AMG Critical Materials N.V.

Good day, everyone, and welcome to today's AMG Q4 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and 1 on your telephone keypad. Please note, this call is being recorded, and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Thomas Svoboda. Please go ahead, sir.

Thank you, Paul. Good day, everyone. Welcome to AMG's first quarter 2025 earnings call. It is a very busy reporting day, we are aware of that, so we appreciate you taking your time for us. Joining me on this call is the entire AMG management board. namely Dr. Heinz Schimmelbus, the Chairman of the Management Board and Chief Exec. Officer, Mr. Jackson Dunkle, the Chief Financial Officer, and Mr. Michael Connor, the Chief Corporate Development Officer. We published our fourth quarter 2025 earnings press release yesterday, along with a presentation for investors, both of which you can find on our website. They include our disclaimers about forward-looking statements. Today's call will begin with a review of the first quarter 2025 business highlights by Dr. Schimmerbusch. Mr. Conon will comment on strategy and Mr. Danko will comment on AMG's financial results. At the completion of Mr. Danko's remarks, Dr. Schimmerbusch will comment on outlook. We will open the line to take your questions thereafter. I will now pass the floor to Dr. Schimmelbusch, AMG's Chairman of the Management Board and Chief Exec Officer. Dr. Schimmelbusch.

Thank you, Thomas. In 2025, we achieved the third highest adjusted EBTA in the company's history, despite weakness in lithium and vanadium. This flexible response to a changing market environment highlights the quality and breadth of our Critical Materials and Technologies portfolio. Governments are pushing for onshoring of critical materials supply, creating significant opportunities to grow our business. AMG is focused on capital light, high return projects that expand its geographic and critical materials space. For example, we are expanding We are expanding the footprint in U.S. critical materials with a high-purity chrome metal facility, which is set to come online in the first half of 26. Moreover, the management board plans to strengthen AMG's critical materials recycling franchise in three ways. First, We plan to develop a circular high-purity molybdenum processing facility for fresh refining catalysts in 2009 at latest. Second, we are strengthening our lithium cluster in Germany by accepting recycled lithium carbonate and converting it to technical grade hydroxide for the use then in Bitterfeld's main upgrading facility. And third, Phase 1 of our Supercenter project in Saudi Arabia is currently under construction and commissioning is targeted for the second half of 2028. Looking ahead, our operational focus will be on compensating for the temporary inventory benefit of more than 70 million in anti-money in 2025. Thanks to the recent tailwinds from pricing as well as volume increases in our vanadium and lithium businesses, we are optimistic about maintaining our attractive earnings level. Based on our detailed scenario planning, we expect 2026 adjusted EBDA in the range of to $240 million. The first quarter of 2025 will represent the trough of earnings likely as higher pricing begins to impact in the second quarter and our volumes ramp up in the second half of 26. This is due to certain delays in the pricing reaching our EBTA. I will now hand over to Mike Connor. Mike?

