MAGONTEC LIMITED — Investor Presentation 2024

Mar 12, 2024

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MAGONTEC Limited ABN 51 010 441 666

Registered office Suite 1.03, 46A Macleay Street Potts Point, Sydney NSW 2011 T: +61 2 8084 7813

13 March 2024

Company Announcements Office Australian Securities Exchange Limited 20 Bridge Street Sydney, NSW, 2000

FULL YEAR 2023 RESULTS INVESTOR PRESENTATION MAGONTEC LIMITED

The attached deck is released prior to meetings between the Company and Investors.

ENDS

Nicholas Andrews, Executive Chairman and Chief Executive Officer of Magontec Limited, has authorised the release of this document to the market on 13 March 2024

Investor enquiries

Media enquiries

Kirsten Thomson Louise Watson Symbol Strategic Communications Symbol Strategic Communications E: magontec@symbolstrategic.com.au E: magontec@symbolstrategic.com.au

Magontec Limited ASX:MGL

Full Year 2023 Results Investor Presentation

March 2024

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Disclaimer

This Presentation has been prepared by Magontec Limited (ABN 30 147 131 977) (Magontec or the Company). This Presentation contains summary information about Magontec and its activities current as at the date of this Presentation. The information in this Presentation is of a general background nature and does not purport to be complete or to comprise all the information that a shareholder or potential investor in Magontec may require in order to determine whether to deal in Magontec shares. It should be read in conjunction with Magontec’s other periodic and continuous disclosure announcements lodged with the Australian Securities Exchange (ASX), which are available at www.asx.com.au. This document is not a prospectus or a product disclosure statement under the Corporations Act (Cth) 2001 (Corporations Act) and has not been lodged with the Australian Securities and Investments Commission (ASIC).

Not investment or financial product advice

This Presentation is for information purposes only and is not financial product or investment advice or a recommendation to acquire Magontec shares and has been prepared without taking into account the objectives, financial situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial situation and needs and seek financial, legal and taxation advice appropriate to their jurisdiction. Magontec is not licensed to provide financial product advice in respect of Magontec shares. Cooling off rights do not apply to the acquisition of Magontec shares.

Financial data

All dollar values are in Australian dollars (A$) unless stated otherwise and financial data is presented within the financial year end of 31 December unless stated otherwise. Any pro forma historical financial information included in this Presentation does not purport to be in compliance with Article 11 of Regulation S-X of the rules and regulations of the US Securities and Exchange Commission.

Past performance

Past performance information given in this Presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.

Future performance

This Presentation contains certain “forward-looking statements”. The words “expect”, “should”, “could”, “may”, “will, “predict”, “plan”, “scenario”, “forecasts”, “anticipates”, “outlook” and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements. Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. Forward-looking statements, opinions and estimates provided in this Presentation are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Such forward-looking statements including projections, guidance on future earnings and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. There can be no assurance that actual outcomes will not differ materially from these forward-looking statements, and there are risks associated with the Company and the industry (including those set out below) which may affect the accuracy of the forward-looking statements. The Company does not undertake any obligation to release publicly any revisions to any forward looking statement to reflect events or circumstances after the date of this presentation, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

Investment Risk and other risks

Investment in Magontec shares is subject to investment and other known and unknown risks, some of which are beyond the control of Magontec Limited, including risk factors associated with the industry in which Magontec operates and risks specific to Magontec, such as: construction, development and operational risk associated with the Golmud Plant, fluctuations in magnesium alloy prices and exchange rates, risks associated with operating in China, financing risks, market price and demand risk and other risks generally relating to security investments.

Not an offer

This document may not be released or distributed in the United States. This Presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States. Securities in the Company have not been, and will not be, registered under the U.S. Securities Act of 1933 or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States unless the securities are registered under the Securities Act or pursuant to an exemption from, or in a transaction not subject to, registration.

To the maximum extent permitted by law, Magontec and its respective advisers and affiliates, directors, officers and employees:

Make no representation or warranty, express or implied, as to the accuracy, reliability or completeness of information in the presentation; and

Exclude and disclaim all liability, for any expenses, losses, damages or costs incurred by you as a result of your participation in the proposed offering and the information in this presentation being inaccurate or incomplete in any way for any reason, whether by negligence of otherwise.

