Good day, everyone, and welcome to today's AMG Q1 2025 Earnings Conference Call. [Operator Instructions] Please note this call is being recorded and I will be standing by should you need any assistance. It is now my pleasure to turn the conference over to Michele Fischer. Please go ahead.

Welcome to AMG's first quarter 2025 earnings call. Joining me on this call are Dr. Heinz Schimmelbusch, the Chairman of the Management Board and Chief Executive Officer; Mr. Jackson Dunckel, the Chief Financial Officer; Mr. Eric Jackson, the Chief Operating Officer; and Mr. Michael Connor, the Chief Corporate Development Officer. AMG's first quarter 2025 earnings press release issued yesterday is on AMG's website. Today's call will begin with a review of the first quarter 2025 business highlights by Dr. Schimmelbusch. Mr. Connor will comment on strategy, Mr. Dunckel 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 outlook. We will then open the line to take your questions. Before I pass the call to Dr. Schimmelbusch, I would like to expressly refer you to our statement on forward-looking statements and the meaning thereof as we have used at all previous occasions and we will use at this earnings call, and which explanatory statement has been published as part of our financial presentation and on our website, all in connection with this earnings call. I will now pass the floor to Dr. Schimmelbusch, AMG's Chairman of the Management Board and Chief Executive Officer.

Thank you, Michel. We are obviously pleased to have achieved such a strong EBITDA in the first quarter, almost double compared to the first quarter last year. We achieved an EBITDA of $58 million for the first three months in 2025, despite the absence of any correction in the lithium or vanadium prices upward. This indicates the power of AMG's critical materials portfolio and demonstrates the significant upside potential should commodity prices normalize. AMG had positive cash from operating activities of $9 million during Q1 '25 compared to $15 million of cash used in operating activities during the first three months of last year. Our technologies segment also had an extremely strong performance with its highest order backlog in AMG's history of $460 million at the end of the first quarter. Looking forward, while the indirect effects of increased tariffs and trade barriers are difficult to assess, there are no material prereq effects of the tariffs on AMG businesses, based on our present analysis. In the current volatile environment, our businesses benefit from the production of materials which are critical to our customers, and to a large extent, we operate within domestic value chains. As we enter into a period of uncertainty, it should be noted that AMG is at the end of its heavy capital expansion phase. Going forward, we will be focused on small, highly-accretive investments which preserve our growth options. The recently announced investments in U.S. Chrome in Lagoa and Graphit demonstrate how we will continue to invest and support growth while maintaining the strength of our balance sheet. As an important example that demonstrates the end of our heavy investment phase, I am very pleased to report that the Bitterfeld refinery has successfully produced lithium hydroxide at battery-grade specifications, and we'll be shipping the first commercial qualification batches to our customers promptly. I will now hand over to Mike. Mike?

Thank you, Heinz. In today's rapidly evolving global economy, critical materials such as lithium, vanadium, and antimony have become essential to the technologies that power modern life, from renewable energy systems and electric vehicles to advanced defense applications and digital infrastructure. As nations accelerate their transitions to cleaner energy and heightened technological competitiveness, access to and control over these strategic resources are increasingly shaping economic policy, national security strategies, and global supply chain dynamics. As a result of our portfolio of critical materials and our globally diverse footprint, AMG is uniquely positioned to capitalize on these accelerating macro trends. We continue to focus on these dynamics in our strategic decision making and our expansion activities. Regarding our major current lithium growth projects, the ramp-up at Bitterfeld, as Heinz just said, is proceeding as expected and has produced battery-grade lithium for qualification by our customers. Additionally, the expansion of our lithium operation in Brazil is complete, solidifying our position as one of the lowest cost lithium concentrate producers globally. AMG is the largest shareholder of Savannah Resources, the sole owner of the Barroso Lithium Project in Portugal. Savannah has continued to build strong positive momentum, recently achieving a major milestone with the European Commission designating Barroso as a strategic project under the Critical Raw Materials Act, highlighting its integral role in Europe's battery and electric vehicle sectors. In April, AMG signed an exclusive agreement with Grupo Lagoa with the goal of becoming the first producer of lithium concentrate in Portugal. Both the initial capital requirement as well as the risk profile of this investment are low. With this agreement, AMG is establishing its foothold within one of the most attractive lithium resources in Europe. In terms of our vanadium segment, we approved the capital investment of $15 million in April to establish an aluminothermic production facility to manufacture chrome metal in the United States. Chrome metal is classified as a critical material in the U.S. due to its importance in various industrial alloys, particularly those within the aerospace sector. The project's benefits are evident and substantial. The necessary capital investment is minimal. The payback period will be short and the facility is anticipated to commence operations in the first quarter of 2026. Phase 1 of our Supercenter project in Saudi Arabia is currently in the detailed engineering phase. In April, we successfully obtained the required environmental permit to construct through the proper channels in Saudi Arabia. We are now in the process of selecting an EPC contractor. In March, AMG successfully repurchased 40% ownership in Graphit Kropfmuhl from Alterna Capital Partners. The acquisition was facilitated with very flexible payment options. This transaction simplifies our capital structure and gives us strategic flexibility, as we now have complete control over the asset. We continue to operate as a low-cost producer and the success of our diversified portfolio is allowing us to continue with highly-accretive, low-risk strategic investments despite market downturns in some of our major products. I will now pass the floor to Jackson Dunckel, AMG's Chief Financial Officer. Jackson?

