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