2

Overview

Dashboard for 2023

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REVENUE EBITDA UNDERLYING NPAT EPS
$102.4 mil $5.5 mil $1.7 mil 0.6 cents
CASH FLOW FROM FINAL DIVIDEND /
NET CASH/(DEBT)
GROSS PROFIT UNDERLYING SHARE
MARGIN OPERATIONS $8.7 m (UNFRANKED)
18.8% $6.1 mil CASH ON HAND 2H23 0.6 cents
$13.1 m
2H22 0.6 cents
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Highlights

• Net cash of $8.7m at 31 December 2023 compared to $2.0m for the previous corresponding period. No net debt

• Operating cashflow of $11.4 million for the year, compared to $10.7 million in the pcp – lower working capital requirement.

• Board declares 2H23 final dividend (unfranked) of 0.6 cents per share, in line with 2H22.

• EBITDA of $5.5m and Underlying NPAT* of $1.7m

• Net Tangible Assets of 67.8 cents per share at 31 December 2023

*Underlying NPAT = reported net profit after tax excluding unrealised FX gains and losses

3

**Cashflow from underlying operations = reported operating cashflow less working capital movements, interest and income tax payments

FY 2023 Full Year Result

• Global Magnesium prices declined in 2023. High pure Mg inventories in China Fugu region reflecting softer global markets

• Strong Magontec market positions in each product

• Refurbishment of Xi’an Mg anode factory and Romanian metal factory during the year

• Global heat pump and Mg anode strong long-term growth businesses

Underlying Net Profit After Tax * ($M )

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$17.8m
$4.4m
$1.7m
-$0.3m
-$1.3m
2019 2020 2021 2022 2023
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*Underlying NPAT = reported net profit after tax excluding unrealised FX gains and losses

Gross Profit ($M) and GP margin (%)

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24.3%
18.8%
16.7%
12.8% $38.6
10.0%
$19.2 $19.2
$13.1 $12.2
2019 2020 2021 2022 2023
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Reported EBITDA and EBIT ($M)

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$27.3
$24.5
$10.1
$7.3
$5.5
$2.7 $3.5 $2.5
$0.4
-$0.5
2019 2020 2021 2022 2023
4
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FY 2023 Full Year Result

• Net cash position of $8.7m as at 31 December 2023.

• No net debt.

• Gearing ratio** of (18.2%)

• Continuation of dividend through 2023

• Higher capex in 2023 to fund MAX Anodes Factory upgrade and MAR factory roof repairs

Underlying Operating Cashflow($M)*

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$28.0
$10.5
$6.1
$3.9
$2.9
2019 2020 2021 2022 2023
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• Operating cashflow excluding working capital movements, interest and tax payments **Gearing = net debt / (net debt + equity)

Net Debt ($M) and Gearing (%)**

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33.0% 28.8%
$15.3
16.0%
$11.7
$6.9
-$2.0 -$8.7
(3.6%)
(18.2%)
2019 2020 2021 2022 2023
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Capital Expenditure & Depreciation ($M)

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Capital expenditure Depreciation
$4.0
$3.2 $3.1 $2.8 $2.8 $3.0
$1.9 $1.9
$0.7 $0.9
2019 2020 2021 2022 2023
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Prices for Mg inputs (coal, FeSi and dolomite) down Vs PCP.

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$55,000 1. Magnesium & Aluminium
$50,000 (1 Jan 2022 - 7 Feb 2024)
$45,000
Mg 99.9% China RMB
$40,000
Al Ingot 99.7% China RMB
$35,000
$30,000
$25,000
$20,000
$15,000
3. PRC Coal & Mg prices
¥1,400 ¥45,000
(1 Jan 2022 - 7 February 2024)
¥1,300 ¥40,000
Coal/t
¥1,200 Mg 99.9% China RMB
¥35,000
¥1,100
¥30,000
¥1,000
¥25,000
¥900
¥800 ¥20,000
¥700 ¥15,000
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$55,000 2. Magnesium & Ferro Silicon (RHS) ¥13,000
(1 Jan 2022 - 7 Feb 2024)
$50,000 ¥12,000
$45,000 ¥11,000
Mg 99.9% China RMB
$40,000 FeSi 75% Ch RMB ¥10,000
$35,000 ¥9,000
$30,000 ¥8,000
$25,000 ¥7,000
$20,000 ¥6,000
4. Dolomite monthly price (Jan 2022 - Jan 2024)
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400
350
300
250
200
150
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FY 2023 Full Year Result - Metals Metal GP lower during the year following lower pure Mg prices

