Finanzen, RHI AG

Corporate news transmitted by euro adhoc with the aim of a Europe-wide distribution.

14.09.2017 - 09:36:47

Results of the first half of 2017. The issuer is responsible for the content of this announcement.

Corporate news transmitted by euro adhoc with the aim of a Europe-wide distribution. The issuer is responsible for the content of this announcement.

Mid Year Results

Vienna -

* Positive economic environment strengthens business development * M&A costs and currency effects weigh on margins * Adjusted operating EBIT exceeds first half of 2016

In the first half of 2017, the RHI Group's revenue was up 3.1% on the comparative period of 2016 and amounted to EUR 855.8 million. Revenue of the Steel Division rose by 2.9%, among other things thanks to a positive business development in the US. The increase in revenue by 2.0% in the Industrial Division is among other things due to higher project deliveries of the glass business unit and a satisfactory repair business in the cement/lime business unit.

Stefan Borgas, CEO of RHI and designated CEO of RHI-Magnesita, comments on the half-year result: "In the first half of the year, we got many issues on the right track, even though the figures were somewhat mixed due to one-off effects. We expect a strong third quarter and are confident to achieve the goals we set."

The operating EBIT amounted to EUR 59.0 million in the first half of 2017 after EUR 70.2 million in the first half of 2016 and includes external costs of EUR 12.6 million related to the planned combination of RHI and Magnesita as well as negative currency effects of EUR 9.2 million resulting from the measurement of balance sheet items. Adjusted for these two effects, the operating EBIT amounts to EUR 80.8 million in the first half of 2017, which corresponds to a margin of 9.4%. This positive development is among other things attributable to a more favorable market environment in many customer industries, the associated improved order situation and the resulting higher utilization of production capacities. The higher raw material costs resulting from a shortage of supply could so far not be fully passed on to customers.

EBIT amounted to EUR 49.6 million in the first half of the year and includes impairments of EUR 5.5 million as a result of the planned sale or closure of the plant in Aken, Germany. The imminent sale of the Italian San Vito plant and the Russian Podolsk plant, which produce fused cast refractories for the use in the glass industry led to impairments of EUR 1.7 million. The negative net effect from the power supply contract in Norway of EUR 1.2 million resulting from declining electricity future prices also had a negative impact on EBIT. In addition, restructuring costs of EUR 1.0 million related to changes in the product portfolio at the site in Porsgrunn, Norway, were incurred in the first quarter of 2017.

Net cash flow from operating activities amounted to EUR 39.8 million in the first half of 2017 after EUR 76.7 million in the same period of 2016. Net cash flow from investing activities amounted to EUR (4.8) million in the first half of 2017 after EUR (17.1) million in the first half of 2016. Free cash flow thus amounted to EUR 35.0 million in the first half of 2017 after EUR 59.6 million in the comparative period of 2016.

Development in the second quarter of 2017 In the second quarter of 2017 the RHI Group's revenue increased by 4.3% compared with the preceding quarter and amounted to EUR 437.0 million. This increase is due to higher contributions to revenue by both the Steel Division and the Industrial Division. Here, revenue growth is above all attributable to the start of the maintenance season in the oil and gas segment in North America as well as in Europe.

The operating EBIT amounted to EUR 21.1 million in the past quarter compared with EUR 37.9 million in the first quarter of 2017 and includes external costs of EUR 8.8 million related to the planned combination of RHI and Magnesita as well negative currency effects of EUR 5.6 million resulting from the measurement of balance sheet items. Adjusted for these two effects, the operating EBIT amounts to EUR 35.5 million in the second quarter of 2017, which corresponds to a margin of 8.1%.

Outlook In its forecast published in July 2017, the International Monetary Fund predicts global economic growth of 3.5% in the current year after 3.2% in the year 2016. However, there is considerable uncertainty regarding the impact of the policies of the newly elected US government. Although the environment in the advanced economies improved, especially in Europe, the pace of growth in the emerging markets will continue to influence the global economy to a significant extent. Based on a current study, the research institute CRU expects a decline in steel production in China by roughly 1% in the year 2017 and an increase in steel production outside China by 4%. Based on these estimates, RHI expects a more positive market environment in 2017. The focus will stay on the generation of free cash flow in the current financial year in order to reduce net debt further. Due to the preparations for a successful completion of the planned combination with Magnesita and the integration of the two companies, external costs will be incurred.

Closing of the combination with Magnesita expected for late October The planned combination of RHI and Magnesita has obtained all merger control clearances. The company is currently working intensively on the preparations for the share's listing in the Premium Segment of the London Stock Exchange. The first trading day in London and the closing of the transaction are scheduled for late October 2017.

Stefan Borgas adds: "London offers the company as the global market leader in the refractories segment access to an important capital market. At the same time we will stay loyal to the Vienna Stock Exchange via the new Global Market. With the combination of the two companies we will open a new chapter in the long history of RHI."

Financial key figures

in EUR million 1H/17 1H/16 Delta 2Q/17 1Q/17 Delta Revenue 855.8 830.2 3.1% 437.0 418.8 4.3% EBITDA 89.2 100.6 (11.3)% 40.7 48.5 (16.1)% EBITDA margin 10.4% 12.1% (1.7)pp 9.3% 11.6% (2.3)pp Operating EBIT1) 59.0 70.2 (16.0)% 21.1 37.9 (44.3)% Operating EBIT margin 6.9% 8.5% (1.6)pp 4.8% 9.0% (4.2)pp EBIT 49.6 68.6 (27.7)% 17.0 32.6 (47.9)% EBIT margin 5.8% 8.3% (2.5)pp 3.9% 7.8% (3.9)pp Profit before income tax 45.9 62.9 (27.0)% 15.7 30.2 (48.0)% Profit after income tax 25.7 38.9 (33.9)% 7.2 18.5 (61.1)%

1) EBIT before expenses from derivatives from supply contracts, impairment and restructuring effects

The half-year report 2017 is now available for download on the RHI website www.rhi-ag.com [http://www.rhi-ag.com/] under Investor Relations / Financial Reports.

Further inquiry note: RHI AG Investor Relations Mag. Simon Kuchelbacher Tel: +43-1-50213-6676 Email: simon.kuchelbacher@rhi-ag.com

end of announcement euro adhoc

issuer: RHI AG Wienerbergstrasse 9 A-1100 Wien phone: +43-1-50213-6676 FAX: mail: investor.relations@rhi-ag.com WWW: http://www.rhi-ag.com ISIN: AT0000676903 indexes: ATX stockmarkets: Wien language: English

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