EANS-Adhoc: RHI AG / Preliminary results 2013

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annual result
25.02.2014

Business Development In a persisting difficult market environment,
the RHI Group's sales volume fell by 6.0% from 1,850,000 tons to
1,739,000 tons due to weaker steel business in Europe and the Middle
East, declining volume in the business unit cement and a lower number
of new construction projects in the business unit environment,
energy, chemicals.

Revenues amounted to EUR 1,754.7 million in the past financial year
after EUR 1,835.7 million in the year 2012. The decline in revenues,
which at 4.4% was slightly more moderate than the decline in volume,
was primarily attributable to the contribution to revenues by the
69.6% share in the Indian company Orient Refractories Ltd., which was
acquired in late April, and improvements in the product mix.

The operating result before restructuring effects dropped
significantly from EUR 164.4 million in the previous year to EUR
126.8 million in the year 2013. This development was caused
especially by difficulties in the fusion line in Porsgrunn, Norway,
which burdened the operating result with more than EUR 30 million,
and weaker capacity utilization of the production plants resulting
from the decline in sales volume. The operating result also includes
write-offs totaling EUR 6.5 million for the engineering and the steel
construction of the investment project in Brazil, which was stopped,
and negative currency effects of EUR 16.9 million.

The restructuring result of EUR (15.7) million includes net proceeds
from the termination of the US Chapter 11 proceedings amounting to
EUR 76.0 million on the one hand, and restructuring expenses of EUR
24.7 million for the closure of the site in Duisburg, Germany, an
impairment of EUR 65.3 million based on the revised assumptions for
the plant in Norway and a write-down of EUR 1.7 million resulting
from product and process optimizations at the raw materials plant in
Dashiqiao,China, on the other hand.

EBIT in the past financial year amounted to EUR 111.1 million after
EUR 167.6 million in the year 2012. The EBIT margin fell from 9.1% to
6.3% in 2013.

The profit for the year thus amounted to EUR 63.4 million in 2013
after EUR 113.5 million in the previous year. Earnings per share
declined from EUR 2.85 to EUR 1.57. The Management Board of RHI AG
will propose a dividend of EUR 0.75 to the Annual General Meeting on
May 9, 2014.

Financial and Assets Position Net cash flow from operating activities
increased from EUR 161.1 million in the year 2012 to EUR 171.5
million in the year 2013 due to net cash inflow of EUR 24.8 million
resulting from the termination of the US Chapter 11 proceedings.

After the record level realized in the previous year, net cash flow
from investing activities decreased from EUR (165.9) million to EUR
(125.1) million in the year 2013, which primarily resulted from the
increase in self-supply with raw materials, with a positive effect
from the sale of non-current assets and land in Turkey, Germany,
Austria and Chile, which added up to EUR 6.9 million (previous year:
EUR 8.6 million).

The balance sheet total of the RHI Group declined by 6.8% from EUR
1,849.6 million in the previous year to EUR 1,724.0 million in the
year 2013, which was primarily attributable to a decrease in
non-current assets resulting from an impairment made for the plant in
Porsgrunn, Norway, and to repayments.

The equity of the RHI Group amounted to EUR 485.5 million at December
31, 2013 compared with EUR 482.1 million in the previous year. As a
result of the lower balance sheet total, the equity ratio rose from
26.1% to 28.2% in the year 2013.

The consolidated statement of financial position as of December 31,
2013 shows net financial liabilities of EUR 422.9 million (previous
year: EUR 418.5 million). That corresponds to roughly 1.6 times the
EBITDA of the year 2013.

Steel Division In a challenging market climate, sales volume of the
Steel Division declined by some 5% year-on-year to 1,187,000 tons due
to weaker business in Europe and the Middle East. In contrast,
revenues were maintained nearly constant at EUR 1,097.5 million after
EUR 1,112.7 million in the previous year due to the initial
consolidation of the 69.6% share in the Indian Orient Refractories
Ltd. (ORL), which was acquired in late April, and improvements in the
product mix. The operating result amounted to EUR 64.4 million in the
past financial year after EUR 54.0 million in the comparative period
and includes write-offs of EUR 6.5 million for the engineering and
the steel construction of the investment project in Brazil, which was
stopped. The operating result margin rose from 4.9% in the previous
year to 5.9% and reflects the focus on sustainable profitability.

Industrial Division Sales volume in the Industrial Division dropped
by roughly 7% compared with the previous year to 439,000 tons due to
a decline in the number of construction projects in the business unit
environment, energy, chemicals and decreasing volume in the business
unit cement. The decline in revenues from EUR 673.9 million in the
year 2012 to EUR 619.0 million in the year 2013 is primarily
attributable to weak demand in the business units glass and
environment, energy, chemicals as well as the fact that a major
project in the ferrochrome segment was delivered in the previous
year. The operating result dropped significantly from EUR 91.8
million to EUR 70.2 million in the year 2013 due to a shift in
product mix. Consequently, the operating result margin fell from
13.6% in the previous year to 11.3%.

