AMG Advanced Metallurgical Group N.V. Reports Second Quarter 2017 Results

Août 3, 2017

Key Highlights

• Revenue increased by 6% to $262.0 million in the second quarter 2017 from $248.3 million in the second quarter 2016
• EBITDA⁽²⁾ was $31.9 million in the second quarter 2017, a 22% increase over the same period in 2016
• Operating profit increased by 19% to $22.6 million in the second quarter 2017 from $19.0 million in the second quarter 2016
• Cash from operating activities on a year to date basis was $28.5 million, an increase of $8.5 million over the same period in 2016
• Annualized return on capital employed increased to 23.9% in the second quarter 2017, as compared to 17.8% in the second quarter 2016

Amsterdam, 3 August 2017 (Regulated Information) — AMG Advanced Metallurgical Group N.V. (« AMG », EURONEXT AMSTERDAM: « AMG ») reported second quarter 2017 revenue of $262.0 million, a 6% increase from $248.3 million in the second quarter 2016. EBITDA for the second quarter 2017 was $31.9 million, a 22% increase from $26.0 million in the second quarter 2016. Net income attributable to shareholders slightly decreased to $13.1 million in the second quarter 2017 from $13.4 million in the second quarter 2016.

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, « We are very pleased that AMG’s strong cash flow generation for the first six months of 2017 enabled the Company to end the quarter with net debt in line with the prior year end, despite substantial capital investments in the first half of 2017 in AMG’s lithium project in Brazil, and titanium aluminide expansion in Germany.

AMG’s lithium project continues to progress in line with our expectations and we intend to make a formal investment decision regarding our targeted expansion to 180,000 tons of lithium concentrate production capacity before the end of the year.

AMG Engineering achieved EBITDA of $8.0 million during the second quarter 2017, a 43% increase from $5.6 million in the second quarter 2016. AMG Engineering signed $76.9 million in new orders during the second quarter 2017, representing a 1.29x book to bill ratio. The Engineering segment continues to experience strong demand for turbine blade coating, powder metallurgy and plasma remelting furnaces for the aerospace market and heat treatment furnaces for the automotive market. Order backlog was $183.3 million as of June 30, 2017, an increase of 35% compared to December 31, 2016. The strong results in AMG Engineering reflect our efforts to diversify our product offerings in recent years, including the introduction of powder metallurgy and SyncroTherm in-line heat treatment furnaces.

AMG Critical Materials generated EBITDA of $23.9 million during the second quarter 2017, thanks to strong financial performance in vanadium and titanium alloys, and the recognition of $3.0 million in business interruption insurance, following the fire at the Mibra mine in Brazil.

In the second quarter of 2017, AMG generated cash from operating activities of $10.6 million, a decrease of $13.7 million over the same period in 2016. On a year to date basis, AMG generated cash from operating activities of $28.5 million in 2017, an increase of $8.5 million compared to the same period in 2016. »

Key Figures

Note: 

1. EBIT is defined as earnings before interest and income taxes. EBIT excludes restructuring 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

* Includes $3.6 million non-cash benefit related to reversal of previously expensed vanadium, nickel and molybdenum inventory adjustments

AMG Critical Materials’ revenue in the second quarter increased by $21.0 million, or 12%, to $202.6 million, driven by improved vanadium, molybdenum, nickel, aluminum, titanium and antimony prices, and higher sales volumes of chrome, antimony, silicon, niobium and titanium products.

Gross profit in the second quarter decreased by $0.4 million, or 1%, to $37.6 million. Strong financial performance in vanadium and titanium alloys in the quarter was offset by lower gross profit in tantalum. The reduction in tantalum gross profit was driven by lower sales volumes, due to the temporary shutdown in one of AMG’s two tantalum production lines, and lower sales prices, following the termination of AMG’s long term supply agreement.

AMG is insured for the interruption to the tantalum business as a result of the fire, and has recorded insurance proceeds of $3.0 million during the second quarter 2017, which is included within gross profit and EBITDA.

In addition, AMG Critical Materials’ gross profit was positively impacted by the partial recovery of asset impairment expenses recorded in the first quarter 2017. AMG recorded an asset impairment expense of $2.2 million in the first quarter 2017 as a result of fire damage sustained at the Mibra mine in Brazil, and subsequently recorded a $1.4 million partial recovery in the second quarter 2017, following the receipt of insurance proceeds. 

Additional insurance proceeds, in respect of both business interruption and property damage, are expected to be recorded in the second half of 2017. In accordance with IFRS, AMG is recognizing the insurance proceeds as recovery amounts are finalized.

SG&A expenses in the second quarter 2017 decreased by $2.4 million, or 10%, compared to the same period in the prior year, primarily due to a reduction in share-based compensation expenses.

Second quarter 2017 EBITDA margin increased slightly to 12%, compared to 11% in the second quarter 2016.

AMG Engineering

AMG Engineering signed $76.9 million in new orders during the second quarter 2017, representing a 1.29x book to bill ratio. Order backlog was $183.3 million as of June 30, 2017, an increase of 35% from December 31, 2016.

AMG Engineering’s second quarter 2017 revenue decreased $7.3 million, or 11%, to $59.4 million, due to lower revenue from plasma remelting furnaces for the aerospace market and heat treatment services for the automotive market.

Second quarter 2017 gross profit increased by $1.4 million, or 9%, to $16.8 million and gross margin increased to 28% from 23%, due to a greater proportion of revenue being generated from high margin, aerospace market facing products in the quarter.

