IBC Advanced Alloys
Corporate Presentation November 2015
LEGAL DISCLAIMER Some statements contained in this presentation or in documents referred to in it are or maybe forwardlooking statements. Actual results may differ from those pressed in such statements, depending on a variety of factors. Any forward-looking information contained in this presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect, and accordingly, actual results may vary. Past performance of the Company cannot be relied on as a guide to future performance. This presentation does not constitute, or form part of or contain any invitation or offer to any person to underwrite, subscribe for, otherwise acquire, or dispose of any shares in IBC Advanced Alloys Corp., or advise persons to do so in any jurisdiction, nor shall it, or any part of it, form the basis or be relied on in any connection with or act as a inducement to enter into any contract or commitment therefore. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this document or on its completeness and no liability whatsoever is accepted for any loss howsoever arising from any use of this document or its contents otherwise in connection therewith.
2
ABOUT US A LEADING ADVANCED ALLOYS & PRECISION CASTINGS COMPANY
Copper Alloys Division Copper Alloy Castings and Forgings Existing $15 M year business Gross margins up to 25% New products / alloys in development
Engineered Materials Division Aluminum Beryllium Advanced Castings Proprietary casting technology Recent Lockheed Martin contract wins Substitute high cost machined parts
Photo courtesy of Lockheed Martin © 2015
High-margin cast components opportunities Sustainable competitive advantages
3
MILESTONES IBC ADVANCED ALLOYS
August 2015 – Second Lockheed Martin purchase order for F-35 EOTS September 2014 – First Lockheed Martin purchase order for F-35 EOTS
July 2015 – Successful first articles delivery February 2014 – First hard tooling K Lockheed Martin EOTS
March 2010 Engineered Materials acquisition.
September 2015 – Hard tooling K Sniper®
4
WHAT IS BERYLLIUM? UNIQUE ADVANTAGES
Beryllium (Be): Rare metal with unique characteristics. Excellent thermal conductivity; Weight by weight, stiffer than steel; Second lightest metal (after lithium); High melting point with excellent thermal conductivity.
Use as pure metal or an alloy with copper or aluminum to: Increase hardness; Dramatically reduce weight; Improve thermal conductivity.
5
LINES OF BUSINESS MANUFACTURING & R&D
Manufacturing
Research & Development
Copper Alloys
Engineered Materials
Products
Products
Beryllium Copper Chrome Copper Aluminum Bronze Specialty Copper Alloys
Beralcast®
- castable
Casting technology Engineered Materials: New alloys in development. Nuclear fuels*
*Purdue University, Texas A&M University, Massachusetts Institute of Technology
Be/Al ABX™ - castable Al/Be alloy for commercial applications.
6
COPPER ALLOYS DIVISION MARKETS
Automotive
Oil & Gas
Electronics
High End Plastics
Injection molds for wide range of parts
Large Rings Down Hole Tubing
Electrical Connectors
Directional Drilling
Industrial Motors
High performance Injection molds liners
Robotic Equipment
7
ENGINEERED MATERIALS DIVISION MARKETS
Aerospace & UAV
Defense
Manufacturing
Cast Components and sub-structural parts
Weapons
High Performance Core Components
Infrared Systems Optical Targeting
TSX-V: IB
OTCQX:
Specialized Replacement Materials Replacement for aluminum, titanium & advanced composites
8
IBC PLANT LOCATIONS A PLATFORM FOR GROWTH
FACILITY
LOCATION
AREA (m2)
AREA (sq. feet)
LEASED/ OWNED
Copper Alloys
Franklin, IN
4,800
48,800
Owned
Copper Alloys
Royersford, PA
1,500
16,000
Leased
Copper Alloys
New Madrid, MO
2,500
26,500
Owned
Engineered Materials
Wilmington, MA
5,800
63,000
Leased
9
FACILITIES & REVENUES CURRENT
COPPER ALLOYS
ENGINEERED MATERIALS
CURRENT
CURRENT
Three facilities; Operating at 70% with single shift; Currently delivers approximately 85% of overall revenues; Historical gross margins of up to 25%; $30M capacity as configured. Diversified global customer base; Sell direct and via distributors; No customer > 10% of sales.
