LEADING THE CRITICAL MATERIALS REVOLUTION CEO Update Annual General Meeting of Shareholders May 4, 2016
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LEADING THE CRITICAL MATERIALS REVOLUTION
CEO Update
Annual General Meeting of Shareholders
May 4, 2016
2
Metal Price Trends 3
Strategy and Growth 6
Lithium Project 13
Safety 17
TABLE OF CONTENTS
METAL PRICE TRENDS
AMG Advanced Metallurgical Group N.V.
4
Critical Materials Price Trends
CRITICAL MATERIAL PRICES
OUTPERFORM THE LME
-50%
0%
50%
100%
150%
200%
1. AMG EU Critical Materials 2. AMG Portfolio (includes #1)
3. LME Metals 4. Oil
10 Yr
CAGR:
-3.5%
10 Yr
CAGR:
2.9%
10 Yr
CAGR:
2.7%
10 Yr
CAGR:
-4.9%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
AMG: EU Critical Materials
OIL
LME Metals
AMG Portfolio
Note: Compound annual growth rates are calculated over the period Mar ‘06 through Mar ‘16 using the equation ((Ending Value / Beginning Value) ̂(1 / # of years) - 1) where ending value is avg monthly price in Mar ‘15 and beginning value is avg monthly price in Mar ‘06; and where AMG EU Critical Materials include Sb, Cr, Graphite & Si; AMG Portfolio includes Sb, Cr, FeV, Li, Nb, Si, Sr, Graphite, Ta, Sn & Ti; and LME Metals include Al, Co, Cu, Pb, Mo, Ni, & Zn. Avg annual growth rates (plotted above) are calculated over the same period using the equation ((Ending Value / Beginning Value) -1) and considering the same metal categorizations where ending value is avg monthly price in Dec of the given year and beginning value is avg monthly price in Mar ‘06.
The cumulative average 10 year
price appreciation of the AMG EU
Critical Materials was 6.4
percentage points higher than LME
Metals and 7.8 points higher than
oil, while the AMG Portfolio
outperformed LME Metals and oil
by 6.2 and 7.6 percentage points,
respectively
5
Critical Materials Prices: 10 Year Perspective
AMG has significant
potential upside within
certain critical materials
based on historical price
ranges
Note: Metal Positions are measured on a scale of 0 to 10, with 0 being the minimum price and 10 being the maximum price. They are calculated using the formula [(Mar ‘06 month avg –
min. monthly avg) / (max. monthly avg – min. monthly avg) *10] where maximum and minimum monthly averages are measured over the period 1 Mar ‘06 through 31 Mar ‘16.
3.0
0.3 0.2 0.4
3.3
1.4 1.7
2.1
5.8
0.1
0.9
4.6
1.3 1.3 1.4
4.5
2.5
3.4
5.9 5.8
2.5
3.3
0
2.5
5
7.5
10
Sc
ale
Metals
Mar 2016 Position Mar 2015 Position
Cr Mo Ni FeV Ti Al C Si Ta Sb
Highest
Price in
10 years
Lowest
Price in
10 years
[unchanged]
• Metal prices are measured on a
scale of 0 to 10, with 0 and 10
representing the minimum and
maximum average quarterly
prices occurring during the past
10 years
• The positions demonstrate the
current price level of each metal
with respect to their various
historical price points over the
past 10 years
5-year average
Nb
STRATEGY AND GROWTH
AMG Advanced Metallurgical Group N.V.