Thank you, Hans. Good morning, everyone. While markets have been captivated by AI and other intangible assets, the foundation of that growth remains deeply physical. AI, electrification, aerospace, defense, renewable energy, all of it depends on refined materials and industrial infrastructure. As a result, it's becoming increasingly clear that critical materials are not commodities. They're strategic assets and they are increasingly being used as tools of geopolitical influence. Governments around the world are intensifying efforts to secure supply chains. In that environment, AMG is not simply participating. We are positioned at the center of it. Today, control of critical materials is not defined by who owns a mine. It's defined by who can process, refine, recycle, and deliver materials to exacting specifications at an industrial scale. This is where AMG lives. We combine more than a century of metallurgical experience with advanced processing technology, world-leading vacuum furnace systems, and global leadership in metallurgical waste recycling. Across lithium, vanadium, specialty alloys, and catalyst recycling, our competitive advantage is processing excellence. Today, we are outlining a $120 million growth CapEx program to expand and strengthen our recycling franchise. You can see a summary of this program detailed on page three of our fourth quarter investor presentation posted this morning on our website. Let me now move to our lithium segment where we are seeing meaningful progress. At Bitterfeld, we are delivering on plan. The refinery is producing battery grade lithium hydroxide in specification and ramping steadily. Operational performance is strong and customer engagement on qualification continues to advance. We expect to begin selling commercial volumes by mid-year and progressively ramp toward full utilization. This marks a significant inflection point for AMG. Bitterfeld provides critical energy storage material capacity in Europe at precisely the moment the region is building its own battery ecosystem. As the plant ramps and pricing recovers, The value of this asset will become increasingly evident. We are also expanding our lithium feedstock optionality in recycling. This is shown on pages five and six of our quarterly slides. Today, we can recover lithium from recycled lithium hydroxide streams, which are typically available at highly attractive pricing and represent a profitable feedstock source for us. To enhance this advantage, We are adding processing capacity for recycled lithium carbonate streams as well. This expansion increases access to low-cost secondary material, improves margin resilience, strengthens flexibility of Bitterfeld, and reinforces our role in building a circular European battery ecosystem. Importantly, this investment is supported by grants from the German government, as we previously announced. In Brazil, concentrate volumes in the fourth quarter were temporarily impacted by amphibolite incursions in that ore body, increasing waste material and reducing production late in the year and into early 2026. Drilling confirms these incursions were isolated. Production has moved beyond the affected area and is now operating smoothly. Most importantly, with lithium and tantalum prices recovering, we are seeing a meaningful and accelerating improvement and profitability in Brazil. Turning to molybdenum, which we detail on pages 7 and 8 of our quarterly presentation. We have announced our ambition to build a fully circular, high-purity platform, similar to what we established in Vanadium. AMG has successfully tested proprietary technology converting recycled molybdenum into high-purity oxide suitable for fresh HDS catalysts. The acquisition of UR Technologies accelerates this strategy. UR provides an established recycling platform and a fully permitted site, reducing execution risk, accelerating our timeline, and lowering capital intensity. It strengthens our specialty recycling platform, expands our footprint in high-specification materials, and we see clear opportunity to further scale this highly profitable venture over time. In the Kingdom of Saudi Arabia, our Supercenter joint venture is advancing toward final documentation for non-recourse project financing. This project, which will process power plant gasification ash into high-purity vanadium pentoxide, demonstrates our ability to combine advanced processing expertise with alignment to regional industrial policy objectives. The full scope of our Supercenter project is shown on page 9 of our quarterly slides. Additionally, AMG Leva will install its hybrid battery system at an Aramco solar plant in the kingdom. This installation supports renewable integration, reduces carbon emissions, and enhances grid independence, translating our materials expertise into energy system solutions. Overall, we expect headcount of approximately 3,200 by year-end, compared with 3,600 at the end of 2025. reflecting the sale of AMG Graphite and the closure of AMG Silicon Operations. This is disciplined portfolio management in action, focusing capital and talent on our highest value strategic platforms. In summary, while 2026 is an operational transition year, strategically, AMG is emerging stronger with expanding processing platforms, improving profitability drivers, and increasing strategic relevance in critical material supply chains. We are building capacity where it matters most, expanding high-return recycling and processing platforms, and positioning AMG at the center of the structural shift toward material security and supply chain localization. The world is rediscovering that physical assets and industrial know-how matter. AMG has spent decades building a global platform that gives us an unparalleled position as geopolitics and supply chain shifts redefine the critical materials industry. As a result, today we are more confident than ever in our strategy, our recent investments, and our ability to capitalize on the opportunities emerging in this market. I will now pass the floor to Jackson Dunkel, AMG CFO.

Thank you, Mike. Starting on page 10 of the presentation, you can see that Q4-25 adjusted EVA-DA decreased 25% versus the same period last year. This was primarily due to the recognition of incremental 45X allowances in Q4-24. On the lower left, you can see that our adjusted net income attributable shareholders. In the fourth quarter, we had to write off $41 million of net operating loss carry-forwards in the U.S. and to a lesser extent in Germany. This was due to historical operating losses and it is consistent with IFRS accounting. It's important to understand, however, that these tax loss carry forwards are at our U.S. and German holding companies. In Germany, we removed the graphite equity and are holding it as assets held for sale. And we had a $19 million write-down for silicon. Per accounting rules, these losses N.V. N.V. N.V. does not reflect management's confidence that we will be able to utilize these net operating losses when the two holding companies return to profitability. As such, we added these back to our adjusted net income figure in addition to the tax-affected amount of our silicon restructuring, which I'll discuss below. The net result is a $5.6 million adjusted net income for the quarter, which better reflects the operational performance of the business.

