Key Highlights
Revenue was $286.4 million in the third quarter 2013, a 4% decrease from the same period in 2012

EBITDA([1]) was $17.7 million in the third quarter 2013, an 11% decrease from the same period in 2012
EPS on a fully diluted basis was $0.05 in the third quarter 2013 compared to $0.18 in the same period in 2012

Cash flows from operating activities were $24.7 million in the third quarter 2013, compared to $30.4 million in the same period in 2012

AMG Processing generated revenue of $138.1 million and EBITDA of $4.6 million in the third quarter 2013

AMG Engineering generated revenue of $66.1 million and EBITDA of $4.2 million in the third quarter 2013

AMG Mining generated revenue of $82.3 million and EBITDA of $8.9 million in the third quarter 2013

As of September 30, 2013, cash on the balance sheet was $116.3 million; net debt was $163.6 million, a reduction of $16.4 million during the third quarter 2013

Amsterdam, 8 November 2013 (Regulated Information) --- AMG Advanced Metallurgical Group N.V. ("AMG", EURONEXT AMSTERDAM: "AMG") reported third quarter 2013 revenue of $286.4 million, a 4% decrease from $296.9 million in the third quarter 2012.

EBITDA decreased 11% to $17.7 million in the third quarter 2013 from $19.8 million in the third quarter 2012. Net income attributable to shareholders for the third quarter 2013 was $1.4 million, or $0.05 per fully diluted share, compared to net income of $5.0 million, or earnings attributable to shareholders of $0.18 in the third quarter 2012.

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, "The specialty metals industry experienced double digit price declines during the third quarter 2013. These declines, from already low 2012 market price levels were most significant in chrome metal, antimony, and vanadium. We have begun to see the benefits of restructuring efforts in AMG Engineering and AMG Mining. Management's comprehensive actions resulted in strong cash flows from operating activities and a significant reduction in net debt. As a result of low prices and lower capacity utilization, we are implementing fixed cost reduction measures at AMG Processing to right size the business for current market conditions. Strategically, we are focusing on the core strengths of our product portfolio and streamlining activities."

Key Figures
In 000's US Dollar Q3 '13 Q3 '12 Change
Revenue $286,415 $296,851 (4%)
Gross profit 39,792 47,537 (16%)
Gross margin 13.9% 16.0%
Operating profit 7,275 11,124 (35%)
Operating margin 2.5% 3.7%
Net income attributable to shareholders 1,407 5,006 (72%)
EPS- Fully diluted 0.05 0.18 (72%)
EBIT (1) 9,623 12,714 (24%)
EBITDA (2) 17,701 19,814 (11%)
EBITDA margin 6.2% 6.7%
Cash flows from operating activities 24,687 30,374 (19%)

Note: EBIT is defined as earnings before interest, tax and excludes non-recurring items

EBITDA is defined as earnings before interest, tax, depreciation and amortization and excludes non-recurring items

Operational Review
AMG Processing
Q3 '13 Q3 '12 Change
Revenue $138,068 $146,886 (6%)
Gross profit 13,008 19,451 (33%)
Operating profit 814 5,000 (84%)
EBITDA 4,629 9,086 (49%)
Capital expenditures 3,074 5,309 (42%)

AMG Processing's third quarter 2013 revenue decreased $8.8 million, or 6%, to $138.1 million. AMG Aluminum revenue increased 2% compared to the third quarter 2012, despite slightly lower aluminum prices. This improvement was more than offset by significant price declines in vanadium and titanium alloys, which resulted in 28% and 6% decreases in AMG Vanadium and AMG Titanium Alloys & Coatings revenue, respectively.

The third quarter 2013 gross margin decreased to 9% from 13% in the third quarter 2012, as declining metal prices significantly affected AMG Processing's margins. Specifically, an unfavorable product mix resulted in a 71% decline in AMG Superalloys gross margins. In addition, significant declines in solar coatings and titanium alloy revenue resulted in a 38% decline in AMG Titanium Alloys & Coatings gross margins. These impacts more than offset a 79% increase in AMG Aluminum gross margins, which was the result of the rationalization of lower margin products and productivity improvements.

The third quarter 2013 EBITDA decreased $4.5 million to 3% of revenue from 6% of revenue in the third quarter 2012. The EBITDA decrease was the result of the $6.4 million decline in gross profit offset by a $2.0 million decrease in SG&A personnel expenses.

Capital expenditures were $3.1 million for the third quarter 2013, a 42% decrease from the third quarter 2012. Capital investments made in the third quarter included $2.2 million of maintenance expenditures.

