Shell & AMG Recycling B.V. Sign Agreement with Shandong Yulong Petrochemical Co., Ltd to Assess Building a Spent Residue Upgrading Catalyst Recycling Facility

Okt 26, 2020

Amsterdam, 26 October 2020 (Regulated Information) — AMG Advanced Metallurgical Group N.V. („AMG“, EURONEXT AMSTERDAM: „AMG“) is pleased to announce that Shell & AMG Recycling B.V. signed a memorandum of understanding (MOU) today with Shandong Yulong Petrochemical Co., Ltd. to enter into exclusive arrangements to evaluate the potential for construction and operation of a spent catalyst recycling facility in Yantai, China.

The MOU will allow Shandong Yulong Petrochemical Co., Ltd and Shell & AMG Recycling B.V. to explore the feasibility of building a world class facility to reclaim valuable metals by recycling spent residue upgrading catalysts generated by refineries in China. Residue upgrading catalysts help refineries upgrade the bottom of the oil barrel into more valuable products, including generation of petrochemicals feedstocks. Such a facility would help maximize the benefits from China’s natural resources while addressing the need to provide environmentally responsible management of spent residue upgrading catalysts.

This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).

About Shell & AMG Recycling B.V.

Shell & AMG Recycling BV brings together the innovative technology and operating experience of Shell and AMG to address refiners’ waste management challenges. In addition, they will benefit by creating value from a refinery waste stream.

About AMG

AMG is a global critical materials company at the forefront of CO₂ reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.

AMG Critical Materials produces aluminum master alloys and powders, ferrovanadium, natural graphite, chromium metal, antimony, lithium, tantalum, niobium and silicon metal. AMG Technologies produces titanium aluminides and titanium alloys for the aerospace market; designs, engineers, and produces advanced vacuum furnace systems; and operates vacuum heat treatment facilities, primarily for the transportation and energy industries.

With approximately 3,100 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the Czech Republic, the United States, China, Mexico, Brazil, India, Sri Lanka and Mozambique, and has sales and customer service offices in Russia and Japan (www.amg-nv.com).

For further information, please contact:

Michele Fischer
Vice President Investor Relations
AMG Advanced Metallurgical Group N.V.
+1 610 975 4979
mfischer@amg-nv.com

Disclaimer

Certain statements in this press release are not historical facts and are “forward looking”.  Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information.  When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements.  By their very nature, forward looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward looking statements will not be achieved.  These forward looking statements speak only as of the date of this press release.  AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward looking statement is based.

Attachment

• AMG Shell Shandong MOU October 26 2020

AMG Advanced Metallurgical Group N.V. Announces 2020 Interim Dividend

Jul 28, 2020

Amsterdam, 28 July 2020 (Regulated Information) — AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) declares an interim dividend of €0.10 per ordinary share, reduced from €0.20 in the prior year.

The interim dividend of €0.10 per ordinary share, in respect of the period from January 1, 2020 to June 30, 2020, is payable on August 13, 2020 to shareholders of record as of August 4, 2020. The ex-dividend date will be August 3, 2020. Dutch withholding tax will be deducted from the dividend at a rate of 15%.

This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).

About AMG

AMG is a global critical materials company at the forefront of CO₂ reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.

AMG Critical Materials produces aluminum master alloys and powders, ferrovanadium, natural graphite, chromium metal, antimony, lithium, tantalum, niobium and silicon metal. AMG Technologies produces titanium aluminides and titanium alloys for the aerospace market; designs, engineers, and produces advanced vacuum furnace systems; and operates vacuum heat treatment facilities, primarily for the transportation and energy industries.

With approximately 3,100 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the Czech Republic, the United States, China, Mexico, Brazil, India, Sri Lanka and Mozambique, and has sales and customer service offices in Russia and Japan (www.amg-nv.com).

For further information, please contact:
AMG Advanced Metallurgical Group N.V.         +1 610 975 4979
Michele Fischer
Vice President Investor Relations
mfischer@amg-nv.com

Disclaimer

Certain statements in this press release are not historical facts and are “forward looking”. Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information. When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements. By their very nature, forward looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward looking statements will not be achieved. These forward looking statements speak only as of the date of this press release. AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward looking statement is based.

Attachment

• Interim Dividend July 2020

AMG Advanced Metallurgical Group N.V. Reports Second Quarter 2020 Results

Jul 28, 2020

 Coronavirus Update

• As of today, we have 4 active confirmed coronavirus cases globally. These cases have not resulted in a facility closure or operational interruption. To protect the health and safety of its employees, AMG continues to implement preventive measures such as practicing social distancing, remote working when possible, and restrictions on travel.
• All of our production facilities are operating.

Strategic Highlights

• AMG has committed $166 million as of June 30, 2020 in construction and engineering contracts for investment in a second ferrovanadium plant in Zanesville, Ohio and the project remains on schedule.
• AMG continued basic engineering for its lithium project in Zeitz, Germany and a final investment decision is planned in due course.
• Shell & AMG Recycling B.V. is operating and continues to pursue refinery residue recycling opportunities globally.

                
Financial Highlights

• AMG’s liquidity as of June 30, 2020 was $390 million, with $220 million of unrestricted cash and $170 million of revolving credit availability.
• Cash from operating activities was $20.3 million in the second quarter of 2020, a $31.4 million increase over the same period in 2019.
• Free cash flow⁽¹⁾ was a robust $11.6 million in the second quarter of 2020.
• EBITDA was $7.8 million in the second quarter of 2020, a 67% decrease from $23.8 million in the second quarter of 2019. COVID-19 had a negative $18 million impact in the second quarter of 2020 which is explained in more detail on pages 2 and 3.
• SG&A declined 20% in the second quarter of 2020 to $27.2 million, compared to $33.8 million in the second quarter of 2019, due to lower personnel costs and ongoing cost reduction initiatives.
• AMG declares an interim dividend of €0.10 per ordinary share, reduced from €0.20 in the prior year, to be paid in the third quarter of 2020.

Note: 
(1)     Free cash flow is defined as cash flows from operating activities less cash flows used in investing activities.

Amsterdam, 28 July 2020 (Regulated Information) — AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported second quarter 2020 revenue of $207.6 million, a 32% decrease from $303.6 million in the second quarter of 2019. EBITDA for the second quarter of 2020 was $7.8 million, a 67% decrease from $23.8 million in the second quarter of 2019, largely due to pandemic-induced lower volumes and prices versus the second quarter of last year. EBIT decreased to ($2.9) million in the second quarter of 2020 from $13.7 million in the second quarter of 2019.

Revenue dropped 32% in the second quarter of 2020, driven by pandemic-related impacts across AMG’s entire portfolio.  AMG Technologies achieved an EBITDA of $2.2 million in the second quarter of 2020, an 81% decline from the second quarter of 2019. The decline was primarily driven by reduced aerospace activity leading to order postponements and volume reductions, as well as lower profitability associated with metal price declines for the Titanium Alloys and Coatings business. AMG Critical Materials achieved an EBITDA of $5.5 million, a 55% decrease from the second quarter of 2019, due to weak volumes and pricing reflecting the general economic downturn.

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “Out of our 3,124 total AMG employees at 33 sites in 15 countries, AMG has 4 active confirmed coronavirus cases globally.
  
“In these unprecedented times our priority is to preserve a strong liquidity position. Our liquidity position is $390 million and is higher than last quarter. Operating cash flow is strong and substantially surpasses operating cash flow in the second quarter of 2019. We are embarking on comprehensive programs to reduce operating costs, SG&A, working capital, and freezing all non-essential capital expenditures. The current global pandemic significantly impacted our financial results with dramatically lower volumes, especially in our aerospace sector, compounding the historically low prices AMG is experiencing across our portfolio.

“We continue to progress our key strategic programs: the construction of the plant in Zanesville, Ohio, which will essentially double our recycling capacity for refinery residues, is proceeding as planned, utilizing the funds raised from our municipal bond. Basic engineering of the new lithium hydroxide production facility in Germany continues and a final investment decision is planned in due course. Shell & AMG Recycling B.V. continues to pursue refinery residue recycling opportunities globally.”

