Key Highlights
EBITDA(2) was $26.0 million in the second quarter 2016, a 4% increase over the same period in 2015
Net income attributable to shareholders more than tripled to $13.4 million in the second quarter 2016 from $3.8 million in the second quarter 2015
EPS, on a fully diluted basis, increased to $0.48 in the second quarter 2016, from $0.14 in the same period in 2015
Cash flows from operating activities increased by 116% to $24.3 million in the second quarter 2016 from $11.3 million in the second quarter 2015
Annualized return on capital employed increased to 17.8% in the second quarter 2016, as compared to 15.7% in the second quarter 2015

Amsterdam, 4 August 2016 (Regulated Information) --- AMG Advanced Metallurgical Group N.V. ("AMG", EURONEXT AMSTERDAM: "AMG") reported EBITDA for the second quarter 2016 of $26.0 million, a 4% increase from $25.1 million in the second quarter 2015. Net income attributable to shareholders increased to $13.4 million in the second quarter 2016 from $3.8 million in the second quarter 2015. On a year to date basis, EBITDA increased by 4% to $47.2 million, from $45.5 million in the prior year, despite an increase in AMG's Performance Share Unit (PSU) plan costs of $3.2 million, compared to the same period in 2015, driven by AMG's strong share price performance.

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, "AMG's focus on operational excellence, cost reduction and price risk management resulted in solid financial results in the second quarter 2016. Despite weak metals prices, AMG performed well across all key financial metrics during the quarter.

AMG Engineering achieved EBITDA of $5.6 million during the second quarter 2016, a 33% increase from $4.2 million in the second quarter of 2015. AMG Engineering signed $92.8 million in new orders during the second quarter of 2016, the highest quarterly order intake since Q4 2010, representing a 1.39x book to bill ratio. The Engineering division continues to experience strong demand for plasma remelting, induction and turbine blade coating furnaces for the aerospace market and heat treatment furnaces for the automotive market. Order backlog was $158.8 million as of June 30, 2016, an increase of 17% from March 31, 2016.

AMG Critical Materials generated EBITDA of $20.5 million during the second quarter 2016. Year-over-year double-digit declines in average quarterly prices of Nickel, Aluminum, Chrome, Niobium and Antimony negatively affected revenue in the second quarter of 2016 compared to the second quarter of 2015.

Cash flows from operating activities increased to $24.3 million in the second quarter 2016 from $11.3 million in the second quarter 2015, due to lower levels of working capital driven by the advance payments received by AMG Engineering."

Key Figures
In 000's US Dollar
Q2 '16 Q2 '15 Change

Revenue $248,349 $257,443 (4%)
Gross profit 53,756 44,613 20%
Gross margin 21.6% 17.3%
Operating profit 18,967 12,122 56%
Operating margin 7.6% 4.7%

Net income attributable to shareholders 13,447 3,808 253%
EPS - Fully diluted 0.48 0.14 243%

EBIT (1) 18,585 18,031 3%
EBITDA (2) 26,049 25,142 4%
EBITDA margin 10.5% 9.8%

Cash flows from operating activities 24,315 11,264 116%

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
Q2 '16 Q2 '15 Change
Revenue $181,619 $201,188 (10%)
Gross profit * 38,230 32,112 19%
Operating profit 15,016 12,272 22%
EBITDA 20,485 20,955 (2%)

* Includes $3.6 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 10%, to $181.6 million.

Double-digit declines in average quarterly prices of Nickel, Aluminum, Chrome, Niobium and Antimony negatively affected revenue in the second quarter of 2016 compared to the second quarter of 2015.

Gross profit in the second quarter increased by $6.1 million, or 19%, to $38.2 million, due to strong sales of Aluminum combined with lower production costs in Aluminum, Tantalum, Chrome and Silicon. In addition, Vanadium gross profit in the second quarter 2016 benefited from a $3.6 million reversal of previously recorded inventory adjustment expenses, due to improving vanadium and molybdenum prices.