Thank you, Mike. I will be referring to the first quarter 2025 Investor Presentation posted yesterday on the website. Starting on Page 5 of the presentation, I'd like to underscore Heinz's comments about the strength of the EBITDA performance this quarter, given the low lithium prices. Despite these low prices, AMG delivered the highest quarterly EBITDA since the fourth quarter of 2023. On Page 6 you can see the price and volume movements for our key products represented by arrows, which underscore our segmental results. On Page 7 you'll see our return on capital and valuation metrics year-over-year. It's important to note that we've invested over $650 million over the last four years for our lithium and vanadium expansion projects, which has impacted the return on capital metrics. AMG Lithium is shown on Page 8. On the top left you can see that Q1 2025 revenues decreased 23% versus the prior year. This decrease was driven mainly by the 27% decline in lithium prices and the 22% decrease in lithium concentrate sales volumes. Those were partially offset by higher tantalum sales prices. Despite the decrease in lithium market prices, adjusted EBITDA for the segment in Q1 '25 was down only 6% from Q1 last year. AMG Vanadium is shown on Page 9. Revenue for the quarter decreased 7% compared to Q1 '24, due mainly to lower volumes of ferrovanadium and titanium alloys, partially offset by increased sales prices in ferrovanadium and chrome metal. Q1 '25 adjusted vanadium EBITDA of $13 million decreased 10% compared to Q1 '24. This was primarily due to the lower sales volumes, partially offset by higher profitability in chrome and the ongoing benefit of 45X. AMG Technologies is shown on Page 10. The Q1 '25 revenue increased by $51 million, or 34% versus Q1 '24. This improvement was driven mainly by steadily increasing sales prices of antimony in the current quarter. Adjusted EBITDA of $39 million during the first quarter was more than triple the same period in 2024. This increase was primarily due to higher profitability in AMG Antimony. Page 11 of the presentation shows our main income statement items. The key change on this page is regarding our tax expense, which was $1 million in the current quarter compared to $3 million during Q1 '24. The Q1 '25 expense is largely due to $6 million of Brazilian deferred tax expense related to the appreciation of the Brazilian real, offset by $5 million of unabsorbed losses. Page 12 of the presentation shows our cash flow metrics. The key item on the page is our Q1 2025 cash from operating activities, which is notably strong versus the same period last year and was driven by high advance payments in our engineering business and strong cash flows from our antimony business. I'd also like to point out that our return on capital employed of 13.4% in the current period was higher than in any quarter of 2024. AMG ended the quarter with $476 million of net debt and as of March 31, 2025 we had $286 million in unrestricted cash and $200 million available on a revolving credit facility. The resulting $486 million of total liquidity at the end of the quarter demonstrates our ability to fully fund all approved capital expansion projects. One note on net debt. We are carrying our vendor note to Alterna and other liabilities. The rationale for this treatment is there are no interest payments associated with the note and we intend to utilize our shares to settle the liability. We continue to expect capital expenditures to be $75 million to $100 million for 2025. That concludes my remarks. Eric?