COVID-19 Effect on AMG’s Business

EBITDA was significantly lower during the quarter as a result of temporary pandemic-related interruptions to our business. As such, we are providing a summary of the estimated impact of the pandemic on our operations during the second quarter. Our estimated COVID-19 EBITDA impact is approximately $18 million for the second quarter. This has been estimated based on a bottom-up analysis of our business units and a detailed comparison to the Company’s financial plan prior to the pandemic. 

AMG Critical Materials’ pandemic-related impacts were due to a confluence of events in our various end-use markets.  In particular, we saw decreased and postponed volumes from our aerospace and automotive customers, and we faced pandemic-related shipping issues which increased costs for our business.  In addition, US steel production volumes were significantly below previous downturns, which negatively impacted vanadium price.

AMG Technologies’ pandemic-related impacts were mostly driven by decreased and postponed volumes from our aerospace customers, but we also experienced difficulty finalizing vacuum furnace orders due to global travel restrictions.  Our Heat Treatment Service operations were impacted by the temporary closure of certain of our customer’s plants.

Restructuring Programs

AMG is executing an initial restructuring program which is expected to reduce operating costs by $15 million per annum. This program will be complemented by further cost cutting actions, but currently we expect to achieve the full $15 million run-rate cost savings by the end of 2021. As part of this initial program, in addition to headcount reductions, we analyzed our operational costs in each facility and took measures to extract savings from our suppliers, increase recycling of off-spec material and increase production efficiency at every plant. In addition to this substantial reduction in operating cost, AMG has taken advantage of government supported furlough and short work (“Kurzarbeit”) programs, and in the second quarter we temporarily reduced our headcount by approximately 500 full time equivalent employees. We have also reduced professional fees and research and development costs and cut back on SG&A expenses across the company.

Key Figures

Note: 

1. EBIT is defined as earnings before interest and income taxes. EBIT excludes restructuring, asset impairment, inventory cost adjustments, environmental provisions, exceptional legal expenses, equity-settled share-based payments, strategic expenses and includes foreign currency gains or losses.
2. EBITDA is defined as EBIT adjusted for depreciation and amortization.

Operational Review

AMG Critical Materials

AMG Critical Materials’ revenue in the second quarter decreased by $71.1 million, or 36%, to $127.4 million, driven largely by lower average prices across all seven business units during the quarter, partially offset by higher sales volumes of ferrovanadium and lithium concentrate.

Gross profit in the second quarter increased by $34.9 million to $9.7 million. The increase was primarily driven by a non-cash expense in the prior year related to a vanadium inventory adjustment as a result of lower vanadium prices.

SG&A expenses in the second quarter of 2020 were $14.4 million, $3.5 million lower than the second quarter 2019, primarily due to lower personnel costs, lower professional fees, and cost reduction efforts across the business.

The second quarter 2020 EBITDA margin was 4% due to lower profitability in the quarter as noted above.

AMG Technologies

Order backlog decreased 10% versus March 31, 2020, resulting in a level of $216.9 million as of June 30, 2020, as the Company signed $32.0 million in new orders during the second quarter of 2020. This represents a 0.6x book to bill ratio. This lower book to bill ratio was a result of decreased activity in the aerospace market, partially offset by strong orders of heat treatment and remelting furnaces.

AMG Technologies‘ second quarter 2020 revenue decreased due to lower prices and volumes driven by slowdowns in both the aerospace and automotive sectors as a result of the pandemic. Consequently, second quarter 2020 gross profit decreased by $10.2 million, or 49%, to $10.8 million.

SG&A expenses decreased to $12.8 million in the second quarter of 2020, $3.1 million lower than the same period in 2019 due to lower personnel costs, lower professional fees, and ongoing cost reduction efforts across the business.

AMG Technologies’ second quarter EBITDA decreased by 81%, or $9.2 million, to $2.2 million from $11.4 million in the second quarter of 2019 due to lower profitability related to the challenging economic environment as outlined above.

Financial Review

Tax

AMG recorded an income tax benefit of $0.4 million in the second quarter of 2020, compared to a benefit of $13.5 million in the same period in 2019. This differential is mainly due to higher pre-tax income versus the prior year’s second quarter. However, the company continued to recognize a net tax benefit due to local operating losses. Movements in the Brazilian real exchange rate impact the valuation of the Company’s net deferred tax assets. The devaluation of the real during the second quarter of 2020 resulted in an additional non-cash tax expense of $2.1 million, compared to a benefit of $1.2 million in the same period in 2019.

AMG received tax refunds of $2.4 million in the second quarter of 2020, compared to tax payments of $6.3 million in the same period in 2019. The current quarter benefited from tax refunds from 2019 as well as the extensive relief due to international COVID-19 tax measures which enabled AMG to delay most of its tax payments during the quarter.

Exceptional Items

AMG’s second quarter 2020 gross profit of $23.3 million includes exceptional items, which are not included in the calculation of EBITDA.

A summary of exceptional items included in gross profit in the second quarters of 2020 and 2019 are below:

Exceptional items included in gross profit

As a result of a decrease in metal prices versus the first quarter of 2020, AMG had a $1.1 million exceptional non-cash expense for inventory cost adjustments during the second quarter which has been adjusted in EBITDA. The Company is in the ramp-up phase for three significant strategic expansion projects, including AMG Vanadium’s expansion project, the joint venture with Shell, and the lithium expansion in Germany, which incurred $1.2 million of project expenses during the quarter but are not yet operational. AMG is adjusting EBITDA for these exceptional charges.

Liquidity

AMG had a net debt position of $209.3 million as of June 30, 2020. This increase was mainly due to the significant investment in growth initiatives during the quarter, especially the vanadium expansion.

Cash from operating activities of $20.3 million in the second quarter of 2020 increased by $31.4 million compared to the same period in 2019, primarily due to operational efficiency and cash preservation management in 2020 to ensure ongoing financial health and stability.

Capital expenditures, including capitalized borrowing costs, increased to $30.9 million in the second quarter of 2020 compared to $12.4 million in the same period in 2019. Capital spending in the second quarter of 2020 included $3.6 million of maintenance capital. The remaining $27.3 million of capital spending is largely attributable to AMG Vanadium’s expansion project.

As of June 30, 2020, AMG had $220 million of unrestricted cash and equivalents and total liquidity of $390 million.

Net Finance Costs

AMG’s second quarter 2020 net finance costs decreased to $6.3 million from $6.8 million in the second quarter of 2019. Additionally, AMG capitalized $3.7 million of borrowing costs in the second quarter of 2020 driven by interest associated with the Company’s tax-exempt municipal bond supporting the vanadium expansion in Ohio.

SG&A

AMG’s second quarter 2020 SG&A expenses were $27.2 million compared to $33.8 million in the second quarter of 2019, due to continued cost reduction efforts across the business as detailed earlier.

Outlook

AMG’s first and most important priority is to ensure the health and safety of our employees.  Additionally, we are acutely focused on the financial health of the company and are dedicated to preserving our strong liquidity position. While maintaining a strong balance sheet, we continue to drive long-term value creation through our transformational strategic projects in vanadium recycling and in our lithium downstream expansion.

Given the results in the first half of the year, the full year EBITDA is unlikely to reach the level of 2019.

Net loss to EBITDA reconciliation

*Excludes foreign exchange expense.

This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).

About AMG

AMG is a global critical materials company at the forefront of CO₂ reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.

AMG Critical Materials produces aluminum master alloys and powders, ferrovanadium, natural graphite, chromium metal, antimony, lithium, tantalum, niobium and silicon metal.  AMG Technologies produces titanium aluminides and titanium alloys for the aerospace market; designs, engineers, and produces advanced vacuum furnace systems; and operates vacuum heat treatment facilities, primarily for the transportation and energy industries.

With approximately 3,100 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the Czech Republic, the United States, China, Mexico, Brazil, India, Sri Lanka and Mozambique, and has sales and customer service offices in Russia and Japan (www.amg-nv.com).

