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 € 1,754.7 million in the past financial year after € 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 € 164.4 million in the previous year to € 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 € 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 € 6.5 million for the engineering and the steel construction of the investment project in Brazil, which was stopped, and negative currency effects of € 16.9 million.
The restructuring result of € (15.7) million includes net proceeds from the termination of the US Chapter 11 proceedings amounting to € 76.0 million on the one hand, and restructuring expenses of € 24.7 million for the closure of the site in Duisburg, Germany, an impairment of € 65.3 million based on the revised assumptions for the plant in Norway and a write-down of € 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 € 111.1 million after € 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 € 63.4 million in 2013 after € 113.5 million in the previous year. Earnings per share declined from € 2.85 to € 1.57. The Management Board of RHI AG will propose a dividend of € 0.75 to the Annual General Meeting on May 9, 2014.
Financial and Assets Position Net cash flow from operating activities increased from € 161.1 million in the year 2012 to € 171.5 million in the year 2013 due to net cash inflow of € 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 € (165.9) million to € (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 € 6.9 million (previous year: € 8.6 million).
The balance sheet total of the RHI Group declined by 6.8% from € 1,849.6 million in the previous year to € 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 € 485.5 million at December 31, 2013 compared with € 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 € 422.9 million (previous year: € 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 € 1,097.5 million after € 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 € 64.4 million in the past financial year after € 54.0 million in the comparative period and includes write-offs of € 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 € 673.9 million in the year 2012 to € 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 € 91.8 million to € 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 € 274.4 million in the past financial year after € 237.6 million in the year 2012. Of this total, deliveries to the Steel and Industrial Divisions of the RHI Group accounted for € 236.2 million and external customers for € 38.2 million (previous year: € 188.5 million and € 49.1 million respectively). The operating result dropped from € 18.6 million to € (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 € 15 to 20 million. The RHI Group will make investments totaling approximately € 75 million in the year 2014.
| Preliminary key figures in € million | 2013 | 20121) | 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 € 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 result 1) | 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 € | |||||||
| Continuing operations | 1.55 | 2.85 | (0.97) | 0.71 | |||
| Discontinued operations | 0.02 | 0.00 | 0.02 | 0.00 |
1) before restructuring effects