

Chengde Vanadium &

Titanium Stock Co. Ltd.

KBM Affilips B.V.

Sunxing Chemical and

Metallurgical Materials Co

Delachaux S.A.

Campine S.A.

Chemtura Corporation

Sample Customers

Chromium Metals

Tantalum

Antimony

Aluminium master alloys

Page 11: Amg  -_investor_presentation_may_2011

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Significant Metals Prices

2010-Q1 2010-Q2 2010-Q3 2010-Q4 2011 Q1

Year over

year change

Ferrovanadium $ 29,652 $ 35,759 $ 31,989 $ 30,027 $ 30,865 4.1%

Molybdenum 34,678 36,177 33,025 34,700 38,007 9.6%

Nickel 20,072 22,376 21,184 23,594 26,863 33.8%

Tantalum Oxide 87,435 111,708 160,276 206,463 260,145 197.5%

Chrome Metal 10,337 11,618 11,728 12,412 14,065 36.1%

Antimony Metal 6,518 8,771 9,603 11,273 14,243 118.5%

Silicon Metal 2,771 3,012 3,328 3,439 3,615 30.5%

■ Tantalum price movements are driven by demand for smart

phones

■ Antimony and silicon metal price movements are driven by supply

restrictions in China

Page 12: Amg  -_investor_presentation_may_2011

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Engineering Systems – Market, Products and Customers

Energy - Solar

Solar silicon melting and

crystallisation systems-

DSS furnaces

Mono2™ technology

Aerospace

Vacuum Melting and Re-

melting Systems

Precision Casting and

Coating Systems

Heat Treatment with high

pressure gas quenching

Energy - Nuclear

Vacuum Sintering

Systems for nuclear fuel

Development project for

the safe storage of

nuclear waste

Competitors GT Solar International,

Inc.

PVA TePla AG

Chinese producers

Inteco Specialty Melting

Technologies GmbH

Consarc Corporation

Aichelin GmbH

No significant competition

Sample Customers

Products

(1) Market shares are an AMG management estimate.

Page 13: Amg  -_investor_presentation_may_2011

13

Graphit Kropfmühl – Market, Products and Customers

Energy - Solar

Silicon metal for

polycrystalline for solar

cells

Specialty Metals & Chemicals

Natural graphite for

insulation, transportation

and industrial uses

Silicon metal for aluminium

and silicones

Competitors Bluestar Silicone Materials Ltd.

Globe Specialty Metals Inc.

Grupo FerroAtlantica, S.L.

Timminco Limited

Dow Corning Corporation

Wacker Chemie AG

Asbury Graphite Mills, Inc.

SGL Carbon SE

Qingdao Graphite Company, Ltd

Sample Customers

Products

Page 14: Amg  -_investor_presentation_may_2011

Financial Overview

Page 15: Amg  -_investor_presentation_may_2011

15

End Markets – by the Numbers

2011 Q1 Gross Margin by

End Market

2011 Q1 Revenue by End

Market

Energy 18.3%

Aerospace 26.1%

Infrastructure 15.3%

Specialty Metals &

Chemicals 40.3%

Energy 24.4%

Aerospace 29.9%

Infrastructure 15.5%

Specialty Metals &

Chemicals 30.3%

Page 16: Amg  -_investor_presentation_may_2011

16

Revenue by Geography

AMG generated less than 3% of revenue from Japan

2011 Q1 Revenue 2010 Full Year Revenue

Europe 52%

North America

23%

Asia 19%

South America

5%

ROW 1%

Europe 51%

North America

20%

Asia 22%

South America 5%

ROW 2%

Page 17: Amg  -_investor_presentation_may_2011

17

Financial Highlights

2011 Q1 Revenue $318.0

2011 Q1 Gross Profit $59.8

in millions

Page 18: Amg  -_investor_presentation_may_2011

18

$22.0$23.9

$18.8 $20.2

$26.2

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

Financial Highlights

$235.8 $243.5 $240.4

$270.7

$318.0

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

(in millions)

(in millions)

Q1 Revenue: $318.0 million

Up 35% from Q1 2010

Q1 EBITDA: $26.2 million

Up 19% from Q1 2010

Q1 EPS: $0.41 (1)

Up from $0.11 in Q1 2010 (1)

TTM Q1 2011

Revenue: $1072.7 million

EBITDA: $89.0 million

Operating Income: $48.9 million

EPS: $0.82 (1)

HighlightsRevenue

EBITDA

(1) Excluding the equity losses from AMG’s 42.5% ownership in Timminco Limited

Page 19: Amg  -_investor_presentation_may_2011

19

Advanced Materials

Financial Summary Highlights

( in millions)

