Amsterdam,13 December 2021(Regulated Information)— AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM) is pleased to increase its earnings guidance for 2022 based on improved market conditions in lithium as well as favorable conditions throughout our portfolio. AMG is increasing its EBITDA guidance for the full year 2022 to a range of between $175 million and $200 million from the previous guidance (“to exceed $150 million”).
Organizationally, AMG will bring its lithium value chain under one corporate entity named AMG Lithium. AMG Lithium will comprise both AMG’s Brazilian mining and processing plants as well as the German hydroxide project. The new company will be headed by Mr. Fabiano Costa and Dr. Stefan Scherer as Managing Directors. The mission of AMG Lithium is to further increase the long-term value of AMG’s lithium activities.
AMG will discuss its lithium strategy during its virtual Capital Markets Day on January 11, 2022 at 10am EST.
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 Clean Energy Materials combines our recycling and mining operations producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. Clean Energy Materials spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies combines our leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals consists of our mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, 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 6109754979 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.
Active cases at AMG remain at a very low level. We continue to apply all safety measures at our disposal with the highest degree of attention in order to ensure our employees are working in the lowest risk environment possible.
Strategic Highlights
The construction of AMG Vanadium’s second spent catalyst recycling facility in Zanesville, Ohio, a $325 million investment and AMG’s largest capital project to date, is proceeding as planned. Commissioning starts in the first quarter of 2022 and the plant is forecast to achieve full run rate capacity in the fourth quarter of 2022.
Spodumene 1+ will increase Brazil’s spodumene production by 40,000 tons. The project is currently in detailed engineering and commissioning is planned to start in the second quarter of 2023.
AMG’s Supervisory Board approved the construction of the first module of a battery grade lithium hydroxide upgrader in Bitterfeld, Germany in its meeting on October 27, 2021. The total expenditure of $120 million includes the infrastructure necessary to support the next four modules. Commissioning of the facility will commence in the third quarter of 2023.
Shell & AMG Recycling B.V. (SARBV) and its local partner, the United Company for Industry (UCI), signed a memorandum of understanding with Saudi Arabian Oil Company (Saudi Aramco) to jointly explore the feasibility of building a recycling “Supercenter” in the Kingdom of Saudi Arabia.
AMG is building its first lithium vanadium battery (“LIVA”) for industrial power management applications. In order to manage its entrance into this market, AMG acquired Phyr7 GmbH, Heidelberg, a specialist for artificial intelligence-based power management solutions. The first LIVA system will be installed in one of AMG’s German manufacturing plants and is scheduled to be commissioned in the first quarter of 2022.
Financial Highlights
Revenue increased by 58% to $311.9 million in the third quarter 2021 from $197.7 million in the third quarter 2020.
EBITDA was $33.1 million in the third quarter of 2021, more than double the third quarter 2020 EBITDA of $14.1 million, marking the fifth straight quarter of sequential improvement.
Cash from operating activities was $17.6 million in the third quarter of 2021, and $60.6 million on a year-to-date basis, more than triple the total cash from operating activities for full year 2020.
AMG’s liquidity as of September 30, 2021, was $489 million, with $319 million of unrestricted cash and $170 million of revolving credit availability.
Amsterdam, 27 October 2021(Regulated Information) — AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported third quarter 2021 revenue of $311.9 million, a 58% increase over $197.7 million in the third quarter of 2020. EBITDA for the third quarter of 2021 was $33.1 million, the fifth straight quarter of sequential growth after the pandemic low point in the second quarter of 2020.
Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “With regard to COVID, we continue to apply all safety measures at our disposal with the highest degree of attention in order to ensure our employees are working in the lowest risk environment possible.
“AMG continued to sequentially improve EBITDA in the third quarter despite negative seasonality impacts. All of AMG’s businesses are experiencing ongoing price increase and strong volumes, however the operating environment has grown more challenging, with increases in shipping times and costs and higher energy prices affecting every business unit. AMG passes these cost increases through to its customers where possible, and we will continue to actively manage these cost exposures going forward.
“All segments performed well, most notably our Clean Energy Materials segment where presently our major strategic projects are clustered. This segment continues to deliver strong EBITDA, which increased 44% over the second quarter of 2021, to $18 million, the sixth straight quarter of sequentially increasing EBITDA.
“AMG’s Clean Energy Materials segment strategic projects are proceeding as planned. Each of these projects is oriented toward growing our production of electricity storage materials and/or increasing our footprint in the circular economy, and each of these projects – the second spent catalyst recycling facility, Spodumene 1+, and the battery grade lithium hydroxide upgrader in Germany – will significantly enhance our profitability and contribute to meeting our long-term goals.
“Regarding our project execution capability, the construction of AMG Vanadium’s second spent catalyst recycling facility in Zanesville, Ohio continues to be on time and within budget. As a reminder, we have also met the spodumene production cost and yield in Brazil that was targeted at the time of the project decision. In transitioning into a high growth company through projects of this kind, execution capability is a critical success factor.
“All of these investments are consistent with our CO2 reduction strategy. Our Enabling CO2 Reduction Portfolio (ECO2RP) in 2021 will substantially outperform our 2020 CO2 enabled reduction. In addition, we are preparing comprehensive long-term direct Scope 1 and Scope 2 CO2 reduction targets which will be announced at the Annual General Meeting in May of 2022.”
Key Figures
In 000’s US dollars
Q3 ‘21
Q3 ‘20
Change
Revenue
$311,946
$197,740
58%
Gross profit
51,083
20,849
145%
Gross margin
16.4%
10.5%
Operating profit (loss)
17,346
(8,687)
N/A
Operating margin
5.6%
(4.4%)
Net loss attributable to shareholders
(599)
(12,775)
95%
EPS – Fully diluted
(0.02)
(0.45)
96%
EBIT (1)
22,475
3,097
626%
EBITDA (2)
33,051
14,143
134%
EBITDA margin
10.6%
7.2%
Cash from (used in) operating activities
17,635
(8,393)
N/A
Notes:
(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, and strategic expenses. Beginning January 1, 2021, AMG has altered its calculation of adjusted EBIT to no longer include the impact of foreign exchange. This alteration was made in consideration of a change in the Company’s hedging policy and to better align the reported adjusted EBITDA with the calculation for our bank covenant calculations. Starting January 2021, the Company is no longer hedging European cash pool intergroup balance sheet exposures which will result in higher volatility in our financial results from foreign exchange which we believe is not representative of our operating performance. Foreign exchange loss in the third quarter of 2021 was $2.5 million. Because of this hedging policy change, we did not retroactively apply this change to the prior year figures, otherwise it would have resulted in a decrease to the prior period EBIT of $0.9 million.
(2) EBITDA is defined as EBIT adjusted for depreciation and amortization.
Operational Review
AMG Clean Energy Materials
Q3 ‘21
Q3 ‘20
Change
Revenue
$105,308
$56,396
87%
Gross profit (loss)
20,120
(135)
N/A
Gross profit before non-recurring items
21,721
4,782
354%
Operating profit (loss)
9,985
(8,269)
N/A
EBITDA
18,029
3,268
452%
AMG Clean Energy Materials’ revenue increased by $48.9 million, or 87%, to $105.3 million, driven mainly by higher sales volumes of lithium concentrate, as well as higher prices in vanadium, tantalum, and lithium concentrate.
Gross profit before non-recurring items during the quarter increased by $16.9 million compared to the same period in the prior year, primarily due to the increased price environment.
SG&A expenses in the third quarter of 2021 were $10.1 million, $2.0 million higher than the third quarter of 2020 due to higher strategic project costs and increased variable compensation expense.
The third quarter 2021 EBITDA increased by $14.8 million, to $18.0 million from $3.3 million in the third quarter of 2020, due to the improved gross profit as noted above.
AMG Critical Minerals
Q3 ‘21
Q3 ‘20
Change
Revenue
$79,392
$52,167
52%
Gross profit
10,660
8,642
23%
Gross profit before non-recurring items
10,843
8,661
25%
Operating profit
4,028
3,409
18%
EBITDA
6,509
6,562
(1%)
AMG Critical Minerals’ revenue increased by $27.2 million, or 52%, to $79.4 million, driven by higher sales volumes across all three businesses, and improved antimony sales prices.
Gross profit before non-recurring items increased by 25% in the third quarter due to increased revenue from each business unit. On a sequential basis, however, energy and shipping costs were higher in the third quarter of 2021 versus the second quarter of 2021, and were only partially passed on to customers.
SG&A expenses in the third quarter of 2021 increased by $1.3 million, to $6.6 million, primarily due to higher personnel costs in the current period.
The third quarter 2021 EBITDA was in line with the same period in the prior year, due to higher personnel costs offset by the improved gross profit as noted above.
AMG Critical Materials Technologies
Q3 ‘21
Q3 ‘20
Change
Revenue
$127,246
$89,177
43%
Gross profit
20,303
12,342
65%
Gross profit before non-recurring items
20,293
13,144
54%
Operating profit (loss)
3,333
(3,827)
N/A
EBITDA
8,513
4,313
97%
AMG Critical Materials Technologies’ third quarter 2021 revenue increased by $38.1 million, or 43% compared to the same period in 2020. This increase was due to higher sales volumes of titanium aluminides and chrome metal, and higher chrome pricing. Therefore, third quarter 2021 gross profit before non-recurring items increased by $7.1 million, or 54%, to $20.3 million.
SG&A expenses increased by $0.8 million, or 5%, in the third quarter of 2021 compared to the same period in 2020, due to higher personnel costs, offset partially by lower professional fees during the quarter.
AMG Critical Materials Technologies’ EBITDA increased to $8.5 million during the quarter, compared to $4.3 million in the third quarter of 2020. This was primarily due to higher profitability related to the higher sales volumes of titanium aluminides and chrome metal as noted above.
The Company signed $27.9 million in new orders during the third quarter of 2021, representing a 0.50x book to bill ratio. This low ratio was driven mainly by timing and seasonality and is expected to be compensated by higher intake in the fourth quarter resulting in a normalized full year book to bill ratio. Order backlog was $155.1 million as of September 30, 2021, 19% lower than $190.6 million as of June 30, 2021, due largely to the delayed orders noted above as well as product mix impacts. The Company is experiencing higher volumes of smaller orders due to diversifying outside of the aerospace market, which reduces the period ending order backlog but does not indicate lower profitability levels.
Financial Review
Tax
AMG recorded an income tax expense of $9.9 million in the third quarter of 2021, compared to a nominal expense in the same period in 2020. This variance was mainly driven by improvements in operating results coupled with movements in the Brazilian real. The effects of the Brazilian real caused a $7.5 million non-cash deferred tax expense in the third quarter of 2021 (2020: $2.1 million expense). Movements in the Brazilian real exchange rate impact the valuation of the Company’s net deferred tax positions related to our operations in Brazil.
AMG paid taxes of $4.1 million in the third quarter of 2021, compared to $10.7 million in the third quarter of 2020. The third quarter 2020 payments were primarily a result of final tax payments in Germany related to the highly profitable 2018 tax year.
Profit (loss) for the period
AMG’s third quarter loss for the period of $0.3 million was negatively impacted by two significant non-cash items: (1) The Brazilian real caused a $7.5 million deferred tax expense in the third quarter of 2021. (2) Intergroup balance sheet positions associated with our European cash pooling arrangements incurred $1.8 million of foreign exchange expense (net of tax) during the third quarter of 2021. Excluding these non-cash items would have resulted in profit for the period of $9.0 million for the quarter.
