AMG achieves record year despite challenging fourth quarter

Market Wire, March, 2009

Key Highlights

* Revenue increased 8% in the fourth quarter 2008 compared to the fourth quarter 2007; full year revenue increased 31% to $1,517.9 million

* EBITDA[1] decreased 73% in the fourth quarter 2008 compared to the fourth quarter 2007; full year EBITDA increased 55% to $185.3 million

* EPS on a fully diluted basis decreased to a loss of ($1.96) compared to the fourth quarter 2007 of $0.66; full year EPS, excluding non-recurring charges, increased to $2.00

* Advanced Materials' fourth quarter revenue decreased 16% compared to the fourth quarter of 2007; EBITDA decreased to ($13.3) million after the $20.5 million inventory write down

* Engineering Systems' fourth quarter revenue improved by 2% and EBITDA decreased by 18% compared to the fourth quarter of 2007

* Timminco's fourth quarter revenue increased by 60% compared to the fourth quarter 2007 and EBITDA increased to $4.7 million in the fourth quarter of 2008

* Graphit Kropfmühl contributed $26.9 million to revenue and $0.6 million to EBITDA during the fourth quarter 2008

* As of 31 December 2008 cash on hand of $143.5 million, net debt of $88.6 million; $167.1 million full year 2008 free cash flow [2]

[1] EBITDA is defined as earnings before interest, tax, depreciation and amortization and excludes nonrecurring items. EBITDA does not exclude inventory valuation write downs.

[2] Free cash flow is defined as EBITDA less change in working capital and maintenance capital expenditures

Amsterdam, 18 March 2009 (Regulated Information) --- AMG Advanced Metallurgical Group N.V. ("AMG", EURONEXT AMSTERDAM: "AMG") reported fourth quarter revenue increased 8% to $341.2 million in the quarter ended 31 December 2008, from $316.9 million in the fourth quarter 2007.

Net loss attributable to shareholders for the fourth quarter 2008 was ($54.1) million, or ($1.96) per fully diluted share. Excluding the non-recurring asset impairment charges due largely to a $46.0 million write down in AMG's investment in Graphit Kropfmühl AG, ("GK") its 79.5% owned subsidiary, net income attributable to shareholders for the fourth quarter 2008 was ($32.2) million, or ($1.17) per fully diluted share. Adjusted net income was $18.2 million or $0.66 per fully diluted share in the fourth quarter 2007. EBITDA decreased 73% to $8.1 million in the fourth quarter 2008 compared with $30.5 million in the fourth quarter 2007.

Full year 2008 revenue increased 31% to $1,517.9 million, from $1,155.7 million in 2007. Net income attributable to shareholders for the full year 2008 was $14.5 million, or $0.53 per fully diluted share. Excluding the non-recurring asset impairment expenses at AMG's 50.7% (50.3% as of December 31, 2008) owned subsidiary, Timminco Limited ("Timminco"), and the non-recurring write down in AMG's investment in Graphit Kropfmühl, net income attributable to shareholders for the full year 2008 was $55.0 million, or $2.00 per fully diluted share. Net income attributable to shareholders was $11.7 million or $0.43 per fully diluted share in 2007. EBITDA increased 55% to $185.3 million in 2008 compared with $119.4 million in 2007.

Dr. Heinz Schimmelbusch, Chairman of the Management Board and CEO, commented: "2008 was a year of success and challenges. AMG achieved record results in revenues and EBITDA. The first three quarters were characterized by strong growth across all segments of our business. Advanced Materials, Engineering Systems, Timminco and Graphit Kropfmühl increased revenues and earnings, driven by the solar, energy and fuel efficiency markets. We made significant investments in our tantalum mine and associated hydroelectric power plant and Timminco's solar grade silicon, to expand capacity and we acquired 79.5% of GK to increase our position in silicon metal. During the fourth quarter, however, the global economic crisis significantly affected revenues and earnings, due to substantial declines in specialty metals prices and volumes. The economic environment has continued to deteriorate in the new year. While we are confident in our long term business strategy, current conditions require us to move quickly to reduce costs, adjust capacity, decrease working capital and conserve cash. 2009 will be a very challenging year, one of repositioning to capitalize on long term value creation when the current economic cycle ends."

Key Figures

In 000's US
Dollar
               Q4 '08     Q4 '07 Change       FY '08        FY '07 Change

Revenue      $341,230   $316,925     8%   $1,517,944    $1,155,659    31%
Gross profit   44,466     53,664  (17%)      298,279       201,430    48%
Gross margin    13.0%      16.9%               19.7%         17.4%

Operating    (48,734)     14,543 (435%)       75,219        84,169  (11%)
income
Operating     (14.3%)       4.6%                5.0%          7.3%
margin

Net income   (54,096)     18,177    N/A       14,453        11,704    24%
(loss)
attributable
to
shareholders

EPS- Fully    ($1.96)       0.66                0.53          0.43
diluted
Adjusted      ($1.17)                           2.00
EPS-Fully                   0.66                              1.71
diluted [1]

EBIT [1]        (474)     25,401    N/A      145,786       100,706    45%
EBITDA [1]      8,141     30,485  (73%)      185,284       119,369    55%
[2]
EBITDA           2.4%       9.6%               12.2%         10.3%
Margin