AMG Engineering
Q3 '13 Q3 '12 Change
Revenue $66,093 $71,209 (7%)
Gross profit 13,979 14,813 (6%)
Operating profit 475 3,213 (85%)
EBITDA 4,179 5,787 (28%)
Capital expenditures 487 1,345 (64%)

AMG Engineering's third quarter 2013 revenue decreased $5.1 million, or 7%, to $66.1 million. Revenue from nuclear furnaces increased 55% to $7.8 million and turbine blade coating furnace revenue increased 843% to $7.2 million, the result of one significant order. These increases were mitigated by a 51% and 32% decrease in revenue from sintering furnaces and remelting furnaces, respectively, compared to the third quarter 2012.

Order backlog decreased 8% to $133.5 million at September 30, 2013 from $145.2 million at June 30, 2013. AMG Engineering generated order intake of $48.4 million in the third quarter 2013, a 39% decrease compared to the third quarter 2012 and a 0.73x book to bill ratio. Remelting furnaces were the largest portion of the order intake, accounting for 28% of the total.

The third quarter 2013 gross margin was 21%, consistent with the third quarter 2012. Improved profitability on certain large projects and an increased focus on cost control resulted in a consistent margin, despite the decline in revenue.

The third quarter 2013 EBITDA decreased $1.6 million, to 6% of revenue from 8% of revenue in the third quarter 2012. The EBITDA decrease was the result of the $0.8 million decrease in gross profit and the $0.6 million increase in SG&A. The increase in SG&A was the result of incentive compensation related to the increase in the AMG share price.

Capital expenditures were $0.5 million in the third quarter 2013, 64% less than the third quarter 2012. Capital investments in the third quarter were primarily maintenance capital expenditures for the heat treatment services business.

AMG Mining
Q3 '13 Q3 '12 Change
Revenue $82,254 $78,756 4%
Gross profit 12,805 13,273 (4%)
Operating profit 5,986 2,911 106%
EBITDA 8,893 4,941 80%
Capital expenditures 2,754 3,778 (27%)

AMG Mining's third quarter 2013 revenue increased $3.5 million, or 4%, to $82.3 million. Volumes for most products increased, while prices were mixed. Prices increased 12% and 5% for AMG Mineração's tantalum and AMG Graphite products, respectively, while AMG Antimony and AMG Silicon product prices decreased 11% and 9%, respectively, compared to the third quarter 2012.

The third quarter 2013 gross margin decreased to 16%, from 17% in the third quarter 2012. The gross margin decrease was primarily the result of lower average prices for the higher volume products at AMG Silicon and AMG Antimony.

The third quarter 2013 EBITDA increased $4.0 million, to 11% of revenue from 6% of revenue in the third quarter 2012. The EBITDA increase was the result of $1.5 million and $0.5 million decreases in environmental expenses and SG&A professional fees, respectively, and a $1.5 million increase in other income from the sale of land. These improvements were slightly offset by the $0.5 million decrease in gross profit.

Capital expenditures were $2.8 million in the third quarter 2013, 27% less than the third quarter 2012. Capital expenditures were primarily composed of $1.0 million for a silicon metal furnace efficiency upgrade and $1.1 million for maintenance expenditures.

Financial Review
For purposes of this release, AMG restated the December 31, 2012 statement of financial position and 2012 income statement to comply with new IFRS standards and interpretations. IAS 19 Employee Benefits (Revised 2011) (IAS 19R) and IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine were effective for periods beginning after January 1, 2013 and require restatement for comparability.

Tax
AMG recorded an income tax expense of $0.5 million in the third quarter 2013 or a 28% effective tax rate. The income tax expense in the third quarter 2012 was $2.1 million, or a 30% effective tax rate. The third quarter 2013 effective tax rate was consistent with AMG's long-term tax rate expectations of 30-35% per annum.

SG&A
AMG's third quarter 2013 SG&A expenses were $32.3 million, compared to $34.4 million in the third quarter 2012, a decrease of 6%. The $2.1 million decrease in SG&A expenses was primarily due to a $2.3 million decrease in variable compensation expense.
Non-Recurring Items
AMG's third quarter 2013 $7.3 million operating profit includes non-recurring items, which are not included in the calculation of EBITDA. These items are comprised of income and expense items, that in the view of management, do not arise in the normal course of business and items that, because of their nature and/or size, should be presented separately to enable better analysis of the results.

A summary of non-recurring items in the third quarter 2013 and 2012 are below:

For the three months ended
September 2013 September 2012
Non-recurring items included in operating profit:
Restructuring expense $1,753 $476
Total non-recurring items included in operating profit 1,753 476
AMG incurred $1.8 million of non-recurring restructuring items in the third quarter 2013, consisting primarily of $1.3 million and $0.3 million related to AMG Engineering and AMG Mining restructuring, respectively. These restructuring expenses are part of the Company's ongoing cost reduction efforts and the process to simplify the corporate structure.