Exceptional Items
AMG’s third quarter 2021 gross profit of $51.1 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 2021 and 2020 are below:
Exceptional items included in gross profit
Q3 ‘21
Q3 ‘20
Change
Gross profit
$51,083
20,849
145%
Inventory cost adjustment
—
4,867
(100%)
Restructuring expense
261
528
(51%)
Strategic project expense
1,095
343
219%
Others
418
—
N/A
Gross profit excluding exceptional items
52,857
26,587
99%
During the quarter, the Company incurred expenses for expansion projects which are not yet operational. AMG is adjusting EBITDA for these exceptional charges.
Liquidity
September 30, 2021
December 31, 2020
Change
Senior secured debt
$363,058
$364,640
—
Cash & cash equivalents
319,454
207,366
54%
Senior secured net debt
43,604
157,274
(72%)
Other debt
16,956
19,876
(15%)
Net debt excluding municipal bond
60,560
177,150
(66%)
Municipal bond debt
319,533
319,699
—
Restricted cash
114,827
208,919
(45%)
Net debt
265,266
287,930
(8%)
AMG had a net debt position of $265.3 million as of September 30, 2021. This decrease was mainly due to the issuance of 3.1 million shares for net proceeds of $119 million in April 2021, offset by the significant investment in growth initiatives during the quarter, especially in our vanadium expansion in Ohio, which reduced AMG’s restricted cash balance.
AMG continued to maintain a strong balance sheet and adequate sources of liquidity during the third quarter. As of September 30, 2021, the Company had $319 million in unrestricted cash and cash equivalents and $170 million available on its revolving credit facility. As such, AMG had $489 million of total liquidity as of September 30, 2021.
Net Finance Costs
AMG’s third quarter 2021 net finance costs were $7.5 million compared to $4.5 million in the third quarter of 2020. This increase was mainly driven by higher foreign exchange losses during the quarter.
AMG capitalized $3.8 million of interest costs in the third quarter of 2021, in line with prior year, driven by interest associated with the Company’s tax-exempt municipal bond supporting the vanadium expansion in Ohio.
SG&A
AMG’s third quarter 2021 SG&A expenses were $33.8 million compared to $29.6 million in the third quarter of 2020, with the variance driven largely by increased strategic project and personnel costs. The prior period personnel cost had been reduced by cost reduction efforts in response to the onset of the pandemic.
Outlook
For 2021, we reiterate our expectation to sequentially improve our EBITDA quarter-over-quarter for the year.
Given the current market conditions, we expect EBITDA to exceed $150 million for full year 2022, and we expect to reach $50 million of quarterly run-rate EBITDA by the end of 2022, as our vanadium expansion project concludes ramp-up.
(2) Amount includes variable compensation expense which settled in shares in 2021.
(3) The Company is in the ramp-up phase for several strategic expansion projects, including AMG Vanadium’s expansion project, the joint venture with Shell, Hybrid Lithium Vanadium Redox Flow Battery System, and the lithium expansion in Germany, which incurred project expenses during the quarter but are not yet operational. AMG is adjusting EBITDA for these exceptional charges.
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Income Statement
For the quarter ended September 30
In thousands of US dollars
2021
2020
Unaudited
Unaudited
Continuing operations
Revenue
311,946
197,740
Cost of sales
260,863
176,891
Gross profit
51,083
20,849
Selling, general and administrative expenses
33,750
29,619
Other income, net
13
83
Net other operating income
13
83
Operating profit (loss)
17,346
(8,687)
Finance income
(357)
(1,155)
Finance cost
7,900
5,651
Net finance cost
7,543
4,496
Share of loss of associates and joint ventures
(209)
(429)
Profit (loss) before income tax
9,594
(13,612)
Income tax expense
9,904
32
Loss for the period
(310)
(13,644)
Loss attributable to:
Shareholders of the Company
(599)
(12,775)
Non-controlling interests
289
(869)
Loss for the period
(310)
(13,644)
Loss per share
Basic loss per share
(0.02)
(0.45)
Diluted loss per share
(0.02)
(0.45)
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Income Statement
For the nine months ended September 30
In thousands of US dollars
2021
2020
Unaudited
Unaudited
Continuing operations
Revenue
874,306
683,640
Cost of sales
727,860
599,090
Gross profit
146,446
84,550
Selling, general and administrative expenses
100,075
91,715
Environmental expense
(11,711)
(55)
Other income, net
186
169
Net other operating (expense) income
(11,525)
114
Operating profit (loss)
34,846
(7,051)
Finance income
(831)
(2,446)
Finance cost
21,789
18,679
Net finance cost
20,958
16,233
Share of loss of associates and joint ventures
(834)
(429)
Profit (loss) before income tax
13,054
(23,713)
Income tax expense
3,414
16,134
Profit (loss) for the period
9,640
(39,847)
Profit (loss) attributable to:
Shareholders of the Company
8,066
(38,853)
Non-controlling interests
1,574
(994)
Profit (loss) for the period
9,640
(39,847)
Earnings (loss) per share
Basic earnings (loss) per share
0.26
(1.37)
Diluted earnings (loss) per share
0.26
(1.37)
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Financial Position
In thousands of US dollars
September 30, 2021
Unaudited
December 31, 2020
Assets
Property, plant and equipment
657,790
551,926
Goodwill and other intangible assets
41,845
43,207
Derivative financial instruments
144
1,894
Other investments
32,146
27,527
Deferred tax assets
57,933
58,081
Restricted cash
114,827
208,919
Other assets
9,370
8,496
Total non-current assets
914,055
900,050
Inventories
197,030
152,306
Derivative financial instruments
4,002
5,961
Trade and other receivables
146,721
122,369
Other assets
64,344
44,821
Current tax assets
6,832
5,108
Cash and cash equivalents
319,454
207,366
Assets held for sale
60
1,005
Total current assets
738,443
538,936
Total assets
1,652,498
1,438,986
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Financial Position
(continued)
In thousands of US dollars
September 30,
2021
Unaudited
December 31, 2020
Equity
Issued capital
853
831
Share premium
553,715
489,546
Treasury shares
(16,828)
(80,165)
Other reserves
(99,292)
(110,593)
Retained earnings (deficit)
(185,583)
(184,139)
Equity attributable to shareholders of the Company
252,865
115,480
Non-controlling interests
27,674
25,790
Total equity
280,539
141,270
Liabilities
Loans and borrowings
671,133
673,262
Lease liabilities
44,466
47,092
Employee benefits
176,580
197,158
Provisions
15,170
15,322
Deferred revenue
22,798
4,361
Other liabilities
10,427
8,237
Derivative financial instruments
3,530
4,389
Deferred tax liabilities
4,620
5,398
Total non-current liabilities
948,724
955,219
Loans and borrowings
23,914
23,392
Lease liabilities
4,690
4,789
Short-term bank debt
4,500
7,561
Deferred revenue
17,852
1,623
Other liabilities
76,737
66,182
Trade and other payables
233,648
164,999
Derivative financial instruments
4,798
10,264
Advance payments from customers
28,673
29,885
Current tax liability
9,185
7,480
Provisions
19,238
26,322
Total current liabilities
423,235
342,497
Total liabilities
1,371,959
1,297,716
Total equity and liabilities
1,652,498
1,438,986
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Cash Flows
For the nine months ended September 30
In thousands of US dollars
2021
2020
Unaudited
Unaudited
Cash from operating activities
Profit (loss) for the period
9,640
(39,847)
Adjustments to reconcile net profit (loss) to net cash flows:
Non-cash:
Income tax expense
3,414
16,134
Depreciation and amortization
32,478
32,181
Asset impairment (reversal) expense
(864)
98
Net finance cost
20,958
16,233
Share of loss of associates and joint ventures
834
429
(Gain) loss on sale or disposal of property, plant and equipment
(96)
248
Equity-settled share-based payment transactions
3,143
5,956
Movement in provisions, pensions, and government grants
(3,267)
(7,468)
Working capital and deferred revenue adjustments
17,908
7,813
Cash generated from operating activities
84,148
31,777
Finance costs paid, net
(14,960)
(14,261)
Income tax paid
(8,625)
(9,255)
Net cash from operating activities
60,563
8,261
Cash used in investing activities
Proceeds from sale of property, plant and equipment
1,071
48
Acquisition of property, plant and equipment and intangibles
(125,366)
(77,042)
Investments in associates and joint ventures
(1,000)
(1,000)
Change in restricted cash
94,092
68,436
Interest received on restricted cash
33
1,107
Capitalized borrowing cost
(15,608)
(15,134)
Other
(428)
25
Net cash used in investing activities
(47,206)
(23,560)
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Cash Flows
(continued)
For the nine months ended September 30
In thousands of US dollars
2021
2020
Unaudited
Unaudited
Cash from (used in) financing activities
Proceeds from issuance of debt
2,644
7,684
Payment of transaction costs related to debt
(390)
–
Repayment of borrowings
(8,047)
(2,997)
Net proceeds from issuance (repurchase of) common shares
121,569
(638)
Dividends paid
(7,598)
(9,513)
Payment of lease liabilities
(3,939)
(3,308)
Contributions by non-controlling interests
648
557
Net cash from (used in) financing activities
104,887
(8,215)
Net increase (decrease) in cash and cash equivalents
Thispress releasecontains regulatedinformation as definedinthe DutchFinancialMarkets SupervisionAct(Wetop hetfinancieel toezicht).
AboutAMG
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 Clean Energy Materials combines our recycling and mining operations producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. Clean Energy Materials spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies combines our leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals consists of our mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, 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, pleasecontact: AMGAdvanced MetallurgicalGroupN.V.+1610 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.
AMG regrets to inform you that on July 15, 2021, AMG experienced its first COVID related fatality among its more than 3,000 employees since the beginning of the pandemic. Active cases at AMG have receded to a very low level. We continue to apply all safety measures at our disposal with the highest degree of attention in order to ensure our employees are working in the lowest risk environment possible.
Strategic Highlights
The construction of AMG Vanadium’s second spent catalyst recycling facility in Zanesville, Ohio, AMG’s largest capital project, is proceeding as planned.
In Nuremberg, Germany, AMG Titanium Alloys & Coatings has started the construction of a plant to produce vanadium electrolytes from spent catalysts, targeting the vanadium battery market.
AMG Engineering is building AMG’s first industrial battery, a Hybrid Lithium Vanadium Redox Flow Battery System for use in one of our operating units to flatten production-driven spikes in electricity demand and thereby reduce CO2 emissions and energy costs.
The new all-solid-state-battery (ASSB) materials pilot plant of AMG Lithium in Frankfurt, Germany, has provided samples to all of the major battery manufacturers working on the emerging transformation to ASSB technology.
Financial Highlights
Revenue increased by 44% to $298.4 million in the second quarter 2021 from $207.6 million in the second quarter 2020.
EBITDA was $31.4 million in the second quarter of 2021, over four times higher than second quarter 2020 EBITDA of $7.8 million, marking the fourth straight quarter of sequential improvement.
Cash from operating activities was $23.0 million in the second quarter of 2021, and $42.9 on a year-to-date basis, more than double the total cash from operating activities for full year 2020.
Net income attributable to shareholders was $3.6 million in the second quarter of 2021 compared to a net loss of $12.5 million in the second quarter of 2020.
AMG’s liquidity as of June 30, 2021, was $511 million, with $341 million of unrestricted cash and $170 million of revolving credit availability.
AMG declares an interim dividend of €0.10 per ordinary share, to be paid in the third quarter of 2021.