$8.5 $14.2 $9.4 $7.7$14.6

$95.9

$152.0$154.9

$168.9

$210.8

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

Revenue EBITDA ■ Q1 2011 revenue up 50% over Q1 2010

■ KB Alloys acquisition contributed $11.0

million

■ Antimony trioxide revenue up 74%

■ Q1 2011 Gross Margin 15% of revenue

■ Q1 2011 EBITDA up 71% over Q1 2010

■ 7% of revenue

■ CAPEX

■ $1.1 million investment in hydropower

facility in Brazil

- - - - -

$3.3$4.2

$5.6

$7.3

$5.6

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

CAPEX

Page 20: Amg  -_investor_presentation_may_2011

20

Engineering Systems

Financial Summary Highlights

( in millions)

- - - - -

$12.1 $8.0 $7.4 $10.0 $5.3

$65.3

$59.5

$53.2

$67.7

$64.9

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

Revenue EBITDA

- - - - -$0.8 $1.3

$0.8

$4.9

$1.5

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

CAPEX

Q1 2011 revenue was flat compared to Q1

2010

Solar furnaces 27% of revenue

Own and Operate 15% of revenue

Order backlog increased 7% to $195.9

million at March 31, 2011

Order intake $65.7 million in Q1 2011

1.01x book to bill ratio

Q1 2011 Gross Margin 28% of revenue

Q1 2011 EBITDA down 56% from Q1 2010

8% of revenue

Page 21: Amg  -_investor_presentation_may_2011

21

Graphit Kropfmühl

Financial Summary Highlights

( in millions)

- - - - -$1.5 $1.7 $2.0 $2.5$6.3

$29.9$32.1 $32.4

$34.2

$42.3

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

Revenue EBITDA

- - - - -

$1.0$1.3

$0.7

$1.7

$1.2

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

CAPEX

Q1 2011 revenue up 41% over Q1 2010

34% increase in silicon metal revenue due

to lower contract prices

Natural graphite revenue up 57%

Q1 2011 Gross Margin 21% of revenue

Q1 2011 EBITDA up 332% over Q1 2010

15% of revenue

CAPEX

$1.2 million primarily for high purity

graphite milling expansion

Page 22: Amg  -_investor_presentation_may_2011

22

Capital Base

■ Cash: $66.1 million

■ Total debt: $267.1 million

■ Net debt: $201.0 million■ Debt to capitalization: 0.52x■ Net Debt to TTM EBITDA:

2.26x

■ Revolver availability: $37.1 million

■ Total liquidity $103.2 million

Note: Cash includes short term investments

$98.9

$84.6$90.2 $89.3

$66.1

$203.0 $204.3

$234.8 $237.1

$267.1

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

Cash Debt

( in millions)

Cash and Debt – March 31, 2011 Summary

Page 23: Amg  -_investor_presentation_may_2011

23

Outlook

■ Advanced Materials

■ Increasing demand and pricing for chromium, antimony and tantalum

■ Antimony mine ramp up is on schedule for H2 2011

■ Engineering Systems

■ Backlog is gradually improving

■ Own and Operate business is growing and will be a significant contributor

■ Graphit Kropfmühl

■ Improved silicon metal pricing; strong demand and pricing for natural graphite

■ AMG EBITDA growth in 2011 in excess of 20%

Page 24: Amg  -_investor_presentation_may_2011

24

Appendix

Page 25: Amg  -_investor_presentation_may_2011

25

Consolidated Balance Sheet

in thousands

Balance Sheet ActualFYE in December 31, 2010 March 31, 2011

Fixed assets 228.6 244.7

Goodwill and intangibles 27.0 36.6

Other non-current assets 80.7 81.9

Inventories 207.2 244.9

Receivables 175.4 206.2

Other current assets 46.9 50.9

Cash 89.3 66.1

TOTAL ASSETS 855.1 931.3

TOTAL EQUITY 234.0 248.3

Long-term debt 187.8 211.0

Pension liabilities 88.4 95.0

Other long-term liabilities 52.9 56.0

Current debt 49.3 56.0

Accounts payable 102.3 115.9

Advance payments 49.6 53.5

Accruals 43.3 55.7

Other current liabilities 47.5 39.9

TOTAL LIABILITIES 621.1 683.0

TOTAL LIABILITIES & EQUITY 855.1 931.3

Page 26: Amg  -_investor_presentation_may_2011

26

Consolidated Income Statement

in thousands

Summary Financials Actual

For the three months ended March 31 2010 2011

Revenue 235.8 318.0

Cost of sales 193.2 258.2

Gross profit 42.6 59.8

Selling, general & admin. 30.6 42.9

Asset impairment & restructuring - 0.3

Environmental 0.3 0.1

Other income (0.1) (0.9)

Operating profit 11.8 17.4

Net finance costs 3.6 0.5

Share of loss of associates 4.4 4.4

Profit before income taxes 3.8 12.5

Income tax expense 3.9 5.0

(Loss) profit for the period (0.1) 7.6

Attributable to:

Shareholders of the Company (0.1) 7.0

Non-controlling interest (0.0) 0.6

Adjusted EBITDA 22.0 26.2