SG&A expenses decreased by $0.4 million, or 3%, compared to the prior year, primarily due to lower share-based compensation expenses.

EBITDA increased by $2.4 million to $8.0 million in the second quarter 2017, driven largely by higher gross profit and lower SG&A costs.

Financial Review

Tax

AMG recorded an income tax expense of $7.7 million in the second quarter 2017 as compared to a tax expense of $2.8 million in the same period in 2016.  The lower tax expense in second quarter 2016 was primarily due to a drop in the Brazilian Real, which reduced income tax expense.

Due to the volatile nature of the Company’s deferred tax balances caused by items such as the Brazil currency fluctuations, AMG focuses on cash tax payments.  AMG paid taxes of $3.4 million in the second quarter 2017 as compared to tax payments of $1.8 million in the same period in 2016. For the second quarter 2017, AMG’s effective cash tax rate was 16%, compared to 11% in the same period in 2016. The increase is due to higher profitability in countries where the Company does not have tax losses carried forward to reduce tax liabilities.

Non-Recurring Items

AMG’s second quarter 2017 gross profit of $54.3 million includes non-recurring items, which are not included in the calculation of EBITDA.

A summary of non-recurring items included in gross profit in the second quarters of 2017 and 2016 are below:

Non-recurring items included in gross profit

Gross profit before non-recurring items by reporting segment

AMG Critical Materials’ gross profit was positively impacted by the partial recovery of asset impairment expenses recorded in the first quarter 2017. AMG recorded an asset impairment expense of $2.2 million in the first quarter 2017 as a result of fire damage sustained at the Mibra mine in Brazil, and subsequently recorded a $1.4 million partial recovery in the second quarter 2017, following the receipt of insurance proceeds.

As noted in AMG’s 2016 financial statements, the Company modified its income statement presentation in order to take into consideration ESMA’s latest recommendations. This resulted in the reclassification of restructuring expenses and asset impairment expenses into expenses by function, and consequently gross profit.

Liquidity

AMG had a net debt position of $7.3 million as of June 30, 2017. Total debt increased by $8.1 million and net debt was unchanged from December 31, 2016.

Cash from operating activities decreased by $13.7 million to $10.6 million in the second quarter 2017, due to an $11.0 million increase in working capital during the quarter which was largely driven by an increase in accounts receivable.

Capital expenditures increased to $18.6 million in the second quarter 2017 compared to $7.5 million in the same period in 2016. Capital spending in the second quarter 2017 included $5.6 million of maintenance capital. The largest expansion capital projects were AMG’s lithium project in Brazil, and titanium aluminide expansion in Germany.

Including the $168.9 million of cash, AMG had $350 million of total liquidity as of June 30, 2017.

Net Finance Costs

AMG’s second quarter 2017 net finance costs decreased to $1.8 million from $3.3 million in the second quarter 2016, due to lower foreign exchange impacts.

SG&A

AMG’s second quarter 2017 SG&A expenses were $32.0 million compared to $34.8 million in the second quarter 2016, primarily due to a decrease in share-based compensation expenses of $1.6 million and lower pension expenses of $0.3 million, as a result of pension contributions made during 2016.

Interim Dividend

AMG has announced an interim dividend of €0.14 per ordinary share in respect of the period from January 1, 2017, to June 30, 2017.

Outlook

AMG expects full year 2017 profitability to improve relative to 2016.

*Reclassified share reserves from other reserves to retained earnings (deficit) for December 31, 2016

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, titanium alloys and coatings, ferrovanadium, natural graphite, chromium metal, antimony, tantalum, niobium and silicon metal. AMG Engineering designs, engineers, and produces advanced vacuum furnace systems and operates vacuum heat treatment facilities, primarily for the transportation and energy industries.

With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, Czech Republic, the United States, China, Mexico, Brazil, 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.         +1 610 293 5804
Steve Daniels
Senior Vice President
sdaniels@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.

AMG Advanced Metallurgical Group N.V. Announces Interim Dividend

Août 3, 2017

Amsterdam, 3 August 2017 (Regulated Information) — AMG Advanced Metallurgical Group N.V. (« AMG », EURONEXT AMSTERDAM: « AMG ») is pleased to announce an interim dividend in respect of the period from 1 January 2017 to 30 June 2017 of €0.14 per ordinary share, payable on or around 15 August 2017, to shareholders of record on 8 August 2017. The ex-dividend date will be 7 August 2017. 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 produces aluminum master alloys and powders, titanium alloys and coatings, ferrovanadium, natural graphite, chromium metal, antimony, tantalum, niobium and silicon metal.  AMG Engineering designs and produces vacuum furnace equipment and systems used to produce and upgrade specialty metals and alloys for the transportation, automotive, infrastructure, and energy markets.

With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, Czech Republic, United States, China, Mexico, Brazil and Sri Lanka, 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.         +1 610 293 5804
Steve Daniels
Senior Vice President
sdaniels@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.

AMG Advanced Metallurgical Group N.V. Announces Results of 2017 Annual Meeting of Shareholders

Mai 4, 2017

Amsterdam, 4 May 2017 (Regulated Information) — AMG Advanced Metallurgical Group N.V. (« AMG », EURONEXT AMSTERDAM: « AMG ») is pleased to announce that during its Annual Meeting held in Amsterdam on May 4, 2017, all proposed agenda items were approved by the shareholders, including the reappointment of Mr. Eric Jackson as Chief Operating Officer (« COO ») and member of the Management Board for a term of 4 years, with effect from May 4, 2017.