In April 2021, AMG issued 3.1 million new shares, generating $119 million of net proceeds and increasing liquidity to approximately $500 million. With this equity raise, in combination with cash on hand and strong projected cash flow from operations, AMG can fully fund its current strategic projects while maintaining strong liquidity.
Amsterdam,28July2021(RegulatedInformation)— AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported second quarter 2021 revenue of $298.4 million, a 44% increase over $207.6 million in the second quarter of 2020. EBITDA for the second quarter of 2021 was $31.4 million, the fourth straight quarter of sequential growth after the pandemic low point of $7.8 million in the second quarter of 2020.
Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “With regard to COVID, active cases at AMG have receded to a very low level; however it is with our deepest regret that I have to inform you that AMG experienced its first COVID-related fatality. We continue to apply all safety measures at our disposal with the highest degree of attention in order to ensure our employees are working in the lowest risk environment possible.
“All three of AMG’s segments performed well in the second quarter, and global demand for our products continued to strengthen throughout the first half of 2021.
“Market prices for materials across the Company’s portfolio have continued to increase, most notably for our Clean Energy Materials segment, which has delivered EBITDA growth of more than 22% quarter-over-quarter for each of the last five quarters.
“EBITDA for the AMG Critical Materials Technologies segment was $9.6 million for the quarter, the fourth straight quarter of sequentially increasing EBITDA, while achieving a consistent book to bill ratio despite ongoing weakness of the aerospace sector.
“In 2007 we introduced AMG to the public markets as a producer of “critical” materials. The real meaning of “criticality” has become more apparent over time, and in particular, materials associated with electricity storage are now perceived as especially critical, because increased electricity storage is required in order to enable higher utilization of renewable energy production.
“All of AMG’s strategic projects cluster in our Clean Energy Materials segment and all of these projects are proceeding as planned. Each of these projects is oriented toward growing our production of electricity storage materials or increasing our footprint in the circular economy.
AMG Vanadium’s second spent catalyst recycling facility in Zanesville, Ohio, the largest capital project AMG has undertaken to date, is scheduled to come in on time and on budget.
AMG Lithium has signed the engineering contracts and has purchased the site and long-lead items for the battery grade lithium hydroxide refinery in Bitterfeld, Sachsen-Anhalt, Germany.
After extensive tests, a new plant to produce vanadium oxide and vanadium electrolyte materials from spent catalysts is under construction at AMG Titanium Alloys & Coatings in Nuremberg, Germany.
AMG Engineering is building AMG’s first industrial battery, a Hybrid Lithium- Vanadium Redox Flow Battery System for use in one of our operating units to flatten production-driven spikes in electricity demand and thereby reduce CO2 emissions and energy costs. The market potential for this battery concept is very large.”
Key Figures
In 000’s US dollars
Q2 ‘21
Q2 ‘20
Change
Revenue
$298,374
$207,610
44%
Gross profit
48,499
20,541
136
Gross margin
16.3%
9.9%
Operating profit (loss)
3,691
(6,690)
N/A
Operating margin
1.2%
(3.2%)
Net income (loss) attributable to shareholders
3,566
(12,510)
N/A
EPS – Fully diluted
0.11
(0.44)
N/A
EBIT (1)
20,462
(2,901)
N/A
EBITDA (2)
31,401
7,756
305%
EBITDA margin
10.5%
3.7%
Cash from operating activities
23,018
20,333
13%
Notes:
(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, and strategic expenses. Beginning January 1, 2021, AMG has altered its calculation of adjusted EBIT to no longer include the impact of foreign exchange. This alteration was made in consideration of a change in the Company’s hedging policy and to better align the reported adjusted EBITDA with the calculation for our bank covenant calculations. Starting January 2021, the Company is no longer hedging certain intergroup balance sheet exposures which will result in higher volatility in our financial results from foreign exchange which we believe is not representative of our operating performance. Foreign exchange gain in the second quarter of 2021 was $0.9 million. Because of this hedging policy change, we did not retroactively apply this change to the prior year figures, otherwise it would have resulted in an increase to the prior period EBIT of $0.5 million.
(2) EBITDA is defined as EBIT adjusted for depreciation and amortization.
Operational Review
AMG Clean Energy Materials
Q2 ‘21
Q2 ‘20
Change
Revenue
$90,135
$53,054
70%
Gross profit
13,822
1,818
660%
Gross profit before non-recurring items
16,122
4,020
301%
Operating loss
(7,415)
(5,481)
(35%)
EBITDA
12,554
1,279
882%
AMG Clean Energy Materials’ revenue increased by $37.1 million, or 70%, to $90.1 million, driven mainly by higher sales volumes of vanadium, tantalum and lithium concentrate, as well as higher prices in vanadium and lithium concentrate.
Gross profit before non-recurring items during the quarter increased by $12.1 million compared to the same period in the prior year, largely due to the improving price environment and increasing global demand for our products.
SG&A expenses in the second quarter of 2021 were $9.6 million, $2.3 million higher than the second quarter of 2020 due to higher strategic project costs and increased variable compensation expense.
During the quarter, AMG discovered additional slag quantities at its decommissioned site in New Jersey. This material was primarily located below surface level and was inconsistent with earlier estimates. As such, AMG recorded an adjustment to its environmental provision of $11.7 million associated with these higher quantities, and management does not expect any additional remediation to be required. This adjustment negatively impacted operating loss for the period.
The second quarter 2021 EBITDA increased by $11.3 million, to $12.6 million from $1.3 million in the second quarter of 2020, due to the improved gross profit as noted above.
AMG Critical Minerals
Q2 ‘21
Q2 ‘20
Change
Revenue
$76,793
$47,908
60%
Gross profit
13,732
6,141
124%
Gross profit before non-recurring items
13,397
6,186
117%
Operating profit
7,009
1,194
487%
EBITDA
9,220
3,648
153%
AMG Critical Minerals’ revenue increased by $28.9 million, or 60%, to $76.8 million, driven by higher sales volumes and higher sales prices across all three business units.
Gross profit before non-recurring items increased by 117% in the second quarter due to increased revenue from each business unit.
SG&A expenses in the second quarter of 2021 increased by $1.9 million, to $6.8 million, primarily due to higher personnel costs in the current period.
The second quarter 2021 EBITDA margin was 12.0%, compared to 7.6% in the same period in the prior year, due to increased profitability as noted above.
AMG Critical Materials Technologies
Q2 ‘21
Q2 ‘20
Change
Revenue
$131,446
$106,648
23%
Gross profit
20,945
12,582
66%
Gross profit before non-recurring items
21,059
13,045
61%
Operating profit (loss)
4,097
(2,403)
N/A
EBITDA
9,627
2,829
240%
AMG Critical Materials Technologies’ second quarter 2021 revenue increased by $24.8 million, or 23% compared to the same period in 2020. This increase was due to higher revenue from engineering and heat treatment services businesses, and higher sales volumes of titanium aluminides and chrome metal, both of which have begun to recover from the second quarter 2020 pandemic low. Consequently, second quarter 2021 gross profit before non-recurring items increased by $8.0 million, or 61%, to $21.1 million.
SG&A expenses increased by $1.9 million, or 12%, in the second quarter of 2021 compared to the same period in 2020, due to higher personnel costs and higher professional fees during the quarter.
AMG Critical Materials Technologies’ EBITDA increased to $9.6 million during the quarter, compared to $2.8 million in the second quarter of 2020. This was primarily due to higher profitability related to increased activity in the engineering and heat treatment services businesses, as well as the higher sales volumes of titanium aluminides and chrome metal. Since the second quarter of 2020, AMG Critical Materials Technologies’ EBITDA has experienced sequential growth quarter-over-quarter.
Order backlog was $190.6 million as of June 30, 2021, in line with $190.7 million as of March 31, 2021. The Company signed $57.3 million in new orders during the second quarter of 2021, representing a 0.92x book to bill ratio. The quarter benefited from strong orders of remelting and induction furnaces.
Financial Review
Tax
AMG recorded an income tax benefit of $5.6 million in the second quarter of 2021, compared to a benefit of $0.4 million in the same period in 2020. This variance was mainly driven by movements in the Brazilian real offset partially by higher pre-tax income compared to the prior period. The effects of the Brazilian real caused an $12.4 million non-cash deferred tax benefit in the second quarter of 2021 (2020: $3.3 million expense). Movements in the Brazilian real exchange rate impact the valuation of the Company’s net deferred tax positions related to our operations in Brazil.
AMG paid taxes of $2.5 million in the second quarter of 2021, compared to a tax refund of $2.4 million in the second quarter of 2020 which was largely due to international COVID-19 tax measures that enabled AMG to delay most of its tax payments during the prior year’s quarter and higher taxable income in the current year.
Exceptional Items
AMG’s second quarter 2021 gross profit of $48.5 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 2021 and 2020 are below:
Exceptional items included in gross profit
Q2 ‘21
Q2 ‘20
Change
Gross profit
$48,499
$20,541
136%
Inventory cost adjustment
1,497
1,093
37%
Restructuring expense
334
370
(10%)
Asset impairment (reversal) expense
(640)
81
N/A
Strategic project expense
888
1,166
(24%)
Gross profit excluding exceptional items
50,578
23,251
118%
AMG had a $1.5 million non-cash expense during the second quarter of 2021 as a result of inventory cost adjustments associated with price movements at the beginning of the second quarter which has been adjusted in EBITDA. During the quarter, the Company incurred expenses for expansion projects which are not yet operational. AMG is adjusting EBITDA for these exceptional charges.
Liquidity
June 30, 2021
December 31, 2020
Change
Senior secured debt
$363,487
$364,640
—%
Cash & cash equivalents
341,102
207,366
64%
Senior secured net debt
22,385
157,274
(86%)
Other debt
21,235
19,876
7%
Net debt excluding municipal bond
43,620
177,150
(75%)
Municipal bond debt
319,590
319,699
—%
Restricted cash
143,357
208,919
(31%)
Net debt
219,853
287,930
(24%)
AMG had a net debt position of $219.9 million as of June 30, 2021. This decrease was mainly due to the additional issuance of shares which generated $119 million of net proceeds offset by the significant investment in growth initiatives during the quarter, especially in our vanadium expansion in Ohio.
AMG continued to maintain a strong balance sheet and adequate sources of liquidity during the second quarter. As of June 30, 2021, the Company had $341 million in unrestricted cash and cash equivalents and $170 million available on its revolving credit facility. As such, AMG had $511 million of total liquidity as of June 30, 2021.
Net Finance Costs
AMG’s second quarter 2021 net finance costs were $4.8 million compared to $6.3 million in the second quarter of 2020. This decline was mainly driven by favorable foreign exchange movements.
AMG capitalized $3.8 million of interest costs in the second quarter of 2021 compared to $3.7 million in the prior year, driven by interest associated with the Company’s tax-exempt municipal bond supporting the vanadium expansion in Ohio.
SG&A
AMG’s second quarter 2021 SG&A expenses were $33.2 million compared to $27.2 million in the second quarter of 2020, with the variance driven largely by strategic project and personnel costs. The prior period personnel cost had been reduced by cost reduction efforts in response to the onset of the pandemic.
Outlook
Given the current market conditions, we reiterate our confidence in being able to exceed $120 million in EBITDA for full year 2021, as we announced in May, and we expect to continue to sequentially improve our EBITDA quarter-over-quarter for the remainder of the year.