For further information, please contact:
AMG Advanced Metallurgical Group N.V.         +1 610 975 4979
Michele Fischer
mfischer@amg-nv.com

Disclaimer

Certain statements in this press release are not historical facts and are “forward looking.”  Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information.  When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements.  By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved.  These forward-looking statements speak only as of the date of this press release.  AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward-looking statement is based.

Attachment

• Second Quarter 2020 Press Release

AMG Advanced Metallurgical Group N.V. Announces 2019 Final Dividend

Mai 6, 2020

Amsterdam, 6 May 2020 (Regulated Information) — AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) is pleased to announce that during the Annual General Meeting, held on May 6, 2020, AMG’s shareholders approved the payment of a dividend of €0.40 per ordinary share over the financial year 2019. The interim dividend of €0.20, paid on August 15, 2019, was deducted from the amount distributed to shareholders. The final dividend per ordinary share therefore amounts to €0.20.

Payment of the final dividend will be completed on May 14, 2020, to shareholders of record on May 11, 2020. The ex-dividend date is May 8, 2020. Dutch withholding tax will be deducted from the dividend at a rate of 15%.

This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).

About AMG

AMG is a global critical materials company at the forefront of CO₂ reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.

AMG Critical Materials produces aluminum master alloys and powders, ferrovanadium, natural graphite, chromium metal, antimony, lithium, tantalum, niobium and silicon metal. AMG Technologies produces titanium aluminides and titanium alloys for the aerospace market; designs, engineers, and produces advanced vacuum furnace systems; and operates vacuum heat treatment facilities, primarily for the transportation and energy industries.

With approximately 3,200 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the Czech Republic, the United States, China, Mexico, Brazil, India, Sri Lanka and Mozambique, and has sales and customer service offices in Russia and Japan (www.amg-nv.com).

For further information, please contact:
AMG Advanced Metallurgical Group N.V.         +1 610 975 4979
Michele Fischer
Vice President Investor Relations
mfischer@amg-nv.com

Disclaimer

Certain statements in this press release are not historical facts and are “forward looking”. Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information. When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements. By their very nature, forward looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward looking statements will not be achieved. These forward looking statements speak only as of the date of this press release. AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward looking statement is based.

Attachment

• May 6 2020 Final Dividend

AMG Advanced Metallurgical Group N.V. Reports First Quarter 2020 Results

Mai 5, 2020

 Coronavirus Update

• As of today, we are grateful to report that we have no active confirmed coronavirus cases globally. AMG had one of its employees test positive for COVID-19. The employee fully recovered and has since returned to work. This event did not result in a facility closure or operational interruption. To protect the health and safety of its employees, AMG continues to implement preventive measures such as practicing social distancing, remote working when possible, and restrictions on travel.
• The majority of our production facilities are operating and our major expansion projects in vanadium and lithium are continuing on schedule.

Strategic Highlights

• AMG and Shell Catalysts & Technologies received all regulatory consents necessary for the formation of the Shell and AMG Recycling B.V. joint venture, and has commenced operations.
• AMG continued basic engineering for its lithium project in Zeitz, Germany, and in Zanesville, Ohio, AMG has committed $140 million as of March 31, 2020 in construction and engineering contracts for investment in a second ferrovanadium plant.
• AMG Engineering successfully completed the installation of the first ceramic matrix composite (“CMC”) vacuum furnace and passed the Final Acceptance Test at its customer’s location; this customer acceptance represents a significant milestone in AMG Engineering’s ongoing new product development program.
• In light of ongoing demand uncertainty in the global aerospace market due to the effect of COVID-19, AMG has put the IPO of AMG Technologies on hold.

Financial Highlights

• EBITDA⁽²⁾ was $22.3 million in the first quarter of 2020 as the Company’s segments provided balanced earnings
• SG&A declined 7% in the first quarter of 2020 to $34.9 million compared to $37.4 million in the first quarter of 2019 due to lower personnel costs and initial steps on cost reduction
• AMG Technologies’ order backlog increased 9% to $242.2 million as of March 31, 2020, compared to $222.6 million as of December 31, 2019
• AMG’s liquidity as of March 31, 2020 was $372.2 million and the Company has maintained its final 2019 declared dividend of €0.20 to be paid in the second quarter 2020

Amsterdam, 5 May 2020 (Regulated Information) — AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported first quarter 2020 revenue of $278.3 million, a 20% decrease from $346.5 million in the first quarter of 2019. EBITDA for the first quarter of 2020 was $22.3 million, a 56% decrease from $50.4 million in the first quarter of 2019, largely due to lower ferrovanadium prices and lower titanium alloy sales versus the first quarter of last year. EBIT decreased 71% to $11.9 million in the first quarter of 2020 from $40.4 million in the first quarter of 2019.

Revenue dropped 20% in the first quarter of 2020, driven by a significant metal price decline across AMG’s entire portfolio. The 56% decrease in EBITDA to $22.3 million was largely due to the Critical Materials segment, which achieved an EBITDA of $9.7 million in the first quarter of 2020. The decline was primarily driven by lower prices for ferrovanadium and chrome metal. AMG Technologies achieved an EBITDA of $12.7 million, a 34% decrease from the first quarter of 2019, due to lower titanium alloy sales and lower profitability associated with metal price declines for the Titanium Alloys and Coatings business.

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “I am pleased to report that out of our 3,200 total AMG employees in 33 sites in 15 countries, AMG has only had one employee test positive for COVID-19. The employee has since fully recovered and has returned to work.
  
However, as a result of the Coronavirus crisis, some of our production facilities are operating below capacity, reflecting reduced demand levels. Our financial results reflect the “lowest price” environment we are experiencing, and we continue to operate in an austerity mode and focus on things we can control, such as operational efficiency, capital expenditures and overhead costs. This focus on expenditures will help to preserve our solid liquidity position.

Despite our intense focus on cash flow, we continue to progress our key strategic programs: the construction of the plant in Zanesville, Ohio, which will essentially double our recycling capacity for refinery residues, is proceeding as planned, utilizing the funds raised from our municipal bond. Basic engineering of the new lithium hydroxide production facility in Germany is expected to be completed by year end. Shell & AMG Recycling B.V. has started to operate and will pursue refinery residue recycling opportunities globally.

Despite our excellent order intake in 2019 of $249 million and of $104 million in the first quarter of 2020, representing a strong 1.3x book to bill ratio, foreseeable depressed conditions in the aerospace industry has forced us to postpone the pursuit of a public offering of AMG Technologies.”

Key Figures

Note: 

1. EBIT is defined as earnings before interest and income taxes. EBIT excludes restructuring, asset impairment, inventory cost adjustments, environmental provisions, exceptional legal expenses, equity-settled share-based payments, strategic expenses and includes foreign currency gains or losses.
2. EBITDA is defined as EBIT adjusted for depreciation and amortization.

Operational Review

AMG Critical Materials

AMG Critical Materials’ revenue in the first quarter decreased by $69.4 million, or 30%, to $159.2 million, driven largely by lower average prices across all seven business units during the quarter, partially offset by higher sales volumes of ferrovanadium, graphite and silicon metal.

Gross profit in the first quarter decreased by $17.0 million to $20.6 million. The reduction in gross profit was primarily driven by decreased profitability in our vanadium business offset by increased profitability in graphite and silicon.

SG&A expenses in the first quarter of 2020 were $18.8 million, $2.7 million lower than the first quarter 2019, primarily due to lower personnel costs, lower professional fees, and initial cost reduction efforts across the business.

The first quarter 2020 EBITDA margin was 6% due to lower profitability in the quarter noted above.

AMG Technologies

Order backlog increased 9% versus December 31, 2019, resulting in a robust level of $242.2 million as of March 31, 2020 as the Company signed $104.4 million in new orders during the first quarter of 2020. This represents a 1.3x book to bill ratio. This higher book to bill ratio was largely driven by strong orders of turbine blade coating and remelting furnaces for the aerospace market.

AMG Technologies‘ first quarter 2020 revenue increased due to the completion of Engineering’s first CMC vacuum furnace, which was offset by lower prices and volumes in the Titanium Alloys and Coatings business driven by lower metals prices as well as a decline in volume due to a slowdown in the aerospace sector. As a result, first quarter 2020 gross profit decreased by $7.0 million, or 24%, to $22.5 million, primarily driven by lower results from the Titanium Alloys and Coatings business.

