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RHI Magnesita: transformational year and strong financial performance in 2017

  • Successful completion of the merger of RHI and Magnesita and the subsequent admission of RHI Magnesita N.V. to the Premium Segment of the London Stock Exchange
  • Adjusted pro-forma revenue1 of €2,677.2 million in 2017, up 11%, driven by sales growth in both steel and industrial divisions, supported by a more favorable market environment
  • Adjusted pro-forma EBITA1 of €304.1 million, up 39%
  • Net Debt/Adjusted Pro-forma EBITDA1 of 1.9x
  • Faster realization of synergies by one year: €40 million in 2018 and the balance of €70 million in 2019

In many ways, 2017 was a transformative year for RHI Magnesita: the listing in the Premium Segment on the London Stock Exchange on October 27th marked the successful combination of RHI and Magnesita as well as the rise of RHI Magnesita to the top of the refractory industry. .

Solid operating performance in 2017
“In addition to the cross-border merger, RHI Magnesita recorded a strong operating performance in the financial year which is attributable to the company’s efficient operations, improving macroeconomic environment and the engagement of all employees worldwide”, commented CEO Stefan Borgas on the first joint annual results.

Adjusted pro-forma revenue1 for 2017 was €2,677.2 million, an 11.1% increase over the adjusted proforma revenue1 of €2,409.1 million achieved in 2016. The increase reflects sales growth in both the steel and industrial divisions, supported by strong industrial production globally.

Adjusted pro-forma EBITA1 was €304.1 million, 38.7% above the adjusted pro-forma performance for 2016. Adjusted pro-forma EBITA margin1 reached 11.4%, up 230 bps compared to the adjusted proforma margin in 2016. The improvement was mostly driven by higher sales with resulting better fixed cost dilution, in addition to the Company’s initiatives to improve efficiency in its operations.

The reported statutory results, which consolidate 10 months of results for RHI and 2 months of results for RHI Magnesita, meaning the consolidated financial statements only include 2 months of results of Magnesita Refratários, are as follows: the reported Group revenue amounted to €1,946.1 million, up by 17.9% over the previous year as a result of growth in both steel and industrial sales, as explained above, and the consolidation of Magnesita revenues from 1 November 2017. Reported revenue from Steel Division totalled €1,308.8 million in 2017, whereas Industrial Division amounted to €577.6 million.

Reported EBITA, which does not exclude transaction costs, merger-related adjustments, foreign exchange variations, disposed businesses and non-merger-related expenses, which are generally nonrecurring, amounted to €56.7 million in 2017, with a 2.9% margin.

Steel division recorded two-digit growth

Adjusted pro-forma sales1 to steel totalled €1,913.1 million, up by 14.2% over 2016 adjusted pro-forma sales1 . The robust performance was largely driven by the 5.3% increase in world steel production in 2017. According to the World Steel Association, global steel production totalled 1.69 billion tonnes, compared with 1.61 billion tonnes in 2016, with output expanding in almost all regions, with steel production increasing simultaneously in Europe, North America and South America, after a few years of production declines. In addition, RHI Magnesita’s growth initiatives evolved constructively, especially in the US, Brazil and India, where deliveries growth surpassed underlying steel market growth.

Note: this is a shortened version. The full version including all details can be found at ir.rhimagnesita.com

22.03.2018, RHI Magnesita

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