Key Highlights
Revenue was $291.5 million in the second quarter 2013, a 9% decrease from the same period in 2012
EBITDA([1]) was $22.2 million in the second quarter 2013, a 4% decrease from the same period in 2012
EPS on a fully diluted basis was ($1.53) in the second quarter 2013, compared to ($0.09) in the same period in 2012. Excluding the asset impairment and restructuring charges, EPS on a fully diluted basis was $0.22 in the second quarter 2013
Cash flows from operating activities were $32.0 million in the second quarter 2013, compared to $6.2 million in the same period in 2012
AMG Processing generated revenue of $144.6 million and EBITDA of $8.0 million in the second quarter 2013
AMG Engineering generated revenue of $66.6 million and EBITDA of $8.4 million in the second quarter 2013
AMG Mining generated revenue of $80.3 million and EBITDA of $5.7 million in the second quarter 2013
AMG incurred $55.1 million of non-cash asset impairments and restructuring charges in the second quarter 2013
As of June 30, 2013, cash on the balance sheet was $112.2 million; net debt was $180.0 million, a reduction of $20.7 million during the second quarter 2013

Amsterdam, 9 August 2013 (Regulated Information) --- AMG Advanced Metallurgical Group N.V. ("AMG", EURONEXT AMSTERDAM: "AMG") reported second quarter 2013 revenue of $291.5 million, a 9% decrease from $319.6 million in the second quarter 2012.

EBITDA decreased 4% to $22.2 million in the second quarter 2013 from $23.2 million in the second quarter 2012. Net loss attributable to shareholders for the second quarter 2013 was $42.2 million, or ($1.53) per fully diluted share, compared to a loss of $2.5 million, or ($0.09) in the second quarter 2012.

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, said, "Business conditions deteriorated during the second quarter 2013. Stable markets in North America were not enough to offset lower growth in Asia and a contraction in Europe. This resulted in sharp declines in specialty metal prices, which particularly affected AMG Processing and AMG Mining. AMG adjusted its business model to adapt to current market conditions, and took restructuring and non-cash asset impairment expenses related to AMG Engineering and AMG Mining. AMG also increased its focus on cost reductions and on positioning the business for improved cash flow generation. Management's actions resulted in strong cash flows from operating activities, significant debt reduction, and improved the business' ability to grow in the long term despite this challenging environment."

Key Figures
In 000's US Dollar
Q2 '13 Q2 '12 Change
Revenue $291,528 $319,591 (9%)
Gross profit 48,618 53,897 (10%)
Gross margin 16.7% 16.9%
Operating (loss) profit (40,222) 7,947 N/A
Operating margin (13.8%) 2.5%
Adjusted operating profit (1) 14,880 15,768 (6%)
Adjusted operating margin 5.1% 4.9%
Net loss attributable to shareholders (42,230) (2,528) N/M
EPS- Fully diluted (1.53) (0.09) N/M
EBIT (2) 14,140 16,162 (13%)
EBITDA (3) 22,184 23,198 (4%)
EBITDA margin 7.6% 7.3%
Cash flows from operating activities 31,966 6,200 416%

Note:
(1) Adjusted operating profit excludes non-recurring items
(2) EBIT is defined as earnings before interest, tax and excludes non-recurring items
(3) EBITDA is defined as earnings before interest, tax, depreciation and amortization and excludes non-recurring items

Operational Review
AMG Processing Q2 '13 Q2 '12 Change
Revenue $144,603 $168,383 (14%)
Gross profit 17,718 24,673 (28%)
Operating profit 4,322 8,879 (51%)
EBITDA 7,992 11,962 (33%)
Capital expenditures 4,262 3,118 37%

AMG Processing's second quarter 2013 revenue decreased $23.8 million, or 14%, to $144.6 million. The decrease in revenue was primarily the result of significant price and volume declines across most materials, resulting in 26%, 20%, and 6% decreases in revenue from AMG Vanadium, AMG Superalloys, and AMG Aluminum, respectively, compared to the second quarter 2012. Prices and volumes decreased across most of AMG Processing's materials due to the slowing Chinese economy and the stagnant European market.

The second quarter 2013 gross margin decreased to 12% from 15% in the second quarter 2012. AMG Processing's margins were affected significantly by declining metal prices. In addition, a 70% decline in coatings gross margins, primarily due to sharp declines in solar coatings, was only partially offset by a 19% increase in AMG Aluminum gross margins. The increase in AMG Aluminum gross margins resulted from productivity improvements and rationalization of lower margin products. Excluding the $0.7 million in allocated corporate restructuring expense, the second quarter 2013 operating profit would be $5.0 million.