SG&A expenses were essentially flat at $16.1 million in the first quarter, compared to $15.9 million in the same period in 2019 as initial cost reductions were offset by higher insurance costs and professional fees.

AMG Technologies’ first quarter EBITDA decreased by 34%, or $6.6 million, to $12.7 million from $19.3 million in the first quarter of 2019 due to lower profitability of the Titanium Alloys and Coatings business noted above.

Financial Review

Tax

AMG recorded an income tax expense of $16.5 million in the first quarter 2020, compared to $5.9 million in the same period in 2019. The increase was primarily due to significant devaluation of the Brazilian currency. Movements in the Brazilian real exchange rate impact the valuation of the Company’s net deferred tax assets. The devaluation of the real during the first quarter of 2020 resulted in an additional non-cash tax expense of $11.7 million. The appreciation of the real in the first quarter of 2019 resulted in a $1.9 million tax benefit.

AMG paid taxes of $0.9 million in the first quarter 2020, compared to tax payments of $3.9 million in the same period in 2019. The current quarter benefited from tax refunds from 2019 as well as the extensive relief due to international COVID-19 tax measures which enabled AMG to delay most of its of tax payments during the quarter.

Exceptional Items

AMG’s first quarter 2020 gross profit of $43.2 million includes exceptional items, which are not included in the calculation of EBITDA.

A summary of exceptional items included in gross profit in the first quarters of 2020 and 2019 are below:

Exceptional items included in gross profit

As a result of an improvement in vanadium prices versus the fourth quarter of 2019, AMG had a $1.9 million reversal of an exceptional non-cash charge for vanadium inventory cost adjustments during the first quarter which has been adjusted in EBITDA. The Company is in the ramp-up phase for three significant strategic expansion projects, including the Zanesville vanadium expansion, the vanadium joint venture with Shell, and the lithium expansion in Germany, which incurred $1.4 million of project expenses during the quarter but are not yet operational. AMG is adjusting EBITDA for these exceptional charges.

Liquidity

AMG had a net debt position of $192.4 million as of March 31, 2020. This increase was mainly due to the significant investment in growth initiatives during the quarter, especially the vanadium expansion.

Cash used in operating activities of ($3.7) million in the first quarter of 2020 decreased by $10.6 million compared to the same period in 2019, primarily due to lower profitability.

Capital expenditures, including capitalized borrowing costs, increased to $21.9 million in the first quarter of 2020 compared to $12.8 million in the same period in 2019. Capital spending in the first quarter of 2020 included $5.5 million of maintenance capital. The remaining $16.4 million of capital spending is attributable to expansion projects at AMG’s vanadium, titanium aluminide, lithium and heat treatment service facilities.

As of March 31, 2020, AMG had $208.9 million of unrestricted cash and equivalents and total liquidity of $372.2 million.

Net Finance Costs

AMG’s first quarter 2020 net finance costs decreased to $5.4 million from $9.2 million in the first quarter of 2019. This decline is mainly driven by lower borrowing rates versus the prior period and favorable foreign exchange movements. Additionally, AMG capitalized $2.8 million of borrowing costs in the first quarter of 2020 driven by interest associated with the Company’s tax-exempt municipal bond supporting the vanadium expansion in Ohio.

SG&A

AMG’s first quarter 2020 SG&A expenses were $34.9 million compared to $37.4 million in the first quarter of 2019, primarily due to lower personnel costs, lower professional fees and initial cost reduction efforts across the business.

Outlook

AMG operates with practiced business resilience and we are acutely focused on safeguarding against the potential for future pandemic-related disruptions. Management continues to drive operational efficiency and manage for cash preservation in 2020 to ensure ongoing financial health and stability.

However, due to the speed with which the COVID-19 situation is developing, there is uncertainty around its ultimate impact; therefore, as previously announced, AMG has decided to withdraw its earnings guidance for 2020. A new target will be announced once the global industrial economy begins to stabilize.

Net (loss) income to EBITDA reconciliation

*Excludes foreign exchange expense (income).

AMG incurred $1.1 million of non-recurring legal expense related to a dispute with a former customer. This dispute was settled in the first quarter 2020 and will not impact the Company’s financial results going forward.

This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).

About AMG

AMG is a global critical materials company at the forefront of CO₂ reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.

AMG Critical Materials produces aluminum master alloys and powders, ferrovanadium, natural graphite, chromium metal, antimony, lithium, tantalum, niobium and silicon metal.  AMG Technologies produces titanium aluminides and titanium alloys for the aerospace market; designs, engineers, and produces advanced vacuum furnace systems; and operates vacuum heat treatment facilities, primarily for the transportation and energy industries.

With approximately 3,200 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the Czech Republic, the United States, China, Mexico, Brazil, India, Sri Lanka and Mozambique, and has sales and customer service offices in Russia and Japan (www.amg-nv.com).

For further information, please contact:
AMG Advanced Metallurgical Group N.V.         +1 610 975 4979
Michele Fischer
mfischer@amg-nv.com

Disclaimer

Certain statements in this press release are not historical facts and are “forward looking.”  Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information.  When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements.  By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved.  These forward-looking statements speak only as of the date of this press release.  AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward-looking statement is based.

Attachment

• May 5 2020 First Quarter 2020 PR

AMG Advanced Metallurgical Group N.V. Withdraws 2020 Earnings Target and Announces First Quarter 2020 Earnings Call and Webcast Date Annual General Meeting to be Held May 6, 2020

Apr 20, 2020

Amsterdam, 20 April 2020 (Regulated Information) — AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) provides an update on its 2020 earnings target and announces the First Quarter 2020 Earnings Call timing.

Given the difficulty of projecting earnings for the remainder of the year due to COVID-19 effects on our customers, AMG has decided to withdraw its earnings guidance for 2020. A new target will be announced once the global industrial economy begins to stabilize.

AMG’s operations remain robust, and its employee base is healthy, with only one reported case of COVID-19. Nonetheless, given the potential strains on our customer base, predicting demand fluctuations is difficult.

AMG’s balance sheet is sound and the Company enjoys significant liquidity. AMG has approximately $200 million in cash, $170 million of undrawn revolver capacity, and $300 million of cash reserved to finance its ferrovanadium expansion project in Ohio.

First Quarter Earnings Call and Annual General Meeting of Shareholders
AMG will release results for its first quarter on Tuesday, May 5, 2020. It will hold a conference call the same day at 2:00 p.m. EDT (8:00 PM CEST) to discuss the results and the impact of the COVID-19 pandemic. In addition, AMG confirms that it will host its Annual General Meeting of Shareholders on May 6, 2020 and has invited shareholders to attend virtually. Details and more information about AMG’s Annual Meeting can be found at AMG’s website (amg-nv.com) which will continue to show any necessary updates up through the date of the Meeting.

This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).

About AMG

AMG is a global critical materials company at the forefront of CO₂ reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.

AMG Critical Materials produces aluminum master alloys and powders, ferrovanadium, natural graphite, chromium metal, antimony, lithium, tantalum, niobium and silicon metal. AMG Technologies produces titanium aluminides and titanium alloys for the aerospace market; designs, engineers, and produces advanced vacuum furnace systems; and operates vacuum heat treatment facilities, primarily for the transportation and energy industries.

With approximately 3,300 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the Czech Republic, the United States, China, Mexico, Brazil, India, Sri Lanka and Mozambique, and has sales and customer service offices in Russia and Japan (www.amg-nv.com).

For further information, please contact:
AMG Advanced Metallurgical Group N.V.         +1 610 975 4979
Michele Fischer
Vice President Investor Relations
mfischer@amg-nv.com

Disclaimer

Certain statements in this press release are not historical facts and are “forward looking”. Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information. When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements. By their very nature, forward looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward looking statements will not be achieved. These forward looking statements speak only as of the date of this press release. AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward looking statement is based.