New advanced vacuum-casting facility; Operating at 20% with single furnace; High margin business high barriers to entry; ~$10M capacity as configured single furnace; Additional high-capacity furnace will increase capacity to 5x; Room to add up to 3 furnaces; AS9100C certified (essential for aerospace).
10
FACILITIES & REVENUES OBJECTIVES & TARGETS
COPPER ALLOYS
ENGINEERED MATERIALS
TARGET
TARGET
Focus on constant incremental margin and yield improvements; Develop “value add” semi finished product mix (example – CuBe rings); Expand machining and finishing capacity; Expand international distributor network; Grow cast input billets business; Introduce new alloys; Add Indiana manufacturing capacity of 20,000 – 40,000 ft2
Add second furnace for growth; Additional growth capacity exists; Add de-waxing and machining capacity; Long-term aerospace / defense
R&D agreements Development contracts Purchase orders
Increase profile in aerospace, defense, automotive and high tech industries. New alloy commercialization
11
GROWTH DRIVERS PROVEN ADVANTAGES
ENGINEERED MATERIALS
COPPER ALLOYS
New products and alloys; Machining capacity to offer wider range of semi finished products; Expansion of distribution channels; Focus on business development; Plant and equipment upgrades.
Proprietary process for delivering proven alloy at lower cost point; New markets, applications and alloys; Acquisitions and joint ventures; Materials performance awareness and substitution opportunities.
Research & Development • Nuclear fuels; • Alloys and composite development.
12
LOCKHEED MARTIN F-35 BUILDING EXCELLENCE Most advanced fighter jet ever Flown by over ten countries Currently orders for over 3000 aircraft Estimated F-35 lifetime program cost $1.5 trillion First LRIP (LRIP 7 & 8) EOTS contract Sept 2014 First articles delivery (LRIP 7 & 8) July 2015 Second contract (LRIP 9&10) Sept 2015 Sniper® hard tooling contract Sept 2015 Lockheed Martin and global partners working together to maximize performance, value and affordability
13
THE BERALCAST® ADVANTAGE LIGHT WEIGHT, HIGH MODULUS Cheaper • Up to 50 - 80% cheaper than machined competitive material; • Significantly improved lead times over beryllium aluminum machined parts. Stiffer • 300% stiffer than aluminum. Lighter • 22% less weight than aluminum. Faster • Weeks vs. months for machined parts. High Volume • Precision cast to simple and complex geometries. • Cast to near net shape reducing expensive machining. Low CTE • Critical in certain applications with wide operating temperature ranges.
Specific Stiffness Comparison (Modulus/Density) 400 350 300 250 200 150 100 50 0
Steel
Magnesium
Titanium
Aluminum
Beralcast®
Beralcast® is an excellent material when light weight and high modulus applications are required.
14
CAST PERFORMANCE ALLOYS SIGNIFICANT ADVANTAGES OVER MACHINED PARTS
Faster delivery
Suited to high volume applications
Cost control / competitive pricing
15
NUCLEAR FUEL OPPORTUNITY PLATFORM FOR GROWTH Nuclear fuels research with Purdue University, Texas A&M University and MIT. Nuclear fuel development MOU with GNF (GE) Provisional patents filed Expected Benefits: •
Increased MW-days per ton.
•
Utility cost savings.
•
Extended fuel cycle.
•
Reduce waste.
• •
Lower core temperature and lower temperature gradient across the fuel. Enhance reactor safety.
Nuclear fuels market currently:
$25 billion Nuclear fuels market projected for 2020:
$35 billion 16
THE OPPORTUNITY FUTURE GROWTH
COPPER ALLOYS • Existing $15M business; • Copper Alloys division is cash flow positive; • Historical gross margins of up to 25%; • Introducing high margin semi-finished products; • Targeting continued growth.
