Amg investor presentation december 2010

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<ul><li>1.Investor Presentation December 2010 AMG Advanced Metallurgical Group N.V. </li></ul><p>2. Disclaimer 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, anyoffer 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 theCompany 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 Companys 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. AMG ADVANCED METALLURGICAL GROUP N.V. 2 3. Introduction Listed on NYSE-Euronext Amsterdam (Euronext: AMG) Products High purity metals and complex metal products Vacuum furnaces used to produce high purity metals 2010 YTD September 30 2010 Revenues - $719.8 million EBITDA - $64.7 million, 9.0% margin EPS of $0.42 (1) Net debt - $144.6 million Capital Investment - $19.1 million Global presence Europe, North America, South America and Asia 2,500 employeesSustainable Metals Technology (1) Excluding the equity losses from AMGs 42.5% ownership in Timminco Limited AMG ADVANCED METALLURGICAL GROUP N.V. 3 4. Macroeconomic Trends and Markets AMG participates in the macro economic trend of: Growing demand for natural resources in context of CO2 reduction and sustainable environmental demands for: Responsible energy production and use Emerging market infrastructure Aerospace and light weight materials Specialty metals and chemicalsAMG ADVANCED METALLURGICAL GROUP N.V. 4 5. Products &amp; Markets Advanced Materials Engineering Systems High-value alloys Capital equipment for high purity Essential raw materials materials Specialty Metals &amp; EnergyAerospace Infrastructure ChemicalsAMG ADVANCED METALLURGICAL GROUP N.V. 5 6. MarketsAMG Advanced Metallurgical Group N.V. Specialty Metals &amp;AerospaceInfrastructureEnergyChemicalsTitanium Alloys Structural SteelSolar Vacuum FurnacesSilicones SuperalloysSpecialty Steel Superalloys Paints &amp; Pigments Turbine Coatings Building Materials Silicon Metal Glass, Tools &amp; OpticsVacuum FurnacesNuclear Fuel Vaccum FurnacesCapacitorsEnergy Storage Technologies AMG ADVANCED METALLURGICAL GROUP N.V. 6 7. ProductsAerospace Infrastructure Recycling Ti alloys(includes VAl) SuperalloysHigh purity stainless steelTypical aerospace jet engine Energy Solar &amp; Nuclear Specialty Metals &amp; ChemicalsStackable GraphiteBlocks Tantalum based capacitor Paints and pigments Vacuum furnaces for solar ingotproduction AMG ADVANCED METALLURGICAL GROUP N.V. 7 8. Markets &amp; Products by the Numbers YTD 2010 Revenue by YTD 2010 Revenue byEnd MarketProductTantalum &amp;Graphite 5% Niobium4% ChromiumMetal 8%Aerospace 26%Vacuum Furnaces25%Specialty Metals &amp; Chemicals 36% Antimony 11%FeV &amp; FeNiMoEnergy - Solar &amp;8% Nuclear 22%Al Master Alloys 14%Si Metal 9% Infrastructure 16% Ti Master Alloysand Coatings16% AMG ADVANCED METALLURGICAL GROUP N.V. 8 9. Advanced Materials - Market, Products and CustomersAerospaceInfrastructure - FeV Specialty MetalsProducts Specialty alloys for titanium Ferro-vanadium Chromium Metals Coatings for wear Ferro-nickel molybdenum Tantalum resistance Antimony Aluminium master alloys Competitors Reading Alloys Inc. Evraz Group S.A. (Highveld KBM Affilips B.V. Steel &amp; Vanadium) Evraz Group S.A. KB Alloys, Inc. (Stratcor) Eramet S.A. (Gulf Chemical Delachaux S.A. &amp; Metallurgical Corporation Campine S.A. Evraz Group S.A. (Stratcor) Chemtura Corporation Xstrata plc Chengde Vanadium &amp; Titanium Stock Co. Ltd. Sample CustomersAMG ADVANCED METALLURGICAL GROUP N.V. 9 10. Advanced Materials Specialty Metals AcquisitionMaterial Antimony AMG is the largest producer of antimony trioxide (a flame retardant) in Europe Transaction In August 2010 AMG acquired antimony mining rights and an adjacent antimony metal smelter in Turkey for a total investment of up to approximately $20 