Attachment

• April 20 2020 Business Operations Release

AMG Advanced Metallurgical Group N.V. Reports Full Year and Fourth Quarter 2019 Results

Feb 26, 2020

Fourth Quarter Strategic Highlights

• AMG Technologies completed its acquisition of the assets of International Specialty Alloys Division (“ISA”) of Kennametal Inc.; ISA is a leading U.S. producer of titanium master alloys and other binary alloys for the aerospace market located in New Castle, PA
• AMG signed a memorandum of understanding (MOU) subject to regulatory approval with the Saudi Arabian General Investment Authority (SAGIA) and Shell Overseas Services Ltd. (Shell) to explore the feasibility of building a world-class spent catalyst recycling facility outside North America
• AMG Lithium GmbH commenced basic engineering for a battery grade lithium hydroxide facility in Germany
• AMG Vanadium signed a new long-term, multi-year agreement to process and recycle spent catalysts from a major oil refinery operator in North America

Fourth Quarter Financial Highlights

• Operating cash flow was $55.5 million in the fourth quarter of 2019, a 10% increase over the same period in 2018
• Revenue decreased by 22% to $268.6 million in the fourth quarter of 2019 from $344.4 million in the fourth quarter of 2018
• EBITDA⁽³⁾ was $22.8 million in the fourth quarter of 2019, a 64% decrease compared to 2018
• AMG returned over $100 million to shareholders in 2019 through its share repurchase program and dividend payments
• Total 2019 dividend proposed of €0.40 per ordinary share, including the interim dividend of €0.20, paid on August 15, 2019

Amsterdam, 26 February 2020 (Regulated Information) — AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported fourth quarter 2019 revenue of $268.6 million, a 22% decrease from $344.4 million in the fourth quarter of 2018. EBITDA for the fourth quarter of 2019 was $22.8 million, a 64% decrease from $62.8 million in the fourth quarter of 2018. In the fourth quarter of 2019, AMG generated cash from operating activities of $55.5 million, an increase of $4.8 million, or 10%, over the same period in 2018 despite the lower profitability noted above.

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “AMG achieved EBITDA of $23 million in the fourth quarter resulting in total EBITDA of $121 million for 2019. AMG generated cash flows from operations of $56 million in the fourth quarter despite the unprecedented fall in critical materials prices across the AMG portfolio. As a result, AMG ends the year with strong liquidity and the ability to continue to invest in our growth projects.

As we face global macroeconomic challenges throughout our business, we continue to focus on the things we can control. Specifically, we have maintained an industry-leading working capital cycle of 21 days, which is down 17 days, or 45%, from the prior year ending balance. This is accomplished by constant management focus on investment effectiveness and increasing operating efficiency throughout the company. In addition, despite the poor market conditions, our status as a low-cost producer across all nine of AMG’s business units ensured that each one was EBITDA positive throughout 2019.

We have also made significant strategic achievements in the quarter. AMG Technologies completed its acquisition of the assets of International Specialty Alloys from Kennametal Inc. AMG Critical Materials signed an MOU, subject to regulatory approval, with SAGIA and Shell to explore the feasibility of building a spent catalyst recycling facility, based on AMG’s proprietary technology; commenced basic engineering for a battery grade lithium hydroxide facility in Germany; and signed a new long-term, multi-year agreement to process and recycle spent catalysts from a major oil refinery operator in North America.”

Key Figures

Notes:

1. Adjusted net income is adjusted for inventory cost adjustments and asset impairment expense, net of tax
2. EBIT is defined as earnings before interest and income taxes. EBIT excludes restructuring, asset impairment, inventory cost adjustments, environmental provisions, exceptional legal expenses and equity-settled share-based payments and includes foreign currency gains or losses.
3. EBITDA is defined as EBIT adjusted for depreciation and amortization.

Operational Review

AMG Critical Materials

AMG Critical Materials’ revenue in the fourth quarter decreased by $51.3 million, or 23%, to $170.2 million, driven largely by lower average prices across all seven business units during the quarter, partially offset by higher sales volumes of vanadium and chrome metal.

Gross profit before non-recurring items in the fourth quarter decreased by $28.6 million, or 57%, to $21.7 million. The reduction in gross profit was primarily driven by decreased profitability in our vanadium business, exacerbated by lower profitability across all seven business units.

SG&A expenses in the fourth quarter of 2019 increased by $3.7 million, or 23%, compared to the same period in the prior year, primarily due to an exceptional legal expense.

The fourth quarter 2019 EBITDA margin declined to 8% due to the lower price environment experienced in the quarter.

AMG Technologies

AMG Technologies’ fourth quarter 2019 revenue decreased by $24.6 million, or 20%, to $98.4 million, due to lower heat treatment services sales, lower metal prices impacting our Titanium Alloys and Coatings business, and a $7.5 million customer payment related to the early termination of a customer contract recorded in the fourth quarter of 2018. These declines were offset by higher revenue from after sales services as well as higher sales of vacuum furnaces such as turbine blade coaters and remelting furnaces.

Gross profit before non-recurring items in the fourth quarter decreased $14.6 million, or 40%, to $22.2 million, and gross margin was 23%, compared to 29% in the fourth quarter 2018 due to the revenue effects noted above, in particular the $7.5 million customer payment received in the fourth quarter of 2018.

SG&A expenses decreased by $1.6 million, or 9%, in the fourth quarter of 2019 compared to the fourth quarter of 2018, primarily due to lower variable compensation expense.

AMG Technologies’ fourth quarter EBITDA decreased by 54% to $9.7 million from $21.3 million in the fourth quarter of 2018 due to the decline in gross profit noted above.

Due to strong orders of remelting, turbine blade coating, engineering services and induction furnaces, the Company signed $80.5 million in new orders during the fourth quarter of 2019, representing a strong 1.2x book to bill ratio. Order backlog was $222.6 million as of December 31, 2019, a 10% increase from $202.6 million as of September 30, 2019. On a full year basis, the Company signed $249.4 million in new orders, representing a balanced 1.0x book to bill ratio. In January 2020, the Company’s strong order intake continued, mainly due to turbine blade coater sales, resulting in a robust backlog as of the end of the month.

Financial Review

Tax

AMG recorded an income tax benefit of $5.1 million in 2019 as compared to an expense of $45.0 million in 2018. The tax benefit is due primarily to losses in the United States related to the decline in vanadium profitability and vanadium inventory cost adjustments in the current year.

AMG paid taxes of $24.6 million in 2019, compared to tax payments of $21.3 million in 2018. As a result of the year-over-year volatility in income and the timing of cash tax payments, the present cash tax rate is not indicative of the current year performance as payments in the current year are reflective of the income in 2018 and not 2019. Once earnings have stabilized, we believe that the cash tax rate is the more meaningful metric with regards to AMG’s taxes due to the volatile nature of the company’s deferred tax balances.

Exceptional Items

AMG’s fourth quarter 2019 and full year 2019 gross profit includes exceptional items, which are not included in the calculation of EBITDA.

A summary of exceptional items included in gross profit in the 2019 and 2018 are below:

Exceptional items included in gross profit

AMG had an $13.4 million exceptional non-cash expense during the fourth quarter of 2019, mainly driven by vanadium metal inventory cost adjustments as a result of the significant decline in price which impacted our inventory cost position and resulted in a non-cash balance sheet adjustment which has been adjusted in EBITDA.

The $2.4 million restructuring expense in the fourth quarter was mainly due to headcount reductions in our Brazilian mining activities and AMG Technologies including reductions at our US heat treatment service center.

Liquidity

In 2019, AMG maintained a strong balance sheet and adequate sources of liquidity. At December 31, 2019, the Company had $226.2 million in unrestricted cash and cash equivalents and $169.9 million available on its revolving credit facility, as such AMG had $396.1 million of total liquidity as of December 31, 2019. Changes in liquidity during the year were due primarily to AMG returning over $100 million to its shareholders through its dividend and share buyback program as well as investing in long-term expansion projects in lithium, vanadium and AMG Technologies.