ENGINEERED MATERIALS • Beryllium aluminum proven and widely used in specific aerospace applications; • IBC’s casting process provides opportunity to substitute machined parts with castings, plus new markets; • Management estimates for castings market >$200M annually; • Enormous market potential.
17
CORPORATE SUMMARY NOVEMBER 2015
Corporate Information
November 28, 2015
Inception
2007
Head Office
Vancouver
F2013 Revenues
$20.9M
F2014 Revenues
$16.9M
F2015 Revenues
$17.8M
TSX-V:IB 100 Day Average Daily Vol. 100 Day High/Low Close
OTCQX:IAALF 199.2K C$0.15 - $0.090
100 Day Average Daily Vol. 100 Day High/Low Close
29.9K U$0.063 -$0.109
18
CORPORATE SUMMARY NOVEMBER 2015
Share Structure
November 28, 2015
Shares Outstanding
98.1M
Fully Diluted*
140.6M
Market Cap
Options
C$9.81M
8,949,999
Exercise Price C$ Amount (Avg.) 0.15
8,949,999
Warrants Financing Warrants
Broker Warrants
Price C$
28-Feb-16
15,166,997
0
.18
13-Mar-16
7,500,000
1,027,289
0.24
10-Jun-17
8,000,000
1,053,500
0.18
18-Jun-17
750,000
10,500
0.18
31,416,997
2,091,289
Expiry Date
Total
19
FUTURE GROWTH COMPARABLES Company IBC Advanced Alloys Corp.*
Symbol
Shares
Share
Market Cap
Revenues
Revenue
millions
Price $
$millions
TTM $M
Multiple
TSXV: IB
80.6
0.14
11.3
20.0
0.6 x
Orbite Aluminae Inc.
TSX: ORT
320.8
0.25
80.2
-
NM
5N Plus Inc.
TSX: VNP
84.0
2.03
170.5
119.4
1.4 x
TSXV: RGX
144.2
0.45
64.91
110.2
0.6x
Globe Specialty Metals
NASDAQ: GSM
75.6
19.63
1,484.3
752.8
2.0 x
Haynes International
NASDAQ: HAYN
12.4
44.61
453.2
455.4
1.0 x
NYSE: CVU
8.5
11.23
78.9
83.0
1.2 x
Aerovironment Inc.
NASDAQ: AVAV
23.2
25.60
593.9
251.7
2.3 x
Precision Castparts
NYSE: PCP
145.1
206.69
29,991.7
1,500.0
3.5x
Alcoa IH Limited acquisition transaction value $3,014.22
1,071
3.0x
Berkshire Hathaway acquisition transaction value $32,300.00
1,500
3.9x
Comparables*
Argex Titanium Inc.
CPI Aerospace
Transaction Based Comparable Firth Rixson Ltd. Precision Castparts * April 30, 2015
20
MANAGEMENT & DIRECTORS Anthony Dutton Director, President & CEO
Major General David R. Heinz (Ret)
Alastair Neill Director
Director Former VP Sales & GM of AMR (Neo-Material Technologies)
Finance & Strategic Advisory Background
Retired US Marine Corp officer. Former PEO for F-35 JSF Program
Simon J. Anderson
Dal S. Brynelsen
Mike Jarvis
Chief Financial Officer
Director
Director
Chartered Accountant with public and private company experience as director / officer
President and CEO of Vangold Resources Ltd., Corporate Finance
Former President of Franklin Power Products and Delco Remy’s Powertrain Division
Jim Malone Vice President Nuclear Fuels, Chair, IBC Nuclear Fuels Advisory Board
Mark Wolma President of IBC Nonferrous
Rajeev Jain Vice President of Sales
Douglas Veitch Vice President of Business Development
Chris Huskamp President– IBC Engineered Materials
Former VP Nuclear Fuels for Exelon Corp.