Two appointments and two reappointments were made to the Supervisory Board at the Annual General Meeting.  AMG is pleased to announce that Mrs. Suzanne Rich Folsom and Mr. Willem van Hassel were appointed as members of the Supervisory Board effective May 4, 2017, both for terms of 4 years. In addition, Mr. Jack Messman and Mr. Herb Depp were reappointed as members of the Supervisory Board effective May 4, 2017, with Mr. Messman reappointed for a term of 2 years and Mr. Depp for a term of 4 years.

During the meeting, Dr. Heinz Schimmelbusch, CEO and Chairman of the Management Board, presented the Company’s strategic framework, including guidance on AMG’s long-term financial goals. Through the execution of a combination of well-developed, highly accretive growth projects, including AMG’s entrance into the lithium market, AMG expects EBITDA to exceed $200 million within 5 years.

The full results of the Annual Meeting, along with the presentations made by Management, can be found on AMG’s corporate website (http://www.amg-nv.com/).

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 produces aluminum master alloys and powders, titanium alloys and coatings, ferrovanadium, natural graphite, chromium metal, antimony, tantalum, niobium and silicon metal.  AMG Engineering designs and produces vacuum furnace equipment and systems used to produce and upgrade specialty metals and alloys for the transportation, automotive, infrastructure, and energy markets.

With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, Czech Republic, United States, China, Mexico, Brazil and Sri Lanka, 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.         +1 610 293 5804
Steve Daniels
Senior Vice President
sdaniels@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.

AMG Advanced Metallurgical Group N.V. Announces Final Dividend for 2016

Mai 4, 2017

Amsterdam, 4 May 2017 (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 4, 2017, AMG’s shareholders approved the payment of a dividend of €0.27 per ordinary share over the financial year 2016. The interim dividend of €0.13, paid on August 16, 2016 will be deducted from the amount to be distributed to shareholders. The proposed final dividend per ordinary share therefore amounts to €0.14.

The final dividend will be payable on or around May 16, 2017, to shareholders of record on May 9, 2017. The ex-dividend date will be May 8, 2017. 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 produces aluminum master alloys and powders, titanium alloys and coatings, ferrovanadium, natural graphite, chromium metal, antimony, tantalum, niobium and silicon metal.  AMG Engineering designs and produces vacuum furnace equipment and systems used to produce and upgrade specialty metals and alloys for the transportation, automotive, infrastructure, and energy markets.

With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, Czech Republic, United States, China, Mexico, Brazil and Sri Lanka, 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.         +1 610 293 5804
Steve Daniels
Senior Vice President
sdaniels@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.

AMG Advanced Metallurgical Group N.V. Presents Update on AMG’s Long-term Financial Goals

Mai 4, 2017

Amsterdam, 4 May 2017 (Regulated Information) — AMG Advanced Metallurgical Group N.V. (« AMG », EURONEXT AMSTERDAM: « AMG ») is pleased to announce that during its Annual Meeting held in Amsterdam on May 4, 2017, Dr. Heinz Schimmelbusch, CEO and Chairman of the Management Board, presented the Company’s strategic framework, including guidance on AMG’s long-term financial goals. Through the execution of a combination of well-developed, highly accretive growth projects, including AMG’s entrance into the lithium market, AMG expects EBITDA to exceed $200 million within 5 years.

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 produces aluminum master alloys and powders, titanium alloys and coatings, ferrovanadium, natural graphite, chromium metal, antimony, tantalum, niobium and silicon metal.  AMG Engineering designs and produces vacuum furnace equipment and systems used to produce and upgrade specialty metals and alloys for the transportation, automotive, infrastructure, and energy markets.

With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, Czech Republic, United States, China, Mexico, Brazil and Sri Lanka, and has sales and customer service offices in Russia and Japan (www.amg-nv.com).

About Alterna Capital Partners

Alterna is a private equity firm that invests in capital assets and companies with significant involvement in the ownership, operation or financing of capital assets.  Alterna seeks to make investments within the energy, industrial, power, transportation and related sectors.  Alterna was founded in 2008 and manages over $1.25 billion across two funds and co-investments (www.alternacapital.com).

For further information, please contact:
AMG Advanced Metallurgical Group N.V.         +1 610 293 5804
Steve Daniels
Vice President of Investor Relations
sdaniels@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.

AMG Advanced Metallurgical Group N.V. Reports First Quarter 2017 Results

Mai 4, 2017

Key Highlights

• Revenue increased by 9% to $258.0 million in the first quarter 2017 from $237.4 million in the first quarter 2016
• EBITDA⁽²⁾ was $33.0 million in the first quarter 2017, a 56% increase over the same period in 2016
• AMG ended the first quarter 2017 net debt free, with net cash of $0.5 million
• Net income attributable to shareholders increased by 30% to $15.6 million in the first quarter 2017 from $12.0 million in the first quarter 2016
• Operating cash flow was $17.8 million in the first quarter 2017, an increase of $22.2 million over the same period in 2016
• Annualized return on capital employed increased to 25.5% in the first quarter 2017, as compared to 14.7% in the first quarter 2016

Amsterdam, 4 May 2017 (Regulated Information) — AMG Advanced Metallurgical Group N.V. (« AMG », EURONEXT AMSTERDAM: « AMG ») reported first quarter 2017 revenue of $258.0 million, a 9% increase from $237.4 million in the first quarter 2016. EBITDA for the first quarter 2017 was $33.0 million, a 56% increase from $21.2 million in the first quarter 2016. Net income attributable to shareholders increased to $15.6 million in the first quarter 2017 from $12.0 million in the first quarter 2016.

