amg investor presentation q3 2010 oppenheimer

AMG Advanced Metallurgical Group N.V.

Oppenheimer Industrials

Conference

September 2010

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

2AMG ADVANCED METALLURGICAL GROUP N.V.

Disclaimer

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.


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, 9.6% margin EPS of $0.31 (1)

Net debt - $119.7 million

Capital Investment - $11.9 million

Global presence Europe, North America, South America and Asia

2,500 employeesSustainable Metals Technology

Introduction

(1) Excluding AMG’s 42.5% ownership in Timminco Limited


■ 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 chemicals

Macroeconomic Trends and Markets


Advanced Materials

High-value alloys

Essential raw materials

Engineering Systems

Capital equipment for high purity

materials

Products & End Markets

InfrastructureAerospaceEnergySpecialty Metals &

Chemicals


End Markets


Aerospace Infrastructure EnergySpecialty Metals &

Chemicals

Titanium Alloys Structural Steel Solar Vacuum Furnaces Silicones

Superalloys Specialty Steel Superalloys Paints & Pigments

Turbine Coatings Building Materials Silicon Metal Glass, Tools & Optics

Vacuum Furnaces Nuclear Fuel Vaccum Furnaces Capacitors

Energy Storage Technologies


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


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%


Advanced Materials – Specialty Metals Acquisition

Material

Specialty Metals

Competitors

Antimony – AMG is the largest producer of antimony trioxide (a flame retardant) in

Europe

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

Secure supply of antimony raw material used in AMG’s antimony trioxide operation

AMG uses approximately 10,000 mt of antimony metal per year

Antimony metal prices have increased from $4,500/mt in 2009 to $10,000/mt in

2010

This will result in substantial raw material cost savings in 2011

Campine S.A., Chemtura Corporation, Hsikwangshan Twinkling Star Antimony Co. Ltd

Transaction

Strategic

Rationale

Antimony Metal

Purchase

Oxidation

Process

Antimony

Trioxide

Dispersions, Pastes,

Granules,

Microgranules


Financial Overview


Financial Highlights – H1 2010

2010 H1 Revenues $479.3

$292.5

$124.8

$62.0

Advanced Materials Engineering Systems GK

2010 H1 EBITDA $45.9

$22.7

$20.0

$3.2

Advanced Materials Engineering Systems GK

Europe56%

North America

21%

Asia18%

South America

4%ROW

1%

Revenue by Geography

Revenues and EBITDA in millions


- -- -

$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


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.

KB Alloys, Inc.

Delachaux S.A.

Campine S.A.

Chemtura Corporation

Sample Customers

Chromium Metals

Tantalum

Antimony

Aluminium master alloys

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


Infrastructure - Pricing

Significant price trends – 10 years

$0

$50

$100

$150

$200

$250

$0

$10

$20

$30

$40

$50

$60

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Pri

ce /

Po

un

d –

V,

Mo

, N

i

Ferro Vanadium Molybdenum Nickel

Prices are still below pre-crisis levels

2010


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


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

Secured first nuclear

engineering contract with

DOE, through Shaw-Areva

Two strategic acquisitions

completed to expand product

portfolio

Sample Customers

http://www.solarpowerindustries.com/index.html

http://www.qcells.de/cmadmin_2_474_0.html


Engineering Systems


( 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


Graphit Kropfmühl


( 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


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

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


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


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amg investor presentation q3 2010 oppenheimer

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