*Beginning January 1, 2021, AMG has altered its calculation of adjusted EBITDA to no longer include the impact of foreign exchange. This alteration was made in consideration of a change in the Company’s hedging policy and to better align the reported adjusted EBITDA with the calculation for our bank covenant calculations. Starting January 2021, the Company is no longer hedging certain intergroup balance sheet exposures which will result in higher volatility in our financial results from foreign exchange which we believe is not representative of our ongoing operating performance. Foreign exchange gain in the second quarter of 2021 was $0.9 million. Because of this hedging policy change, we did not retroactively apply this change to the prior year figures, otherwise it would have resulted in an increase to the prior period adjusted EBIT of $0.5 million.
**Amount includes variable compensation expense which settled in shares in 2021.
***Shieldalloy Metallurgical Corporation (“SMC”), AMG’s subsidiary, has completed the removal of low-level radioactive materials, primarily including slag, from the former storage yard of SMC’s decommissioned Newfield, NJ site. During the quarter, AMG discovered additional slag quantities that were primarily located below surface level and were inconsistent with earlier estimates. As such, AMG recorded an adjustment to its environmental provision of
$11.7 million associated with these higher quantities, and management does not expect any additional remediation to be required. This adjustment negatively impacted operating loss for the period.
****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 project expenses during the quarter but are not yet operational. AMG is adjusting EBITDA for these exceptional charges.
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Income Statement
For the quarter ended June 30
In thousands of US dollars
2021
2020
Unaudited
Unaudited
Continuing operations
Revenue
298,374
207,610
Cost of sales
249,875
187,069
Gross profit
48,499
20,541
Selling, general and administrative expenses
33,232
27,209
Environmental expense
11,651
55
Other income, net
(75)
(33)
Net other operating expense
11,576
22
Operating profit (loss)
3,691
(6,690)
Finance income
(264)
(419)
Finance cost
5,025
6,748
Net finance cost
4,761
6,329
Share of loss of associates and joint ventures
(238)
—
Loss before income tax
(1,308)
(13,019)
Income tax benefit
(5,580)
(413)
Profit (loss) for the period
4,272
(12,606)
Profit (loss) attributable to:
Shareholders of the Company
3,566
(12,510)
Non-controlling interests
706
(96)
Profit (loss) for the period
4,272
(12,606)
Earnings (loss) per share
Basic earnings (loss) per share
0.11
(0.44)
Diluted earnings (loss) per share
0.11
(0.44)
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Income Statement
For the six months ended June 30
In thousands of US dollars
2021
2020
Unaudited
Unaudited
Continuing operations
Revenue
562,360
485,900
Cost of sales
466,997
422,199
Gross profit
95,363
63,701
Selling, general and administrative expenses
66,325
62,096
Environmental expense
11,711
55
Other income, net
(173)
(86)
Net other operating expense (income)
11,538
(31)
Operating profit
17,500
1,636
Finance income
(474)
(1,291)
Finance cost
13,889
13,028
Net finance cost
13,415
11,737
Share of loss of associates and joint ventures
(625)
—
Profit (loss) before income tax
3,460
(10,101)
Income tax (benefit) expense
(6,490)
16,102
Profit (loss) for the period
9,950
(26,203)
Profit (loss) attributable to:
Shareholders of the Company
8,665
(26,078)
Non-controlling interests
1,285
(125)
Profit (loss) for the period
9,950
(26,203)
Earnings (loss) per share
Basic earnings (loss) per share
0.29
(0.92)
Diluted earnings (loss) per share
0.28
(0.92)
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Financial Position
In thousands of US dollars
June 30, 2021 Unaudited
December 31, 2020
Assets
Property, plant and equipment
625,467
551,926
Goodwill and other intangible assets
41,985
43,207
Derivative financial instruments
659
1,894
Other investments
32,404
27,527
Deferred tax assets
65,688
58,081
Restricted cash
143,357
208,919
Other assets
9,817
8,496
Total non-current assets
919,377
900,050
Inventories
191,638
152,306
Derivative financial instruments
4,688
5,961
Trade and other receivables
151,374
122,369
Other assets
61,821
44,821
Current tax assets
5,439
5,108
Cash and cash equivalents
341,102
207,366
Assets held for sale
1,474
1,005
Total current assets
757,536
538,936
Total assets
1,676,913
1,438,986
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Financial Position
(continued)
In thousands of US dollars
June 30, 2021 Unaudited
December 31, 2020
Equity
Issued capital
905
831
Share premium
608,194
489,546
Treasury shares
(71,481)
(80,165)
Other reserves
(96,192)
(110,593)
Retained earnings (deficit)
(181,757)
(184,139)
Equity attributable to shareholders of the Company
259,669
115,480
Non-controlling interests
27,867
25,790
Total equity
287,536
141,270
Liabilities
Loans and borrowings
Loans and borrowings
676,142
673,262
Lease liabilities
44,296
47,092
Employee benefits
181,275
197,158
Provisions
15,387
15,322
Deferred revenue
23,282
4,361
Other liabilities
14,677
8,237
Derivative financial instruments
3,369
4,389
Deferred tax liabilities
4,605
5,398
Total non-current liabilities
963,033
955,219
Loans and borrowings
20,670
23,392
Lease liabilities
4,450
4,789
Short-term bank debt
7,500
7,561
Deferred revenue
19,212
1,623
Other liabilities
83,425
66,182
Trade and other payables
225,726
164,999
Derivative financial instruments
2,951
10,264
Advance payments from customers
32,323
29,885
Current tax liability
9,614
7,480
Provisions
20,473
26,322
Total current liabilities
426,344
342,497
Total liabilities
1,389,377
1,297,716
Total equity and liabilities
1,676,913
1,438,986
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Cash Flows
For the six months ended June 30
In thousands of US dollars
2021
2020
Unaudited
Unaudited
Cash from operating activities
Profit (loss) for the period
9,950
(26,203)
Adjustments to reconcile net profit (loss) to net cash flows:
Non-cash:
Income tax (benefit) expense
(6,490)
16,102
Depreciation and amortization
21,902
21,135
Asset impairment (reversal) expense
(776)
98
Net finance cost
13,415
11,737
Share of loss of associates and joint ventures
625
—
(Gain) loss on sale or disposal of property, plant and equipment
(91)
114
Equity-settled share-based payment transactions
2,127
2,744
Movement in provisions, pensions, and government grants
2,647
(6,432)
Working capital and deferred revenue adjustments
14,171
4,724
Cash generated from operating activities
57,480
24,019
Finance costs paid, net
(10,053)
(8,826)
Income tax (paid) received
(4,499)
1,461
Net cash from operating activities
42,928
16,654
Cash used in investing activities
Proceeds from sale of property, plant and equipment
1,055
6
Acquisition of property, plant and equipment and intangibles
(78,606)
(46,480)
Investments in associates and joint ventures
(1,000)
(1,000)
Change in restricted cash
65,562
37,254
Interest received on restricted cash
25
1,067
Capitalized borrowing cost
(7,795)
(7,417)
Other
19
3
Net cash used in investing activities
(20,740)
(16,567)
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Cash Flows
(continued)
For the six months ended June 30
In thousands of US dollars
2021
2020
Unaudited
Unaudited
Cash from (used) in financing activities
Proceeds from issuance of debt
2,411
6,370
Payment of transaction costs related to debt
(390)
—
Repayment of borrowings
(3,127)
(2,281)
Net proceeds from (repurchase of) common shares
121,569
(638)
Dividends paid
(3,858)
(6,167)
Payment of lease liabilities
(2,608)
(2,167)
Contributions by non-controlling interests
648
368
Net cash from (used) in financing activities
114,645
(4,515)
Net increase (decrease) in cash and cash equivalents
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 Clean Energy Materials combines our recycling and mining operations producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. Clean Energy Materials spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies combines our leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals consists of our mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, 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 furtherinformation,pleasecontact: AMGAdvancedMetallurgical GroupN.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.
Amsterdam, 28 July 2021(Regulated Information)— AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) declares an interim dividend of €0.10 per ordinary share, unchanged from the interim dividend of €0.10 per ordinary share in the prior year.
The interim dividend of €0.10 per ordinary share, in respect of the period from January 1, 2021 to June 30, 2021, is payable on August 13, 2021 to shareholders of record as of August 4, 2021. The ex-dividend date will be August 3, 2021. 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 Clean Energy Materials combines our recycling and mining operations, producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. Clean Energy Materials spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies combines our leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals consists of our mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, 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 6109754979 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.
Amsterdam, 6 May 2021(Regulated Information)— AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) is pleased to announce that during its Annual General Meeting held virtually on May 6, 2021, shareholders approved all agenda items presented, including the reappointment of Dr. Heinz Schimmelbusch as Chief Executive Officer and Chairman of the Management Board for an additional term of two years, with effect from May 6, 2021. In addition, Mr. Eric Jackson was reappointed as Chief Operating Officer and member of the Management Board for a term of 4 years, with effect from May 6, 2021.
During the meeting, Mr. Willem van Hassel and Mr. Herb Depp were reappointed as independent members of the Supervisory Board for terms of four years and two years, respectively, beginning May 6, 2021.
Mr. Frank Löhner has requested to step down from AMG’s Supervisory Board in view of other pressing priorities in his career, having served on AMG’s Supervisory Board since 2018. Given the vacancy created by the departure of Mr. Löhner, Mr. Warmolt Prins was appointed as an independent member of the Supervisory Board for a term of four years beginning May 6, 2021.
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 Clean Energy Materials combines our recycling and mining operations, producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. Clean Energy Materials spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies combines our leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals consists of our mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, 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 6109754979 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.
Amsterdam, 6 May 2021(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, 2021, AMG’s shareholders approved the payment of a dividend of €0.20 per ordinary share over the financial year 2020. The interim dividend of €0.10, paid on August 13, 2020, was deducted from the amount distributed to shareholders. The final dividend per ordinary share therefore amounts to €0.10.
Payment of the final dividend will be completed on May 13, 2021, to shareholders of record on May 11, 2021. The ex-dividend date is May 10, 2021. 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 financieeltoezicht).
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 Clean Energy Materials combines our recycling and mining operations, producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. Clean Energy Materials spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies combines our leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals consists of our mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, 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 6109754979 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.
Amsterdam, 6 May 2021(Regulated Information)— AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) is pleased to announce that during its Annual Meeting held virtually on May 6, 2021, Dr. Heinz Schimmelbusch, CEO and Chairman of the Management Board, presented a comprehensive update on the Company’s strategic growth projects, including guidance on AMG’s long-term financial target.
Based on the growth opportunities that exist throughout AMG’s portfolio, in particular AMG Clean Energy Materials’ spent catalyst recycling expansion and lithium value chain projects, AMG expects to deliver an EBITDA level of $350 million, or more, in the next five years or less.
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 Clean Energy Materials combines our recycling and mining operations, producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. Clean Energy Materials spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies combines our leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals consists of our mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, 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 6109754979 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.
As of today, out of over 3,000 employees we have 9 active confirmed coronavirus cases globally. AMG has not experienced any coronavirus related fatalities, and our current cases have not resulted in a facility closure or operational interruption. AMG continues to implement preventive measures such as practicing social distancing, remote working when possible, and restrictions on travel to protect the health and safety of our employees.
Strategic Highlights
The construction of AMG’s second ferrovanadium plant in Zanesville, Ohio is proceeding as planned. As of April 22, 2021, AMG Vanadium had committed $257 million in construction and engineering contracts. All significant contracts for the project have now been committed and signed.
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.
AMG purchased a site on the premises of Chemiepark Bitterfeld-Wolfen, advancing its strategic expansion project for a battery-grade lithium hydroxide production plant which will reliably supply the European battery industry with this key raw material via short delivery routes.