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, « AMG’s focus on operational excellence once again resulted in solid financial results in the first quarter 2017.

AMG Engineering achieved EBITDA of $7.3 million during the first quarter 2017, a 57% increase from $4.6 million in the first quarter 2016. AMG Engineering signed $81.8 million in new orders during the first quarter 2017, representing a 1.29x book to bill ratio. The Engineering segment continues to experience strong demand for turbine blade coating and plasma remelting furnaces for the aerospace market and heat treatment furnaces for the automotive market. Order backlog was $154.3 million as of March 31, 2017, an increase of 14% compared to December 31, 2016. The strong results in AMG Engineering reflect our efforts to diversify our product offerings in recent years, including the introduction of powder metallurgy and SyncroTherm in-line heat treatment furnaces.

AMG Critical Materials generated EBITDA of $25.7 million during the first quarter 2017, thanks to strong financial performance in vanadium, titanium alloys, and chrome, as well as the recognition of additional tantalum deferred revenue.

AMG generated cash from operating activities of $17.8 million during the first quarter 2017, an increase of $22.2 million compared to the same period in 2016. This strong cash flow generation enabled AMG to end the first quarter net debt free, with net cash of $0.5 million. »

Key Figures

Note: 

1. EBIT is defined as earnings before interest and income taxes. EBIT excludes restructuring 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 first quarter increased by $18.0 million, or 10%, to $194.5 million, driven by improved vanadium, molybdenum, nickel, aluminum and antimony prices, and higher sales volumes of chrome, antimony and titanium products.  

Gross profit in the first quarter increased by $5.8 million, or 19%, to $36.3 million. Strong financial performance in vanadium, titanium alloys and chrome was partially offset by lower gross profit in silicon. In addition, AMG Critical Materials incurred an asset impairment expense of $2.2 million in the first quarter 2017 as a result of fire damage sustained at the Mibra mine in Brazil. AMG is insured for the damage sustained and the business interruption, and in accordance with IFRS, will recognize the insurance proceeds once recovery amounts are virtually certain.

Following the early cancellation of AMG Mineração’s long term tantalum supply contract, deferred revenue recognized in the first quarter 2017 increased by $6.8 million, compared to the first quarter 2016, resulting in additional tantalum revenue and profitability.

SG&A expenses in the first quarter 2017 increased by $0.7 million, or 3%, compared to the same period in the prior year, due to an increase in the allowance for doubtful accounts associated with AMG’s tantalum business.

First quarter 2017 EBITDA margin increased to 13%, compared to 9% in the first quarter 2016, due primarily to the improvement in gross profit in the quarter.

AMG Engineering

AMG Engineering signed $81.8 million in new orders during the first quarter 2017, representing a 1.29x book to bill ratio. Order backlog was $154.3 million as of March 31, 2017, an increase of 14% from December 31, 2016.

AMG Engineering’s first quarter 2017 revenue increased $2.6 million, or 4%, to $63.5 million, due to strong sales of turbine blade coating and induction furnaces for the aerospace market and heat treatment furnaces for the automotive market.

First quarter 2017 gross profit increased by $2.5 million, or 18%, to $16.2 million due to higher revenues and product mix effects. Gross Margin increased slightly to 26% from 23% in the first quarter 2016 due to product mix effects.

SG&A expenses decreased slightly by $0.4 million, or 4%, compared to the prior year due to lower personnel costs.

EBITDA increased by $2.7 million to $7.3 million in the first quarter 2017, driven by higher gross profit and lower SG&A costs.

Financial Review

Tax

AMG recorded an income tax expense of $3.5 million in the first quarter 2017 as compared to a tax expense of $0.3 million in the same period in 2016. AMG paid taxes of $1.5 million in the first quarter 2017 as compared to tax payments of $1.9 million in the same period in 2016. For the first quarter 2017, AMG’s effective cash tax rate was 8%, compared to 15% in the same period in 2016.

Non-Recurring Items

AMG’s first quarter 2017 gross profit of $52.5 million includes non-recurring items, which are not included in the calculation of EBITDA.

A summary of non-recurring items included in gross profit in the first quarters of 2017 and 2016 are below:

Non-recurring items included in gross profit

Gross profit before non-recurring items by reporting segment

AMG Critical Materials gross profit in the first quarter 2017 was negatively impacted by asset impairment expenses of $2.2 million related to the Mibra mine in Brazil.

The Company decided to modify its income statement presentation in order to take into consideration ESMA’s latest recommendations. This new presentation results in the reclassification of restructuring expenses and asset impairment expenses into expenses by function, and consequently gross profit. Accordingly, the comparative figures of the 2017 consolidated financial statements have been restated to comply with IFRS requirements.

Liquidity

AMG had a net cash position of $0.5 million as of March 31, 2017. Net debt decreased by $7.8 million and total debt decreased by $2.1 million from December 31, 2016.

Cash from operating activities increased by $22.2 million to $17.8 million in the first quarter 2017.

Capital expenditures increased to $10.9 million in the first quarter 2017 compared to $6.9 million in the same period in 2016. Capital spending in the first quarter 2017 included $4.8 million of maintenance capital. The largest expansion capital projects were AMG’s lithium project in Brazil, and titanium aluminide expansion in Germany.

