Key Highlights
EBITDA(2) was $21.2 million in the first quarter 2016, a 4% increase over the same period in 2015
Net income attributable to shareholders increased to $12.0 million in the first quarter 2016 from $2.7 million in the first quarter 2015
EPS, on a fully diluted basis, increased to $0.42 in the first quarter 2016, from $0.10 in the same period in 2015
Annualized return on capital employed increased to 14.7% in the first quarter 2016, as compared to 12.7% in the first quarter 2015

Amsterdam, 4 May 2016 (Regulated Information) --- AMG Advanced Metallurgical Group N.V. ("AMG", EURONEXT AMSTERDAM: "AMG") reported EBITDA for the first quarter 2016 of $21.2 million, a 4% increase from $20.4 million in the first quarter 2015. Net income attributable to shareholders increased to $12.0 million in the first quarter 2016 from $2.7 million in the first quarter 2015.

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, "AMG earnings for the first quarter were strong despite continued year-over-year weakness in metal prices. AMG did experience a modest improvement in select metal prices compared to the fourth quarter 2015. AMG's focus on operational excellence and price risk management has resulted in solid financial results under difficult market conditions.

AMG Engineering achieved EBITDA of $4.6 million during the first quarter 2016, a 49% increase from $3.1 million in the first quarter of 2015. The Engineering division continues to experience strong demand in the areas of plasma remelting furnaces for the aerospace market and induction furnaces for powder metallurgy applications. First quarter 2016 order intake and advanced payments were adversely impacted by the postponement of several orders into the second quarter of 2016.

AMG Critical Materials generated EBITDA of $16.5 million during the first quarter 2016, a 4% decrease compared to the first quarter of 2015. Year-over-year double-digit declines in average quarterly prices for all key products resulted in a 13% reduction in revenues in the first quarter 2016 compared to the first quarter 2015.

Cash flows used in operating activities of $4.3 million in the first quarter 2016 were adversely impacted by an increase in working capital, following low levels at the end of the fourth quarter 2015, and a temporary decrease in advanced payments at AMG Engineering."

Key Figures

000's US Dollar
Q1 '16 Q1 '15 Change
Revenue $237,399 $256,991 (8%)
Gross profit 44,291 43,302 2%
Gross margin 18.7% 16.8%
Operating profit 12,933 11,553 12%
Operating margin 5.4% 4.5%
Net income attributable to shareholders 11,974 2,676 347%
EPS - Fully diluted 0.42 0.10 320%
EBIT (1) 13,815 13,207 5%
EBITDA (2) 21,189 20,388 4%
EBITDA margin 8.9% 7.9%
Cash flows (used in) from operating activities (4,320) 3,797 N/A
Note:
EBIT is defined as earnings before interest and income taxes. EBIT excludes restructuring and equity-settled share-based payments and includes foreign currency gains or losses.
EBITDA is defined as EBIT adjusted for depreciation and amortization.

Operational Review
AMG Critical Materials
Q1 '16 Q1 '15 Change
Revenue $176,555 $202,288 (13%)
Gross profit * 30,476 31,206 (2%)
Operating profit 10,478 10,656 (2%)
EBITDA 16,545 17,273 (4%)

* Includes $1.5 million non-cash benefit related to reversal of previously expensed vanadium, nickel and molybdenum inventory adjustments


AMG Critical Materials continues to be impacted by weak metal prices, and as a result, revenue decreased by 13%, to $176.6 million.


Double-digit declines in average quarterly prices for AMG Critical Materials' key products negatively affected revenue in the first quarter of 2016 compared to the first quarter of 2015.

Gross profit in the first quarter 2016 benefited from a $1.5 million reversal of previously recorded inventory adjustment expenses, due to improving vanadium, nickel and molybdenum prices in March 2016.

Despite strong sales of vanadium, tantalum and silicon metal in the first quarter, gross profit decreased $0.7 million, or 2%, to $30.5 million, due primarily to lower average vanadium, nickel and molybdenum prices when compared to the first quarter of 2015.

First quarter 2016 EBITDA margin increased to 9.4% from 8.5% in the first quarter 2015.


AMG Engineering
Q1 '16 Q1 '15 Change
Revenue $60,844 $54,703 11%
Gross profit 13,815 12,096 14%
Operating profit 2,455 897 174%
EBITDA 4,644 3,115 49%

AMG Engineering signed $50.5 million in new orders during the first quarter of 2016, representing a 0.83x book to bill ratio. Order backlog was $135.6 million as of March 31, 2016, a decrease of 4% from December 31, 2015. Order intake was adversely impacted by orders postponed into the second quarter of 2016.

AMG Engineering's first quarter 2016 revenue increased $6.1 million, or 11%, to $60.8 million, due to strong sales of plasma remelting furnaces for the aerospace market and induction furnaces for powder metallurgy applications.

First quarter 2016 gross margin increased to 23% from 22% in the first quarter of 2015 due to higher revenue, product mix effects and improved project cost management.

EBITDA increased by $1.5 million, to $4.6 million, in the first quarter of 2016, the second highest quarterly EBITDA in eleven quarters, due to higher levels of gross profit.

Financial Review
Tax
AMG recorded an income tax expense of $0.3 million in the first quarter of 2016 as compared to a tax expense of $5.5 million in the same period in 2015. The tax expense in the quarter was positively impacted by the currency effect of the Brazilian Real on deferred taxes.

AMG paid taxes of $1.9 million in the first quarter of 2016 as compared to tax payments of $0.6 million in the same period in 2015. For the first quarter of 2016, AMG's effective cash tax rate was 15%.


Liquidity
March 31, 2016 December 31, 2015 Change
Total debt $128,836 $126,743 2%
Cash and cash equivalents 111,618 127,778 (13%)
Net debt (cash) 17,218 (1,035) N/A

AMG had a net debt position of $17.2 million as of March 31, 2016. Net debt and gross debt increased $18.3 million and $2.1 million, respectively, from December 31, 2015.

Cash flows used in operating activities were $4.3 million in the first quarter of 2016 primarily due to an increase in working capital following low levels of working capital at the end of the fourth quarter 2015, and a temporary decline in advanced payments due to timing of AMG Engineering orders.

Cash flow used in investing activities increased to $11.5 million in the first three months of 2016 compared to $5.5 million in the same period in 2015, due to higher levels of capital expenditures and the acquisition of the remaining 50% share of ALD-Holcroft Co. Inc. from AFC-Holcroft LLC.

Capital expenditures increased to $6.9 million in the first quarter of 2016 compared to $3.8 million in the same period in 2015. Capital spending in the first quarter of 2016 included $3.9 million of maintenance capital. The largest expansion capital project was for AMG's Ancuabe graphite mine project.

Including the $111.6 million of cash, AMG had $254.8 million of total liquidity as of March 31, 2016.

SG&A
AMG's first quarter 2016 SG&A expenses were $31.3 million compared to $30.1 million in the first quarter of 2015, an increase of 4%. This was primarily due to higher personnel costs.

Outlook
In this challenging market environment, AMG's management target is to continue to generate strong operating cash flow and maintain 2015 levels of profitability in 2016.


tijd 09.11
De Smallcap 758,89 -2,96 -0,39% AMG EUR 9,738 +22ct vol. 21.000