On page 11,

You can see the price and volume movements for our key products represented by arrows, which underscore our segmental results. I will cover these price and volume movements in the individual segment comments. AMG lithium results are shown on page 13. On the top left, you can see that Q425 revenues increased 16% versus the prior year, driven by higher lithium and tantalum market prices, as well as a 35% increase in tantalum sales volumes. These impacts were partially offset by lower lithium concentrate sales volumes versus Q4-24. In Brazil, as Mike discussed, poor ore quality caused recoveries to drop during Q4, reducing production volumes and impacting production costs. We are currently running at an annualized production rate of 110,000 tons. Despite the depressed volumes, we remain profitable and low cost due to our multi-product mining operations. AMG Venadium results are shown on page 14. Revenue for the quarter increased by 8% compared to Q4-24, due largely to our aerospace-focused businesses. Titanium alloys and chrome, which had increased volumes and prices during the quarter. Q4-25 adjusted EBITDA of $11 million for our Venadium segment was 64% lower than the same period in 2024. This is primarily due to the recognition of incremental 45X allowances in Q4-24, but it is also due to lower volumes of ferrovanadium produced due to supply shortages from our North American refinery suppliers and shipping challenges for overseas spent catalysts. The net results for AMG Technologies are shown on page 15. The Q4-25 revenue increased by $66 million, or 40%, compared to the same period in 24. This improvement was driven largely by the higher antimony sales prices in the current quarter, as well as strong sales in engineering. Adjusted EBITDA of $31 million during Q425 was 54% higher than the $20 million in Q424. The increase was due to higher profitability in AMG antimony and AMG engineering. Page 16 of the presentation shows our main income statement items. The key change on this page is regarding our tax expense. which was $43 million for Q4-24, up from $8 million in the same period in 24. This increase was due to the derecognition of net operating losses we discussed earlier. Page 17 of the presentation shows our cash flow metrics. Strong cash generation resulted in $81 million of cash from operating activities during Q4-25 compared to $64 million in the same period in 24. Our cash generation would have been even stronger N.V. N.V. The resulting $484 million of total liquidity demonstrates that our balance sheet is in good shape, and importantly, we have no significant near-term debt maturities. In 26, capital expenditures are projected to be approximately $70 to $90 million, primarily driven by the targeted growth investments in our vanadium and lithium segments, which Mike discussed earlier in his remarks. Based on our expected 2026 EBITDA and this estimated capex, We expect to generate positive free cash flow in 2026. That concludes my remarks.

Thank you, Jackson. Pricing for many of our materials has strengthened in early 2026 and the backlog in our engineering business has sustained historically high levels. However, given the lack of pricing effect falling through our P&L, this tailwind will only begin supporting our adjusted EBTA in the second quarter of this year. We expect the first quarter of 26 to be down sequentially. Our detailed scenario planning results in an adjusted EBTA range for the year of 210 to 240 million for 26. The upper end of the guidance range reflects the current price level of our key products. Operator, we would now like to open the line for questions.

At this time, we will open the question and answer session. If you would like to ask a question, please press star and 1 on your telephone keypad, and you'll be placed into the queue in the order received. You may remove yourself from the queue at any time by pressing pound and one. Once again, to ask a question, press star and one on your phone now. And our first question comes from Frank Clausen of DeGroof Petercam.

Yes, good morning to you. Good afternoon. Frank Clausen of DeGroof Petercam. Two questions, please. First of all, you've indicated that on the Brazilian lithium plant, you are now at a 110 kiloton run rate. When do you expect to reach the full 130 kilotons? That's my first question. And then secondly, you've made 30 million equity contribution to the super center in Saudi Arabia. Is this it or is there more to come in the coming years? Thank you.

For the Brazilian operation, we're working on it. We obviously have had some problems with the expansion. Currently, we are running at the 110 rate, and we're working to fix it as quickly as possible. Our hope is to have it running at the full rate by the end of the year.