Including the $166.5 million of cash, AMG had $354 million of total liquidity as of March 31, 2017.

Net Finance Costs

AMG’s first quarter 2017 net finance costs slightly increased to $2.0 million compared to $1.8 million in the first quarter 2016.

SG&A

AMG’s first quarter 2017 SG&A expenses were $31.6 million compared to $31.3 million in the first quarter 2016, primarily due to an increase in the allowance for doubtful accounts during the period.

Outlook

AMG expects full year 2017 profitability to be in-line with 2016 levels, assuming that the business interruption insurance claim related to the fire in Brazil is received in the current financial year.

AMG’s management team is focused on delivering our highly accretive lithium project and executing our long-term lithium strategy. In addition, we will continue to pursue other acquisition opportunities and organic growth projects in order to generate long term value for our shareholders.

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, titanium alloys and coatings, ferrovanadium, natural graphite, chromium metal, antimony, tantalum, niobium and silicon metal. AMG Engineering designs, engineers, and produces advanced vacuum furnace systems and operates vacuum heat treatment facilities, primarily for the transportation and energy industries.

With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, Czech Republic, the United States, China, Mexico, Brazil and Sri Lanka, 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.         +1 610 293 5804
Steve Daniels
Senior Vice President
sdaniels@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.

AMG Advanced Metallurgical Group N.V. Announces Increased Lithium and Tantalum Mineral Resources at Mibra Mine

Avr 3, 2017

Amsterdam, 3 April 2017 (Regulated Information) — AMG Advanced Metallurgical Group N.V. (« AMG », EURONEXT AMSTERDAM: « AMG ») is pleased to announce that its subsidiary AMG Mineração has updated its mineral resource estimates for its Mibra mine in Brazil in accordance with CIM Definition Standard and Canadian Securities Administrators’ National Instrument 43-101 (« NI 43-101 ») Guidelines.

The Technical Report on Mineral Resources states that AMG Mineração’s Mibra mine has 20.3 million tonnes of measured and indicated resources, an increase of approximately 38% compared to the previous Mineral Resource Statement completed in 2013. Those resources include lithium, tantalum, niobium and tin. This report is based upon drillings and research done during the 2016-2017 core drilling campaign and certain economic assumptions that reflect today’s current market prices and extraction costs.

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, commented, « The increase of our lithium resources, reflected in the updated 43-101 statement, affirms our target to double annual production capacity of lithium concentrate to 180k MT by 2020 as the next step in our lithium strategy. In support of this target, preliminary engineering work is currently being performed by both Hatch and Outotec. »

Based upon AMG’s targeted production level of 180k MT of lithium concentrate from 2020 onwards, AMG estimates that the current life of the mineral resource is approximately 20 years, based upon current extraction and processing costs, and current economic conditions.

Compared to the previous Mineral Resource Statement, which was completed in 2013:

• the measured and indicated mineral resource increased by 5.5 million tonnes, to 20.3 million tonnes, an increase of approximately 38%
• the inferred mineral resource decreased by 0.4 million to 4.2 million tonnes, indicating a positive migration from inferred to measured and indicate resources

The detailed table of the mineral resources is below:

Mineral Resource Statement*, SRK Consultores do Brasil Ltda., March 30, 2017

*Mineral resources are not mineral reserves and do not have a demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimates. The mineral resources are reported within a conceptual pit shell at a cut-off grade of 80 ppm of Ta considering a selling price of R$316 per pound of Ta₂O₅, R$130 per tonne of feldspar and R$1,860 per tonne of concentrate 5.5% Li₂O, a metallurgic recovery of 55 percent of tantalum, 65 percent of lithium, 10% mass recovery for feldspar.

The mineral resource estimates have been prepared in accordance with the classification standards adopted by the Canadian Securities Administrators’ National Instrument 43-101 Standards of Disclosure for Mineral Projects. The construction of the mineral resource was a collaborative effort between AMG and SRK staff from the Belo Horizonte and Toronto offices. Mr. Caymon Assumpção (MAIG#5551), of AMG, constructed the wireframe interpretation of the boundaries of pegmatite dikes and provided input to all stages of resource modelling. The mineral resource modelling work was completed by Ms. Camila Passos (APGO#2431) with the assistance of Dr. Oy Leuangthong, PEng (PEO#90563867) for the geostatistical analysis. Pit optimization was conducted by Mr. Italo Koyama, a mining engineer in the Brazil office. The overall process benefited from the senior review of Dr. Jean-François Couture, PGeo (APGO#0196, OGQ#1106).

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 produces aluminum master alloys and powders, titanium alloys and coatings, ferrovanadium, natural graphite, chromium metal, antimony, tantalum, niobium and silicon metal.  AMG Engineering designs and produces vacuum furnace equipment and systems used to produce and upgrade specialty metals and alloys for the transportation, automotive, infrastructure, and energy markets.

With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, Czech Republic, United States, China, Mexico, Brazil and Sri Lanka, 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.         +1 610 293 5804
Steve Daniels
Vice President of Investor Relations
sdaniels@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.

AMG Advanced Metallurgical Group N.V. Receives Notice of Cancellation of Tantalum Supply Contract

Mar 27, 2017

Amsterdam, 27 March 2017 (Regulated Information) — AMG Advanced Metallurgical Group N.V. (« AMG », EURONEXT AMSTERDAM: « AMG ») announces that it has recently received a purported « notice of cancellation » of its tantalum supply contract from its customer, Global Advanced Metals USA Inc. (« GAM »). GAM has asserted that AMG has failed to provide adequate assurances of its ability to perform under the supply contract following the fire in January 2017 in one of AMG’s two tantalum concentrate production lines. 

