Innovative frontiers in aluminum - a comprehensive financial review of amag´s readiness for future opportunities

Abstract

This dissertation offers a thorough examination of AMAG Austria Metall AG, a prominent player in the Austrian aluminum industry celebrated for its superior aluminum products utilized in automotive, aerospace, and packaging sectors. Established in 1939 and publicly traded since 2011, AMAG boasts a robust global presence, with significant operations in Western Europe, North America, and other regions. The research delves into AMAG’s strategic emphasis on specialized market niches, innovative quality, and large-scale production capabilities, positioning the company effectively in a competitive industry landscape increasingly shaped by sustainability, recycling, and technological advancements. The dissertation investigated AMAG’s financial performance, highlighting its resilient growth trajectory and the impact of external factors such as the Covid-19 pandemic and recent geopolitical tensions. It presents a comprehensive financial analysis, encompassing evaluations of revenues, cost of goods sold (COGS), selling, general and administrative expenses (SG&A), and capital expenditures. The revenue forecast employs a bottom-up methodology, taking into account key drivers like product sales volume and pricing trends. Additionally, the dissertation conducts a SWOT analysis, identifying AMAG’s operational strengths, diverse product range, and challenges such as market volatility and supply chain dependencies. A critical assessment of AMAG's capital structure and dividend strategy is provided, acknowledging its high debt-to-equity ratio and prudent dividend approach. For valuation purposes, the Discounted Cash Flow method is utilized, complemented by a comparative company analysis. The valuation process entails forecasting free cash flows and applying the Weighted Average Cost of Capital (WACC) to determine AMAG’s intrinsic value. The dissertation concludes with a recommendation to invest in AMAG stock, citing its potential for future growth and resilience in a dynamic industry environment.