AMG Critical Materials N.V.

on by. We're about to begin. Good day, everyone, and welcome to AMG's Q3 earnings call. Today's conference is being recorded. At this time, I'd like to turn the call over to Ms. Michelle Fisher, Vice President of Investor Relations. Please go ahead, ma'am.

Welcome to AMG's third quarter 2020 earnings call. Joining me on this call are Dr. Heinz Schimmelbusch, the Chairman of the Management Board and the Chief Executive Officer, Mr. Jackson Dunkel, the Chief financial officer, and Mr. Eric Jackson, the chief operating officer. AMG's third quarter 2020 earnings press release issued yesterday is on AMG's website. Today's call will begin with a review of the third quarter 2020 business highlights by Dr. Schimmelbusch. Mr. Dunkel will comment on AMG's financial results, and Mr. Jackson will discuss operations. At the completion of Mr. Jackson's remarks, Dr. Schimmelbusch 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 acquisition, 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. The risk exists and any prediction, forecast, 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. Shimabushi, AMG's Chairman of the Management Board and Chief Executive Officer.

Thank you, Michelle. Out of over 30, out of 3,000 total employees in AMG, 33 sites in 15 countries, AMG has active confirmed coronavirus cases globally. Our Corporate Health, Safety and Environmental Center helps us manage 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, we believe it is imperative to preserve a strong liquidity position. The current global pandemic continued to significantly impact our financial results in the third quarter, with dramatically lower volumes in our aerospace-exposed businesses, compounding the historically low prices AMGs experienced across our portfolio. Our ongoing focus is on our comprehensive programs to reduce operating costs SG&A, working capital, and limit all non-essential capital expenditures. We are implementing an 8% workforce reduction, mainly in our aerospace-related businesses, or 250 positions, and we have 285 full-time equivalent employees in furlough or Kurzarbeit. As a result of these ongoing efforts, our liquidity position is 376 million as of September 30, essentially unchanged from the end of the last quarter. It is important to note that AMG Engineering's order intake in the first nine months of 2020 increased 5% from 169 million in 2019 to 177 million in 2020. This increase is due to the end market diversity within AMG's engineering product portfolio. We continue to execute our key strategic programs, the construction of the plant in Sainsville, Ohio, which will essentially double our recycling capacity for refinery residues, is proceeding as planned, utilizing the funds raised from our municipal bond issue. Basic engineering of the new lithium hydroxide refinery in Germany continues and a final investment decision is presently expected in early 2021. In addition, we are pleased to announce a segmental realignment which will provide investors increased transparency into our business and enable them to track the strategic differentiation more accurately within the portfolio of our activities. In future, we will report in three segments, clean energy materials, critical materials and critical materials technologies. The basis of the new segments was a thorough analysis in which the new segments had to meet three tests, similarity of end markets, similarity of business models, and inter-segment cross-fertilization potential. Green energy materials include the lithium and the tantalum business, AMG Brazil, and the vanadium business, AMG Venetium. Critical Minerals includes the Antimony, Tresorite and Silicon Metal units. Critical Materials Technology is the former AMG Technologies with the addition of the Grown Metal business. Peen Energy Materials is managing AMG's major growth projects including Cambridge II, essentially the doubling of our recycling capacity in Ohio, and the development of the first lithium hydroxide refinery in Germany. The global expansion of our recycling solution for spent catalysts and for vanadium-containing gasification ash is pursued through Shell AMG Recycling BV Amsterdam. Shell AMG Recycling continues to pursue refinery residue recycling opportunities globally with a focus on the Middle East and China, including the Science Memorandum of Understanding earlier this week. The Shandong Yulong Petrochemical Company Limited to enter into exclusive arrangements to evaluate the potential for construction and operation of a spent catalyst recycling facility in Shanghai, China. I have mentioned business model and end market similarities. The common end market across the clean energy material segment is electricity storage. That market is clearly the fastest growing market within the renewable energy sector. Critical Minerals has consistently proven stable earnings performance in difficult times as is typical for the industrial minerals industry. Antimony, silicon and graphite are neighbors in the section of the element table reserved for metallurgy. The business model similarity of the segment is evident. A ranging supply from difficult and non-conventional origins such as China provinces, Tajikistan, Vietnam, Madagascar, Sri Lanka, Mozambique, Colombia, long established process technology leadership and selling to hundreds of customers in the chemical, automotive, aluminum and building materials industries worldwide. Critical Materials Technologies is operating under a classic equipment engineering business model. In 2019, we added AMG titanium alloys to form AMG technologies following the global trend of engineering companies to flatten their order intake volatility by moving into own and operate models. Under those models, you don't sell the equipment, you build it for the customer who pays a fee to use it. The idea is steady cash flow. We introduced that idea successfully in our engineering business through heat treatment services. Now we are adding AMG chrome metal, formerly AMG super alloys, to form the new critical materials technology segment. The chrome metal product line is an essential alloy for aerospace turbines and adds to the attractiveness of the AMG portfolio to this market. Strategically and operationally, AMG management is very pleased with its segmental realignment. It also will add a great deal of transparency for our business. I would now like to pass the floor to Jackson Dunkel, AMG's Chief Financial Officer.