amg investor presentation july 2012

Investor Presentation July 2012

http://www.amg-nv.com/index.php

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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

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Overview

Listed: NYSE-Euronext Amsterdam: AMG

Founded: 2006

2011 Revenues: $1,351.3M

2011 EBITDA: $110.1M

Employees: 3,154

Facilities: Netherlands, Germany, UK, USA, Brazil, France, China, Belgium, Turkey, Poland, India, Sri Lanka, Czech Republic

Market cap: €182M ($231M)

Shares outstanding: 27.5M

52 week range: €5.81–€13.70

Recent share price: €6.63 (June 30, 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

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Antimony and 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

67% of Q1 2012 revenue 62% of Q1 2012 EBITDA



Creating new reporting segment in 2012

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Advancing productivity

and technology

Vertical Integration

Horizontal Consolidation

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

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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

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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


Surface Coating


FeV is added into high-strength light-weight steel as used in the Shanghai World Financial Center²

A Boeing 787 Dreamliner contains ~250,000 lb titanium, 5x more than a comparable airplane, the A340¹

An iPhone installed ~469 tantalum capacitors³

¹ Titanium Metal Industry Primer, by J.P. Morgan research on January 23, 2012 ² Resource Revolution: Meeting the world’s energy, materials, food, and water needs, by McKinsey, November 2011 ³ iSuppli in August 2010

http://en.wikipedia.org/wiki/File:Logo_of_Hindlaco.png

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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 – Solar

Energy – Nuclear

Vacuum Melting and Re-melting Systems Precision Casting

and Coating Systems Heat Treatment

with high pressure gas quenching


Sample Customers

Technology Solar silicon melting and crystallisation systems- DSS furnaces Mono2(TM)

technology

Technology Vacuum Sintering and Annealing Systems for nuclear fuel Development

project for the safe storage of nuclear waste

End Markets

Surface Coating




All modern turbine engines use titanium compressor blades and discs to reduce weight and lower CO2 emission¹

Solar power could achieve $1 per watt by 2020, down from $4 per watt in 2010²

¹ AMG Management ² Resource Revolution: Meeting the world’s energy, materials, food, and water needs, by McKinsey in November 2011

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Li-iron batteries for electric vehicles (EV) typically 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


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




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, by McKinsey in November 2011 ³ Solarbuzz ³ AMG Management

http://www.hoganas.com/en/

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Financial Highlights

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Revenue

$26.2 $31.4

$27.7 $24.8

$21.9

Down 16% YoY

Q1 11 Q2 11 Q3 11 Q4 11 Q1 12

Financial Highlights

$318.0

$368.3 $356.4 $308.6

$324.0

Up 2% YoY

Q1 11 Q2 11 Q3 11 Q4 11 Q1 12

■ Q1 2012 EPS: $0.26 (1)

■ Down 26% from Q1 2011 (1)

■ LTM EPS: $1.25 (1)

2011 Gross Profit

EBITDA

(in USD millions)

Adjusted EPS

- - - - - - - - - -

$59.8 $69.0

$58.7 $50.5

$53.4

Down 11% YoY

Q1 11 Q2 11 Q3 11 Q4 11 Q1 12

LTM: $1,357.3

LTM: $105.8

(in USD millions) LTM: $231.6

(in USD millions)

(1) Adjusted to exclude non-recurring charges and Timminco Results

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10.5% 11.9%

15.1%

8.0%02009 2010 2011

Capital Base

■ Net debt: $206.4 million ■ Debt to capitalization: 0.55x ■ Net Debt to LTM EBITDA: 1.95x

■ Revolver availability: $47.9 million ■ Total liquidity: $129.1 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 Q1 2012 in conjunction with the Voluntary Tender Offering for GK

$66.1 $61.1 $71.3 $79.6

$81.2

$267.1 $278.5 $274.9 $268.6 $287.6

Q1 11 Q2 11 Q3 11 Q4 11 Q1 12

Cash Debt ( in USD millions)

Cash and Debt

ROCE

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Key Products

Q1 2012: $324.0

Revenue Gross Profit

Q1 2012: $53.4 ( in USD millions) ( in USD millions)

$-

$50

$100

$150

$200

$250

$300

YTD Q1 2011 YTD Q1 2012

Vacuum Furnaces Ti Master Alloys and CoatingsAl Master Alloys and Powders FeV & FeNiMoAntimony Chromium MetalTantalum & Niobium GraphiteSi Metal

$-

$10

$20

$30

$40

$50

$60

YTD Q1 2011 YTD Q1 2012

Vacuum Furnaces Ti Master Alloys and CoatingsAl Master Alloys and Powders FeV & FeNiMoAntimony Chromium MetalTantalum & Niobium GraphiteSi Metal

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End Markets

Aerospace + 26% v. Q1 2011

Infrastructure + 3% v. Q1 2011

Q1 2012: $324.0

Revenue Gross Profit

Q1 2012: $53.4 ( in USD millions) ( in USD millions)

Aerospace 32.4%

Infrastructure 14.2%

Energy 14.3%


39.1%

Aerospace 33.5%

Energy 19.6%


29.1%

Infrastructure 17.8%

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■ Q1 2012 revenue up 3% from Q1 2011 ■ Titanium master alloys revenue up

83% ■ Antimony revenue down 6% ■ FeV revenue down 5%

■ Q1 2012 gross margin 14% of revenue ■ Lower gross margin due to an increase

in Aluminium alloy revenue

■ Q1 2012 EBITDA margin 6% of revenue ■ SG&A costs down 8% v. Q1 2011

■ Q1 2012 CAPEX $8.3 million ■ $3.5 million for FeV expansion

$210.8 $235.6 $226.8

$198.7 $216.5

$14.6

$17.5

$12.3

$6.0

$13.7

$1.0

$6.0

$11.0

$16.0

$21.0

$(20.0)

