Key Highlights
Revenue was $279.7 million in the third quarter 2014, a 2% decrease from the same period in 2013
EBITDA([1]) was $23.4 million in the third quarter 2014, a 32% increase from the same period in 2013
EPS on a fully diluted basis was $0.12 in the third quarter 2014, a 140% increase from the same period in 2013
Cash flows from operating activities were $47.7 million in the third quarter 2014, compared to $24.7 million in the same period in 2013; record nine month free cash flow generation of $55.5[2] million
As of September 30, 2014, cash on the balance sheet was $122.2 million; net debt was $103.9 million, a reduction of $56.7 million during 2014

Amsterdam, 7 November 2014 (Regulated Information) --- AMG Advanced Metallurgical Group N.V. ("AMG", EURONEXT AMSTERDAM: "AMG") reported third quarter 2014 revenue of $279.7 million, a 2% decrease from $286.4 million in the third quarter 2013. Net income attributable to shareholders for the third quarter 2014 was $3.2 million, or $0.12 per fully diluted share, an increase from $1.4 million, or $0.05 in the third quarter 2013. EBITDA increased 32% to $23.4 million in the third quarter 2014 from $17.7 million in the third quarter 2013.

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, "AMG's efforts to improve its balance sheet and create financial flexibility have been a remarkable success. AMG generated record free cash flow for the first nine months of 2014 and reduced net debt by over $56 million, or 35%. This was accomplished despite subdued market conditions, through cost reductions, improved working capital management and disciplined capital spending. In the third quarter, AMG Processing and AMG Mining increased year over year gross margins through a focus on providing higher value-added products. AMG Engineering improved profitability compared to the second quarter 2014 and generated significant order intake."

Key Figures in 000's US Dollar
Q3 '14 Q3 '13 Change
Revenue $279,718 $286,415 (2%)
Gross profit 48,059 39,792 21%
Gross margin 17.2% 13.9%
Operating profit 14,999 7,275 106%
Operating margin 5.4% 2.5%
Net income attributable to shareholders3,236 1,407 130%
EPS- Fully diluted 0.12 0.05 140%
EBIT (1) 15,285 9,623 59%
EBITDA (2) 23,414 17,701 32%
EBITDA margin 8.4% 6.2%
Cash flows from operating activities 47,662 24,687 93%

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 '14 Q3 '13 Change
Revenue $134,479 $138,068 (3%)
Gross profit 20,493 13,008 58%
Operating profit 8,724 814 972%
EBITDA 11,911 4,629 157%

AMG Processing's third quarter 2014 revenue decreased $3.6 million, or 3% to $134.5 million. A 78% increase in ferrovanadium volume was offset by a 28% decline in chrome volume, as AMG focused on higher margin, lower volume, chrome products. Improved product mix and increased operating efficiencies in the AMG Vanadium, Superalloys and Titanium Alloy and Coatings units all contributed to the increase in gross margin to 15.2% from 9.4% in the third quarter 2013. The increase in gross profit resulted in 157% improvement in EBITDA.

AMG Engineering Q3 '14 Q3 '13 Change
Revenue $61,132 $66,093 (8%)
Gross profit 10,484 13,979 (25%)
Operating (loss) profit (1,384) 475 (391%)
EBITDA 709 4,179 (83%)

AMG Engineering's third quarter 2014 revenue decreased $5.0 million, or 8%, to $61.1 million due to pricing pressure and delays in order intake. The third quarter 2014 gross margin decreased to 17%, from 21% in the third quarter 2013, due to reduced economies of scale and pricing pressure. The $3.5 million decline in gross profit directly corresponded to the decline in EBITDA.

AMG Engineering signed $66.9 million in new orders during the third quarter 2014, a 1.09x book to bill ratio. Order backlog was $141.1 million as of September 30, 2014 and excluding the impact of currency, the backlog increased 3% from June 30, 2014. Heat treatment furnaces accounted for approximately 43% of the order intake.