Currency Fluctuations
AMG transacts business in many currencies other than the U.S. dollar, the Company's reporting currency. AMG's financial statements are prepared in U.S. dollars, so fluctuations in the exchange rates between the U.S. dollar and other currencies have an effect both on the results of operations and on the reported value of assets and liabilities as measured in U.S. dollars. The depreciation in the value of the U.S. dollar as of September 30, 2013 compared to June 30, 2013, resulted in an increase in the assets and liabilities on the balance sheet of $20.9 million and $14.6 million, respectively. The net result of the depreciation in the value of the U.S. dollar in the third quarter 2013 compared to the third quarter 2012, resulted in an increase in revenue and EBITDA of $9.3 million and $0.8 million, respectively.

Liquidity
September 30, 2013 December 31, 2012 Change
Total debt $279,894 $315,844 (11%)
Cash and cash equivalents 116,278 121,639 (4%)
Net debt 163,616 194,205 (16%)

AMG had a net debt position of $163.6 million as of September 30, 2013. AMG's net debt position decreased $30.6 million since December 31, 2012 primarily due to $62.1 million of EBITDA and a $27.4 million decrease in working capital and deferred revenue. These cash generation activities were offset by $22.5 million in capital investments, $11.5 million of cash tax payments, $11.3 million of net cash interest payments, and restructuring costs and pension payments in excess of expense of $7.0 million. Including the $116.3 million of cash, AMG had $190.0 million of total liquidity as of September 30, 2013.

Cash Flow
For the nine months ended
September 30 2013 2012
Net cash flows from operating activities $57,318 $33,508
Capital expenditures (22,534) (33,875)
Cash flows from (used in) other investing activities 436 (169)
Net cash flows used in investing activities (22,098) (34,044)

Net cash flows (used in) from financing activities (42,596) 32,260
Cash flows from operating activities were $57.3 million for the nine months ended September 30, 2013 compared to cash flows from operating activities of $33.5 million in the same period in 2012. Net cash flows from operating activities are comprised of $62.1 million in EBITDA and $27.4 million decrease in working capital and deferred revenue, slightly offset by $11.5 million in cash tax payments and $11.3 million in cash interest payments.

Cash flows used in investing activities were $22.1 million for the nine months ended September 30, 2013. The $11.9 million decrease compared to the same period in 2012 is primarily composed of an $11.3 million decrease in capital investments. This reduction in capital investments reflects management's cash control initiatives and more stringent return metrics.

Cash flows used in financing activities were $42.6 million for the nine months ended September 30, 2013 as the Company repaid $42.6 million of borrowings. In the same period in 2012, AMG generated $32.3 million from financing activities primarily to fund the Brazilian mine expansion and the acquisition of Graphit Kropfmühl shares.

Outlook
The specialty metals markets continue to be weak, specifically due to destocking in the global aerospace value chain, continued stagnation for high performance steel, and slowing growth in China. These conditions are affecting prices and volumes for many of AMG's products. AMG has rationalized production levels in AMG Mining and AMG Engineering and is currently implementing plans to reduce the fixed cost structure and decrease capital expenditures in AMG Processing. AMG expects that it will generate positive operating cash flow during the fourth quarter. Overall, AMG's full year 2013 EBITDA will decline compared to 2012.

AMG Advanced Metallurgical Group N.V.
Condensed interim consolidated income statement
For the three months ended September 30
In thousands of US Dollars 2013 2012
Unaudited
Unaudited[2]
Continuing operations
Revenue 286,415 296,851
Cost of sales 246,623 249,314
Gross profit 39,792 47,537
Selling, general and administrative expenses 32,343 34,411
Restructuring expense 1,753 476
Environmental expense 48 1,712
Other income, net (1,627) (186)
Operating profit 7,275 11,124
Finance expense 6,347 5,270
Finance income (324) (243)
Foreign exchange gain (358) (699)
Net finance costs 5,665 4,328
Share of profit of associates 26 208
Profit before income tax 1,636 7,004
Income tax expense 459 2,101
Profit for the period 1,177 4,903
Attributable to:
Shareholders of the Company 1,407 5,006
Non-controlling interests (230) (103)
Profit for the period 1,177 4,903
Earnings per share
Basic earnings per share 0.05 0.18

Diluted earnings per share 0.05 0.18

AMG Advanced Metallurgical Group N.V.

Condensed interim consolidated income statement

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