AMG believes that it has supplied detailed empirical information that provides reasonable and adequate assurance of its ability to perform its obligations under the supply contract, notwithstanding the fire, and that GAM’s action has no legal or factual basis. AMG intends to take all steps to protect its rights under the contract.

AMG is currently assessing the financial impact of the purported contract cancellation, which will depend on a number of factors, including making tantalum product available to the market, as well as evaluating our rights under our business interruption insurance policy. AMG’s current best estimate of the financial impact on 2017 profitability, as a result of the purported contract cancellation, is approximately $5m.

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 produces aluminum master alloys and powders, titanium alloys and coatings, ferrovanadium, natural graphite, chromium metal, antimony, tantalum, niobium and silicon metal.  AMG Engineering designs and produces vacuum furnace equipment and systems used to produce and upgrade specialty metals and alloys for the transportation, automotive, infrastructure, and energy markets.

With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, Czech Republic, United States, China, Mexico, Brazil and Sri Lanka, 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.         +1 610 293 5804
Steve Daniels
Senior Vice President
sdaniels@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.

AMG Advanced Metallurgical Group N.V. Announces Changes in the Composition of its Supervisory Board

Mar 17, 2017

Amsterdam, 17 March 2017 (Regulated Information) — The Supervisory Board of AMG Advanced Metallurgical Group N.V. (« AMG », EURONEXT AMSTERDAM: « AMG ») resolved during its meeting on March 17, 2017 to make the following changes to its composition.

At the Annual Meeting on May 4, 2017 in Amsterdam, the Supervisory Board will nominate for appointment by the General Meeting of Shareholders, Mrs. Suzanne Rich Folsom and Mr. Willem van Hassel as new (independent) Supervisory Board members. Mrs. Folsom is a United States citizen and currently serves as the General Counsel, Chief Compliance Officer and SVP-Government Affairs, and is a member of the Executive Team, at the United States Steel Corporation. Mr. van Hassel is a Dutch citizen, senior lawyer and Dutch corporate governance expert. Full details of the Agenda of the Annual Meeting and the CV’s of Mrs. Folsom and Mr. van Hassel can be found on AMG’s website as of March 23, 2017, when AMG will publish the Agenda of its Annual Meeting to be held on May 4, 2017 in Amsterdam.

Mr. Martin Hoyos, who has been a Supervisory Board member since 2009, and chaired the Audit Committee since 2013, has requested to step down at the end of his term in May 2017 in view of other priorities and is not available for re-appointment. The Supervisory Board wishes to thank Mr. Hoyos for his dedication and services and his leadership of the Audit Committee during the past four years, and wishes him well in his future endeavors.

Furthermore, Mr. Petteri Soininen has requested to step down after having served on the Supervisory Board since 2015. Mr. Soininen joined the Supervisory Board in 2015 as non-independent nominee of AMG’s largest shareholder, RWC European Focus Master Inc. (RWC), after RWC had entered into a Relationship Agreement with AMG. The Relationship Agreement comes to an end after the General Meeting of Shareholders on May 4, 2017 and Mr. Soininen wishes to retire as a member of the Supervisory Board on that date. The Supervisory Board wishes to thank Mr. Soininen for his dedication and services and wishes him well in his future endeavors. 

During the period that Messrs. Hoyos and Soininen were members of the Supervisory Board, AMG has made important strategic decisions which have been positively reflected in AMG’s share price. The Supervisory Board is grateful for the services of Messrs. Hoyos and Soininen as members of the Supervisory Board and wishes to thank them for their valuable insights and contributions.

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 produces aluminum master alloys and powders, titanium alloys and coatings, ferrovanadium, natural graphite, chromium metal, antimony, tantalum, niobium and silicon metal.  AMG Engineering designs and produces vacuum furnace equipment and systems used to produce and upgrade specialty metals and alloys for the transportation, automotive, infrastructure, and energy markets.

With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, Czech Republic, United States, China, Mexico, Brazil and Sri Lanka, 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.         +1 610 293 5804
Steve Daniels
Senior Vice President
sdaniels@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.

AMG Reports Full Year and Fourth Quarter 2016 Results and Provides Update on Lithium Project

Mar 9, 2017

Key Highlights

• Revenue increased by 8% to $237.9 million in the fourth quarter 2016 from $220.8 million in the fourth quarter 2015
• EBITDA⁽²⁾ was $30.0 million in the fourth quarter 2016, a 210% increase over the same period in 2015, and represents the highest quarterly EBITDA in 5 years
• On a full year basis, EBITDA in 2016 increased by 33% to $100.7 million, from $75.6 million in the prior year
• Full year EPS, on a fully diluted basis, increased by 230% to $1.32 in 2016 from $0.40 in 2015
• Return on capital employed increased to 18.8% in 2016, as compared to 12.0% in 2015
• Total 2016 dividend proposed of €0.27 per ordinary share, including the interim dividend of €0.13, paid on August 16, 2016
• AMG’s lithium project is progressing in-line with expectations, with production expected to commence mid-2018

Amsterdam, 9 March 2017 (Regulated Information) — AMG Advanced Metallurgical Group N.V. (« AMG », EURONEXT AMSTERDAM: « AMG ») reported fourth quarter 2016 revenue of $237.9 million, an 8% increase from $220.8 million in the fourth quarter 2015. EBITDA for the fourth quarter 2016 was $30.0 million, a 210% increase from $9.7 million in the fourth quarter 2015. Net income attributable to shareholders increased to $10.0 million in the fourth quarter 2016 from a loss of $0.3 million in the fourth quarter 2015. On a full year basis, EBITDA increased by 33% to $100.7 million, from $75.6 million in the prior year, despite an increase in AMG’s Performance Share Unit (« PSU ») plan costs of $4.5 million, compared to the same period in 2015, driven by AMG’s strong share price performance in 2016.

