amg barclays clean energy conference september 2010 final
TRANSCRIPT
AMG Advanced Metallurgical Group N.V.
Barclays Global Renewables and
Clean Technology Conference
2-3 September 2010
2AMG ADVANCED METALLURGICAL GROUP N.V.
Disclaimer
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3AMG ADVANCED METALLURGICAL GROUP N.V.
Listed on NYSE-Euronext Amsterdam (Euronext: AMG)
Products High purity metals and complex metal products
Vacuum furnaces used to produce high purity metals
2010 H1 2010 June 30 Revenues - $479.3 million
EBITDA - $45.9 million
Net debt - $119.7 million
Capital Investment - $11.9 million
Global presence Europe, North America, South America and Asia
2,500 employees
Sustainable Metals Technology
Introduction
4AMG ADVANCED METALLURGICAL GROUP N.V.
■ AMG participates in the macro economic trend of:
■ Growing demand for natural resources in context of the need
for sustainable environmental demands including: ■ CO2 reduction
■ Emerging market infrastructure
■ Aerospace and light weight materials
■ Specialty metals and chemicals
Macroeconomic Trends and Markets
5AMG ADVANCED METALLURGICAL GROUP N.V.
Advanced Materials
High-value alloys
Essential raw materials
Vacuum Furnaces
Capital equipment for high purity
materials
Products & End Markets
InfrastructureAerospaceEnergySpecialty Metals &
Chemicals
6AMG ADVANCED METALLURGICAL GROUP N.V.
End Markets
AMG Advanced Metallurgical Group N.V.
Aerospace Infrastructure EnergySpecialty Metals &
Chemicals
Titanium Alloys Structural Steel Solar Vacuum Furnaces Silicones
Superalloys Specialty Steel Superalloys Paints & Pigments
Turbine Coatings Building Materials Solar - Silicon Metal Glass, Tools & Optics
Vacuum Furnaces Nuclear Fuel Vaccum Furnaces Capacitors
Energy Storage Technologies
7AMG ADVANCED METALLURGICAL GROUP N.V.
End Products
Vacuum furnaces for solar ingot
production
Stackable
Graphite
Blocks
Energy – Solar & Nuclear
Tantalum based capacitor Paints and pigments
Specialty Metals & Chemicals
High purity stainless steel
Infrastructure – Recycling
Typical aerospace jet engine
SuperalloysTi alloys
(includes VAl)
Aerospace
8AMG ADVANCED METALLURGICAL GROUP N.V.
Markets & Products
H1 2010 Revenue by
Product
H1 2010 Revenue by End
Market
Vacuum Furnaces 26%
Al Master Alloys 15%
Ti Master Alloys and Coatings
15%
Si Metal 10%
FeV & FeNiMo 8%
Antimony 10%
Chromium Metal 8%
Tantalum & Niobium
4%
Graphite 4%
Aerospace 27%
Energy - Solar & Nuclear 23%
Infrastructure 15%
Specialty Metals & Chemicals 35%
9AMG ADVANCED METALLURGICAL GROUP N.V.
Clean Technology Innovation
10AMG ADVANCED METALLURGICAL GROUP N.V.
SCU
600plus
furnace
hot zone
top heater
crucible
& support
system
bottom
heaterheat gate
cooling
platerun out
protection
Energy – Solar Technologies
Energy – Polycrystalline Solar
ZnO:Al (AMG)
n-CdS
p-CuInS2 + Ga + Se2 (AMG)
Metal contact (AMG)
Glass
TCO
Energy – Thin Film Solar
Increasing the efficiency and cost
competitiveness of solar energy
Over $250 million of solar revenue
in 2009
New innovations driving revenues
Coatings improve thin film sunlight
to energy conversion
11AMG ADVANCED METALLURGICAL GROUP N.V.
Energy and Aerospace Technologies
Energy – Lithium for batteries Aerospace – Titanium aluminides
Tantalum Oxide
Ta2O5
Niobium Oxide
Nb2O5
Mibra MineConcentration
and Separation
Chemical Plant
Lithium
Minerals
Low weight materials improve fuel
efficiency and reduced CO2 emissions
Over 80% market share
Market expected to grow to over $50
million in the next 5 years
Sustainable mining in Brazil
Largest producer of tantalum
AMG is now able to extract lithium
minerals from mine by products
Lithium is used in energy saving
applications: lithium ion batteries
Superalloys
Ti alloys(includes VAl)
12AMG ADVANCED METALLURGICAL GROUP N.V.