7
AMG: Ready for Growth
2012 2013 2014 2015 2016 to 2020
Cost Reduction
Product Mix Optimization
Supply Chain Excellence
Targeted W/C & Debt Levels
Scaling Profitable Growth
Cost-reduction and
capex discipline in
response to global
economic slowdown
Competitive advantage
through manufacturing
and supply chain
excellence, accelerating
cost-reduction efforts
Properly positioned,
financially and
operationally, to pursue
growth targets across
portfolio
Streamlined operations
and improved operating
performance by
eliminating low-margin
product lines
Further reduction in
both working capital
and net debt,
strengthening the
balance sheet
8
WORKING CAPITAL DAYS REDUCED BY 67% SINCE Q3’10
Financial Highlights
79
69 70 70 70
65 65 65 65 62 61
53
47
43
47
42
31
23
28 30 30
19
26
Q3
10
Q4
10
Q1
11
Q2
11
Q3
11
Q4
11
Q1
12
Q2
12
Q3
12
Q4
12
Q1
13
Q2
13
Q3
13
Q4
13
Q1
14
Q2
14
Q3
14
Q4
14
Q1
15
Q2
15
Q3
15
Q4
15
Q1
16
Working Capital Reduction
53 DAYS,
OR 67%
REDUCTION
Q1
‘11
Q2
‘11
Q3
‘11
Q4
‘11
Q1
‘12
Q2
‘12
Q3
‘12
Q4
‘12
Q1
‘13
Q2
‘13
Q3
‘13
Q4
‘13
Q1
‘14
Q2
‘14
Q3
‘14
Q3
‘10
Q4
‘10
Q4
‘14
Q1
‘15
Q2
‘15
Q3
‘15
Q4
‘15
Q1
‘16
9
INDUSTRY
CONSOLIDATION
PROCESS
INNOVATION
& PRODUCT
DEVELOPMENT
Pursue opportunities for horizontal and vertical industry consolidation
across AMG’s critical materials portfolio
Continue to focus on process innovation and product development to
improve the market position of AMG’s businesses
Strategy
AMG’S STRATEGY IS TO EXPAND ITS CRITICAL MATERIALS BUSINESS THROUGH
INDUSTRY CONSOLIDATION, PROCESS INNOVATION AND PRODUCT DEVELOPMENT
EXPANSION OF
EXISTING HIGH
GROWTH
BUSINESSES
Pursue opportunities in high-growth areas within the existing product
portfolio
AMG’S OVERRIDING STRATEGIC OBJECTIVE IS TO ACHIEVE INDUSTRY
LEADERSHIP WHILE BEING THE LOW COST PRODUCER
10
Process Innovation – Critical Materials
AMG’s gamma titanium aluminide is a
newly developed light-weight
aerospace alloy which enables aircraft
engines to operate at higher
temperatures, reducing carbon
emissions and improving fuel
consumption.
AMG increased titanium aluminide
production capacity to meet customer
demands by commissioning three new
vacuum furnaces, designed and built
by AMG Engineering.
The reduced weight of turbine blades
dramatically increases efficiency with
an estimated fuel savings of 15% over
the current technology.
11
Process Innovation – Engineering
AMG delivered newly
developed plasma hearth
melting furnaces for the
recycling and improved
ecological reuse of titanium
scrap to several key
customers in the aerospace
industry, significantly
reducing waste and CO2
emissions
AMG launched a new, high-
productivity super alloy
powder atomizer with the
world’s largest melting
capacity
Ti-based alloy powders for
3D printing applications
Po
wd
er
VIGA, EIGA
Spherical powder
Plasma spray and
applications for
MIM parts
3D printing
application
Pla
sm
a M
elt
ing
Electron Beam, Plasma Cold Hearth Melting
Round Ingot and
square slaps
Description Products Technology
12
Acquisitions vs. Organic
AMG is focused on organic growth
and very selective in acquisitions
LITHIUM PROJECT
AMG Advanced Metallurgical Group N.V.
14
2015 Lithium End Use (LCE basis)
Forecast battery growth demand is predominantly driven by expansion of
automotive and consumer device applications
Rechargeable battery
37%
Ceramics 13% Glass-ceramics
11%
Greases 8%
Glass 7%
Metallurgical powders
5%
Polymer 4%
Air treatment 4%
Primary battery 2%
Aluminum 0%
Other 9%
Aluminum
<1%
SAFETY
AMG Advanced Metallurgical Group N.V.
16
Health and Safety Focus
Leading Safety Indicators
• The number of safety improvement items reported
increased by 3% compared to the 12 month period ending
December 2014. These are essential in order to avoid
potential injuries.
• Incident severity rate over the 12 months ending December
2015 is down 11% from the previous 12 month period.
• Days away from work resulting from these lost time
incidents are down 22%.
Rigorous commitment
to safety reflected in
continually improving
safety records
Period Ending
December
Lost Time
Incidents
in the Last 12
Months
12 Month
Average Lost
Time Incident
Rate
12 Month
Average
Incident
Severity Rate
2014 36 1.20 0.19
2015 30 1.03 0.17
17
AMG – A Global Supplier of Critical Materials AMG Safety Results: 5 Year LTI Rate
ZERO Fatalities since
AMG was formed
18
AMG – A Global Supplier of Critical Materials AMG Safety Results: 5 Year Severity Rate
19
AMG: MITIGATING
TECHNOLOGIES
Products and Processes saving
raw materials, energy and CO2
emissions during manufacturing
(i.e., recycling of Ferrovanadium)
AMG: ENABLING
TECHNOLOGIES
Products and Processes saving
CO2 emissions during use
(i.e., light-weighting and fuel efficiency in
the aerospace and automotive industries)
AMG HAS DEVELOPED INTO A LEADER IN ENABLING TECHNOLOGIES
A GLOBAL IMPERATIVE FOR THE 21ST CENTURY
CO2 REDUCTION
LEADER IN ADVANCED TECHNOLOGIES
TO ADDRESS CO2 REDUCTION
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