$30.0

$80.0

$130.0

$180.0

$230.0

$280.0

Q1 11 Q2 11 Q3 11 Q4 11 Q1 12

Revenue EBITDA

Advanced Materials

Financial Summary

- - - - -

$5.6 $6.2 $6.6

$10.7 $8.3

Q1 11 Q2 11 Q3 11 Q4 11 Q1 12

Capital Expenditure

( in USD millions)

( in USD millions)

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Q1 2012 revenue up 5% from Q1 2011 Heat treatment revenue up 128% Remelting furnace revenue up 45% Solar DSS revenue down 88%

Q1 2012 gross margin 22% of revenue Increasing price pressure Cost overruns impacted gross

margin Q1 2012 EBITDA 5% of revenue

SG&A costs down 11%

$64.9

$89.8 $86.3

$72.9 $68.0

$5.3

$7.7 $9.3

$11.8

$3.0

$-

$5.0

$10.0

$15.0

$20.0

$(15.0)

$5.0

$25.0

$45.0

$65.0

$85.0

$105.0

Q1 11 Q2 11 Q3 11 Q4 11 Q1 12

Revenue EBITDA

Engineering Systems

Financial Summary

- - - - -

$65.7 $88.6

$68.5 $69.5 $80.6

Q1 11 Q2 11 Q3 11 Q4 11 Q1 12

Order Intake

( in USD millions)

( in USD millions) Order backlog increased 11% to $176.2

million at March 31, 2012 Order intake $80.6 million in Q1

2012 1.19x book to bill ratio

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Q1 2012 revenue down 7% from Q1 2011 Natural graphite revenue down 11% Silicon metal revenue down 4%

Q1 2012 gross margin 19% of revenue Lower sales prices for silicon metal Lower volumes for natural graphite

Q1 2012 EBITDA 13% of revenue SG&A costs down 11%

$42.3 $42.9 $43.3

$37.0 $39.5

$6.3 $6.2 $6.2 $7.0

$5.2

$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

Q1 11 Q2 11 Q3 11 Q4 11 Q1 12

Revenue EBITDA

Graphit Kropfmühl

Financial Summary

- - - - -

$1.2

$2.5 $2.7 $3.2

$2.2

Q1 11 Q2 11 Q3 11 Q4 11 Q1 12

Capital Expenditure

( in USD millions)

( in USD millions)

■ Q1 2012 CAPEX $2.2 million Upgrading silicon metal electric arc

furnace

Outlook

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Outlook

■ AMG expects 2012 Revenue and EBITDA consistent with 2011 ■ AMG announces Q2 2012 financial results on August 9, 2012

Formed AMG Mining AG and announced squeeze out of GK Tantalum demand is

moderating

Aerospace remains strong Market and pricing

are generally stable Market visibility is

limited

Heat Treatment Services business providing more stable recurring revenues Eurozone debt crisis

impacting capital goods spending

Silicon metal prices locked in for 2012 Graphite demand is

stable; re-opened the Kropfmühl graphite mine Shareholder meeting

in August to approve the merger

Advanced Materials Engineering Systems Graphit Kropfmühl AMG Mining

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Appendix

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Consolidated Balance Sheet Balance Sheet ($’000) Actual As of 31-Dec-11 31-Mar-12 Fixed assets 263.6 273.8 Goodwill and intangibles 38.1 38.9 Other non-current assets 63.4 65.4 Inventories 228.9 232.5 Receivables 188.1 223.0 Other current assets 39.1 47.1 Cash 79.6 81.2 TOTAL ASSETS 900.8 961.9 TOTAL EQUITY 220.6 232.0 Long-term debt 210.4 222.2 Pension liabilities 90.1 92.9 Other long-term liabilities 71.6 75.9 Current debt 58.2 65.4 Accounts payable 128.5 145.6 Advance payments 30.2 39.5 Accruals 51.7 54.8 Other current liabilities 39.5 33.6 TOTAL LIABILITIES 680.2 729.9 TOTAL LIABILITIES & EQUITY 900.8 961.9

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Consolidated Income Statement Income Statement ($’000) Actual For the three months ended 31-Mar-11 31-Mar-12 Revenue 318.0 324.0 Cost of sales 258.2 270.6 Gross profit 59.8 53.4 Selling, general & admin. 42.9 39.1 Asset impairment & restructuring 0.3 2.8 Environmental 0.1 0.7 Other income (0.9) (0.5) Operating profit 17.4 11.2 Net finance costs 0.5 6.9 Share of (loss) profit of associates (4.4) 0.2 Profit before income taxes 12.5 4.5 Income tax expense 5.0 1.2 Profit for the period 7.6 3.2 Attributable to: Shareholders of the Company 7.0 3.5 Non-controlling interest 0.6 (0.3) Adjusted EBITDA 26.2 21.9

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Consolidated Statement of Cash Flows

Cash Flow Statement ($’000) Actual For the three months ended 31-Mar-11 31-Mar-12 EBITDA 26.2 21.9 +/- Change in operating assets/liabilities (22.1) (19.4) -Interest paid, net (1.2) (3.1) Other operating cash flow (0.3) 0.8 Cash flows from operations before taxes 2.6 0.2 Income tax paid (16.3) (3.2) Total cash flows from operations (13.7) (3.0) Capital expenditures (8.2) (11.5) Other investing activities (24.7) 0.0 Cash flows from investing activities (32.9) (11.5) Cash flows from financing activities 19.4 14.7 Net increase (decrease) in cash (27.2) 0.2 Beginning cash 89.3 79.6 Effects of exchange rates on cash 4.0 1.4 Ending cash 66.1 81.2

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