Global metals gross profit (A$M)

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25.0 25.0%
19.9%
20.0 20.0%
15.0 15.0%
8.1%
7.7%
10.0 10.0%
6.3%
5.0 5.0%
- 0.0%
2020 2021 2022 2023
Metal Gross Profit GP Margin (%)
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Global Mg alloy and specialist metals sales volumes (metric tonnes)

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2023
2022
2021
2020
-
5,000 10,000 15,000 20,000 25,000
Metal Volumes
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Softer demand leading to lower sales volumes

Production costs and labour issues impacting FY 2023

Energy costs moderating and renewable component rising

7

Primary Mg alloy manufacturing: At Golmud in Qinghai province PRC Manufactures Mg alloys from pure Mg and other alloying element raw materials

Magontec plant adjacent to QSLM electrolytic Mg smelter Installed capacity 60,000 mtpa

~ 90% renewable Customers in the QSLM anticipates supply of energy from installed automotive and other Mg pure Mg in late 2024 wind, hydro and solar alloy die cast sectors

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Magontec Limited: ASX Code: MGL

Our businesses

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Metals Anodes
Primary & recycled Magnesium and
magnesium alloys electronic anodes
Pure Mg & Scrap Electronic Mg alloy &
other alloying returns components components
elements
Mg alloy Cathodic
ingots Corrosion
Generic Protection
CCP
Specialist
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Mg alloy recycling: At Bottrop (Germany) and Santana (Romania) An essential part of the European and North American die casting industry

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Recycling adds
Mg is 100% Installed capacity Europe’s largest
recyclable just 0.59 kg CO2 24k mtpa Mg recycler
equivalent/kg of Mg
Magontec Customer
Mg alloy recycling Mg Die cast part manufacturer
process
Automotive Power
tools
Steering wheel
Cross beam
Seat Frame Medical
40-70%
Door frame devices
Recycled
Magnesium Front end
Scrap
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*German Aerospace Institute of Vehicle Concepts survey on CO2 emissions from magnesium smelters around the World

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FY 2023 Full Year Result – CCP / anodes GP Margin resilient in the face of lower volumes

Global CCP gross profit (A$M)

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20.0 31.7% 32.5% 35.0%
30.6%
18.0
26.1% 30.0%
16.0
14.0 25.0%
12.0
20.0%
10.0
15.0%
8.0
6.0 10.0%
4.0
5.0%
2.0
- 0.0%
2020 2021 2022 2023
Anode Gross Profit GP Margin (%)
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Global magnesium anode sales volumes (metric tonnes)

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2023
2022
2021
2020
-
1,000 2,000 3,000 4,000
Anode volumes
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Strong market shares maintained in China, Europe & North America

Steady capex driving cost efficiencies and competitiveness

Flexible global production base and price makes Magontec #1

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Cathodic Corrosion Protection (CCP)

Every water tank in every house requires corrosion protection

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New
Buildings
20%
CCP
80%
Replacement
Magnesium Electronic anodes
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Industry drivers Urbanisation (water heater installation) 80% replacement (5 to 10 years)

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Climate change Switch from oil/gas to electric heat pump Accelerated replacement of installed appliances

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Powered anodes a growth market European Hydronic (water) Heat Pump Installations up to 400kW (Total Market)

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1,600,000
The market for Magontec's powered anodes is growing quickly, driven
1,400,000
by government incentives and the climate emergency.
1,200,000
+380% in the 11 years to 2023
1,000,000
800,000
600,000
400,000
200,000
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
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Global market for powered anodes is growing quickly

Changing government incentives have impacted powered anode volumes in 2023

Emphasis on home heating climate issues to promote future growth

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Magontec Qinghai magnesium alloy cast house