Net Finance Costs

AMG’s fourth quarter 2019 net finance costs were $6.1 million compared to $6.9 million in the fourth quarter of 2018, driven by interest expense associated with the outstanding gross debt on AMG’s long-term credit facility. Additionally, AMG capitalized $2.8 million of interest costs in the fourth quarter of 2019 compared to nil in the prior year, driven by interest associated with the Company’s new tax-exempt municipal bond supporting the vanadium expansion in Ohio.

SG&A

AMG’s fourth quarter 2019 SG&A expenses were $37.2 million, an increase of 6% from the same period in the prior year, primarily due to an increase in exceptional legal fees.

Full year 2019 SG&A expenses were $143.5 million, in line with 2018.

Final Dividend Proposed

AMG intends to declare a dividend of €0.40 per ordinary share over the financial year 2019. The interim dividend of €0.20, paid on August 15, 2019, will be deducted from the amount to be distributed to shareholders. The proposed final dividend per ordinary share therefore amounts to €0.20.

A proposal to resolve upon the final dividend distribution will be included on the agenda for the Annual General Meeting to be held on May 6, 2020.

Outlook

It is extremely difficult to provide firm guidance for 2020. Temporary disruptions in the aerospace supply chain resulting from the Boeing 737 MAX issues and the uncertain impact of the coronavirus continue to infuse unpredictable variables into the current market. On the bright side, we note AMG Technologies’ backlog at the end of January 2020 is at its highest level in over a decade. In addition, critical material prices appear to have reached a bottom as early 2020 market pricing is showing signs of improvement from the depressed pricing experienced throughout 2019. Specifically, vanadium pricing is already up over 30% in the early part of 2020.

As a result of all these factors, our target for 2020 is unchanged: we expect to improve profitability relative to 2019.

Net (loss) income to EBITDA reconciliation

*Excludes foreign exchange expense (income).

Net (loss) income adjusted for non-cash impairments

*The Company applied IFRS 16 (lease accounting) for the first time as of January 1, 2019. The Company recognized new assets and liabilities for its operating leases which are primarily comprised of buildings, equipment, machinery and automobiles. Right of use assets are included within property, plant and equipment and classified in the same manner as if the underlying assets were owned by the Company. The lease liabilities are presented as a separate line item on the consolidated statement of financial position. The nature and pattern of expense recognition in relation to these leases has changed. The Company recognizes depreciation on the right of use assets on a straight-line basis over the expected term of the lease. Interest expense related to the lease liabilities are recognized over the expected term of the lease using the effective interest method. Comparative figures have not been adjusted. Assets and liabilities increased per January 1, 2019 by $37 million.

This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).

About AMG

AMG is a global critical materials company at the forefront of CO₂ reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.

AMG Critical Materials produces aluminum master alloys and powders, ferrovanadium, natural graphite, chromium metal, antimony, lithium, tantalum, niobium and silicon metal.  AMG Technologies produces titanium aluminides and titanium alloys for the aerospace market; designs, engineers, and produces advanced vacuum furnace systems; and operates vacuum heat treatment facilities, primarily for the transportation and energy industries.

With approximately 3,300 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the Czech Republic, the United States, China, Mexico, Brazil, India, Sri Lanka and Mozambique, and has sales and customer service offices in Russia and Japan (www.amg-nv.com).

For further information, please contact:
AMG Advanced Metallurgical Group N.V.         +1 610 975 4979
Michele Fischer
Vice President Investor Relations
mfischer@amg-nv.com

Disclaimer

Certain statements in this press release are not historical facts and are “forward looking.”  Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information.  When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements.  By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved.  These forward-looking statements speak only as of the date of this press release.  AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward-looking statement is based.

Attachment

• Fourth Quarter & Full Year 2019 PR

Saudi Arabian General Investment Authority, Shell and AMG Sign Agreement to Assess Building a Spent Residue Upgrading Catalyst Recycling Facility

Nov 21, 2019

Amsterdam, 21 November 2019 (Regulated Information) — The Saudi Arabian General Investment Authority (SAGIA), Shell Overseas Services Ltd. (Shell) and Advanced Metallurgical Group N.V. (AMG) signed a memorandum of understanding (MOU) today to evaluate the potential for construction and operation, subject to regulatory approvals, of a spent catalyst recycling facility in Jubail Industrial City, Saudi Arabia. The signing took place in Riyadh, Saudi Arabia.

The MOU was exchanged among His Excellency, Ibrahim Alomar, Governor of SAGIA; Andy Gosse, President of Shell Catalysts & Technologies; and Dr. Heinz C. Schimmelbusch, Chairman & CEO of AMG.

The MOU will allow SAGIA, Shell and AMG to explore the feasibility of building a world class facility to reclaim valuable metals by recycling spent residue upgrading catalysts generated by refineries in Saudi Arabia and the surrounding region. Residue upgrading catalysts help refineries upgrade the bottom of the oil barrel into more valuable products, including generation of petrochemicals feedstocks. Such a facility would help maximise the benefits from the Kingdom’s natural resources while addressing the need to provide environmentally responsible management of spent residue upgrading catalysts.

“We are pleased to sign this MOU with AMG and Shell for the safe, efficient and clean processing of the growing quantities of spent catalysts in the region and recovery of vanadium and other precious metals for utilization in specialty steel production,” said H.E. Ibrahim Alomar.

“This MOU reflects Shell’s interest in growing its presence in Saudi Arabia and serving its clients locally and regionally. New global fuel regulations, combined with the growing trend of crude oil to chemicals production, are leading refiners to develop sustainable waste management plans for their spent catalyst. We look to have meaningful opportunities to build strong relationships with local and international participants,” said Andy Gosse.

“AMG is excited to provide cutting edge recycling technologies for treating refinery waste in Saudi Arabia. The recycling process also allows for the extraction of specialty alloys from spent catalysts for use by the steel market. Reclamation of these alloys in the recycling process allows steel manufacturers to benefit from a low CO2 method of sourcing the alloys as an alternative to mining. It is also the basis for building stationary batteries used for grid stabilisation for the growing renewable energy sector in Saudi Arabia. All of that is in line with AMG’s vision to enable CO2 reduction through its technologies and products,” said Heinz Schimmelbusch.

The MOU will provide a framework for conducting the required studies to assess the commercial feasibility of this proposed project and, subject to regulatory approvals, the potential construction of a spent catalyst recycling facility in the region.

This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).

About Saudi Arabian General Investment Authority (SAGIA):
The Saudi Arabian General Investment Authority (SAGIA) works in collaboration with other government entities to attract, retain and expand high-value investments for the benefit of sustainable national economic growth.

SAGIA works across the public and private sectors to help businesses and investors access fast-emerging opportunities across Saudi Arabia. It identifies and develops investment opportunities and supports regulatory improvements to increase competitiveness, unleash the capabilities of promising economic sectors, and open new opportunities for foreign investments.

SAGIA supports businesses throughout the investment journey: from identifying opportunities, to conducting feasibility studies and connecting with potential partners, to setting-up operations.

SAGIA has a particular focus on nine priority sectors identified within Saudi Arabia’s Vision 2030: chemicals, information & technology, energy & water, industrial & manufacturing, mining & metals, healthcare & life sciences, transport & logistics, tourism, culture & entertainment, and emerging sectors.

About Shell in the Kingdom of Saudi Arabia:
Shell has been in The Kingdom of Saudi Arabia for more than 75 years, a journey that began with the refuelling of the late King Abdulaziz’s first airplane. Shell is active in the blending and marketing of lubricants: JOSLOC – Al Jomaih and Shell Lubricating Oil Company Limited (50% Al Jomaih / 50% Shell) manufactures and distributes Shell-branded lubricants in Saudi Arabia. Shell has been working together with the Al Jomaih family since 1956. Shell Catalysts & Technology supply technical process licences, technical services and catalysts to various refining and petrochemical customers throughout the Kingdom.

About Shell Catalysts & Technologies
The companies that comprise Shell Catalysts & Technologies, all of which are Shell’s wholly owned subsidiaries, provide technical services and licensed technologies. Shell Catalysts & Technologies also offers a market-leading catalyst portfolio with a specific focus on providing innovative refinery, petrochemical and environmental catalyst solutions.