21
Thank You Contact: IBC Advanced Alloys Ian Tootill Director of Corporate Communications [email protected] (604) 685-6263 ext. 110
LEGAL DISCLAIMER Some statements contained in this presentation or in documents referred to in it are or maybe forwardlooking statements. Actual results may differ from those pressed in such statements, depending on a variety of factors. Any forward-looking information contained in this presentation has been prepared on the basis of a number of assumptions which may prove to be incorrect, and accordingly, actual results may vary. Past performance of the Company cannot be relied on as a guide to future performance. This presentation does not constitute, or form part of or contain any invitation or offer to any person to underwrite, subscribe for, otherwise acquire, or dispose of any shares in IBC Advanced Alloys Corp., or advise persons to do so in any jurisdiction, nor shall it, or any part of it, form the basis or be relied on in any connection with or act as a inducement to enter into any contract or commitment therefore. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this document or on its completeness and no liability whatsoever is accepted for any loss howsoever arising from any use of this document or its contents otherwise in connection therewith.
2
ABOUT US A LEADING ADVANCED ALLOYS & PRECISION CASTINGS COMPANY
Copper Alloys Division Copper Alloy Castings and Forgings Existing $15 M year business Gross margins up to 25% New products / alloys in development
Engineered Materials Division Aluminum Beryllium Advanced Castings Proprietary casting technology Recent Lockheed Martin contract wins Substitute high cost machined parts
Photo courtesy of Lockheed Martin © 2015
High-margin cast components opportunities Sustainable competitive advantages
3
MILESTONES IBC ADVANCED ALLOYS
August 2015 – Second Lockheed Martin purchase order for F-35 EOTS September 2014 – First Lockheed Martin purchase order for F-35 EOTS
July 2015 – Successful first articles delivery February 2014 – First hard tooling K Lockheed Martin EOTS
March 2010 Engineered Materials acquisition.
September 2015 – Hard tooling K Sniper®
4
WHAT IS BERYLLIUM? UNIQUE ADVANTAGES
Beryllium (Be): Rare metal with unique characteristics. Excellent thermal conductivity; Weight by weight, stiffer than steel; Second lightest metal (after lithium); High melting point with excellent thermal conductivity.
Use as pure metal or an alloy with copper or aluminum to: Increase hardness; Dramatically reduce weight; Improve thermal conductivity.
5
LINES OF BUSINESS MANUFACTURING & R&D
Manufacturing
Research & Development
Copper Alloys
Engineered Materials
Products
Products
Beryllium Copper Chrome Copper Aluminum Bronze Specialty Copper Alloys
Beralcast®
- castable
Casting technology Engineered Materials: New alloys in development. Nuclear fuels*
*Purdue University, Texas A&M University, Massachusetts Institute of Technology
Be/Al ABX™ - castable Al/Be alloy for commercial applications.
6
COPPER ALLOYS DIVISION MARKETS
Automotive
Oil & Gas
Electronics
High End Plastics
Injection molds for wide range of parts
Large Rings Down Hole Tubing
Electrical Connectors
Directional Drilling
Industrial Motors
High performance Injection molds liners
Robotic Equipment
7
ENGINEERED MATERIALS DIVISION MARKETS
Aerospace & UAV
Defense
Manufacturing
Cast Components and sub-structural parts
Weapons
High Performance Core Components
Infrared Systems Optical Targeting
TSX-V: IB
OTCQX:
Specialized Replacement Materials Replacement for aluminum, titanium & advanced composites
8
IBC PLANT LOCATIONS A PLATFORM FOR GROWTH
FACILITY
LOCATION
AREA (m2)
AREA (sq. feet)
LEASED/ OWNED
Copper Alloys
Franklin, IN
4,800
48,800
Owned
Copper Alloys
Royersford, PA
1,500
16,000
Leased
Copper Alloys
New Madrid, MO
2,500
26,500
Owned
Engineered Materials
Wilmington, MA
5,800
63,000
Leased
9
FACILITIES & REVENUES CURRENT
COPPER ALLOYS
ENGINEERED MATERIALS
CURRENT
CURRENT
Three facilities; Operating at 70% with single shift; Currently delivers approximately 85% of overall revenues; Historical gross margins of up to 25%; $30M capacity as configured. Diversified global customer base; Sell direct and via distributors; No customer > 10% of sales.