million Strategic Secure supply of antimony raw material used in AMGs antimony trioxide operation Rationale AMG uses approximately 10,000 mt of antimony metal per year Antimony metal prices have increased from $4,500/mt in 2009 to over $10,000/mt in October 2010 This will result in substantial raw material cost savings in 2011Competitors Campine S.A., Chemtura Corporation, Hsikwangshan Twinkling Star Antimony Co. LtdAntimony MetalOxidationAntimony Dispersions, Pastes, PurchaseProcess Trioxide Granules, MicrogranulesAMG ADVANCED METALLURGICAL GROUP N.V. 10 11. Advanced Materials - Infrastructure metals pricing $60$250$50Price / Pound V, Mo, Ni$200$40 $150$30 $100$20$10 $50 $0 $0 2000 2001200220032004 2005 20062007 20082009 2010 Ferro VanadiumMolybdenum Nickel Prices are still below pre-crisis levels AMG ADVANCED METALLURGICAL GROUP N.V. 11 12. Engineering Systems - Market, Products and Customers Energy - SolarAerospace Energy - Nuclear Solar silicon melting and Vacuum Melting and Re- Vacuum Sintering Productscrystallisation systems melting SystemsSystems(DSS furnaces) Precision Casting andCoating Systems Heat Treatment with highpressure gas quenching Notable Successes 2005 Introduced single 2010 Market Share leader Secured first nuclearcrucible furnaces in Ti remelting in China, theengineering contract withfastest growing Ti marketDOE, through Shaw-Areva 2005 2009 &gt;$172 mmin revenue, 2nd largest 2010 Leading market share Two strategic acquisitionsmarket participantin turbine blade coating completed to expand product portfolio 2010 Introduced SCU600+ DSS systemSample Customers AMG ADVANCED METALLURGICAL GROUP N.V. 12 13. Financial OverviewAMG ADVANCED METALLURGICAL GROUP N.V. 13 14. Financial Highlights YTD September 20102010 YTD Revenue2010 YTD EBITDA$719.8$64.7 $5.1$94.4 $178.0$27.5$32.1$447.4Revenue by GeographyAdvanced MaterialsEngineering SystemsAdvanced MaterialsEngineering Systems Graphit KropfmhlGraphit Kropfmhl NorthAmerica21% Asia18% Europe56%South America 4% ROW1% Revenue and EBITDA in millions AMG ADVANCED METALLURGICAL GROUP N.V. 14 15. Financial Highlights Revenue Highlights (in millions) Q3 Revenue: $240.4 million Up 17% from Q3 2009 Q3 EBITDA: $18.8 million $243.5$231.4 $235.8 $240.4 Up 1% from Q3 2009$205.4 Q3 EPS: $0.11 Up from ($0.50) in Q3 2009Q3 09 Q4 09 Q1 10Q2 10Q3 10 EBITDA (in millions) YTD Revenue: $719.8 million Up 13% from YTD 2009 YTD EBITDA: $64.7 million $23.9 Up 14% from YTD 2009$22.0 $18.6$18.8 $12.4 YTD EPS: $0.42 (1)--- Up from ($0.65) YTD 2009 (1)Q3 09Q4 09Q1 10Q2 10Q3 10 (1) Excluding the equity losses from AMGs 42.5% ownership in Timminco LimitedAMG ADVANCED METALLURGICAL GROUP N.V. 15 16. Advanced MaterialsFinancial SummaryHighlights ( in millions) RevenueEBITDA Infrastructure - ferrovanadium $152.0$154.9 Reference prices increased 18% v. Q3 $140.5 2009 Volumes improved 32% v. Q3 2009$124.3 Ferronickel-molybdenum demand$95.9 decreased 43% v. Q3 2009 Aerospace master alloys prices declined 23%v. Q3 2009; volumes improved 165%$8.5 $14.2$9.4 CAPEX$5.0$5.3 Expansion of ferrovanadium operationsQ3 09 Q4 09Q1 10 Q2 10 Q3 10in the United States CAPEX$5.0$5.6 $4.2 $3.3 $1.9 --- - -Q3 09 Q4 09Q1 10 Q2 10 Q3 10AMG ADVANCED METALLURGICAL GROUP N.V. 16 17. Engineering SystemsFinancial SummaryHighlights ( in millions) RevenueEBITDA Q3 revenue decreased 14% v. Q3 2009$73.8 Solar silicon DSS furnace revenues$65.3$61.6decreased 44% in Q3 2010 v. Q3 2009 $59.5 $53.2 Q3 EBITDA decreased 33% v. Q3 2009 September 30, 2010 Backlog improved to$147.1 million from $121 million at June 30,2010 Order intake $66.9 million in Q3 2010$11.0$5.9$12.1$8.0 $7.4 1.26x book to bill ratio---- -Q3 09 Q4 09 Q1 10 Q2 10Q3 10 Diversified backlog - solar, aerospace and transportation CAPEX$3.0 $1.2 $1.3 $0.8 $0.8- --- -Q3 09 Q4 09 Q1 10 Q2 10Q3 10 AMG ADVANCED