Thank you, Jackson. AMG Technologies reported exceptional results driven by our market-leading position in our engineering business and very strong results in our diversified mineral operations. AMG Engineering signed $107 million in new orders during the first quarter. The order intake was driven by strong orders for turbine blade coatings, and as mentioned, this resulted in a record breaking order backlog of $416 million as of the end of the quarter. Our other operating units under the AMG Technologies umbrella, especially AMG Antimony also performed extremely well in the quarter and made a significant contribution to the $29 million quarter-over-quarter increase in AMG Technologies EBITDA. After temporarily halting our silicon metal production in the first quarter, we have restarted and will operate one of our four furnaces in the second quarter. The profitability of AMG's silicon business is presently not material and is excluded from adjusted EBITDA during this period of abnormal operations. Our Brazil lithium operation delivered 12,167 metric tons CIF China of lithium concentrate in the first quarter. Volumes were low due to shipment schedules and the decision to use this period of low prices to perform significant testing on our lithium concentrate production lines to increase both reliability and performance. We plan to ramp up to full capacity again during the second quarter. The average realized sales price was $640 per metric ton and the average cost of production was $572 per metric ton, again CIF China. This higher than run rate cost per tonne was driven by the lower vanadium concentrate and tantalum concentrate production in the current quarter. It's important to note that the fourth quarter 2024 cost per tonne of $290 was, as we mentioned after that quarter, especially low given the high tantalum sales volumes during that period. In our Vanadium segment, AMG Titanium experienced weakened market demand during the first quarter of 2025, particularly titanium aluminides. The segment's profitability was also negatively impacted by start-up costs of our new vanadium electrolyte plant in Germany, which is now fully operational. AMG Vanadium's Zanesville and Cambridge spent catalyst processing facilities lead the industry in terms of cost structure and environmental performance. AMG Vanadium's results were, however, negatively impacted by lower volumes during the first quarter. The increase - the small increase in sales prices in ferrovanadium helped to offset the impact of lower volumes. We believe that as the only producer of ferrovanadium in the United States, our vanadium operations are well positioned in this uncertain tariff environment. Our overriding operating objectives are to be the lowest cost, highest quality, and most environmentally responsible producer of all of our products. This enables us to deliver strong financial performance, even as many of our direct competitors report significant losses. I'll now pass the floor to Dr. Schimmelbusch.

Thank you, Jackson - sorry, Eric. Despite exceptionally low lithium and vanadium prices, we had a very strong start in '25. The AMG Technology segment performed particularly well. Based on that, and considering uncertain economic and market conditions globally, we increased our adjusted EBITDA outlook from $150 million or more in '25 to $170 million or more in '25. Regarding AMG's five-year guidance, the key pillars which represent significant investments are now complete. The Bitterfeld battery grade lithium hydroxide facility, our lithium concentrate expansion, the establishment of AMG battery strategy, LIVA, Voith Energy acquisition, the doubling of spent catalyst processing capacity in AMG vanadium, and AMG Engineering's highest ever backlog, these projects deliver the volume growth which underpin the long-term guidance of an EBITDA of $500 million or more in five years or earlier at normalized market prices. Operator, we would now like to open the line for questions.

[Operator Instructions] And we'll take our first question from Frank Claassen with Degroof Petercam.

Yes. Good morning all. Two questions, please. First of all, on the antimony business, given that it is a conversion business, how long can you still benefit from the current rally in the antimony prices? Could you elaborate on that? That is my first question. And then secondly, on the Bitterfeld refinery, you're now shipping the first commercial batches. Does that also mean that you expect already a positive EBITDA contribution for '25 or is that too early? Thank you.

On antimony, it is a conversion business, and as you know, we would normally expect constant margins despite high prices. However, in today's very short market, we're able to command significantly higher margins. That being said, we have no indication that prices are going to change in the near term. We have no indication that China is going to suddenly start to ship antimony metal overseas. But predicting what that looks like out more than a quarter or two is very difficult.

Okay, basically - so, basically, the high margins can - this high margin can be sustainable, at least in the foreseeable future. Is that the line of thinking?

Correct.

Okay. Thanks. And then--

So now let me go to your second question. The lithium battery-grade hydroxide qualification process is going through a standard pattern. The first step is achieved. The first step is the production of battery-grade lithium hydroxide in specification. That happened last week. So now the second step is that we ship batches, so called qualification batches to the customers. They do analytical reconfirmation. Analytical reconfirmation. Then we are shipping the batches for the performance test to the customer. Then they send us a letter that we are free to ship consecutive production. So we are extremely pleased and we actually celebrated this first achievement, the first step of this process, the most important step, namely that we have demonstrated the production of in-spec material battery-grade hydroxide in our plant. So now, second step, batches, et cetera as I have said. Given the logical uncertainties with that process, we have no reason to change whatever we said about the start-up of the timing of the start-up steps in that refinery.

But does that mean that this year there will already be a positive EBITDA contribution or will that be more for next year?

Well, it will be next year, but when you ask me, I might be more optimistic.

Okay. All right. Okay. Thank you.

I wasn't looking at my colleagues here. I have to be under total discipline here in this [indiscernible].

I see. Okay. Thank you very much for the comments. Helpful. Thank you.

And our next question will come from Stijn Demeester with ING.