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Revenue and profit Currently operating Cast house impact
Delayed SOP
opportunity at low levels
2023 Target
Mg production mtpa 5k 56k
Revenue A$ ~$25m $200m+
Cast house
Contribution Loss Profit
Industry CO [2] output High Low
SOP Timetable
Production restart target 2H 2024
Initial volumes ~1k mt/month
Full production 2+ years
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• assumes pure magnesium price of A$4,000 per tonne

Magontec Qinghai will use the lowest CO2 Mg ever produced*

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Qinghai 35
Future Present
30
Includes credits for
25 use of waste gas
20
15
Includes credits
for by-products
10
5
0
Golmud, China 2020
Qinghai 2020
Electrolysis Pidgeon process
eq / kg Mg
2
Kg CO
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*German Aerospace Institute of Vehicle Concepts survey on CO2 emissions from magnesium smelters around the World

FY 2023 Full Year Result – Key financial highlights Equity, Borrowings, Cashflow

Equity, Borrowings, Cashflow
	12 months to	12 months to
(AUD ‘000)	31 December 2023	31 December 2022
Equity
EBITDA	5,470	27,263	(79.9%)
NPAT excluding unrealised FX	1,746	17,818	(90.2%)
Reported Net Profit After Tax	466	16,515	(97.2%)
Earnings per share (cents)	0.6	21.5
Dividend declared per share (cents) – unfranked	1.2	1.2
Return on Equity (%)	0.8%	35.7%
Net tangible assets per share (cents)	67.8	67.9	(0.1%)
Borrowings
Net debt/(net cash)	(8,717)	(1,964)	343.9%
Net debt to net debt + equity (%)	(18.2%)	(3.6%)
Cashflow
Cash from Underlying Operations**	6,145	28,030	(78.1%)
Reported Operating Cashflow	11,396	10,746	6.0%

FY23 Total Dividend of 1.2 cents per share (unfranked) despite lower EPS

Net cash position improved to $8.7 million at 31 December 2023

Net tangible assets of 67.8 cents per share at 31 December 2023

** Operating cashflow excluding working capital movements, interest and tax payments

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Magontec Limited Market Information

ASX Code: MGL Total Per Share Ordinary shares on issue 78,515,474 Book value of net assets $56.6 million 72.1 cents/share – 31 December 2023 1 Market capitalisation $29.8 million 38.0 cents/share Net debt/(cash) – 31 December 2023 ($8.7 million) Enterprise value $21.1 million 2 LTM EBITDA to 31 December 2023 $5.5 million 2 LTM Reported NPAT to 31 Dec 2023 $0.5 million 0.6 cents/share Performance rights on issue 6,146,254 31 December 2023

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Shareholder Structure 31 December 2023
42.0%, Other
28.9%, QSLM
19.2%, Allan
Gray
9.9%, Directors,
Management &
Associates
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1 Based on share price of $0.38 as at 23 February 2024 (close) 2 LTM = Last 12 Months

17

Thank You

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MAGONTEC

Head Office, Sydney Suite 1.03 46a Macleay St Potts Point Sydney NSW 2011 AUSTRALIA

Tel +61 2 8084 7813 Fax +61 2 9252 8960 corporate@magontec.com www.magontec.com

MAGONTEC GmbH

Industriestraße 61 46240 Bottrop Germany

Tel +49 (0) 20 41 / 99 07-0 Fax +49 (0) 20 41 / 99 07 99 europe@magontec.com www.magontec.com

MAGONTEC Xian Co., Ltd

No. 40, Feng Cheng 3 Road, Xian Economic and Development Zone Xian, China, 710021

Tel. +86 29 / 86 52 68 78 Fax +86 29 / 86 52 37 22 china@magontec.com www.magontec.com

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18

Magontec Limited ASX:MGL

Full Year 2023 Results Investor Presentation

March 2024

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Appendix - FY 2023 Full Year Result Summary Income statement