AMG Mining Q3 '14 Q3 '13 Change
Revenue $84,107 $82,254 2%
Gross profit 17,082 12,805 33%
Operating profit 7,659 5,986 28%
EBITDA 10,794 8,893 21%

AMG Mining's third quarter 2014 revenue increased $1.9 million, or 2%, to $84.1 million, with increases in tantalum, graphite and silicon revenues offsetting declines in antimony. AMG Mineração's revenue grew due to a 50% increase in tantalum volume. AMG Graphite's revenue improved primarily due to a 13% increase in volume, despite lower prices. Third quarter 2014 gross margins increased to 20.3% from 15.6% in the third quarter 2013 due to increased revenue from higher value-added products and the recent production efficiency improvements. EBITDA increased 21%, to 13% of revenue, primarily due to the 33% improvement in gross profit.

Financial Review
SG&A
AMG's third quarter 2014 SG&A expenses were $33.1 million, up slightly from $32.3 million in the third quarter 2013. A one-time charge for an update to the long-term pension liability resulted in the increase in SG&A.

Non-Recurring Items
AMG did not incur any material non-recurring charges during the third quarter 2014. In the third quarter 2013 AMG incurred $1.8 million of charges consisting primarily of $1.3 million and $0.3 million for AMG Engineering and AMG Mining restructuring, respectively.

Liquidity
September 30, 2014 December 31, 2013 Change
Total debt $226,092 $263,580 (14%)
Cash and cash equivalents 122,230 103,067 19%
Net debt 103,862 160,513 (35%)

AMG had a net debt position of $103.9 million as of September 30, 2014. The net debt decreased $56.7 million from December 31, 2013 due to strong cash flow from operations and lower capital spending.

Cash flows from operating activities were $72.5 million in the first nine months of 2014 compared to $57.3 million in the first nine months of 2013. The improvement is primarily attributable to the $1.8 million increase in EBITDA and the $9.5 million reduction in financing and tax payments during 2014.

Capital expenditures declined $5.3 million in the first nine months of 2014 compared to the first nine months of 2013. The $17.2 million of capital spending in the first nine months of 2014 included $8.4 million of maintenance capital. The largest expansion capital projects were for AMG TAC's titanium aluminides, AMG Silicon efficiency improvements, and increased capacity of higher value-added graphite products.

Including the $122.2 million of cash, AMG had $191.6 million of total liquidity as of September 30, 2014.

Engineering Strategic Alternatives Update
As previously announced, AMG has retained a financial advisor to evaluate a potential IPO of ALD. Equity markets for small cap IPOs have not cooperated for such a transaction to go forward. We will continue to update the market accordingly.

Outlook
In this challenging environment, AMG has generated significant free cash flow and considerably reduced gross and net debt. AMG expects full year 2014 EBITDA growth in excess of 10%. 2014 net income and ROCE will substantially exceed 2013 levels, despite the weakening global economic outlook. AMG is well positioned to further reduce debt through increased profitability and selective capital spending in 2015.

Amsterdam, 7 November 2014 (Regulated Information) --- AMG Advanced Metallurgical Group N.V. ("AMG", EURONEXT AMSTERDAM: "AMG") The Supervisory Board of AMG has in its meeting of 6 November 2014, decided to propose to the Annual Meeting in May 2015, by way of a binding nomination, that its current CEO Dr. Heinz Schimmelbusch, will be re-appointed as CEO and Chairman of the Management Board for a term of four years.

The decision of the Supervisory board follows the endorsement by the Supervisory Board of the strategy of the Company. Pedro Pablo Kuczynski, Chairman of the Supervisory Board, commented: "Our Board has intensely reviewed the strategy of AMG going forward. This strategy is based upon the objective to maintain and improve AMG's leadership position as a provider of critical materials to industries active in fields such as automotive, aerospace and clean energy. Major long term trends force these industries to find solutions in their search for and dependence on critical materials. AMG can deliver these solutions. Our Board is dedicated to create substantial shareholder value by executing this strategy of sustainable growth and profitability initiatives. The nomination of the present CEO for another term is testimony of our unanimous support of this strategy."

Chairman Pedro Pablo Kuczynski added why the current CEO is the best man for the job in the coming years: "Dr. Schimmelbusch has been doing an excellent job during the past years where the Company faced very difficult market conditions with ongoing declining metals prices. The quarterly results published today are a tribute to his and the Management Board's performance. The Board unanimously believes he is the right person and only candidate at this juncture to execute the strategy of value creation as a leader in the global markets for critical materials. We are very pleased that Dr. Schimmelbusch has agreed to accept his nomination."