About AMG
AMG is a global critical materials company at the forefront of CO₂ reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.

AMG Critical Materials produces aluminum master alloys and powders, ferrovanadium, natural graphite, chromium metal, antimony, lithium, tantalum, niobium and silicon metal. AMG Technologies produces titanium aluminides and titanium alloys for the aerospace market; designs, engineers, and produces advanced vacuum furnace systems; and operates vacuum heat treatment facilities, primarily for the transportation and energy industries.

With approximately 3,300 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the Czech Republic, the United States, China, Mexico, Brazil, India, Sri Lanka and Mozambique, and has sales and customer service offices in Russia and Japan (www.amg-nv.com).

For further information, please contact:

Mohamed Al-Zumaia
General Manager
Shell Overseas Services Ltd – Saudi Arabia
Fax: +966115118923
Cell: +966 56 0599996
Mohammed.Alzomaia@shell.com

Nureddin Wefati
Head Media Relations Middle East & North Africa
Shell EP International
Tel: +971 4 705 5347
Cell: +971 56 216 2409
Nureddin.Wefati@Shell.com

Hassan Almarashi
Spokesperson Middle East & North Africa
Shell EP International Ltd
Tel: +9714 705 5783
Cell: +97156 226 0924
Hassan.Almarashi@shell.com

Michele Fischer
Vice President Investor Relations
AMG Advanced Metallurgical Group N.V.
+1 610 975 4979
mfischer@amg-nv.com

Cautionary note
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this press release “Shell”, “Shell group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to Royal Dutch Shell plc and subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this press release refer to entities over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as “joint ventures” and “joint operations”, respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.

This press release contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “aim”, “ambition’, ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this press release, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; and (m) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this press release are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell’s 20-F for the year ended December 31, 2018 (available at www.shell.com/investor and www.sec.gov). These risk factors also expressly qualify all forward looking statements contained in this press release and should be considered by the reader. Each forward-looking statement speaks only as of the date of this press release, November 21, 2019. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this press release.

We may have used certain terms, such as resources, in this press release that United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov.

Disclaimer

Certain statements in this press release are not historical facts and are “forward looking.”  Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information.  When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements.  By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved.  These forward-looking statements speak only as of the date of this press release.  AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward-looking statement is based.

Attachment

• 112119 AMG Shell SAGIA MOU

AMG Advanced Metallurgical Group N.V. Starts Basic Engineering for a Lithium Hydroxide Refining Plant in Germany

Nov 14, 2019

Amsterdam, 14 November 2019 (Regulated Information) — AMG Advanced Metallurgical Group N.V. („AMG“, EURONEXT AMSTERDAM: „AMG“) today announced its subsidiary, AMG Lithium GmbH, Frankfurt, has commenced basic engineering for a “battery grade” lithium hydroxide facility. It has applied with Investitionsbank Sachsen-Anhalt, Germany, for a governmental grant for the construction of a lithium hydroxide refining plant to be located in Elsteraue/Zeitz. Detailed engineering for that plant will begin by the end of this year.

The new plant, subject to the necessary approvals, will operate on validated processes and be fed with “technical grade” lithium hydroxide, enabling AMG to serve a key need of the electric vehicle lithium battery market for consistent, high-quality “battery grade” lithium hydroxide delivered on a just in time basis. In order to support such plans, AMG Lithium GmbH has established a state-of-the-art lithium hydroxide and battery materials laboratory in Frankfurt-Hoechst. Total capital investment for the refining plant and laboratory is presently estimated at approximately $50 million to $60 million. This “battery grade” lithium hydroxide facility will complement AMG’s plans to build a “technical grade” lithium hydroxide plant in Brazil and therefore will open the European market for that expansion in Brazil.

This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).
  

About AMG

AMG is a global critical materials company at the forefront of CO₂ reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.

AMG Critical Materials produces aluminum master alloys and powders, ferrovanadium, natural graphite, chromium metal, antimony, lithium, tantalum, niobium and silicon metal. AMG Technologies produces titanium aluminides and titanium alloys for the aerospace market; designs, engineers, and produces advanced vacuum furnace systems; and operates vacuum heat treatment facilities, primarily for the transportation and energy industries.

With approximately 3,300 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the Czech Republic, the United States, China, Mexico, Brazil, India, Sri Lanka and Mozambique, and has sales and customer service offices in Russia and Japan (www.amg-nv.com).

For further information, please contact:

AMG Lithium GmbH                                         +49 69 305 24390
Dr. Stefan Scherer
Managing Director
sscherer@amg-nv.com

OR

AMG Advanced Metallurgical Group N.V.         +1 610 975 4979
Michele Fischer
Vice President Investor Relations
mfischer@amg-nv.com

Disclaimer

Certain statements in this press release are not historical facts and are “forward looking”.  Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information.  When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements.  By their very nature, forward looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward looking statements will not be achieved.  These forward looking statements speak only as of the date of this press release.  AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward looking statement is based.

Attachment

• 11.14.2019 Lithium Hydroxide Plant

AMG Advanced Metallurgical Group N.V. Reports Third Quarter 2019 Results

Okt 30, 2019

Strategic Highlights

• AMG commenced the construction of a new catalyst recycling facility in Ohio which will double our spent catalyst recycling capacity to 60,000 tons; to finance the expansion, AMG closed on a tax-exempt bond, generating proceeds of $325 million
• AMG signed a multi-year offtake agreement with Glencore AG to reduce marketing risk and improve working capital management
• AMG entered into a 50/50 joint venture for the global expansion of catalyst recycling services; upon obtaining the necessary regulatory approvals, the joint venture company, Shell & AMG Recycling B.V., will service the rapidly expanding spent resid catalyst market
• AMG formed AMG Technologies to integrate its aerospace business units; as part of its growth strategy, AMG Technologies signed a definitive agreement to acquire the assets of International Specialty Alloys (located in New Castle, PA) from Kennametal Inc.

Financial Highlights

• AMG completed its share repurchase program which returned $89.9 million to shareholders in 2019
• Revenue decreased by 18% to $269.9 million in the third quarter 2019 from $328.1 million in the third quarter 2018
• EBITDA⁽²⁾ was $24.4 million in the third quarter 2019, a 59% decrease compared to the same period in 2018
• Annualized return on capital employed was 16.1% in the third quarter 2019, as compared to 32.8% in the third quarter 2018

Amsterdam, 30 October 2019 (Regulated Information) — AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported third quarter 2019 revenue of $269.9 million, an 18% decrease from $328.1 million in the third quarter 2018. EBITDA for the third quarter 2019 was $24.4 million, a 59% decrease from $59.1 million in the third quarter 2018, largely due to lower ferrovanadium prices versus the third quarter of last year. EBIT decreased 73% to $13.9 million in the third quarter 2019 from $50.8 million in the third quarter 2018.

Revenue dropped 18% in the third quarter 2019, driven by a significant metal price decline across our portfolio. The 59% decrease in EBITDA to $24.4 million was largely due to the Critical Materials segment, which achieved an EBITDA of $8.8 million in the third quarter 2019. That drop is almost entirely explained by the decreased pricing of ferrovanadium, as well as lower chrome metal margin and lower silicon prices.  AMG Technologies achieved an EBITDA of $15.6 million, a 15% decrease from the third quarter of 2018, due to lower profitability in the Titanium Alloys and Coatings business.

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “The unprecedented fall in all critical materials prices across the AMG portfolio has been a major challenge. This negative trend appears to be bottoming out as higher cost producers are experiencing negative cash flows in the vanadium, tantalum, graphite, silicon metal and spodumene industries.

We continue to focus on the things we can control. We have made significant strategic achievements in the quarter, which included signing a long-term offtake agreement with Glencore, mitigating our sales exposure; securing a tax-exempt bond, generating proceeds of $325 million to build a second catalyst recycling facility in Ohio; signing a joint venture agreement with Shell Catalysts & Technologies for the global expansion of spent catalyst recycling services; and acquiring International Specialty Alloys, Inc., located in New Castle, PA, as a platform to produce several of our advanced metal alloy product lines in the United States.”