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, « AMG’s focus on operational excellence and price risk management resulted in very strong financial results in the fourth quarter 2016. Both AMG Critical Materials and AMG Engineering generated triple-digit percentage improvements in quarterly EBITDA compared to the same period in 2015.

AMG Critical Materials generated EBITDA of $22.1 million during the fourth quarter 2016, an increase of 214% from $7.0 million in the fourth quarter of 2015. All operating units within AMG Critical Materials performed well during the quarter, due to a combination of lower operating costs, improved product mix, strong sales volumes and improving vanadium prices. Despite improvements in select materials prices in 2016, current prices for many of our products still reside in the lowest quartile when analyzed over a 10-year timeframe.

AMG Engineering achieved EBITDA of $7.9 million during the fourth quarter 2016, an increase of 199% from $2.6 million in the fourth quarter of 2015. AMG Engineering signed $61.7 million in new orders during the fourth quarter of 2016, an increase of 29% from $48.0 million in the fourth quarter of 2015. New innovations continue to have a positive impact on the results of AMG Engineering, such as our industry leading SyncroTherm® heat treatment furnaces; powder metallurgy furnaces related to additive manufacturing; titanium remelting furnaces; and turbine blade coating plants. These innovative product offerings continue to drive a significant portion of sales and profitability for the division.

On a full year basis, AMG generated cash from operating activities of $56.2 million, a decrease of 26% from $76.3 million in 2015. The full year 2016 operating cash flows include voluntary cash contributions to the Company’s pension plans of $23.1 million made during the year. This strong cash generation enabled AMG to fund a substantial investment in growth capital expenditures during 2016. »

Key Figures

Notes: 

1. EBIT is defined as earnings before interest and income taxes. EBIT excludes restructuring and equity-settled share-based payments and includes foreign currency gains or losses.
2. EBITDA is defined as EBIT adjusted for depreciation and amortization.
3. Gross Profit has been restated to include restructuring expenses and asset impairment expenses, in order to take into consideration ESMA’s latest recommendations.

Operational Review

AMG Critical Materials

* Includes $4.4 million non-cash expense related to vanadium, nickel and molybdenum inventory adjustments in the fourth quarter 2015

** FY ’15 includes $6.5 million non-cash expense related to vanadium, nickel and molybdenum inventory adjustments in the full year 2015; FY ’16 includes $5.1 million non-cash benefit related to reversal of previously expensed vanadium, nickel and molybdenum inventory adjustments

AMG Critical Materials fourth quarter 2016 revenue of $166.0 million was in-line with prior year. Lower quarter-over-quarter sales in AMG Silicon, AMG Aluminum and AMG Brazil, were offset by stronger sales from AMG Vanadium, AMG Titanium Alloys & Coatings, AMG Antimony and AMG Superalloys.

Gross profit before non-recurring items in the fourth quarter increased by $11.1 million, or 53%, to $31.8 million, due to strong financial performance across all AMG Critical Materials business units. AMG Vanadium gross profit improved significantly in the fourth quarter 2016, due to higher volumes and improving vanadium prices. In addition, AMG Vanadium incurred a non-cash inventory adjustment expense of $4.4 million in the prior year due to rapidly falling vanadium, nickel and molybdenum prices.

AMG Titanium Alloys & Coatings and AMG Superalloys quarterly gross profits benefited from higher sales volumes of Titanium Aluminides and Chrome Metal, respectively, compared to the prior year. AMG Brazil, AMG Graphite and AMG Antimony quarterly gross profits also improved due to a combination of lower operating costs and product mix effects. Quarterly gross profits in AMG Silicon and AMG Aluminum were in-line with the prior year.

Gross margin before non-recurring items improved to 19% from 12% in the fourth quarter of 2015 due to improved vanadium pricing, higher volumes and lower costs.

EBITDA increased by $15.1 million to $22.1 million in the fourth quarter of 2016, driven primarily by higher gross profit and lower segment specific SG&A expenses.

AMG Engineering

AMG Engineering signed $61.7 million in new orders during the fourth quarter of 2016, representing a 0.86x book to bill ratio. Order backlog was $135.5 million as of December 31, 2016, a 4% reduction from $140.9 million as of December 31, 2015. On a full year basis, AMG Engineering signed $273.1 million in new orders, representing a 1.01x book to bill ratio.

AMG Engineering’s fourth quarter 2016 revenue increased $17.3 million, or 32%, to $71.9 million, the highest quarterly revenue in 5 years, due to strong sales of plasma remelting, induction and turbine blade coating furnaces for the aerospace market.

Fourth quarter 2016 gross profit before non-recurring items increased by $5.0 million, or 43%, to $16.6 million, due to higher revenues. Gross margin before non-recurring items improved to 23% from 21% in the fourth quarter of 2015 due to product mix effects.

