AMG Critical Materials N.V.

Good day, and welcome to AMG's Quarter 2 2020 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Fisher. Please go ahead, ma'am.

Welcome to AMG's Second Quarter 2020 Earnings Call. Joining me on this call are Dr. Heinz Schimmelbusch, the Chairman of the Management Board and Chief Executive Officer Mr. Jackson Dunkel, the Chief Financial Officer, and Mr. Eric Jackson, the Chief Operating Officer. AMG's second quarter 2020 earnings press release issued today is on AMG's website. Today's call will begin with a review of the second quarter 2020 business highlights by Dr. Schimelbush. Mr. Dunkel will comment on AMG's financial results, and Mr. Jackson will discuss operations. At the completion of Mr. Jackson's remarks, Dr. Schimelbush will comment on strategy and outlook. We will then open the call to take your questions. Before I pass the call to Dr. Schimmelbusch, I would like to comment on forward-looking statements. This conference call could contain forward-looking statements about AMG Advanced Metallurgical Group. Forward-looking statements are not historical facts but may include statements concerning AMG's plans, expectations, future revenues or performance, financing needs, plans and intentions relating to acquisitions, AMG's competitive strengths and weaknesses, reserves, financial position, and future operations and development, AMG's business strategy, and the trends AMG anticipates in the industries and the political and legal environment in which it operates, and other similar or different information that is not historical information. When used in this conference call, the words expect, believe, anticipate, plan, may, will, should, and similar expressions and the negatives thereof are intended to identify forward-looking statements. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that any predictions, forecasts, or similar projections contained by such forward-looking statements will not be achieved. These forward-looking statements speak only at the date of this conference call. AMG expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect any change in AMG's expectations with regard thereto or any changes in events, conditions, or circumstances on which any forward-looking statement is based. I will now pass the floor to Dr. Shumelbush, AMG's Chairman of the Management Board and Chief Executive Officer.

Thank you, Michelle. Out of our 3,124 total AMG employees at 33 sites in 15 countries, AMG has four confirmed coronavirus active cases globally. Our corporate health safety environment center is all over this on a daily basis. That department reports to me. I get a report every morning and we react accordingly. We take this extremely seriously, as you might expect. In these unprecedented times, our priority is to preserve a strong liquidity position. Our liquidity position is 390 million and is higher than last quarter. Operating cash flow is strong and substantially surpasses operating cash flow in the second quarter 2019. We are embarking on comprehensive programs to reduce operating costs, SG&A, working capital, and freezing all non-essential capital expenditures. The current global pandemic significantly impacted our financial results with dramatic lower volumes, especially in our aerospace sector, compounding the historical low prices AMG is experiencing across our critical materials portfolio. Despite the unpredictable challenges faced in the second quarter of 2020, AMG's business units were all able to contribute positive EBITDA. This exceptional performance across the company was only possible because of AMG's position as the low-cost provider in this target market. AMG's ability to generate positive results during cyclical downturns was the driver of our strong operating cash flow for the quarter. We continue to progress our key strategic projects. The construction of the new Vanadium recycling facility in Sainsville, Ohio, is proceeding on schedule. The project will essentially double our recycling capacity for refinery residues and is funded by our tax-exempt bond that generated $325 million of proceeds for the financing of this project issued last year. Through Shell AMG Recycling BD, we pursue recycling project outside North America, offering to produce vanadium and other metals from refinery waste, such as spent catalysts and gasification residues, by the way of a superior recycling technology. This is an exercise in circular economy. Shell Catalysts and Technologies provides fresh catalysts, and Shell AMG takes back spent catalysts. For a refinery, this is a financially and environmentally attractive proposition, especially vis-a-vis landfilling. Furthermore, this circular solution reduces CO2 emissions in comparison to primary mining. Petrochemical refining is growing strongly in the Mideast and China as they upgrade and build new refineries. increasing the demand for fresh catalysts. These developments are partly a result of the IMO 2020 legislation. The Ohio recycling facilities are producing ferrovenadium. We are now also preparing to expand our other vanadium recycling route operating in Germany, namely gasification residues into vanadium oxide. High-purity vanadium in form of electrolytes is the essential part of the vanadium flow battery used for stationary electricity storage. The demand for stationary electricity storage is a function of the growth in renewable energy production given the intermittent nature of solar and wind. That brings me to the other major growth project in the AMG, lithium hydroxide. That also is an electricity storage activity related primarily to electrification of cars and transport. The engineering for the first battery-grade lithium hydroxide refinery with a capacity of 20,000 tons per year is nearing completion with a final investment decision planned in due course. I would now like to pass the floor to Jackson Dunkel, AMG's Chief Financial Officer. Jackson.