Energy Technologies
Energy – Silicon metal for solar
Natural graphite used in new Neopor®
insulation
Graphite helps increase insulation
performance by over 20%
GK is the largest producer of high
purity natural graphite in Europe
Through this equity ownership in TIM
and GK, AMG has 54,000 MT of
silicon metal capacity (1)
Si metal spot prices over $3,300/MT;
historic highs due to demand shortage
UMG-Si development continues
Energy – graphite for insulation
(1) Pro-forma for pending TIM- Dow transaction
13AMG ADVANCED METALLURGICAL GROUP N.V.
Recycling and Nuclear Energy Technologies
AMG designs and manufactures
sintering furnaces for the production of
UO2 fuel pellets
Developing technology for the safe
storage of high level nuclear waste from
light water nuclear reactors
Largest recycler of spent catalysts in
North America
Recycling ferro-vanadium, nickel and
molybdenum metals
Revenue from recycling fees and sale
of end products
Energy – nuclear fuelsInfrastructure – Recycling
Ferovan®
FeV
Alloy
FeNiMoly® Alloy
Revan™
Slag
Spent
Catalyst
Residue
Oil
Sands
Oil
Power
Plants
Roas
ter
Roasted
Catalyst
Melting and
Pre-reduction
Reduction
14AMG ADVANCED METALLURGICAL GROUP N.V.
Financial Overview
15AMG ADVANCED METALLURGICAL GROUP N.V.
■ Revenue: $479.3 million
■ EBITDA: $45.9 million, 9.6% EBITDA margin■ Increases in Advanced Materials’ sales prices
■ Advanced Materials’ profitability improved substantially in Q2
■ Engineering Systems order intake remained low
■ EPS of $0.31 (1)
■ Capital investment of $11.9 million in Q2 2010
■ Cash: $84.6 million and debt of $204.3 million
■ Net debt of $119.7 million
Financial Highlights – H1 2010
(1) Excluding AMG’s 42.5% ownership in Timminco Ltd.
16AMG ADVANCED METALLURGICAL GROUP N.V.
Financial Highlights
2010 H1 Revenues $479.3
2010 H1 EBITDA $45.9
$292.5
$124.8
$62.0
Advanced Materials Engineering Systems GK
$22.7
$20.0
$3.2
Advanced Materials Engineering Systems GK
Europe56%
North America
21%
Asia18%
South America
4%ROW
1%
Revenue by Geography
17AMG ADVANCED METALLURGICAL GROUP N.V.
- -- -
$22.2$18.6
$12.4
$22.0 $23.9
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
Financial Highlights
$214.9$205.4
$231.4 $235.8$243.5
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
(in millions)
(in millions)
Q2 Revenue: $243.5 million
Up 13% from Q2 2009
Q2 EBITDA: $23.9 million
Up 8% from Q2 2009
Balance sheet highlights at June 30, 2010
Cash: $84.6 million
Debt: $204.3 million
Net debt: $119.7 million
Total liquidity: $163.6 million
HighlightsRevenue
EBITDA
18AMG ADVANCED METALLURGICAL GROUP N.V.
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.
Strategic Minerals
Corporation
Highveld Steel & Vanadium
Gulf Chemical &
Metallurgical Corporation
Strategic Minerals
Corporation
Xstrata plc
Chengde Vanadium &
Titanium Stock Co. Ltd.
KBM Affilips B.V.
KB Alloys, Inc.
Delachaux S.A.
Campine S.A.
Chemtura Corporation
Sample Customers
Chromium Metals
Tantalum
Antimony
Aluminium master alloys
19AMG ADVANCED METALLURGICAL GROUP N.V.