The second quarter 2013 EBITDA decreased $4.0 million, to 6% of revenue from 7% of revenue in the second quarter 2012. The EBITDA decrease was the result of the $7.0 million decrease in gross profit offset by a $1.5 million decrease in SG&A personnel expenses.

Capital expenditures were $4.3 million for the second quarter 2013, a 37% increase from the second quarter 2012. Capital investments made in the second quarter included $0.9 million for the expansion of the spent catalyst recycling facility for ferrovanadium production, $0.4 million for expansion of high purity chrome metal production and maintenance expenditures of $1.9 million.

AMG Engineering Q2 '13 Q2 '12 Change
Revenue $66,618 $65,400 2%
Gross profit 18,189 14,939 22%
Operating loss (12,420) (4,907) (153%)
EBITDA 8,443 4,173 102%
Capital expenditures 552 2,909 (81%)

AMG Engineering's second quarter 2013 revenue increased $1.2 million, or 2%, to $66.6 million. Revenue from nuclear furnaces increased 72% to $8.4 million and casting and sintering furnace systems revenue increased 34% to $13.3 million. These increases were mitigated by 45% and 20% decreases in revenues from heat treatment furnaces and remelting furnaces, respectively, compared to the second quarter 2012.

Order backlog increased 10% to $145.2 million at June 30, 2013 from $132.2 million at March 31, 2013 as the business realized a number of delayed orders from the first quarter. AMG Engineering generated order intake of $76.4 million in the second quarter 2013, a 110% increase compared to the second quarter 2012 and a 1.15x book to bill ratio. Heat treatment furnaces were the largest portion of the order intake, accounting for 38% of the total.

The second quarter 2013 gross margin increased to 27%, from 23% in the second quarter 2012. Improved profitability on certain large projects and an increased focus on cost control were the primary drivers of the increase in gross margin. Excluding the $14.2 million of non-cash asset impairments and the $4.4 million in Engineering and allocated corporate restructuring expense, the second quarter 2013 operating profit would be $6.2 million.

The second quarter 2013 EBITDA increased $4.3 million, to 13% of revenue from 6% of revenue in the second quarter 2012. The EBITDA increase was primarily the result of the $3.3 million increase in gross profit and the $0.5 million decrease in SG&A personnel expenses.

Capital expenditures were $0.6 million in the second quarter 2013, 81% less than the second quarter 2012. Capital investments in the second quarter were primarily maintenance capital expenditures for the heat treatment services business.

AMG Mining Q2 '13 Q2 '12 Change
Revenue $80,307 $85,808 (6%)
Gross profit 12,711 14,285 (11%)
Operating (loss) profit (32,124) 3,975 N/A
EBITDA 5,749 7,063 (19%)
Capital expenditures 2,281 5,890 (61%)

AMG Mining's second quarter 2013 revenue decreased $5.5 million, or 6%, to $80.3 million. Price declines caused revenue to decrease 10% and 4% for silicon metal and antimony, respectively. The decrease was partially offset by a 3% increase in revenue from graphite, a result of improved product mix, compared to the second quarter 2012.

The second quarter 2013 gross margin decreased to 16%, from 17% in the second quarter 2012. The gross margin decrease was primarily the result of lower average prices of 13% and 10% for silicon metal and antimony, respectively. Excluding the $35.5 million of non-cash asset impairments and the $0.4 million in Mining and allocated corporate restructuring expense, the second quarter 2013 operating profit would be $3.7 million.

The second quarter 2013 EBITDA decreased $1.3 million, to 7% of revenue from 8% of revenue in the second quarter 2012. The EBITDA decrease was primarily the result of the $1.6 million decrease in gross profit slightly offset by $0.3 million decrease in SG&A personnel expenses.

Capital expenditures were $2.3 million in the second quarter 2013, 61% less than the second quarter 2012. Capital expenditures were primarily composed of $0.7 million for the silicon metal furnace efficiency upgrade and $0.7 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 a tax benefit of $1.8 million in the second quarter 2013. This was the result of the asset impairment and restructuring expenses in the quarter, a portion of which, however, relates to entities for which a tax benefit cannot be booked. For the second quarter of 2012 AMG recorded an income tax expense of $5.5 million.

SG&A
AMG's second quarter 2013 SG&A expenses were $34.0 million, compared to $37.8 million in the second quarter 2012, a decrease of 10%. The $3.8 million decrease in SG&A expenses was primarily due to a $2.4 million decrease in personnel expenses.

