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EANS-News: RHI AG
Preliminary results 2014

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annual result

Business Development
The RHI Group's sales volume rose from roughly 1,768,000 tons in the previous
year to roughly 1,868,000 tons in 2014. This is primarily attributable to
increased sales activities of the Raw Materials Division. Revenues in the past
financial year amounted to EUR 1,721.2 million, after EUR 1,754.7 million in the
year 2013. While revenues in the Steel Division rose by 1.0%, the Industrial
Division recorded a decline in revenues by 8.5% compared to the previous year as
customers in the nonferrous metals business unit postponed major projects and
due to weaker demand in the glass business.
 
The operating EBIT before impairment and restructuring costs increased from EUR
126.8 million in the previous year to EUR 141.9 million in the past financial
year. While the Steel Division benefitted from an improved product mix and
higher utilization of the production capacities as a result of the closure of
the Duisburg plant, Germany, in early 2014, the operating EBIT of the Industrial
Division decreased because of a decline in revenues and the related lack of
coverage of fixed costs at the production facilities. The operating EBIT of the
Raw Materials Division improved due to the progress made in optimizing the fused
magnesia production at the site in Porsgrunn, Norway.
 
EBIT amounted to EUR 109.3 million in the past financial year and includes
impairments on existing assets of the glass business unit amounting to roughly
EUR 12 million and some EUR 7 million related to the fused magnesia production
in Norway. In addition, EBIT of the year 2014 was affected by restructuring
expenses resulting from the discontinuation of operations at the site in Kretz,
Germany, in the course of optimizing raw material treatment in Europe, which
amounted to roughly EUR 10 million, and from the closure of the plant in
Duisburg, Germany, which amounted to roughly EUR 4 million. In the previous year
EBIT was EUR 111.1 million and included, amongst other things, net income of
roughly EUR 76 million from the termination of the US Chapter 11 proceedings,
restructuring costs of roughly EUR 25 million for the closure of the plant in
Duisburg, Germany, and an impairment of roughly EUR 65 million for the plant in
Porsgrunn, Norway.
 
Profit after income tax thus totaled EUR 52.5 million in the financial year 2014
compared with EUR 63.4 million in the previous year. Earnings per share dropped
from EUR 1.57 to EUR 1.28. The Management Board of RHI AG will propose a
dividend of EUR 0.75 to the Annual General Meeting on May 8, 2015.
 
Financial and Assets Position
Net cash flow from operating activities decreased from EUR 171.5 million in the
previous year to EUR 72.4 million in the past financial year. While the prior-
year figure was positively influenced by net cash inflows resulting from the
termination of the US Chapter 11 proceedings totaling EUR 24.8 million, an
increase in working capital by EUR 89.9 million had a negative impact in the
year 2014. Net cash flow from investing activities included payouts related to
the acquisition of the 69.9% share in the Indian company Orient Refractories
Ltd. amounting to EUR 48.7 million in the previous year and declined from EUR
(125.1) million in the year 2013 to EUR (61.1) million in the year 2014.
 
Working capital amounted to EUR 570.9 million at the end of the financial year,
versus EUR 481.0 million in the previous year. The increase in inventories by
some EUR 40 million is predominantly attributable to regions where RHI has no
production capacities, for example North and South America, and is also
influenced by exchange rate effects such as the strengthening of the US dollar
against the euro. RHI currently works on new approaches to optimize the supply
chain with the objective to reduce inventories by roughly EUR 100 million on a
sustained basis. The higher receivables are due, amongst other things, to very
strong monthly revenues in December 2014, which exceeded EUR 186 million.
 
The balance sheet total of the RHI Group increased by 7.9%, from EUR 1,724.0
million in the previous year to EUR 1,860.5 million in the year 2014, which was
primarily due to an increase in working capital and higher non-current financial
liabilities resulting from the issue of a Schuldscheindarlehen. The RHI Group's
equity amounted to EUR 493.9 million at December 31, 2014 after EUR 485.5
million in the previous year. The consolidated statement of financial position
as of December 31, 2014 shows net financial liabilities of EUR 466.9 million
(previous year: EUR 422.9 million). That corresponds to 2.3 times the EBITDA of
the year 2014.
 