METALLURGICAL GROUP N.V. 17 18. Graphit Kropfmhl Financial SummaryHighlights( in millions) RevenueEBITDA Q3 revenue decreased 4% v. Q3 2009 $33.7 Decrease in silicon metal revenues due to $33.3$32.1 $32.4 $29.9 production issues Silicon metal down 7% Natural graphite up 37% Q3 EBITDA decreased 23% v. Q3 2009 Lower revenues and higher costs in silicon metal $2.6 $1.5$1.7$2.0 -$1.2- - -- Silicon metal down $1.0 millionQ3 09Q4 09 Q1 10 Q2 10 Q3 10 Natural graphite up $0.5 million CAPEX for graphite milling expansion CAPEX$1.3 $1.0 $0.8$0.7$0.4-- - - -Q3 09Q4 09 Q1 10 Q2 10 Q3 10 AMG ADVANCED METALLURGICAL GROUP N.V. 18 19. Capital Base Cash and Debt Highlights September 30, 2010( in millions) Cash: $90.2 millionCashDebt Total debt: $234.8 million $234.8$204.3 Net debt: $144.6 million $202.3 $203.8 $203.0 Revolver availability: $61.3 million Total liquidity $151.5 million$124.4 $117.0 $98.9 $90.2$84.6Q3 09 Q4 09Q1 10Q2 10Q3 10 Note: Cash includes short term investmentsAMG ADVANCED METALLURGICAL GROUP N.V. 19 20. Outlook Advanced Materials Markets are improving but remain volatile Antimony, tantalum and aerospace alloys and coatings will drive growth in 2011 Engineering Systems Backlog is increasing; renewed interest in solar silicon furnaces Order intake driven by Chinese and Indian markets Graphit Kropfmhl High purity natural graphite demand and pricing is improving Timminco AMG owns 42.5% of Timminco; not consolidated Timminco sold 49% of its silicon metal operations for C$40.3 million; up to C$10.0 million more based upon meeting performance metrics Repaid all of its senior bank debt (non-recourse to AMG)AMG ADVANCED METALLURGICAL GROUP N.V. 20 21. AppendixAMG ADVANCED METALLURGICAL GROUP N.V. 21 22. Consolidated Balance SheetDecember 31, 2009 September 30, 2010Fixed assets211,022 212,440 Goodwill and intangibles28,253 38,924 Other non-current assets78,209 54,848Inventories 193,378 202,318 Receivables 147,787 177,586 Other current assets35,313 48,903 Cash117,01690,213 TOTAL ASSETS810,978 825,232TOTAL EQUITY228,423 219,427Long-term debt168,319 184,499 Pension liabilities 91,358 88,500 Other long-term liabilities 51,249 34,896Current debt35,477 50,295 Accounts payable69,791 84,450 Advance payments54,764 44,556 Accruals46,179 48,061 Other current liabilities 65,418 70,548 TOTAL LIABILITIES 582,555 605,805TOTAL LIABILITIES AND EQUITY810,978 825,232in thousands AMG ADVANCED METALLURGICAL GROUP N.V. 22 23. Consolidated Income StatementQ3 2009Q3 2010Revenue205,406240,427 Cost of sales165,457198,325 Gross profit39,949 42,102Selling, general and admin.31,87631,682 Asset impairment and restructuring5,302 - Environmental 4,075257 Other income (1,194)(270)Operating profit(110)10,433Net finance costs 5,465 2,921Share of loss of associates(1,285)(17,554)Profit before income taxes (6,860)(10,042)Income tax expense5,694 325Profit for the year from continuing operations (12,554) (10,367)Loss after tax for the year from discontinued operations (14,240) -Loss for the year(26,794) (10,367)Attributable to: Shareholders of the Company(20,302) (11,170) Minority interest (6,492) 803in thousands AMG ADVANCED METALLURGICAL GROUP N.V. 23 24. Consolidated Cash FlowsNine months endedNine months ended September 30, 2009 September 30, 2010Cash Flows from Operations (6,033)(13,903)Capital Expenditures(20,755)(19,054)Other Investing Activities(55,796)(26,622)Cash Flows from Investing Activities(76,551)(45,676)Cash Flows from Financing Activities 59,24736,812Net increase (decrease) in cash (23,337)(22,767)Beginning Cash143,473117,016Effects of exchange rates on cash4,255 (4,036)Ending Cash 124,39190,213 Approximate availability under AMG lines of credit 97,70861,300Total Liquidity 222,099151,513in thousands AMG ADVANCED METALLURGICAL GROUP N.V. 24 25. AMG Advanced Metallurgical Group N.V. </p>