Non-Recurring Items
AMG's second quarter 2013 $40.2 million operating loss 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 second quarter 2013 and 2012 are below:

For the three months ended

June 2013
June 2012

Non-recurring items included in operating (loss) profit:
Restructuring expense $5,399 $1,842
Impairment of AMG Mining assets - Antimony 22,144 -
Impairment of AMG Engineering assets 14,218 5,979
Impairment of AMG Mining assets - AMG Mining AG 13,341 -
Total non-recurring items included in operating (loss) profit 55,102 7,821

AMG incurred $5.4 million of non-recurring restructuring items in the second quarter 2013, consisting primarily of $3.9 million and $1.4 million related to AMG Engineering and corporate restructuring, respectively. As a result of the significant slowdown in the global solar market, AMG Engineering reduced its workforce 16% and recorded $14.2 million of non-cash solar asset impairments. Based upon global metal supply and demand trends as well as the continuing efforts to reduce capital spending, AMG Mining has suspended its short-term plans for new mine development. As a result, impairment charges of $22.1 million and $13.3 million were taken to write-down antimony mining assets and AMG Mining AG (formerly Graphit Kropfmühl) assets, respectively.

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 June 30, 2013 compared to March 31, 2013, resulted in an increase in the assets and liabilities on the balance sheet of $6.9 million and $3.4 million, respectively. The net result of the slight depreciation in the value of the U.S. dollar in the second quarter 2013 compared to the second quarter 2012, resulted in an increase in revenue and EBITDA of $2.7 million and $0.3 million, respectively.

Liquidity
June 30, 2013 December 31, 2012 Change
Total debt $292,222 $315,844 (7%)
Cash & short-term investments 112,230 121,639 (8%)
Net debt 179,992 194,205 (7%)

AMG had a net debt position of $180.0 million as of June 30, 2013. AMG's net debt position decreased $14.2 million since December 31, 2012 primarily due to $44.4 million of EBITDA and an $11.4 million decrease in working capital, slightly offset by $18.7 million in capital investments and other investing activities, $9.6 million of cash tax payments, and $9.3 million of net cash interest payments. Including the $112.2 million of cash, AMG had $172.7 million of total liquidity as of June 30, 2013.

As of June 30, 2013, AMG was not in compliance with the tangible net worth covenant of its revolving credit facility because of the impairments that were recognized in the first half of 2013. On August 7, 2013, the Company received a waiver for this covenant. As required by IAS 1, all portions outstanding under the revolving credit facility are presented as current in the statement of financial position as the non-compliance occurred as of June 30, 2013. AMG is currently working with its banks in order to amend the debt agreement to ensure compliance in future quarters.

Cash Flow
H1 '13 H1 '12
Net cash flows from operating activities $32,631 $3,134
Capital expenditures (16,219) (23,443)
Cash flows (used in) from other investing activities (2,471) 534
Net cash flows used in investing activities (18,690) (22,909)
Net cash flows (used in) from financing activities (22,494) 34,171

Cash flows from operating activities were $32.6 million in the first half of 2013 compared to cash flows from operating activities of $3.1 million in the first half of 2012. Net cash flows from operating activities are comprised of $44.4 million in EBITDA and an $11.4 million change in working capital and deferred revenue, slightly offset by $9.6 million in cash tax payments and $9.3 million in cash interest payments.

Cash flows used in investing activities were $18.7 million in the first half of 2013. The $4.2 million decrease compared to the first half of 2012 is primarily composed of a $7.2 million decrease in capital investments. This reduction in capital investments reflects management's cash control initiatives.

Cash flows used in financing activities were $22.5 million in the first half of 2013 as the Company repaid $22.5 million of borrowings. In the first half of 2012, AMG had a net increase of $40.7 million in existing credit facilities used to fund the Brazilian mine expansion, the acquisition of Graphit Kropfmühl shares, and to retire Graphit Kropfmühl's external debt.

Outlook
The specialty metals markets continue to struggle due to the decline in the growth of the Asian market and continued European economic weakness. This is affecting both prices and volumes for many of AMG's products. These markets are not expected to improve significantly in the near term. AMG is aggressively addressing this environment by rationalizing production and capital investments, and implementing cost reduction programs. These activities are producing results. AMG achieved a 10% reduction in SG&A in the second quarter 2013, improved cash flows from operating activities and reduced net debt. Despite the challenging market environment, AMG believes that it will generate significant cash flows, consistent EBITDA and further reduce net debt in 2013.

AMG Advanced Metallurgical Group N.V.