 
Steel Division
The Steel Division's revenues were up 1.0% from EUR 1,097.5 million to EUR
1,108.8 million. The sharp drop in revenues in South America due to a highly
competitive situation resulting from the strong devaluation of local currencies
was balanced out by growth in all other regions. The business development was
particularly positive in India, Africa and the Middle East, where significant
increases were recorded. The operating EBIT rose from EUR 64.4 million in the
previous year to EUR 93.1 million in the past financial year due to improvements
in the product mix and higher utilization of the production capacities resulting
from the closure of the plant in Duisburg, Germany, at the beginning of the
year.
 
Industrial Division
The decline in revenues of the Industrial Division from EUR 619.0 million in the
year 2013 to EUR 566.6 million in the year 2014 is primarily attributable to
weaker demand in the nonferrous metals and glass business units. While falling
metal prices caused customers of the former to postpone major repairs, worldwide
excess capacity burdened the market environment for the latter. The operating
EBIT decreased from EUR 70.2 million in the year 2013 to EUR 48.6 million in the
past financial year as a result of lower revenues and the related lack of
coverage of fixed costs at the production plants.
 
Raw Materials Division
Revenues of the Raw Materials Division were up 10.5%, from EUR 274.4 million in
the previous year to EUR 303.3 million in the past financial year. This is due
to both an increase in internal demand and higher external revenues. The
operating EBIT rose from EUR (7.8) million in the previous year to EUR 0.2
million in the past financial year. This development reflects the progress made
in optimizing the production of fused magnesia at the site in Porsgrunn, Norway,
and successes resulting from a continuous improvement program.
 
Outlook
The outlook given in the ad hoc release of January 23, 2015 is confirmed. Due to
the positive development of incoming orders in the past months and the measures
taken by the management, RHI thus expects a year-on-year increase in revenues by
roughly 3% and an operating EBIT margin of approximately 9% in the current
economic environment. If the US dollar continues to strengthen against the euro,
further positive effects on revenues and EBIT can be expected. In the year 2015,
the RHI Group will make investments totaling roughly EUR 80 million.
 


Preliminary key figures (in EUR million)  2014    2013    Delta
Balance sheet total                       1,860.5 1,724.0 7.9%
Equity                                    493.9   485.5   1.7%
Equity ratio (in %)                       26.5%   28.2%   (1.7)pp
Investments in PP&E and intangible assets 76.2    89.4    (14.8)%
Net debt                                  466.9   422.9   10.4%
Gearing ratio (in %)                      94.5%   87.1%   7.4pp
Net debt / EBITDA                         2.3     1.6     0.7
Working capital                           570.9   481.0   18.7%
Working capital (in %)                    33.2%   27.4%   5.8pp
Capital employed                          1,225.3 1,138.8 0.0%
Return on average capital employed (in %) 6.5%    7.3%    (0.8)pp
Net cash flow from operating activities   72.4    171.5   (57.8)%
Net cash flow from investing activities   (61.1)  (125.1) 51.2%
Net cash flow from financing activities   24.6    (112.8) 121.8%
                                                           