Second quarter 2016 EBITDA margin increased to 11% from 10% in the second quarter 2015.
AMG Engineering
Q2 '16 Q2 '15 Change
Revenue $66,730 $56,255 19%
Gross profit 15,526 12,501 24%
Operating profit 3,951 (150) N/A
EBITDA 5,564 4,187 33%

AMG Engineering signed $92.8 million in new orders during the second quarter of 2016, representing a 1.39x book to bill ratio. Order backlog was $158.8 million as of June 30, 2016, an increase of 17% from March 31, 2016. Order intake in the quarter benefited from a number of orders which had been postponed from the first quarter of 2016. Year to date, AMG Engineering signed $143.3 million in new orders, representing a 1.12x book to bill ratio.

AMG Engineering's second quarter 2016 revenue increased $10.5 million, or 19%, to $66.7 million, due to strong sales of plasma remelting and induction furnaces for the aerospace market and heat treatment furnaces for the automotive market.

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

EBITDA increased by $1.4 million to $5.6 million in the second quarter of 2016, the highest quarterly EBITDA in twelve quarters, due to higher levels of gross profit.

Financial Review
Tax

AMG recorded an income tax expense of $2.8 million in the second quarter of 2016 as compared to a tax expense of $4.1 million in the same period in 2015. The currency effect of the strengthening Brazilian Real on deferred taxes positively affected tax expense in the quarter.

AMG paid taxes of $1.8 million in the second quarter of 2016 as compared to tax payments of $1.6 million in the same period in 2015. For the second quarter of 2016, AMG's effective cash tax rate was 11%.

Liquidity
June 30, 2016 December 31, 2015 Change

Total debt $131,251 $126,743 4%
Cash and cash equivalents 125,075 127,778 (2%)
Net debt (cash) 6,176 (1,035) N/A

AMG had a net debt position of $6.2 million as of June 30, 2016. Net debt and gross debt increased $7.2 million and $4.5 million, respectively, from December 31, 2015.

Cash flows from operating activities increased to $24.3 million in the second quarter 2016 from $11.3 million in the second quarter 2015, primarily due to lower levels of working capital driven by advance payments received by AMG Engineering.

Historic declines in discount rates have negatively influenced AMG's defined benefit plan liabilities and the related funding status of those plans. In response, the Company made cash contributions to its pension plans of $20.6 million during the second quarter 2016. Voluntary contributions to the plans create flexibility in reducing plan liabilities and allow the Company to avoid certain future costs associated with plan deficits. The contributions made during the quarter negatively impacted cash flows from operating activities and the Company's net debt balance.

Cash flow used in investing activities increased to $7.8 million in the second quarter of 2016 compared to $0.7 million in the same period in 2015, due to higher levels of capital expenditures.

Capital expenditures increased to $7.5 million in the second quarter of 2016 compared to $3.3 million in the same period in 2015. Capital spending in the second quarter of 2016 included $3.0 million of maintenance capital. The largest expansion capital project was for AMG's Ancuabe graphite mine project.

Including the $125.1 million of cash, AMG had $268.0 million of total liquidity as of June 30, 2016.

SG&A
AMG's second quarter 2016 SG&A expenses were $34.8 million compared to $32.9 million in the second quarter of 2015, an increase of 6%. This increase was primarily due to higher costs associated with AMG's Performance Share Unit (PSU) plan as a result of recent increases in the Company's share price compared to the defined peer group.

Interim Dividend
AMG has announced an interim dividend in respect of the period from January 1, 2016, to June 30, 2016, of €0.13 per ordinary share, an increase of €0.03, or 30%, compared to the interim dividend paid in September 2015.

The increased dividend reflects AMG's ongoing commitment to return value to our shareholders and the Board's confidence in our long term ability to generate solid cash flow.

Outlook
In this challenging market environment, AMG expects 2016 full year profitability to improve relative to 2015. AMG will also continue to generate strong operating cash flows throughout the year.


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