Yes, good morning. Thanks for the opportunity to ask questions. Three if I may. The first one is on the long-term guidance. Since you mentioned the end of the phase of large CapEx items, are you actually moving away from building further modules in Bitterfeld? And doesn't the long-term guidance assume at least one more module to be built? So can you comment maybe on that question?

Well, we are not moving away and we expect a second model to be built, but that only affects the last year of that five-year guidance. Answered your question?

Yes, that's clear. The second one is also on the guidance, unfortunately, because you mentioned normalized prices. Now, I don't - I know you don't provide guidance on prices, but could you maybe elaborate a bit where you situate normalized prices versus current prices, notably for lithium because, obviously, over the last couple of years we've seen a lot of extremes both on the up and down side. So, yes, any color here would help.

Lithium project for - resource project and upgrading project is dependent on finance ability. Most of these projects are project financed. Project financing is not available unless you have a stable forecast north of $20,000 of lithium carbonate equivalent. So at present this is far from it. There are no projects or very rare projects under development with project financing. So there will be a correction. It's very difficult to comment intelligently on the size of correction, but let me make three remarks on this. The first is corrections never come - rarely come gradually. Corrections - and then suddenly, corrections come suddenly and mostly when nobody expects them, as typically demonstrated by antimony crisis. There are external shocks possible in this anyhow, very tight structure, and that I think will happen because it always starts. The second is that when you look at benchmark, they have a long-term very steady increase, and we have built that into our assumptions of the lithium price. First a little correction and then it stays very steady and that's absolutely not going to happen. The volatility in this, it will stay with us. Every commodity industry which was in the same position, and I have a real experience on that, goes through the same initial volatility until the industry reaches a certain degree of maturity and that's far from it. So there will be a correction, and then there will be a massive correction, and then that will be again the fall-off and et cetera, et cetera. It will be high volatility. And the third one is that there is a big uncertainty when the feed in China of low quality raw materials such as lepidolite. When that use - intensive use of a lipidolite in China ends, that's a complicated question which we, of course, analyze and that is - there are different theories about that because it is a difficult material and it's an expensive material and it might be used more or less also for national strategic reasons in China.

Thank you. This is very helpful. If I may elaborate on this, because in Bitterfeld you will not produce lithium carbonate, obviously. You will produce lithium hydroxide, which is an entirely different chemical. Are you still confident that that material could command a premium versus what is currently shipped in the market? And then, could you also comment maybe on how many customers are currently qualifying your material?

Well, it's quite a number and we are not naming the number, but we are totally confident on the premium.

Okay, this is very helpful. Maybe final one from me on vanadium. Despite the IRA tax credit in Q1, which was not directly recorded in Q1 '24, and somewhat lower prices, I think the result is somewhat weaker than what I - maybe the market was expecting in vanadium. So can you comment maybe if there is some volume shortfall in Q1 that explains this?

Yes, there was no real effect from 45X in Q1. We did have shipping issues moving spent catalyst into our facilities, which caused the volume shortfall.

Okay. Will it be resolved in Q2?

Yes, they should be.

Okay, thank you. That's it for me. And congrats on the very strong results.

Thank you.

Our next question will come from Martijn den Drijver with ABN AMRO.

Yes, good morning, gentlemen. Thanks for taking my questions. My first one is going back to the battery-grade lithium hydroxide. The qualification test batches and the subsequent performance test, can you perhaps elaborate on how long that process will take? Are we talking two quarters? Three quarters? Any color would help. That's question one.

It takes a few months.

A few months. Okay, clear. And then my second question goes back to antimony. Normally, I assume that you have two quarters, three quarters of inventory to run a processing business. So, I was assuming that eventually you would have to start buying at market price, therefore, the positive impact on profitability would eventually fade. Now you're saying that that may continue going forward. Does that also imply that you found alternative sources of antimony, perhaps at advantageous prices, or what else sustains that profitability?

That's a complicated question, but can you handle it?

Yes, well, I think at higher prices, obviously, we - our margins increase. We did have some inventory as a producer, but we don't see the prices changing dramatically, and we expect our margins to be - to continue to be substantially above our historical margins.

I understand that, but you have to buy it somewhere, you have to source it somewhere, right?

That's true because if you don't source somewhere, you don't - can't produce.

Exactly. So, if you have to source at market prices, logically that profitability will not be as high as you have during the ramp-up phase?

No, I mean, what I'm saying is, of course, we source in many, many places.

What just was said is that the margins at higher price levels are higher.

Do we buy at high price?

Of course, when you buy at higher prices, you need much higher prices in order to a higher margin, but that's a tautology. I mean, I don't understand your question.

We have no advantageous sourcing of cheap antimony. We're buying at market prices.