New advanced vacuum-casting facility; Operating at 20% with single furnace; High margin business high barriers to entry; ~$10M capacity as configured single furnace; Additional high-capacity furnace will increase capacity to 5x; Room to add up to 3 furnaces; AS9100C certified (essential for aerospace).
10
FACILITIES & REVENUES OBJECTIVES & TARGETS
COPPER ALLOYS
ENGINEERED MATERIALS
TARGET
TARGET
Focus on constant incremental margin and yield improvements; Develop “value add” semi finished product mix (example – CuBe rings); Expand machining and finishing capacity; Expand international distributor network; Grow cast input billets business; Introduce new alloys; Add Indiana manufacturing capacity of 20,000 – 40,000 ft2
Add second furnace for growth; Additional growth capacity exists; Add de-waxing and machining capacity; Long-term aerospace / defense
R&D agreements Development contracts Purchase orders
Increase profile in aerospace, defense, automotive and high tech industries. New alloy commercialization
11
GROWTH DRIVERS PROVEN ADVANTAGES
ENGINEERED MATERIALS
COPPER ALLOYS
New products and alloys; Machining capacity to offer wider range of semi finished products; Expansion of distribution channels; Focus on business development; Plant and equipment upgrades.
Proprietary process for delivering proven alloy at lower cost point; New markets, applications and alloys; Acquisitions and joint ventures; Materials performance awareness and substitution opportunities.
Research & Development • Nuclear fuels; • Alloys and composite development.
12
LOCKHEED MARTIN F-35 BUILDING EXCELLENCE Most advanced fighter jet ever Flown by over ten countries Currently orders for over 3000 aircraft Estimated F-35 lifetime program cost $1.5 trillion First LRIP (LRIP 7 & 8) EOTS contract Sept 2014 First articles delivery (LRIP 7 & 8) July 2015 Second contract (LRIP 9&10) Sept 2015 Sniper® hard tooling contract Sept 2015 Lockheed Martin and global partners working together to maximize performance, value and affordability
13
THE BERALCAST® ADVANTAGE LIGHT WEIGHT, HIGH MODULUS Cheaper • Up to 50 - 80% cheaper than machined competitive material; • Significantly improved lead times over beryllium aluminum machined parts. Stiffer • 300% stiffer than aluminum. Lighter • 22% less weight than aluminum. Faster • Weeks vs. months for machined parts. High Volume • Precision cast to simple and complex geometries. • Cast to near net shape reducing expensive machining. Low CTE • Critical in certain applications with wide operating temperature ranges.
Specific Stiffness Comparison (Modulus/Density) 400 350 300 250 200 150 100 50 0
Steel
Magnesium
Titanium
Aluminum
Beralcast®
Beralcast® is an excellent material when light weight and high modulus applications are required.
14
CAST PERFORMANCE ALLOYS SIGNIFICANT ADVANTAGES OVER MACHINED PARTS
Faster delivery
Suited to high volume applications
Cost control / competitive pricing
15
NUCLEAR FUEL OPPORTUNITY PLATFORM FOR GROWTH Nuclear fuels research with Purdue University, Texas A&M University and MIT. Nuclear fuel development MOU with GNF (GE) Provisional patents filed Expected Benefits: •
Increased MW-days per ton.
•
Utility cost savings.
•
Extended fuel cycle.
•
Reduce waste.
• •
Lower core temperature and lower temperature gradient across the fuel. Enhance reactor safety.
Nuclear fuels market currently:
$25 billion Nuclear fuels market projected for 2020:
$35 billion 16
THE OPPORTUNITY FUTURE GROWTH
COPPER ALLOYS • Existing $15M business; • Copper Alloys division is cash flow positive; • Historical gross margins of up to 25%; • Introducing high margin semi-finished products; • Targeting continued growth.