AMG has progressed its methodology to achieve Verified Carbon Unit (VCU) credits. AMG’s proposed Verra Carbon Standard for processing metal bearing wastes has passed through public comment and is currently being reviewed by an approved third-party validation/verification body.
Financial Highlights
EBITDA was $28.3 million in the first quarter of 2021, 27% higher than the first quarter 2020 EBITDA of $22.3 million.
Cash from operating activities was $19.9 million in the first quarter of 2021, an increase of $23.6 million over the same period in 2020.
Net income attributable to shareholders was $5.1 million in the first quarter of 2021 compared to a net loss of $13.6 million in the first quarter of 2020.
AMG’s liquidity as of March 31, 2021, was $381 million, with $211 million of unrestricted cash and $170 million of revolving credit availability.
The Company has maintained its final 2020 declared dividend of €0.10 to be paid to shareholders of record on May 13, 2021.
AMG was promoted from the Euronext’s AScX® (small cap) index to their AMX® (mid cap) index, effective March 22, 2021.
Amsterdam, 5 May 2021(Regulated Information) — AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported first quarter 2021 revenue of $264.0 million, a 5% decrease from $278.3 million in the first quarter of 2020. EBITDA for the first quarter of 2021 was $28.3 million, a 27% increase over the $22.3 million in the same period in 2020.
Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “Out of over 3,000 AMG employees at 33 sites in 15 countries, AMG has 9 active confirmed coronavirus cases globally. AMG’s priority continues to be the health and safety of our employees.
“All three of AMG’s segments performed well in the first quarter. Global demand for our products started to strengthen in the second half of 2020 and has further accelerated in 2021.
“Market prices for materials across the Company’s portfolio have increased from the depressed levels we faced at the peak of the pandemic. Prices for both the AMG Clean Energy Materials segment and the AMG Critical Minerals segment have improved, which has positively impacted financial results relative to the prior year.
“EBITDA for the AMG Critical Materials Technologies segment is lower than the same period in 2020, however, the segment delivered sequentially increasing EBITDA in the first three months of 2021 for the third straight quarter, improving 37% from the fourth quarter of 2020 while recording a greater than 1.0 book to bill ratio.
“Last year, we communicated that we believed that the second quarter of 2020 would be the pandemic low and our financial results have proven that to be true as our EBITDA has improved sequentially each quarter since then.
“AMG’s strategic projects have all advanced during the quarter. We have finalized all outstanding major contracts for the construction of our new recycling plant in Ohio and we are proceeding toward project completion at the end of the first quarter of next year. AMG Brazil is operating at full capacity and preliminary engineering for the spodumene expansion, known as SP1+, is underway post the receipt of a $20 million prepayment from our customer. AMG Lithium commenced detailed engineering as well as the purchase of long lead time items, and in addition purchased a site on the premises of Chemiepark Bitterfeld-Wolfen for the lithium hydroxide upgrader project.
“We made progress in our comprehensive strategy to advance our CO2 reduction activities. In particular, AMG has progressed its methodology to achieve Verified Carbon Unit (VCU) credits. AMG’s proposed Verra Carbon Standard for processing metal bearing wastes has passed through public comment and is currently being reviewed by an approved third-party validation/verification body.
“Although not reflected in the first quarter financial results, in April 2021 AMG issued 3.1 million new shares, generating $119 million of net proceeds and increasing current liquidity to approximately $500 million. With this equity raise, in combination with cash on hand and strong projected cash flow from operations, AMG believes it can fully fund its current strategic Clean Energy Materials projects while maintaining strong balance sheet and liquidity positions.”
Key Figures
In 000’s US dollars
Q1 ‘21
Q1 ‘20
Change
Revenue
$263,986
$278,290
(5%)
Gross profit
46,864
43,160
9%
Gross margin
17.8%
15.5%
Operating profit
13,809
8,326
66%
Operating margin
5.2%
3.0%
Net income (loss) attributable to shareholders
5,099
(13,568)
N/A
EPS – Fully diluted
0.18
(0.48)
N/A
EBIT (1)
17,376
11,851
47%
EBITDA (2)
28,339
22,329
27%
EBITDA margin
10.7%
8.0%
Cash from (used in) operating activities
19,939
(3,679)
N/A
Notes:
(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, and strategic expenses. Beginning January 1, 2021, AMG has altered its calculation of adjusted EBIT to no longer include the impact of foreign exchange. This alteration was made in consideration of a change in the Company’s hedging policy and to better align the reported adjusted EBITDA with the calculation for our bank covenant calculations. Starting January 2021, the Company is no longer hedging certain intergroup balance sheet exposures which will result in higher volatility in our financial results from foreign exchange which we believe is not representative of our operating performance. Foreign exchange loss in the first quarter of 2021 was $3.0 million. Because of this hedging policy change, we did not retroactively apply this change to the prior year figures, otherwise it would have resulted in a reduction of prior year EBIT of $0.9 million.
(2) EBITDA is defined as EBIT adjusted for depreciation and amortization.
Operational Review
AMG Clean Energy Materials
Q1 ‘21
Q1 ‘20
Change
Revenue
$70,627
$69,219
2%
Gross profit
13,203
4,307
207%
Gross profit before non-recurring items
13,383
3,897
243%
Operating profit (loss)
3,605
(5,654)
N/A
EBITDA
10,286
(1,048)
N/A
AMG Clean Energy Materials’ revenue increased by $1.4 million, or 2%, to $70.6 million, driven mainly by higher sales volumes of tantalum and lithium concentrate and higher prices in vanadium, tantalum and lithium concentrate.
Gross profit before non-recurring items more than tripled in the first quarter due to the improving price environment experienced in the first quarter of 2021.
SG&A expenses in the first quarter of 2021 were $9.6 million, 3% lower than the first quarter of 2020 due to non-recurring legal expenses in the first quarter of 2020.
The first quarter 2021 EBITDA increased by $11.3 million, to $10.3 million from negative $1.0 million in the first quarter of 2020, due to the improved gross profit and SG&A noted above.
AMG Critical Minerals
Q1 ‘21
Q1 ‘20
Change
Revenue
$72,916
$57,760
26%
Gross profit
13,154
10,289
28%
Gross profit before non-recurring items
13,071
10,308
27%
Operating profit
6,560
4,285
53%
EBITDA
9,012
6,807
32%
AMG Critical Minerals’ revenue increased by $15.2 million, or 26%, to $72.9 million, driven by higher sales volumes and higher sales prices across all three business units.
Gross profit before non-recurring items increased by 27% in the first quarter due to increased revenue noted above.
SG&A expenses in the first quarter of 2021 slightly increased by $0.5 million, to $6.6 million, primarily due to higher personnel costs and insurance expenses in the current period.
The first quarter 2021 EBITDA margin was 12%, in line with the same period in the prior year.
AMG Critical Materials Technologies
Q1 ‘21
Q1 ‘20
Change
Revenue
$120,443
$151,311
(20%)
Gross profit
20,507
28,564
(28%)
Gross profit before non-recurring items
20,569
28,894
(29%)
Operating profit
3,644
9,695
(62%)
EBITDA
9,041
16,570
(45%)
AMG Critical Materials Technologies’ first quarter 2021 revenue decreased by $30.9 million, or 20%, due to reduced aerospace activity and volume reductions. These declines were partially offset by higher revenue from remelting and nuclear waste recycling furnaces, highlighting AMG Engineering’s diversified technology base outside of its aerospace activities. As a result of these factors, first quarter 2021 gross profit before non-recurring items decreased by $8.3 million, or 29%, to $20.6 million.
SG&A expenses decreased by $2.0 million, or 11%, in the first quarter of 2021 compared to the first quarter of 2020, due to lower personnel costs and lower professional fees as a result of cost reduction efforts across the business.
AMG Critical Materials Technologies’ first quarter EBITDA decreased by 45% to $9.0 million from $16.6 million in the first quarter of 2020 due to lower profitability related to the pandemic-impacted aerospace market, offset partially by cost reduction efforts. First quarter EBITDA was 37% higher than fourth quarter 2020, demonstrating continuing recovery in the segment.
Order backlog was $190.7 million as of March 31, 2021, a 4% decrease from $198.1 million as of December 31, 2020. The Company signed $57.5 million in new orders during the first quarter of 2021, representing a 1.03x book to bill ratio. The quarter benefited from strong orders of remelting, induction, and heat treatment furnaces.
Financial Review
Tax
AMG recorded an income tax benefit of $0.9 million in the first quarter of 2021, compared to an expense of $16.5 million in the same period in 2020. This variance was mainly driven by movements in the Brazilian real offset partially by higher pre-tax income compared to the prior period. The effects of the Brazilian real caused a $14.2 million lower non-cash tax expense in the first quarter of 2021 versus the first quarter of 2020. Movements in the Brazilian real exchange rate impact the valuation of the Company’s net deferred tax positions related to our operations in Brazil.
AMG paid taxes of $2.0 million in the first quarter of 2021, compared to tax payments of $0.9 million in the first quarter of 2020.
Exceptional Items
AMG’s first quarter 2021 gross profit of $46.9 million includes exceptional items, which are not included in the calculation of EBITDA.
A summary of exceptional items included in gross profit in the first quarters of 2021 and 2020 are below:
Exceptional items included in gross profit
Q1 ‘21
Q1 ‘20
Change
Gross profit
$46,864
$43,160
9%
Inventory cost adjustment (reversal)
(333)
(1,901)
82%
Restructuring expense
67
428
(84%)
Asset impairment (reversal) expense
(136)
17
N/A
Strategic project expense
561
1,395
(60%)
Gross profit excluding exceptional items
47,023
43,099
9%
AMG had a $0.3 million exceptional non-cash net reversal during the first quarter of 2021 as a result of inventory cost adjustments primarily from our Brazilian operations, which has been adjusted in EBITDA. During the quarter, the Company incurred expenses for expansion projects which are not yet operational. AMG is adjusting EBITDA for these exceptional charges.
Liquidity
March 31, 2021
December 31, 2020
Change
Senior secured debt
$363,917
$364,640
—
Cash & equivalents
211,079
207,366
2%
Senior secured net debt
152,838
157,274
(3%)
Other debt
19,775
19,876
(1%)
Net debt excluding municipal bond
172,613
177,150
(3%)
Municipal bond debt
319,645
319,699
—
Restricted cash
175,041
208,919
(16%)
Net debt
317,217
287,930
10%
AMG had a net debt position of $317.2 million as of March 31, 2021. This increase was mainly due to the significant investment in growth initiatives during the quarter, especially in our vanadium expansion in Ohio.
AMG continued to maintain a strong balance sheet and adequate sources of liquidity during the first quarter. As of March 31, 2021, the Company had $211 million in unrestricted cash and cash equivalents and $170 million available on its revolving credit facility. As such, AMG had $381 million of total liquidity as of March 31, 2021.
Subsequent to the close of the quarter, AMG issued additional shares and generated $119 million of net proceeds which are not reflected in the above figures.
Net Finance Costs
AMG’s first quarter 2021 net finance costs were $8.7 million compared to $5.4 million in the first quarter of 2020. This increase is mainly driven by higher foreign exchange losses during the quarter, which were partially offset by lower borrowing rates versus the prior period.
AMG capitalized $3.8 million of interest costs in the first quarter of 2021 compared to $2.8 million in the prior year, driven by interest associated with the Company’s tax-exempt municipal bond supporting the vanadium expansion in Ohio.
SG&A
AMG’s first quarter 2021 SG&A expenses were $33.1 million compared to $34.9 million in the first quarter of 2020, primarily due to lower professional fees and continued cost reduction efforts across the business.