All right. Thank you. That's clear. And then my final question is on the lithium operations in Brazil, the optimization. Why is it necessary to do optimization so shortly after the full ramp up and the decommissioning? More importantly, when will the facility go back to what we perhaps see as normal nameplate capacity?

We have a particular problem in a particular equipment, more or less in a particular section of the flowsheet and we are fixing it, and that's it.

Okay, so back to normal operations in Q2 or it may take a little bit longer?

Re-expansion of a complex facility of that type of complexity. Within the existing plant, without - it's not the expansion next door. It's within the existing plant. A reconfiguration of the whole flowsheet has, of course, its complexities and its demands. And we decided to do it that way because it's the most economical way to do it. However, there is a particular equipment is still not functioning and we are fixing it. That's it. I mean--

Yes. I think I stated in our script we are moving back towards full capacity in the second quarter. It's a recovery issue that we're confident we will solve.

Great. That's it. Thank you very much, gentlemen.

That wasn't Stefan, by the way. That was Eric.

Yes.

[Operator Instructions] And we'll move next to Krishan Agarwal with Citibank.

Hi. Thanks for taking my question. I have three if I may. The first is on the vanadium plant. Can you comment on how the ramp-up is progressing? What are the capacity utilization rates are there in the Q1 for the expansion of the vanadium? And do we expect some kind of a positive benefit from higher output going forward in Q2 and the second half?

Which vanadium plant?

Are you - lithium or vanadium?

The vanadium.

In vanadium we are in - the big vanadium project has been completed and is full production.

Yes. So this is the context where there was a comment that you haven't been able to source the spent catalyst. So I have assume that, okay, the operating rates are also lower in that context.

No, there were a few shipping issues.

It's a raw material.

It's a raw material. It's a logistics issue. But there is no - this is - it happens from time to time because of quarterly - this is a quarterly problem. It's just the volatility occurs sometimes in a quarter. It will be corrected in the second quarter.

Understand. Understand. Okay. The second question is on the Bitterfeld plant. Can you help understand the material flow as in the sense that the feed is coming from your own spodumene operation or is it the third party based for now?

The feed - are you talking about lithium?

Feed for lithium.

Yes.

Well, we take the opportunity to buy in the spot market off-grade material which is very advantageous as regard to prices, and that is reducing the material which we take from our own sources by the way of conversion agreements.

Okay. But the longer-term plant is to have full integration with your own feed?

Yes. There are this appearance of spot opportunities is the result of sort of start-up problems in other areas of the lithium market. And it's a very - those spot occurrences we, of course, want to capitalize on, and how that is being - going in the future, we don't know, but we don't care. We have flexibility here.

Yes. Understand. And then finally, I mean the guidance upgrades for 2025, obviously, you would have factored the continuing better results from antimony. How much of the weakness do you think is already into the price for the lithium business? Do we see more pricing weakness coming through with the Q2?

No. Let me again say the $500 million guidance is the result of a myriad of model runs with a variety of scenarios and those scenarios then stabilize around a certain number and then we make a conservative discount on that number, and then that's the five-year guidance. So, it's a very consolidated result of many scenario runs.

Yes. The question was more regarding the guidance for 2025.

What?

Could you repeat the question?

So, for the 2025 guidance of $170 million and more, how much of the pricing weakness you have factored for lithium business in the Q2?

We assume, as always, that current lithium prices will remain for the entire year. So, we have no projected lithium price increases in the $170 million.

Okay. That's what I wanted to know. Okay, thanks a lot.

Yes.

Our next question comes from Martin Verbeek with The Idea.

Good morning. It's Martin Verbeek from The Idea. Firstly, on the acquisition of the remaining 40% stake in Graphit Kropfmuhl, the change in other liabilities, is that a reflection of the future price for this - these shares or otherwise could you share how much that will be in future?

The change in liabilities reflects, yes, approximate purchase price, but we don't want to put a number on it right now. We're under NDA with the Alterna.

But the price is fixed because you handed over this vendor loan?

Exactly. The price is fixed. The quantity of shares that we provide is obviously to be determined.

Exactly.

We have the option to buy that for cash or for shares.

Yes.

Okay, thanks. And then secondly, concerning the antimony business and the impact, if you look at the technologies business and you can more or less work your way what engineering has done, is it then fair to assume that the change of the technologies business, excluding engineering, and that comes down to roughly a change of $70 million and a change in gross and EBITDA of $30 million. Is that fully contributable for this antimony business?

Yes, it's mainly antimony. Not to say that our engineering and graphite business in any way, shape, or form underperformed. They performed very well.

Thank you very much.

And there are no further questions at this time. Thank you everyone for joining AMG's first quarter 2025 earnings call. Good day.