And on ACMC, that $30 million has not yet been invested. We are currently investing equity to get the plant moving and starting construction. But that does represent the total required outlay, assuming that we close the non-recourse project financing, which we feel very good about.

We haven't contributed it yet, but that is the max we will contribute.

So, one might add that this is Phase 1 of a multi-year, multi-phase

Project Development Concept in Saudi Arabia, but that is not a short-term equity contribution matter. This is just to mention that this is not a one-time project. This is part of a multi-project expansion.

Okay, that's clear. Thank you very much.

And our next question comes from Michael Kuhn of Deutsche Bank.

Good afternoon or good morning. Thanks for taking my questions. Firstly, on, let's say, sequential results momentum, you're basically saying another down quarter. Maybe you could provide a few more insights into the building blocks here, and maybe you could also... but maybe a rough number on the 45X effect in the 25 accounts and let's say in the catch-up effect that you expect for 2026.

So I'll start with 45X. We have an outstanding receipt from the government of $30 million. That is not a catch-up effect. That's purely the calculation. from 2024, 2023. We will be submitting 25 in due course.

And as far as the sequential earnings, you know, there's about a three-month lag that we see the impact of lithium prices. And so you can look at the timing on the charts, but essentially that's happening, you know, over the past few weeks. So we'll really see that in the second quarter. So I wouldn't expect to see significant increase in profitability in our lithium segment until the second quarter. There's also a lag on some vanadium prices as well. It's not as significant, but similar in nature. And so, you know, when you look at the profitability of those two segments, you won't see the pricing effects until the second quarter. And the impact of the pricing effect, you know, you know our volumes for both lithium and vanadium largely, and you can kind of calculate that. We wouldn't expect significant movements for those two segments in the first quarter, but do expect to see that price impact come through in the second quarter.

So, Michael, numerically what that means is, yeah, sequentially down in the first quarter. Second quarter, well north of $50 million of EBITDA, and then ramping thereafter throughout the rest of the year.

Understood. Thank you. Dan, maybe on the AURA. acquisition on that deal. I understand the logic. The question I would ask is why wasn't that part of AMG's portfolio right from the beginning and entered it now?

Yes. So we're on a standalone basis was a pretty small operation and the key to unlocking the potential for us, for AMG, that made it highly attractive was the technology that we came up to produce high purity molybdenum, which can be reused in fresh catalysts. The technology didn't exist historically, and so that's why we weren't in there originally, but once we were able to develop this technology, which we've worked on for several years, because we saw the huge market potential of it, once we achieved that, we then looked at the best opportunities to Quickly and as cost effectively as possible, develop that expansion, which we're extremely excited about because it's a fantastic market. And there's great opportunity for further expansion on it. But the key is the technology advance that we made recently and then putting a strategy together to advance it. And so historically, prior to us achieving that technology, it would have been a relatively small business for us. As you can see in the purchase price, it wasn't a huge opportunity from an EBJ perspective until we added in that technology advance.

Thanks for that. One more on the carbonate converter. Let's say adding this to your supply chain and having discussed potential investments in Brazil and Portugal in the past, does this have an impact on, let's say, the overall planning of your What you want to reach at some point, integrated lithium supply chain?

No. This is an optimization. We want to open our supply chain to recycling, and recycling interim products have that quality which we need to convert into a quality in order to the hydroxide refinery being able to process it.

All right, thanks for that. And then very last question. Any additional use you can share on, let's say, the talks with the U.S. government that we already discussed over the past two calls?

Well, we are discussing, as Mike has said, of course, with several governments, wherever we are operationally involved in critical materials. This is a worldwide thing. We are very happy that the U.S. government is active in this and we are since quite some time in very constructive conversations with the various funds which are covering that subject in the U.S. government in the As a reminder, if you would like to ask a question, please press star and one on your telephone keypad.

And it appears that we have no further questions at this time. I will now turn the program back to our presenters for closing remarks.

Thank you, Paul. Your line was quite bad. I hope I'm getting it right. So thank you again for taking the time, and we hope to see you on the road to discuss the developments in the industry and in our company in person. Thank you very much. See you next time.

Thank you. This does conclude today's AMG Q4 and FY 2025 earnings conference call. Thank you for your participation. You may disconnect at any time.