Outlook
Due to improving market conditions, AMG’s financial results for the first quarter were above previous expectations. We believe that these improvements will continue as we advance in 2021 and, as such, we are updating our outlook for the full year to exceed $120 million EBITDA.
AMG’s long-term guidance will be detailed at the Annual General Meeting tomorrow at 15:00 CEST. Net income (loss) to EBITDA reconciliation
*Beginning January 1, 2021, AMG has altered its calculation of adjusted EBITDA to no longer include the impact of foreign exchange. This alteration was made in consideration of a change in the Company’s hedging policy and to better align the reported adjusted EBITDA with the calculation for our bank covenant calculations. Starting January 2021, the Company is no longer hedging certain intergroup balance sheet exposures which will result in higher volatility in our financial results from foreign exchange which we believe is not representative of our ongoing operating performance. Foreign exchange loss in the first quarter of 2021 was $3.0 million. Because of this hedging policy change, we did not retroactively apply this change to the prior year figures, otherwise it would have resulted in a reduction of the prior year adjusted EBIT of $0.9 million.
**Amount includes variable compensation expense which was share-settled in 2021.
***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 project expenses during the quarter but are not yet operational. AMG is adjusting EBITDA for these exceptional charges.
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Income Statement For the quarter ended March 31
In thousands of US dollars
2021
Unaudited
2020
Unaudited
Continuing operations
Revenue
263,986
278,290
Cost of sales
217,122
235,130
Gross profit
46,864
43,160
Selling, general and administrative expenses
33,093
34,887
Other income, net
38
53
Net other operating income
38
53
Operating profit
13,809
8,326
Finance income
(210)
(1,399)
Finance cost
8,864
6,807
Net finance cost
8,654
5,408
Share of loss of associates and joint ventures
(387)
–
Profit before income tax
4,768
2,918
Income tax (benefit) expense
(910)
16,515
Profit (loss) for the period
5,678
(13,597)
Profit (loss) attributable to:
Shareholders of the Company
5,099
(13,568)
Non-controlling interests
579
(29)
Profit (loss) for the period
5,678
(13,597)
Earnings (loss) per share
Basic earnings (loss) per share
0.18
(0.48)
Diluted earnings (loss) per share
0.18
(0.48)
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Financial Position
In thousands of US dollars
March 31, 2021 Unaudited
December 31, 2020
Assets
Property, plant and equipment
581,569
551,926
Goodwill and other intangible assets
42,109
43,207
Derivative financial instruments
477
1,894
Other investments
28,505
27,527
Deferred tax assets
58,509
58,081
Restricted cash
175,041
208,919
Other assets
8,054
8,496
Total non-current assets
894,264
900,050
Inventories
173,829
152,306
Derivative financial instruments
4,702
5,961
Trade and other receivables
148,329
122,369
Other assets
51,009
44,821
Current tax assets
5,018
5,108
Cash and cash equivalents
211,079
207,366
Assets held for sale
971
1,005
Total current assets
594,937
538,936
Total assets
1,489,201
1,438,986
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Financial Position
(continued)
In thousands of US dollars
March 31, 2021 Unaudited
December 31, 2020
Equity
Issued capital
831
831
Share premium
489,546
489,546
Treasury shares
(74,706)
(80,165)
Other reserves
(113,430)
(110,593)
Retained earnings (deficit)
(183,688)
(184,139)
Equity attributable to shareholders of the Company
118,553
115,480
Non-controlling interests
25,679
25,790
Total equity
144,232
141,270
Liabilities
Loans and borrowings
672,553
673,262
Lease liabilities
44,285
47,092
Employee benefits
189,376
197,158
Provisions
14,716
15,322
Other liabilities
31,905
12,598
Derivative financial instruments
4,283
4,389
Deferred tax liabilities
4,543
5,398
Total non-current liabilities
961,661
955,219
Loans and borrowings
23,284
23,392
Lease liabilities
4,433
4,789
Short-term bank debt
7,500
7,561
Other liabilities
76,430
67,805
Trade and other payables
203,796
164,999
Derivative financial instruments
5,901
10,264
Advance payments from customers
31,490
29,885
Current tax liability
8,686
7,480
Provisions
21,788
26,322
Total current liabilities
383,308
342,497
Total liabilities
1,344,969
1,297,716
Total equity and liabilities
1,489,201
1,438,986
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Cash Flows For the quarter ended March 31
In thousands of US dollars
2021
2020
Unaudited
Unaudited
Cash from (used in) operating activities
Profit (loss) for the period
5,678
(13,597)
Adjustments to reconcile net profit (loss) to net cash flows:
Non-cash:
Income tax (benefit) expense
(910)
16,515
Depreciation and amortization
10,963
10,478
Asset impairment (reversal) expense
(136)
17
Net finance cost
8,654
5,408
Share of loss of associates and joint ventures
387
—
Loss on sale or disposal of property, plant and equipment
9
112
Equity-settled share-based payment transactions
1,088
1,490
Movement in provisions, pensions, and government grants
(3,796)
(2,761)
Working capital and deferred revenue adjustments
4,748
(15,468)
Cash generated from operating activities
26,685
2,194
Finance costs paid, net
(4,749)
(4,951)
Income tax paid
(1,997)
(922)
Net cash from (used in) operating activities
19,939
(3,679)
Cash used in investing activities
Proceeds from sale of property, plant and equipment
171
—
Acquisition of property, plant and equipment and intangibles
(35,583)
(15,500)
Investments in associates and joint ventures
(1,000)
—
Change in restricted cash
33,878
14,086
Interest received on restricted cash
15
941
Capitalized borrowing cost
(7,722)
(7,336)
Other
13
8
Net cash used in investing activities
(10,228)
(7,801)
AMG Advanced Metallurgical Group N.V.
Condensed Interim Consolidated Statement of Cash Flows
(continued) For the quarter ended March 31
In thousands of US dollars
2021
2020
Unaudited
Unaudited
Cash used in financing activities
Proceeds from issuance of debt
1,481
–
Payment of transaction costs related to debt
(390)
–
Repayment of borrowings
(1,510)
(1,257)
Net proceeds from (repurchase of) common shares
176
(592)
Payment of lease liabilities
(1,283)
(1,057)
Contributions by non-controlling interests
244
–
Net cash used in financing activities
(1,282)
(2,906)
Net increase (decrease) in cash and cash equivalents
8,429
(14,386)
Cash and cash equivalents at January 1
207,366
226,218
Effect of exchange rate fluctuations on cash held
(4,716)
(2,888)
Cash and cash equivalents at March 31
211,079
208,944
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 Clean Energy Materials combines our recycling and mining operations producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. Clean Energy Materials spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies combines our leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals consists of our mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, 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.
Amsterdam, 24 February 2021(Regulated Information)— The Supervisory Board of AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) resolved during its meeting on February 24, 2021 to propose to the General Meeting of Shareholders to nominate for reappointment Dr. Heinz Schimmelbusch and Mr. Eric Jackson for additional terms of two and four years, respectively, when their current terms expire in 2021.
Supervisory Board Composition
At the Annual General Meeting (“AGM”) in May 2021, Mr. Willem van Hassel, Vice Chairman, will have served four years on the Supervisory Board when his current term ends. On that occasion, Mr. Herb Depp, Chair of the Remuneration Committee, will have served eight years on the Supervisory Board when his current term ends. The Board is very pleased that both gentlemen have agreed to continue to serve on the Supervisory Board. The Supervisory Board will nominate Mr. van Hassel and Mr. Depp for reappointment by the General Meeting Shareholders on May 6 of this year as independent members of the Supervisory Board for terms of respectively four years (Mr. van Hassel) and two years (Mr. Depp).
Mr. Frank Löhner has indicated that he wishes to step down after the AGM on May 6 of this year due to other pressing engagements, having served three years on the Supervisory Board. The Supervisory Board respects and accepts with regret the decision of Mr. Löhner and thanks him for his valuable insights and contributions and wishes him well in his future endeavors. Given the retirement of Mr. Löhner, the Supervisory Board is very pleased to nominate Mr. Warmolt Prins for appointment by the General Meeting of Shareholders as a Supervisory Board member with effect as of May 6, 2021. Mr. Prins, who has Dutch nationality, is a chartered accountant and former partner of EY Accountants and served as external auditor (on behalf of EY) of AMG from 2010 through 2015. Mr. Prins also brings highly relevant industry experience.
Management Board Composition
The terms of both the CEO and COO (Dr. Heinz Schimmelbusch and Mr. Eric Jackson, respectively) will end in May 2021. As extensively explained in the 2017 Annual Report and at the 2018 Annual Meeting, the Supervisory Board had concluded that it was of the utmost importance that AMG secure the leadership of Dr. Heinz Schimmelbusch for the coming years as CEO and Chairman of the Management Board, given the transformational changes that had been initiated by the Company by implementing the Company’s long-term strategy.
Now, in 2021, AMG finds itself still in the midst of the COVID-19 pandemic that has shaken the world and its global economy in unprecedented ways. The Selection & Appointment Committee has held extensive discussions with its fellow board members and the Management Board about the leadership of the Company and the entirely unforeseen and dramatic impact of the COVID-19 pandemic that began in early 2020 and is expected to continue to affect AMG’s business operations and prospects in 2021 and 2022.
The committee is extremely pleased that both Dr. Schimmelbusch and Mr. Jackson have agreed to be available for extensions of their terms on the Management Board, if and when appointed, for periods of two and four years, respectively, in order to drive the strategic agenda of the Company and prepare the Company in the best possible way for the post-pandemic economy.
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 Clean Energy Materials combines our recycling and mining operations producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. Clean Energy Materials spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies combines our leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals consists of our mineral processing operations in antimony, graphite and silicon metal.
With approximately 3,000 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, 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.
As of today, out of over 3,000 employees we have 3 active confirmed coronavirus cases globally. AMG has zero current COVID hospitalization cases. AMG has not experienced any coronavirus related fatalities, and our current cases have not resulted in a facility closure or operational interruption. AMG continues to implement preventive measures such as practicing social distancing, remote working when possible, and restrictions on travel to protect the health and safety of our employees.
Strategic Highlights
The construction of AMG’s second ferrovanadium plant in Zanesville, Ohio is proceeding as planned. As of December 31, 2020, AMG has committed $206 million in construction and engineering contracts for the project.
AMG Brazil has entered into an Exclusive Cooperation Agreement (“ECA”) with one of its major customers for lithium concentrates. The ECA provides for AMG Brazil to supply 200,000 DMT over a 5-year supply term, which will be obtained from an expansion (targeting 40,000 DMT per annum) of AMG Brazil’s existing lithium concentrate plant. The ECA includes an advanced payment for lithium concentrate which will fund AMG Brazil’s investment in the expansion.
Shell & AMG Recycling B.V. signed a memorandum of understanding (MOU) with the Saudi Arabian Oil Company (Saudi Aramco) to explore the feasibility of building a recycling “Supercenter” in the Kingdom of Saudi Arabia.
AMG published its ESG Strategic Statement which concludes with: “AMG was founded on the principle that CO2 abatement targets would create increased criticality for specialty materials. This strategic focus is encapsulated in the ECO2RP products and will continue to drive AMG’s strategy and capital investment program across its three new reporting segments. Our strategic focus is fully aligned with – and in support of – the EU Taxonomy initiative on sustainability and its climate objectives.”