Key Figures

Note: 

1. EBIT is defined as earnings before interest and income taxes. EBIT excludes restructuring, asset impairment, inventory cost adjustments and equity-settled share-based payments and includes foreign currency gains or losses.
2. EBITDA is defined as EBIT adjusted for depreciation and amortization.

Operational Review

AMG Critical Materials

AMG Critical Materials’ revenue in the third quarter decreased by $54.4 million, or 25%, to $165.2 million, driven largely by lower average prices across all seven business units during the quarter, partially offset by higher sales volumes of chrome metal and lithium concentrate.

Gross (loss) profit in the third quarter decreased by $54.1 million to ($1.3) million. The reduction in gross profit was largely driven by lower vanadium profitability and non-cash expenses for vanadium, lithium and tantalum inventory cost adjustments as a result of a significant decline in prices for those materials.

SG&A expenses in the third quarter of 2019 were consistent at $19.6 million compared to the third quarter 2018.

The third quarter 2019 EBITDA margin was 5% due to lower profitability in the quarter.

AMG Technologies

With a 2% increase versus June 30, 2019, order backlog maintained a high level of $202.6 million as of September 30, 2019, and the Company signed $79.5 million in new orders during the third quarter of 2019. This represents a 1.20x book to bill ratio. This higher book to bill ratio was largely driven by strong orders of turbine blade coating and induction furnaces for the aerospace market.

AMG Technologies‘ third quarter 2019 revenue slightly decreased due to lower prices and volumes in the Titanium Alloys and Coatings business, which was partially offset by profitability related to the favorable finalization of an outstanding large nuclear contract during the quarter.

Third quarter 2019 gross profit slightly decreased by $0.6 million, or 2%, to $26.2 million and gross margin was 25%, consistent with the third quarter 2018.

SG&A expenses decreased slightly to $15.5 million in the third quarter, compared to $16.1 in the same period in 2018, primarily due to lower variable compensation expense.

AMG Technologies’ third quarter EBITDA decreased by 15%, or $2.7 million, to $15.6 million from $18.3 million in the third quarter of 2018 due to lower prices in the Titanium Alloys and Coatings business.

Financial Review

Tax

AMG recorded an income tax expense of $1.5 million in the third quarter 2019, compared to $10.0 million in the same period in 2018. The decrease was primarily due to losses in the United States related to the decline in vanadium profitability and vanadium inventory cost adjustments in the current year.

AMG paid taxes of $7.2 million in the third quarter 2019, compared to tax payments of $6.3 million in the same period in 2018. As a result of the year-over-year volatility in income and the timing of cash tax payments, the present cash tax rate is not indicative of the current year performance as payments in the current year are reflective of the income in 2018 and not 2019.  Once earnings have stabilized, we believe that the cash tax rate is the more meaningful metric with regards to AMG’s taxes due to the volatile nature of the company’s deferred tax balances.

Exceptional Items

AMG’s third quarter 2019 gross profit of $24.9 million includes exceptional items, which are not included in the calculation of EBITDA.

A summary of exceptional items included in gross profit in the third quarters of 2019 and 2018 are below:

Exceptional items included in gross profit

AMG had a $21.1 million exceptional non-cash expense for vanadium, lithium and tantalum inventory cost adjustments as a result of a significant decline in prices for those materials. Therefore, it impacted our inventory cost position and resulted in a non-cash balance sheet adjustment which has been adjusted in EBITDA.

Liquidity

AMG had a net debt position of $154.0 million as of September 30, 2019. This was due to the return of $86.8 million to shareholders in 2019 through its share repurchase program, dividend payments of $16.7 million and significant investment in growth initiatives.

Cash (used in) operating activities of ($4.9) million in the third quarter of 2019 decreased by $28.0 million compared to the same period in 2018, primarily due to lower profitability.

Capital expenditures decreased to $13.3 million in the third quarter of 2019 compared to $14.0 million in the same period in 2018. Capital spending in the third quarter 2019 included $6.2 million of maintenance capital. The remaining $7.1 million of capital spending is primarily attributable to expansion projects at AMG’s vanadium, titanium aluminide, lithium and heat treatment facilities.

Including the $229.0 million of cash, AMG had $398.7 million of total liquidity as of September 30, 2019.

Net Finance Costs

AMG’s third quarter 2019 net finance costs increased to $5.9 million compared to $4.7 million in the third quarter 2018. Third quarter 2019 includes additional interest expense associated with lease liabilities due to the adoption of IFRS16 on January 1, 2019.

SG&A

AMG’s third quarter 2019 SG&A expenses were $35.1 million compared to $35.6 million in the third quarter of 2018, primarily due to lower variable compensation expense.

Subsequent Events

On October 8, 2019, AMG signed an agreement with Shell Catalysts & Technologies to form a joint venture that will provide a long-term solution for catalyst reclamation and recycling. Also, to increase AMG Titanium Alloys & Coatings’ market position, the Company signed a definitive agreement on October 9, 2019 to acquire the assets of International Specialty Alloys from Kennametal.

Outlook

Although our financial results continue to be impacted by depressed market conditions, we reiterate our 2019 EBITDA outlook of approximately $120 million. We are continuing to focus on the things we can control and are extremely pleased with the noted achievements in our strategic initiatives which will drive long-term value creation. Assuming continued weak market conditions, our target for 2020 is to improve profitability relative to 2019.

Net (loss) income to EBITDA reconciliation

*Excludes foreign exchange expense (income).

Net (loss) income adjusted for non-cash impairments

*The Company applied IFRS 16 (lease accounting) for the first time as of January 1, 2019. The Company recognized new assets and liabilities for its operating leases which are primarily comprised of buildings, equipment, machinery and automobiles. Right of use assets are included within property, plant and equipment and classified in the same manner as if the underlying assets were owned by the Company. The lease liabilities are presented as a separate line item on the consolidated statement of financial position. The nature and pattern of expense recognition in relation to these leases has changed. The Company recognizes depreciation on the right of use assets on a straight-line basis over the expected term of the lease. Interest expense related to the lease liabilities are recognized over the expected term of the lease using the effective interest method. Comparative figures have not been adjusted. Assets and liabilities increased per January 1, 2019 by $37 million.

This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

This press release contains regulated information as defined in the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).

About AMG

AMG is a global critical materials company at the forefront of CO₂ reduction trends. AMG produces highly engineered specialty metals and mineral products and provides related vacuum furnace systems and services to the transportation, infrastructure, energy, and specialty metals & chemicals end markets.

AMG Critical Materials produces aluminum master alloys and powders, ferrovanadium, natural graphite, chromium metal, antimony, lithium, tantalum, niobium and silicon metal.  AMG Technologies produces titanium aluminides and titanium alloys for the aerospace market; designs, engineers, and produces advanced vacuum furnace systems; and operates vacuum heat treatment facilities, primarily for the transportation and energy industries.

With approximately 3,300 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, the Czech Republic, the United States, China, Mexico, Brazil, India, Sri Lanka and Mozambique, and has sales and customer service offices in Russia and Japan (www.amg-nv.com).

For further information, please contact:
AMG Advanced Metallurgical Group N.V.         +1 610 975 4979
Michele Fischer
mfischer@amg-nv.com

Disclaimer

Certain statements in this press release are not historical facts and are “forward looking.”  Forward looking statements include statements concerning AMG’s plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans and intentions relating to acquisitions, AMG’s competitive strengths and weaknesses, plans or goals relating to forecasted production, reserves, financial position and future operations and development, AMG’s business strategy and the trends AMG anticipates in the industries and the political and legal environment in which it operates and other information that is not historical information.  When used in this press release, the words “expects,” “believes,” “anticipates,” “plans,” “may,” “will,” “should,” and similar expressions, and the negatives thereof, are intended to identify forward looking statements.  By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the predictions, forecasts, projections and other forward-looking statements will not be achieved.  These forward-looking statements speak only as of the date of this press release.  AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in AMG’s expectations with regard thereto or any change in events, conditions, or circumstances on which any forward-looking statement is based.

Attachment

• Third Quarter 2019 PR