EANS-News: RHI AG / Results of the first quarter 2016

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quarterly report

Due to a weaker business development of the Steel and Industrial
Divisions, the RHI Group's revenue, at EUR 389.7 million in the first
quarter of 2016, was lower than revenue of the comparative period of
2015, at EUR 424.1 million, and lower than revenue of the fourth
quarter of 2015, at EUR 440.0 million.

The operating EBIT amounted to EUR 30.3 million in the first quarter
of 2016, after EUR 34.5 million in the comparative period of 2015,
and was thus lower than in the fourth quarter of 2015, at EUR 32.7
million. While the Raw Materials Division increased its operating
EBIT compared with the first quarter of 2015 due to better
utilization of the raw material production capacities, the operating
EBIT of the Steel and Industrial Divisions decreased due to declining
revenues. In comparison with the fourth quarter of 2015 the Steel
Division increased its operating EBIT significantly, among other
things due to a positive development in Europe and North America as a
result of an improved product mix. The decline in the operating EBIT
of the Industrial Division can be explained by the high number of
project deliveries at the end of the year. The operating EBIT margin
of the RHI Group, at 7.8% in the first quarter of 2016, was lower
than in the comparative period of 2015, at 8.1%, but exceeded that of
the fourth quarter of 2015, at 7.4%.

EBIT includes a negative net effect from the power supply contract in
Norway. Here, financial liabilities of roughly EUR 1.9 million were
reversed through profit and loss due to own use and the sale at
market prices; however, due to a decline in electricity future
prices, a negative non-cash effect on earnings of roughly EUR 5.1
million had to be recognized.

Equity amounted to EUR 486.8 million at March 31, 2016, after EUR
491.4 million at December 31, 2015. This development is among other
things due to a reduction of the actuarial interest rate to determine
pension and termination benefit obligations predominantly in Austria
and Germany. Working capital, which consists of inventories, trade
receivables less trade payables and prepayments received, was reduced
from EUR 532.6 million at the end of the year 2015 to EUR 516.4
million at March 31, 2016 due to lower receivables. Free cash flow
amounted to EUR 22.1 million in the past quarter after EUR 12.4
million in the comparative period of 2015. As a result, net debt
dropped from EUR 397.9 million at the end of the year 2015 to EUR
378.9 million at March 31, 2016.

The number of employees declined slightly from 7,898 at the end of
the year 2015 to 7,876.

Outlook For the full year 2016, the Management Board of the RHI Group
still expects revenue (2015: EUR 1,752.5 million) below and operating
EBIT (2015: EUR 124.1 million) at the level of the past financial
year, provided that the macroeconomic environment and exchange rates
remain stable, with the first half of 2016 slightly weaker than the
second half of the year. The expected decline in revenue in the Steel
Division is related especially to an expected slowdown of the
business development in South America and a highly competitive
environment. In the Industrial Division, a weaker nonferrous metals
and cement business could cause a decrease in revenue.

Due to the development in the customer industries, RHI is currently
working on further optimizing the plant structure, which could lead
to an adjustment of production capacities in Europe in the current
financial year. In addition, different cost measures have been
defined in the sales and general administrative departments. The
planned continuation of the reduction of working capital should
support the generation of free cash flow and lead to a further
reduction of net debt.

in EUR million Q1/2016 Q1/2015 Delta Q4/2015 Delta
Revenue 389.7 424.1 (8.1)% 440.0 (11.4)%
EBITDA 43.2 51.2 (15.6)% (2.3) 1,978.3%
EBITDA margin 11.1% 12.1% (1.0)pp (0.5)% 11.6pp
Operating EBIT 1) 30.3 34.5 (12.2)% 32.7 (7.3)%
Operating EBIT margin 7.8% 8.1% (0.3)pp 7.4% 0.4pp
EBIT 27.1 34.5 (21.4)% (53.9) 150.3%
EBIT margin 7.0% 8.1% (1.1)pp (12.3)% 19.3pp
Profit before income tax 23.8 29.9 (20.4)% (54.7) 143.5%
Profit after income tax 14.8 21.1 (29.9)% (38.4) 138.5%

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

The report for the first quarter of 2016 is available for download at the RHI
website: www.rhi-ag.com/ 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
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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