Raw Materials Division Revenues of the Raw Materials Division
amounted to EUR 274.4 million in the past financial year after EUR
237.6 million in the year 2012. Of this total, deliveries to the
Steel and Industrial Divisions of the RHI Group accounted for EUR
236.2 million and external customers for EUR 38.2 million (previous
year: EUR 188.5 million and EUR 49.1 million respectively). The
operating result dropped from EUR 18.6 million to EUR (7.8) million
in the year 2013 as a result of difficulties in the fusion line in
Norway. Consequently, the operating result margin fell from 7.8% in
the previous year to (2.8)%.

Outlook Provided that the macroeconomic environment remains stable
and exchange rates do not change in 2014, RHI expects an increase in
revenues by roughly 3% compared with the year 2013 and an operating
result margin between 8% and 9% including the negative effects from
Norway in the range of EUR 15 to 20 million. The RHI Group will make
investments totaling approximately EUR 75 million in the year 2014.

Preliminary key figures (in EUR million) 2013 2012 1) Delta
Balance sheet total 1,724.0 1,849.6 (6.8)%
Equity 485.5 482.1 0.7%
Equity ratio (in %) 28.2% 26.1% 2.1pp
Investments in PP&E and intangible assets 89.4 167.9 (46.8)%
Net debt 422.9 418.5 1.1%
Gearing ratio (in %)2) 87.1% 86.8% 0.3pp
Net debt / EBITDA 1.6 1.8 (0.2)
Working capital 481.0 479.6 0.3%
Working capital (in %) 27.4% 26.1% 1.3pp
Capital employed 1,138.8 1,181.8 (3.6)%
Return on capital employed (in %) 7.3% 11.6% (4.3)pp
Net cash flow from operating activities 171.5 161.1 6.5%
Net cash flow from investing activities (125.1) (165.9) 24.6%
Net cash flow from financing activities (112.8) 47.8 (336.0)%

1) adjusted
2) without non-current personnel provisions

Preliminary key figures 2013

in EUR million 2013 2012 Delta 4Q/13 4Q/12 Delta
Revenues 1,754.7 1,835.7 (4.4)% 456.6 463.0 (1.4)%
Steel Division 1,097.5 1,112.7 (1.4)% 278.7 264.7 5.3%
Industrial Division 619.0 673.9 (8.1)% 170.9 186.9 (8.6)%
Raw Materials Division
External revenues 38.2 49.1 (22.2)% 7.0 11.4 (38.6)%
Internal revenues 236.2 188.5 25.3% 58.1 44.3 31.2%
EBITDA 261.6 229.4 14.0% 43.3 48.4 (10.5)%
EBITDA margin 14.9% 12.5% 2.4pp 9.5% 10.5% (1.0)pp
Operating result1) 126.8 164.4 (22.9)% 18.0 31.8 (43.4)%
Steel Division 64.4 54.0 19.3% 7.1 3.8 86.8%
Industrial Division 70.2 91.8 (23.5)% 19.7 26.7 (26.2)%
Raw Materials Division (7.8) 18.6 (141.9)% (8.8) 1.3 (776.9)%
Operating result margin 7.2% 9.0% (1.8)pp 3.9% 6.9% (3.0)pp
Steel Division 5.9% 4.9% 1.0pp 2.5% 1.4% 1.1pp
Industrial Division 11.3% 13.6% (2.3)pp 11.5% 14.3% (2.8)pp
Raw Materials Division (2.8)% 7.8% (10.6)pp (13.5)% 2.3% (15.8)pp
EBIT 111.1 167.6 (33.7)% (53.0) 33.3 (259.2)%
Steel Division 97.3 50.1 94.2% 3.3 5.1 (35.3)%
Industrial Division 86.8 91.8 (5.4)% 17.7 27.1 (34.7)%
Raw Materials Division (73.0) 25.7 (384.0)% (74.0) 1.1 (6,827.3)%
EBIT margin 6.3% 9.1% (2.8)pp (11.6)% 7.2% (18.8)pp
Steel Division 8.9% 4.5% 4.4pp 1.2% 1.9% (0.7)pp
Industrial Division 14.0% 13.6% 0.4pp 10.4% 14.5% (4.1)pp
Raw Materials Division (26.6)% 10.8% (37.4)pp (113.7)% 2.0% (115.7)pp
Financial results (29.8) (21.3) (39.9)% (1.9) (6.6) 71.2%
Result from associates 8.0 5.3 50.9% 2.8 0.9 211.1%
Profit before income taxes 89.3 151.6 (41.1)% (52.1) 27.6 (288.8)%
Income taxes (26.6) (38.1) 30.2% 13.6 0.3 4,433.3%
Income taxes (in %) 29.8% 25.1% 4.7pp 26.1% (1.1)% 27.2pp
Profit from continuing
operations 62.7 113.5 (44.8)% (38.5) 27.9 (238.0)%
Profit from discontinued
operations 0.7 0.0 100.0% 0.7 0.0 100.0%
Profit for the year 63.4 113.5 (44.1)% (37.8) 27.9 (235.5)%

Earnings per share in EUR
Continuing operations 1.55 2.85 (0.97) 0.71
Discontinued operations 0.02 0.00 0.02 0.00

1) before restructuring effects

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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issuer: 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