Financial Highlights
EBITDA was $22.5 million in the fourth quarter of 2020, in line with $22.8 million in the fourth quarter of 2019. In light of the COVID impacts during the year, it is important to note however, that this is a 59% increase over Q3 2020. COVID-19 had a negative $12 million impact in the fourth quarter of 2020, which is explained in more detail on page 3.
AMG reduced SG&A by 30% in the fourth quarter of 2020 to $26.1 million, compared to $37.2 million in the fourth quarter of 2019, due to lower personnel costs and ongoing cost reduction initiatives. Full year 2020 SG&A declined by $25.7 million versus 2019 due to austerity measures and reduced variable compensation.
AMG’s liquidity as of December 31, 2020, was $377 million, with $207 million of unrestricted cash and $170 million of revolving credit availability.
The total 2020 dividend proposed is €0.20 per ordinary share, including the interim dividend of €0.10, paid on August 13, 2020.
Amsterdam, 24 February 2021(Regulated Information)— AMG Advanced Metallurgical Group N.V. (“AMG”, EURONEXT AMSTERDAM: “AMG”) reported fourth quarter 2020 revenue of $253.5 million, a 6% decrease from $268.6 million in the fourth quarter of 2019. EBITDA for the fourth quarter of 2020 was $22.5 million, in line with the fourth quarter of 2019 of $22.8 million.
Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, “Out of over 3,000 AMG employees at 33 sites in 15 countries, AMG has 3 active confirmed coronavirus cases globally. AMG has zero current COVID hospitalization cases. AMG’s priority continues to be the health and safety of our employees.
“We continued to feel the impact of the coronavirus pandemic in the fourth quarter of 2020 but began to experience selective price stabilization in Critical Materials. These market price improvements accelerated in early 2021, particularly in ferrovanadium and lithium. AMG Technologies experienced ongoing lower results associated with weakness in the aerospace sector, however, it is important to note that AMG Engineering’s order intake in 2020 exceeded $200 million for the year.
“AMG’s strategic investments are all progressing despite the challenging market environment. The construction of the recycling plant in Zanesville, Ohio, which will essentially double our recycling capacity for refinery residues, is proceeding as planned, utilizing the funds from the municipal bond issue. Shell & AMG Recycling B.V. continues to pursue refinery residue recycling opportunities globally with a focus on the Middle East and China including an MOU with Saudi Aramco to explore the feasibility of building a recycling “Supercenter” in the Kingdom of Saudi Arabia. AMG Brazil is operating at full capacity and the spodumene expansion, known as SP1+, is underway as noted above. AMG Lithium GmbH has invested in a solid-state battery (SSB) pilot plant within its state-of-the-art battery materials laboratory located in Frankfurt, Germany. In addition, the lithium hydroxide upgrader project has commenced in Germany, and AMG’s Supervisory Board approved moving ahead with the detailed engineering as well as the purchase of long lead-time items and the site.”
COVID-19 Effect on AMG’s Business
EBITDA in the fourth quarter of 2020 was in line with the same period in the prior year despite the temporary pandemic-related interruptions to our business. However, we are once again providing a summary of the estimated impact of the pandemic on our operations. Our estimated COVID-19 EBITDA impact is approximately $12 million for the fourth quarter. This figure is an estimate of what management believes the Company’s EBITDA may have been for the quarter if the pandemic had not occurred. It was calculated using on a bottom-up analysis of our business units, including management’s appraisal of the approximate decline in revenues from lower volumes and pricing, as well as related expense implications resulting from the impacts of the pandemic compared to the Company’s financial plan.
AMG Critical Materials’ pandemic-related impacts continued from the second and third quarters into the fourth, but we saw increased volumes being sold to our customers in five of seven of our business units, and the COVID effects were reduced versus the level in the second and third quarters of 2020.
AMG Technologies’ pandemic-related impacts continued to be driven by the decreased and postponed volumes from our aerospace customers, but we also experienced difficulty finalizing vacuum furnace orders and servicing our customers with replacement parts due to global travel restrictions. These effects were partially offset by an improved performance from our Heat Treatment Services business, which experienced higher demand as a result of the rapidly recovering automotive sector.
Key Figures
In 000’s US dollars
Q4 ‘20
Q4 ‘19
Change
FY ‘20
FY ‘19
Change
Revenue
$253,476
$268,563
(6%)
$937,116
$1,188,571
(21%)
Gross profit
28,103
30,422
(8%)
112,653
118,290
(5%)
Gross margin
11.1%
11.3%
12.0%
10.0%
Operating loss
(2,184)
(7,012)
69%
(9,235)
(25,722)
64%
Operating margin
(0.9%)
(2.6%)
(1.0%)
(2.2%)
Net loss attributable to shareholders
(2,839)
(14,239)
80%
(41,692)
(48,283)
14%
EPS – Fully diluted
(0.10)
(0.50)
80%
(1.47)
(1.64)
10%
EBIT (1)
11,059
11,450
(3%)
23,106
79,415
(71%)
EBITDA (2)
22,539
22,772
(1%)
66,767
121,382
(45%)
EBITDA margin
8.9%
8.5%
7.1%
10.2%
Cash from operating activities
11,358
55,517
(80%)
19,619
46,573
(58%)
Notes:
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.
EBITDA is defined as EBIT adjusted for depreciation and amortization.
Operational Review
AMG Critical Materials
Q4 ‘20
Q4 ‘19
Change
FY ‘20
FY ‘19
Change
Revenue
$171,396
$170,152
1%
$575,717
$762,482
(24%)
Gross profit
17,758
8,211
116%
56,342
19,343
191%
Gross profit before non-recurring items
21,847
21,653
1%
67,953
110,315
(38%)
Operating profit (loss)
403
(11,594)
N/A
(9,726)
(59,318)
84%
EBITDA
16,425
13,061
26%
41,016
65,401
(37%)
AMG Critical Materials’ revenue in the fourth quarter reflected a continuing weak price environment versus the fourth quarter of 2019. Revenues increased by $1.2 million, or 1%, to $171.4 million, driven mainly by higher sales volumes of lithium concentrate, aluminum, antimony, graphite and silicon, offset by lower sales volumes of ferrovanadium and lower prices in vanadium, chrome, tantalum and spodumene.
Gross profit before non-recurring items increased by 1% in the fourth quarter due to increased revenue.
SG&A expenses in the fourth quarter of 2020 were $13.4 million, $6.4 million lower than the fourth quarter of 2019, due to lower personnel costs, particularly variable compensation expense, lower professional fees, as well as cost reduction efforts across the business.
The fourth quarter 2020 EBITDA margin was 10%, compared to 8% in the same period in the prior year, due to cost reduction efforts as noted above.
AMG Technologies
Q4 ‘20
Q4 ‘19
Change
FY ‘20
FY ‘19
Change
Revenue
$82,080
$98,411
(17%)
$361,399
$426,089
(15%)
Gross profit
10,345
22,211
(53%)
56,311
98,947
(43%)
Gross profit before non- recurring items
13,669
22,209
(38%)
60,500
103,551
(42%)
Operating (loss) profit
(2,587)
4,582
N/A
491
33,596
(99%)
EBITDA
6,114
9,711
(37%)
25,751
55,981
(54%)
AMG Technologies’ fourth quarter 2020 revenue decreased by $16.3 million, or 17%, due to reduced aerospace activity and volume reductions, as well as lower profitability associated with metal price declines for the Titanium Alloys and Coatings business. These declines were offset by higher revenue from heat treatment services and remelting furnaces. Consequently, fourth quarter 2020 gross profit before non-recurring items decreased by $8.5 million, or 38%, to $13.7 million.
SG&A expenses decreased by $4.8 million, or 27%, in the fourth quarter of 2020 compared to the fourth quarter of 2019, due to lower personnel costs, particularly variable compensation expense, lower professional fees, as well as cost reduction efforts across the business.
AMG Technologies’ fourth quarter EBITDA decreased by 37% to $6.1 million from $9.7 million in the fourth quarter of 2019 due to lower profitability related to the challenging economic environment as outlined above.
Order backlog was $198.1 million as of December 31, 2020, a 9% decrease from $217.7 million as of September 30, 2020 and an 11% decrease from $222.6 million as of December 31, 2019. The Company signed $45.5 million in new orders during the fourth quarter of 2020, but order intake and order backlog were reduced by the cancellation of a $14.3 million order. The quarter benefited from strong orders of induction melting and arc remelting furnaces for specialty steel producers. On a full year basis, including the cancellation, the Company signed $208.6 million in new orders, representing a 0.83x book to bill ratio.
Financial Review
Tax
AMG recorded an income tax expense of $11.2 million in 2020 as compared to a benefit of $5.1 million in 2019. In addition to increased profitability in certain jurisdictions, this increased tax expense was mainly driven by a year-over-year increase of $11.7 million in non-cash tax expense due to movements in the Brazilian real. Movements in the Brazilian real exchange rate impact the valuation of the Company’s net deferred tax assets. The devaluation of the real during 2020 resulted in an additional non-cash tax expense of $11.1 million, compared to a benefit of $0.6 million in 2019.
AMG paid taxes of $8.6 million in 2020, compared to tax payments of $24.6 million in 2019. 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 attributable to income from prior years and not 2020. 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 2020 and full year 2020 gross profit includes exceptional items, which are not included in the calculation of EBITDA.
A summary of exceptional items included in gross profit in 2020 and 2019 are below:
Exceptional items included in gross profit
Q4 ‘20
Q4 ‘19
Change
FY ‘20
FY ‘19
Change
Gross profit
$28,103
$30,422
(8%)
$112,653
$118,290
(5%)
Inventory cost adjustment
2,160
12,001
(82%)
6,219
87,792
(93%)
Restructuring expense
4,374
2,442
79%
5,700
3,265
75%
Asset impairment expense
566
(1,003)
N/A
664
4,519
(85%)
Strategic project expense
313
–
N/A
3,217
–
N/A
Gross profit excluding exceptional items
35,516
43,862
(19%)
128,453
213,866
(40%)
AMG had a $2.2 million exceptional non-cash expense during the fourth quarter of 2020 as a result of inventory cost adjustments in our Brazilian operations, which has been adjusted in EBITDA. The $4.4 million restructuring expense in the fourth quarter was mainly due to headcount reductions in our AMG Technologies and Chrome operations. 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 project expenses during the quarter but are not yet operational. AMG is adjusting EBITDA for these exceptional charges.
Liquidity
December 31, 2020
December 31, 2019
Change
Senior secured debt
$364,640
$366,682
(1%)
Cash & equivalents
207,366
226,218
(8%)
Senior secured net debt
157,274
140,464
12%
Other debt
19,876
12,144
64%
Net debt excluding municipal bond
177,150
152,608
16%
Municipal bond debt
319,699
319,911
–
Restricted cash
208,919
309,581
(33%)
Net debt
287,930
162,938
77%
AMG had a net debt position of $287.9 million as of December 31, 2020. This increase was mainly due to the significant investment in growth initiatives during the quarter, especially the vanadium expansion.
In 2020, AMG maintained a strong balance sheet and adequate sources of liquidity. As of December 31, 2020, the Company had $207 million in unrestricted cash and cash equivalents and $170 million available on its revolving credit facility. As such, AMG had $377 million of total liquidity as of December 31, 2020.
Net Finance Costs
AMG’s fourth quarter 2020 net finance costs were $4.9 million compared to $6.1 million in the fourth quarter of 2019. This decline is mainly driven by favorable foreign exchange movements. Additionally, AMG capitalized $3.8 million of interest costs in the fourth quarter of 2020 compared to $2.8 million 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 2020 SG&A expenses were $26.1 million compared to $37.2 million in the fourth quarter of 2019, due to continued cost reduction efforts across the business as detailed earlier.