EBITDA increased by $5.3 million to $7.9 million in the fourth quarter of 2016, driven by higher gross profit.

Financial Review

Tax

AMG recorded an income tax expense of $8.1 million in 2016 as compared to $18.7 million in 2015. The income tax expense in 2015 was negatively impacted by the currency effect of the Brazilian Real on deferred tax balances. Due to the volatile nature of the company’s deferred tax balances, AMG believes that the cash tax rate is a more meaningful metric.

AMG paid taxes of $6.6 million in 2016 as compared to $5.7 million in 2015. For 2016, AMG’s effective cash tax rate was 13%, as compared to 20% in 2015.

Non-Recurring Items

AMG’s fourth quarter 2016 and full year 2016 gross profit of $186.8 million includes non-recurring items, which are not included in the calculation of EBITDA.

A summary of non-recurring items in 2016 and 2015 are below:

Non-recurring items included in gross profit

Gross profit before non-recurring items by reporting segment

AMG Critical Materials and AMG Engineering gross profit in the fourth quarter 2016 was negatively impacted by restructuring related to cost reduction initiatives in Germany and France, respectively.

The Company decided to modify its income statement presentation in order to take into consideration ESMA’s latest recommendations. This new presentation resulted in a reclassification of restructuring expenses and asset impairment expenses into expenses by function, and consequently gross profit. Accordingly, the comparative figures of the 2016 consolidated financial statements have been restated to comply with IFRS requirements.

Environmental expense

During the fourth quarter 2016, AMG recorded non-recurring environmental expense of $1.3 million related to its Newfield, NJ site, which are not included in the calculation of EBITDA.

Liquidity

AMG had a net debt position of $7.3 million as of December 31, 2016. Net debt increased by $8.4 million from December 31, 2015, while gross debt increased by $41.3 million, driven by the increased term loan associated with the new debt facility.

Cash from operating activities decreased to $56.2 million in 2016 from $76.3 million in 2015. As noted above, the Company made $23.1 million of discretionary pension contributions during the year. These contributions drove the decline in cash from operating activities from prior year.

Capital expenditures increased to $44.1 million in 2016 compared to $23.3 million in 2015. Capital spending in 2016 included $18.4 million of maintenance capital, compared to $13.1 million in 2015. The largest expansion capital projects in 2016 were AMG’s lithium project in Brazil, Ancuabe graphite mine project in Mozambique, titanium aluminide expansion in Germany and silicon furnace upgrade in Germany.

Including the $161 million of cash, AMG had $343 million of total liquidity as of December 31, 2016.

Net Finance Costs

AMG’s fourth quarter 2016 net finance costs were less than $0.1 million compared to $2.3 million in the fourth quarter of 2015. The decrease was primarily due to currency gains associated with the Mozambique Metical during the quarter.

SG&A

AMG’s fourth quarter 2016 SG&A expenses were $30.0 million, down 1% from the same period in the prior year.

Full year 2016 SG&A expenses were $130.8 million, a 7% increase from $122.3 million in 2015, driven by an increase in PSU plan costs of $4.5 million and an increase in personnel costs of $2.4 million.

Final Dividend Proposed

AMG intends to declare a dividend of €0.27 per ordinary share over the financial year 2016. The interim dividend of €0.13, paid on August 16, 2016, will be deducted from the amount to be distributed to shareholders. The proposed final dividend per ordinary share therefore amounts to €0.14.

The full year dividend proposed in 2016 represents an increase of 29% compared to the full year dividend paid in 2015. This increase reflects AMG’s commitment to return value to shareholders.

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 4, 2017.

Lithium Project Update

AMG’s lithium project is progressing in-line with expectations, and production is expected to commence mid-2018. Capital expenditures in the fourth quarter 2016 related to the lithium project were $5.8 million.

On March 3, 2017, AMG announced that its subsidiary AMG Mineração, Brazil, had signed a multi-year contract to supply 90,000 tons per year of lithium concentrate, for conversion into lithium chemicals, with deliveries commencing in the second half of 2018. Sales prices under the agreement are partially indexed to the published market price of lithium carbonate, subject to a contractual minimum threshold. The sales price (CIF China), determined with reference to the current published lithium carbonate market price, would exceed $800 per ton lithium concentrate.

In the second quarter 2017, AMG Mineração will finalize and publish an updated resource statement for the Mibra mine. The Company targets to double its annual lithium concentrate production capacity to 180,000 tons by end of 2019.

Outlook and Strategy

AMG is well positioned to maintain full year 2016 levels of profitability in 2017, subject to a high degree of global uncertainty.

AMG’s management team is focused on delivering our highly accretive lithium project and executing our long term, transformational lithium strategy. In addition, we will continue to pursue other acquisition opportunities and organic growth projects in order to generate long term value for our shareholders.

*AMG modified December 31, 2015 Income Statement presentation in order to take into consideration ESMA’s latest recommendations.

*AMG modified December 31, 2015 Income Statement presentation in order to take into consideration ESMA’s latest recommendations.

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, titanium alloys and coatings, ferrovanadium, natural graphite, chromium metal, antimony, tantalum, niobium and silicon metal. AMG Engineering designs, engineers, and produces advanced vacuum furnace systems and operates vacuum heat treatment facilities, primarily for the transportation and energy industries.

With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, Czech Republic, the United States, China, Mexico, Brazil and Sri Lanka, 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.         +1 610 293 5804
Steve Daniels
Senior Vice President
sdaniels@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.