Advanced Materials
Financial Summary Highlights
( in millions)
-$0.5 $5.0 $5.3$8.5
$14.2
$95.9
$110.1
$124.3
$140.5
$152.0
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
Revenue EBITDA
- - -
$2.1 $1.9
$5.0
$3.3$4.2
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
CAPEX
■ Infrastructure - ferrovanadium
■ Reference prices increased 83% v. Q2
2009
■ Volumes declined 28% v. Q2 2009
■ Aerospace – master alloys prices improved 71%
v. Q2 2009
■ CAPEX
■ Expansion of ferrovanadium operations
in the United States
■ Expansion of the tantalum and lithium
mine in Brazil
20AMG ADVANCED METALLURGICAL GROUP N.V.
Engineering Systems - Market, Products and Customers
Products
Energy - Solar
Solar silicon melting and
crystallisation systems
(DSS furnaces)
Aerospace
Vacuum Melting and Re-
melting Systems
Precision Casting and
Coating Systems
Heat Treatment with high
pressure gas quenching
Energy - Nuclear
Vacuum Sintering
Systems
Notable Successes 2001 – Secured furnace
exclusivity with REC
2005 – Introduced single
crucible furnaces
2009 – >$172 mm in
revenue, 2nd largest
market participant
2010 – Market Share leader
in Ti remelting in China, the
fastest growing Ti market
2010 – Leading market share
in turbine blade coating
July 2008 – Secured first
nuclear engineering contract
with DOE, through Shaw-
Areva
Two strategic acquisitions
completed to expand product
portfolio
Sample Customers
21AMG ADVANCED METALLURGICAL GROUP N.V.
Engineering Systems
Financial Summary Highlights
( in millions)
- - - -
$22.5$11.0 $5.9 $12.1 $8.0
$91.2
$61.6$73.8 $65.3
$59.5
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
Revenue EBITDA
- - - - -
$1.7$1.2
$3.0
$0.8 $1.3
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
CAPEX
Revenue: $59.5 million, 35% decrease quarter
over quarter
Solar silicon DSS furnace revenues
decreased 67% in Q2 2010 v. Q2 2009
EBITDA: $8.0 million
Backlog declined from $162 million at
December 31 2009 to $121 million at June
30, 2010
Order backlog is now primarily
comprised of furnaces for aerospace
end market
2010 EBITDA is expected to be lower than
2009 due to the decline in backlog
22AMG ADVANCED METALLURGICAL GROUP N.V.
Graphit Kropfmühl
Financial Summary Highlights
( in millions)
- - - - -$1.7 $2.6 $1.2 $1.5 $1.7
$27.3
$33.7$33.3
$29.9$32.1
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
Revenue EBITDA
- - - - -
$1.4
$0.4
$0.8$1.0
$1.3
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
CAPEX
Revenue: $32.1 million; 17% increase over
Q2 2009 due to increases in natural graphite
prices and volumes
EBITDA: $1.7 million
Consistent with Q2 2009 due to cost
containment measures in natural
graphite and increased revenue
CAPEX only for graphite milling expansion
Natural graphite being used in energy
saving insulation applications
Silicon metal seeing stronger demand from
solar and specialty chemical markets
23AMG ADVANCED METALLURGICAL GROUP N.V.
Capital Base
■ Cash: $84.6 million
■ Total debt: $204.3 million
■ Net debt: $119.7 million
■ Revolver availability: $79.0 million
■ Total liquidity $163.6 million
31 December 2008
Note: Cash includes short term investments
$108.8$124.4
$117.0
$98.9$84.6
$193.9$202.3 $203.8 $203.0 $204.3
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
Cash Debt
Cash and Debt
( in millions)
Highlights – June 30, 2010
24AMG ADVANCED METALLURGICAL GROUP N.V.
Outlook
■ Advanced Materials
■ Demand from the Aerospace and Energy industries continues to improve from 2009, however prices and volumes for infrastructure have reached a plateau;
■ 2010 revenues and EBITDA will improve significantly
■ Engineering Systems
■ Backlog is bottoming; renewed interest in solar silicon furnaces
■ Lower order backlog will result in lower 2010 revenues and EBITDA
■ Graphit Kropfmühl
■ Natural graphite demand and pricing is improving
■ Timminco
■ AMG owns 42.5% of Timminco
■ Timminco signed an agreement to sell 49% of its silicon metal operations for $39.7 million; up to $10 million more based upon meeting performance metrics
AMG Advanced Metallurgical Group N.V.