Neo Performance Materials (NEO) investor relations material

Industry and geopolitical context

• Rare earth supply chains face disruption due to recent Chinese export restrictions, raising concerns for US and European manufacturers reliant on permanent magnets.

• The company was highlighted at the G7 summit as a critical supplier for secure supply chains, with its magnets showcased by EU and Canadian leaders.

• Global demand for permanent magnets is rising, especially outside China, with a significant supply-demand gap projected for 2025.

• Governments are enacting policies and providing funding to localize and secure critical materials supply chains, such as the EU's Critical Raw Materials Act and US Department of Defense investments.

• The company is one of the few globally integrated rare earth magnet producers outside Asia, with a broad manufacturing footprint.

Business model and operations

• Operates three main business units: chemicals and oxides, MagnaQuench (permanent magnets), and rare metals, serving diverse end markets.

• Not a mining company; sources ore from mines, processes it into oxides, and produces value-added products for automotive, electronics, and water treatment.

• Supplies critical materials like hafnium and gallium, with unique recycling capabilities in Europe and North America.

• Maintains strong customer relationships across automotive, robotics, and industrial sectors, supported by a global sales team.

• Revenue is geographically diversified, with a focus on reducing earnings volatility and sustaining margins.

Growth strategy and capital projects

• Major growth driver is the new European permanent magnet facility, with phase one (2,000 metric tons) opening in 2024 and commercial production expected in 2026.

• Plans to expand European facility to 5,000 metric tons and replicate similar facilities globally, targeting a 20,000 metric ton business and over $1 billion in revenue.

• Secured two major awards from tier-one automotive customers and delivered first product samples within months of commissioning.

• Completed a new emission-controlled catalyst facility in China, targeting 10% annual growth in the auto catalyst segment.

• Investing in a heavy rare earth pilot line in Europe, leveraging decades of expertise in rare earth separation.