 
Preliminary key figures 2014
 
in EUR million              2014    2013    Delta      4Q/14   4Q/13    Delta
Revenues                    1,721.2 1,754.7 (1.9)%     466.5   456.6    2.2%
Steel Division              1,108.8 1,097.5 1.0%       293.6   278.7    5.3%
Industrial Division         566.6   619.0   (8.5)%     162.7   170.9    (4.8)%
Raw Materials Division                                                   
External revenues           45.8    38.2    19.9%      10.2    7.0      45.7%
Internal revenues           257.5   236.2   9.0%       62.6    58.1     7.7%
EBITDA                      199.4  260.7 1) (23.5)%    51.8    42.9 1)  20.7%
EBITDA margin               11.6%   14.9%   (3.3)pp    11.1%   9.4%     1.7pp
Operating EBIT 2)           141.9   126.8   11.9%      41.8    18.0     132.2%
Steel Division              93.1    64.4    44.6%      27.9    7.1      293.0%
Industrial Division         48.6    70.2    (30.8)%    18.2    19.7     (7.6)%
Raw Materials Division      0.2     (7.8)   102.6%     (4.3)   (8.8)    51.1%
Operating EBIT margin       8.2%    7.2%    1.0pp      9.0%    3.9%     5.1pp
Steel Division              8.4%    5.9%    2.5pp      9.5%    2.5%     7.0pp
Industrial Division         8.6%    11.3%   (2.7)pp    11.2%   11.5%    (0.3)pp
Raw Materials Division 3)   0.1%    (2.8)%  2.9pp      (5.9)%  (13.5)%  7.6pp
EBIT                        109.3   111.1   (1.6)%     11.9    (53.0)   122.5%
Steel Division              91.4    97.3    (6.1)%     27.7    3.3      739.4%
Industrial Division         34.9    86.8    (59.8)%    5.7     17.7     (67.8)%
Raw Materials Division      (17.0)  (73.0)  76.7%      (21.5)  (74.0)   70.9%
EBIT margin                 6.4%    6.3%    0.1pp      2.6%    (11.6)%  14.2pp
Steel Division              8.2%    8.9%    (0.7)pp    9.4%    1.2%     8.2pp
Industrial Division         6.2%    14.0%   (7.8)pp    3.5%    10.4%    (6.9)pp
Raw Materials Division 3)   (5.6)%  (26.6)% 21.0pp     (29.5)% (113.7)% 84.2pp
Net finance costs           (32.7)  (29.8)  (9.7)%     (10.3)  (1.9)    (442.1)%
Share of profit of joint
ventures                    8.2     8.0     2.5%       2.5     2.8      (10.7)%
Profit before income tax    84.8    89.3    (5.0)%     4.1     (52.1)   107.9%
Income taxes                (32.3)  (26.6)  (21.4)%    (3.2)   13.6     (123.5)%
Income taxes in %           38.1%   29.8%   8.3pp      78.0%   26.1%    51.9pp
Profit from continued
operations                  52.5    62.7    (16.3)%    0.9     (38.5)   102.3%
Profit from discontinued
operations                  0.0     0.7     (100.0)%   0.0     0.7      (100.0)%
Profit for the year         52.5    63.4    (17.2)%    0.9     (37.8)   102.4%
                                                                         
Earnings per share in EUR 4)                                              
Continuing operations       1.28    1.55               0.01    (0.97)    
Discontinued operations     0.00    0.02               0.00    0.02      
                                                                         


1) adjusted for income from the reversal of investment grants recognized as
liabilities
2) EBIT before impairment losses, restructuring effects and result from the US
Chapter 11 proceedings
3) based on internal and external revenues
4) basic and diluted
Gearing ratio: net debt / equity
Working Capital: Inventories + Trade receivables and receivables from long-term
construction contracts - Trade payables - Prepayments received
Capital Employed: Property, plant and equipment + Goodwill + Other intangible
assets + Working Capital
Return on average capital employed: (EBIT - Taxes) / average Capital Employed

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 
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company:     RHI AG
             Wienerbergstrasse 9
             A-1100 Wien
phone:       +43 (0)50213-6676
FAX:         +43 (0)50213-6130
mail:         rhi@rhi-ag.com
WWW:         http://www.rhi-ag.com
sector:      Refractories
ISIN:        AT0000676903
indexes:     ATX Prime, ATX
stockmarkets: official market: Wien 
language:   English

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