Full year 2020 SG&A expenses were $117.8 million, a decrease of $25.7 million, or 18%, from the prior year, which includes a non-recurring reversal for share-based compensation expense of $4.1 million related to share-based awards currently not forecasted to meet the threshold to vest. This reversal was excluded from EBITDA. SG&A expenses for 2020 included $18.7 million in professional fees versus $26.6 for 2019, $68.0 million in personnel costs and variable compensation expense compared to $78.0 in 2019. These decreases were partially offset by the Lithium expansion projects in Germany.
Final Dividend Proposed
AMG intends to declare a dividend of €0.20 per ordinary share over the financial year 2020. The interim dividend of €0.10, paid on August 13, 2020, will be deducted from the amount to be distributed to shareholders. The proposed final dividend per ordinary share therefore amounts to €0.10.
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, 2021.
Outlook
We believe that AMG’s results will continue to trend positively, and we expect to exceed $100 million EBITDA in 2021.
Segmental Realignment
The Company has changed its organizational structure effective January 1, 2021. This change results in three reporting segments: AMG Clean Energy Materials (“CEM”), AMG Critical Minerals (“CMI”), and AMG Critical Materials Technologies (“CMT”). Each of these segments address similar markets, apply similar business models, and each segment has its own set of peers. Most importantly, each segment has products which enable CO2 reduction, and each segment is targeting growth in its contribution to the ECO2RP.
AMG’s pro forma segmental information for AMG Clean Energy Materials, AMG Critical Minerals, and AMG Critical Materials Technologies for the fourth quarter of 2020 is shown below:
AMG Clean Energy Materials
Q1 ‘20
Q2 ‘20
Q3 ‘20
Q4 ‘20
FY ‘20
Revenue
69,219
53,054
56,396
66,995
245,664
Gross (loss) profit
4,307
1,818
(135)
6,004
11,994
Operating loss
(5,654)
(5,481)
(8,269)
(5,118)
(24,522)
EBITDA
(1,048)
1,279
3,268
7,081
10,580
AMG Critical Minerals
Q1 ‘20
Q2 ‘20
Q3 ‘20
Q4 ‘20
FY ‘20
Revenue
57,760
47,908
52,167
55,483
213,318
Gross profit
10,289
6,141
8,642
10,557
35,629
Operating profit
4,285
1,194
3,409
5,279
14,167
EBITDA
6,807
3,648
6,562
8,871
25,888
AMG Critical Materials Technologies
Q1 ‘20
Q2 ‘20
Q3 ‘20
Q4 ‘20
FY ‘20
Revenue
151,311
106,648
89,177
130,998
478,134
Gross profit
28,564
12,582
12,342
11,542
65,030
Operating profit (loss)
9,695
(2,403)
(3,827)
(2,345)
1,120
EBITDA
16,570
2,829
4,313
6,587
30,299
Net loss to EBITDA reconciliation
Q4 ‘20
Q4 ‘19
FY ‘20
FY ‘19
Loss for the year
($2,613)
($14,083)
($42,460)
($48,586)
Income tax (benefit) expense
(4,950)
938
11,184
(5,119)
Net finance cost*
5,956
5,920
23,524
27,626
Equity-settled share-based payment transactions**
(2,164)
1,422
3,792
5,514
Restructuring expense
4,374
2,442
5,700
3,265
Inventory cost adjustment
2,160
12,001
6,219
87,792
Asset impairment expense
566
(1,003)
664
4,519
Environmental provision
4,287
234
4,342
725
Exceptional legal expense
(35)
3,133
1,353
3,133
Strategic project expense
2,529
–
7,085
–
Share of loss of associates
518
–
947
–
Others
431
446
756
546
EBIT
11,059
11,450
23,106
79,415
Depreciation and amortization
11,480
11,322
43,661
41,967
EBITDA
22,539
22,772
66,767
121,382
*Excludes foreign exchange (gain) loss. **Amount includes variable compensation expense which is expected to be share-settled in 2021.
During the fourth quarter of 2020, AMG recorded non-recurring environmental expense of $4.3 million, the majority of which was related to the remediation of a closed site in Newfield, New Jersey. This amount offset a $21.7 million reduction to the underlying environmental provision due to significant progress in remediating the site.
AMG Advanced Metallurgical Group N.V.
Consolidated Income Statement
For the quarter ended December 31
In thousands of US dollars
2020
2019
Unaudited
Continuing operations
Revenue
253,476
268,563
Cost of sales
225,373
238,141
Gross profit
28,103
30,422
Selling, general and administrative expenses
26,065
37,209
Environmental expense
4,287
234
Other income, net
(65)
(9)
Net other operating expense
4,222
225
Operating loss
(2,184)
(7,012)
Finance income
(2,311)
(1,662)
Finance cost
7,172
7,795
Net finance cost
4,861
6,133
Share of loss of associates
(518)
–
Loss before income tax
(7,563)
(13,145)
Income tax (benefit) expense
(4,950)
938
Loss for the period
(2,613)
(14,083)
Loss attributable to:
Shareholders of the Company
(2,839)
(14,239)
Non-controlling interests
226
156
Loss for the period
(2,613)
(14,083)
Loss per share
Basic loss per share
(0.10)
(0.50)
Diluted loss per share
(0.10)
(0.50)
AMG Advanced Metallurgical Group N.V.
Consolidated Income Statement
For the year ended December 31
In thousands of US dollars
2020
2019
Unaudited
Continuing operations
Revenue
937,116
1,188,571
Cost of sales
824,463
1,070,281
Gross profit
112,653
118,290
Selling, general and administrative expenses
117,780
143,451
Environmental expense
4,342
725
Other income, net
(234)
(164)
Net other operating expense
4,108
561
Operating loss
(9,235)
(25,722)
Finance income
(4,757)
(4,728)
Finance cost
25,851
32,711
Net finance cost
21,094
27,983
Share of loss of associates
(947)
–
Loss before income tax
(31,276)
(53,705)
Income tax expense (benefit)
11,184
(5,119)
Loss for the year
(42,460)
(48,586)
Loss attributable to:
Shareholders of the Company
(41,692)
(48,283)
Non-controlling interests
(768)
(303)
Loss for the year
(42,460)
(48,586)
Loss per share
Basic loss per share
(1.47)
(1.64)
Diluted loss per share
(1.47)
(1.64)
AMG Advanced Metallurgical Group N.V.
Condensed Statement of Financial Position
In thousands of US dollars
December 31, 2020 Unaudited
December 31, 2019
Assets
Property, plant and equipment
551,926
429,993
Goodwill and other intangible assets
43,207
41,923
Derivative financial instruments
1,894
922
Other investments
27,527
23,565
Deferred tax assets
58,081
60,945
Restricted cash
208,919
309,581
Other assets
8,496
11,072
Total non-current assets
900,050
878,001
Inventories
152,306
204,152
Derivative financial instruments
5,961
2,693
Trade and other receivables
122,369
119,052
Other assets
44,821
33,720
Current tax assets
5,108
7,980
Cash and cash equivalents
207,366
226,218
Assets held for sale
1,005
140
Total current assets
538,936
593,955
Total assets
1,438,986
1,471,956
AMG Advanced Metallurgical Group N.V.
Consolidated Statement of Financial Position
(continued)
In thousands of US dollars
December 31, 2020 Unaudited
December 31, 2019
Equity
Issued capital
831
831
Share premium
489,546
489,546
Treasury shares
(80,165)
(83,880)
Other reserves
(110,593)
(116,358)
Retained earnings (deficit)
(184,139)
(129,626)
Equity attributable to shareholders of the Company
115,480
160,513
Non-controlling interests
25,790
23,893
Total equity
141,270
184,406
Liabilities Loans and borrowings
673,262
669,497
Lease liabilities
47,092
46,490
Employee benefits
197,158
175,870
Provisions
15,322
28,984
Other liabilities
12,598
3,629
Derivative financial instruments
4,389
4,289
Deferred tax liabilities
5,398
4,300
Total non-current liabilities
955,219
933,059
Loans and borrowings
23,392
21,740
Lease liabilities
4,789
4,227
Short-term bank debt
7,561
7,500
Other liabilities
67,805
61,479
Trade and other payables
164,999
157,108
Derivative financial instruments
10,264
4,037
Advance payments from customers
29,885
57,650
Current tax liability
7,480
18,299
Provisions
26,322
22,451
Total current liabilities
342,497
354,491
Total liabilities
1,297,716
1,287,550
Total equity and liabilities
1,438,986
1,471,956
AMG Advanced Metallurgical Group N.V.
Consolidated Statement of Cash Flows
For the year ended December 31
In thousands of US dollars
2020
2019
Unaudited
Cash from operating activities
Loss for the year
(42,460)
(48,586)
Adjustments to reconcile net loss to net cash flows:
Non-cash:
Income tax expense (benefit)
11,184
(5,119)
Depreciation and amortization
43,661
41,967
Asset impairments
664
4,519
Net finance cost
21,094
27,983
Share of loss of associates and joint ventures
947
–
Loss (gain) on sale or disposal of property, plant and equipment
358
(69)
Equity-settled share-based payment transactions
1,429
5,514
Movement in provisions, pensions, and government grants
(121)
(8,053)
Working capital and deferred revenue adjustments
10,829
76,169
Cash generated from operating activities
47,585
94,325
Finance costs paid, net
(19,410)
(23,152)
Income tax paid
(8,556)
(24,600)
Net cash from operating activities
19,619
46,573
Cash used in investing activities
Proceeds from sale of property, plant and equipment
71
421
Acquisition of property, plant and equipment and intangibles
(123,695)
(79,442)
Acquisition of subsidiaries
–
(25,435)
Investments in associates and joint ventures
(1,000)
–
Change in restricted cash
100,662
(307,866)
Interest received on restricted cash
1,120
2,762
Capitalized borrowing cost
(15,150)
(325)
Other
76
6
Net cash used in investing activities
(37,916)
(409,879)
AMG Advanced Metallurgical Group N.V.
Consolidated Statement of Cash Flows
(continued)
For the year ended December 31
In thousands of US dollars
2020
2019
Unaudited
Cash (used in) from financing activities
Proceeds from issuance of debt
9,190
325,093
Payment of transaction costs related to the issuance of debt
–
(4,981)
Repayment of borrowings
(4,072)
(3,911)
Proceeds from issuance of common shares
–
2,915
Net repurchase of common shares
(638)
(89,881)
Dividends paid
(9,513)
(16,703)
Payment of lease liabilities
(4,738)
(3,829)
Contributions by non-controlling interests
597
–
Net cash (used in) from financing activities
(9,174)
208,703
Net decrease in cash and cash equivalents
(27,471)
(154,603)
Cash and cash equivalents at January 1
226,218
381,900
Effect of exchange rate fluctuations on cash held
8,619
(1,079)
Cash and cash equivalents at December 31
207,366
226,218
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 Clean Energy Materials combines our recycling and mining operations producing materials for infrastructure and energy storage solutions while reducing the CO2 footprint of both suppliers and customers. Clean Energy Materials spans the vanadium, lithium, and tantalum value chains. AMG Critical Materials Technologies combines our leading vacuum furnace technology line with high-purity materials serving global leaders in the aerospace sector. AMG Critical Minerals consists of our mineral processing operations in antimony, graphite, and silicon metal.
With approximately 3,100 employees, AMG operates globally with production facilities in Germany, the United Kingdom, France, 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.