Income statement
		12 months to	12 months to
(AUD ‘000)		31 December 23	31 December 22
Revenue		102,357	158,600	(35.5%)
Cost of Sales		(83,133)	(120,005)	(30.7%)
Gross Profit		19,224	38,595	(50.2%)
Gross Profit margin (%)		18.8%	24.3%
Other income		2,682	1,450	85.0%
Impairment – Inventory, fixed assets, doubtful debts		(1,471)	(25)
Other operating expenses*		(14,965)	(12,757)	17.3%
EBITDA		5,470	27,263	(79.9%)
Depreciation and amortization		(2,990)	(2,776)	7.7%
EBIT		2,480	24,487	(89.9%)
Interest		(495)	(650)	(23.8%)
Tax		(1,519)	(7,322)	(79.3%)
Reported Net Profit After Tax		466	16,515	(97.2%)
Gross margin decline to 18.8%	Revenue decline driven by lower pure		Higher overheads driven by one-off
impacted by Metal Business	Mg prices and volumes		corporate and travel costs (post covid).
			Ongoing focus on cost control in 2024

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• In 2023, Other operating expenses included write back of $2.3m of D&A contained in Cost of Sales (2022: D&A $2.2m) ** Operating cashflow excluding working capital movements, interest and tax payments

Appendix - FY 2023 Full Year Result Reconciliation of significant items in earnings

Appendix - FY 2023 Full Year Result Reconciliation of significant items in earnings
(AUD ‘000)	12 months to 31-Dec-23	12 months to 31-Dec-22
Reported Net Profit Before Tax, unrealised FX & Significant Items	5,940	25,434
Significant items before tax
Less write-down of inventory to net realisable value	(1,251)	-
Less non-cash equity writeback / (expense)	(555)	(253)
Less MAQ depreciation (non-cash)	(918)	(915)
Less MAQ Primary Mg Alloy EBITDA profit/ (loss)	49	443
Add insurance proceeds and other one off compensation received	-	430
Reported Net Profit Before Tax excl. unrealised FX	3,265	25,139
Less tax expense	(1,519)	(7,322)
Reported Net Profit After Tax excl. unrealised FX (underlying NPAT)	1,746	17,818
Add/Less unrealised FX gains / (losses)	(1,280)	(1,303)
Reported Net Profit After Tax	466	16,515

2023 NPAT excluding unrealised FX of $1.7 million

2023 MAQ EBITDA losses and noncash depreciation costs continued to reduce profitability

2023 included $1.25m write down of inventory to net realisable value

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Appendix Full Year 2023 Result by Region Segment P&L

				12 months to
(AUD ‘000)	EUR	PRC	Head office	31 December 2023
Gross Profit	16,018	3,206	-	19,224
Other income	1,777	902	3	2,682
Operating expenses	(12,183)	(3,895)	(2,618)	(18,696)
Add back D&A in Cost of Sales	1,098	1,162	-	2,260
EBITDA	6,710	1,375	(2,615)	5,470
Depreciation and amortization	(1,779)	(1,211)	-	(2,990)
EBIT	4,931	163	(2,615)	2,480
Interest	(319)	(176)	-	(495)
Tax	(1,506)	(13)	-	(1,519)
Reported Net Profit After Tax	3,106	(25)	(2,615)	466

EUR segment key driver of Group profitability in 2023 in more difficult macro environment

PRC close to break even despite anode factory shutdown for upgrade works

Operating expenses in 2023 in EUR included $1.3m inventory write down to NRV

22

Appendix Full Year 2022 Result by Region Segment P&L

				12 months to
(AUD ‘000)	EUR	PRC	Head office	31 December 2022
Gross Profit	34,298	4,296	-	38,595
Other income	1,197	252	-	1,450
Operating expenses	(9,148)	(3,453)	(2,351)	(14,952)
Add back D&A in Cost of Sales	1,080	1,091	-	2,171
EBITDA	27,428	2,186	(2,351)	27,263
Depreciation and amortization	(1,602)	(1,147)	(27)	(2,776)
EBIT	25,825	1,040	(2,378)	24,487
Interest	(294)	(356)	(1)	(650)
Tax	(7,365)	44	-	(7,322)
Reported Net Profit After Tax	18,167	728	(2,379)	16,515
EUR segment underpinned 2022	PRC business profitable, but impacted		Head office costs $2.4m in 2022
Group result	by Xi’an lockdown

23