ENGINEERED MATERIALS • Beryllium aluminum proven and widely used in specific aerospace applications; • IBC’s casting process provides opportunity to substitute machined parts with castings, plus new markets; • Management estimates for castings market >$200M annually; • Enormous market potential.
17
CORPORATE SUMMARY NOVEMBER 2015
Corporate Information
November 28, 2015
Inception
2007
Head Office
Vancouver
F2013 Revenues
$20.9M
F2014 Revenues
$16.9M
F2015 Revenues
$17.8M
TSX-V:IB 100 Day Average Daily Vol. 100 Day High/Low Close
OTCQX:IAALF 199.2K C$0.15 - $0.090
100 Day Average Daily Vol. 100 Day High/Low Close
29.9K U$0.063 -$0.109
18
CORPORATE SUMMARY NOVEMBER 2015
Share Structure
November 28, 2015
Shares Outstanding
98.1M
Fully Diluted*
140.6M
Market Cap
Options
C$9.81M
8,949,999
Exercise Price C$ Amount (Avg.) 0.15
8,949,999
Warrants Financing Warrants
Broker Warrants
Price C$
28-Feb-16
15,166,997
0
.18
13-Mar-16
7,500,000
1,027,289
0.24
10-Jun-17
8,000,000
1,053,500
0.18
18-Jun-17
750,000
10,500
0.18
31,416,997
2,091,289
Expiry Date
Total
19
FUTURE GROWTH COMPARABLES Company IBC Advanced Alloys Corp.*
Symbol
Shares
Share
Market Cap
Revenues
Revenue
millions
Price $
$millions
TTM $M
Multiple
TSXV: IB
80.6
0.14
11.3
20.0
0.6 x
Orbite Aluminae Inc.
TSX: ORT
320.8
0.25
80.2
-
NM
5N Plus Inc.
TSX: VNP
84.0
2.03
170.5
119.4
1.4 x
TSXV: RGX
144.2
0.45
64.91
110.2
0.6x
Globe Specialty Metals
NASDAQ: GSM
75.6
19.63
1,484.3
752.8
2.0 x
Haynes International
NASDAQ: HAYN
12.4
44.61
453.2
455.4
1.0 x
NYSE: CVU
8.5
11.23
78.9
83.0
1.2 x
Aerovironment Inc.
NASDAQ: AVAV
23.2
25.60
593.9
251.7
2.3 x
Precision Castparts
NYSE: PCP
145.1
206.69
29,991.7
1,500.0
3.5x
Alcoa IH Limited acquisition transaction value $3,014.22
1,071
3.0x
Berkshire Hathaway acquisition transaction value $32,300.00
1,500
3.9x
Comparables*
Argex Titanium Inc.
CPI Aerospace
Transaction Based Comparable Firth Rixson Ltd. Precision Castparts * April 30, 2015
20
MANAGEMENT & DIRECTORS Anthony Dutton Director, President & CEO
Major General David R. Heinz (Ret)
Alastair Neill Director
Director Former VP Sales & GM of AMR (Neo-Material Technologies)
Finance & Strategic Advisory Background
Retired US Marine Corp officer. Former PEO for F-35 JSF Program
Simon J. Anderson
Dal S. Brynelsen
Mike Jarvis
Chief Financial Officer
Director
Director
Chartered Accountant with public and private company experience as director / officer
President and CEO of Vangold Resources Ltd., Corporate Finance
Former President of Franklin Power Products and Delco Remy’s Powertrain Division
Jim Malone Vice President Nuclear Fuels, Chair, IBC Nuclear Fuels Advisory Board
Mark Wolma President of IBC Nonferrous
Rajeev Jain Vice President of Sales
Douglas Veitch Vice President of Business Development
Chris Huskamp President– IBC Engineered Materials
Former VP Nuclear Fuels for Exelon Corp.
21
Thank You Contact: IBC Advanced Alloys Ian Tootill Director of Corporate Communications [email protected] (604) 685-6263 ext. 110
