Revenues of the RHI Group increased to € 436.9 million in the first quarter of 2012, up 5.6% on the comparable period of 2011. While the Steel Division recorded an increase in revenues of 6.2%, revenues in the Industrial Division fell slightly by 1.1%. Despite negative foreign currency effects, the operating result of the first quarter increased by 15.1% to € 33.6 million compared with the reference period of 2011 and corresponds to EBIT as no restructuring costs were incurred. The EBIT margin improved from 7.1% to 7.7%.
As of March 31, 2012, the equity ratio amounted to 26.7%, after 26.0% at December 31, 2011. Cash and cash equivalents increased by € 9.6 million compared with the end of 2011 and amounted to € 154.1 million. Despite the acquisition of Stopinc AG and significantly higher investments, net debt rose only slightly to € 363.1 million, after € 361.5 million at December 31, 2011.
Net cash flow from operating activities increased to € 45.0 million in the first quarter of 2012 (Q1/2011: € 26.8 million). Due to the construction of a fusion plant in Norway and the increase in the stake held in Stopinc AG from 50% to 100% in order to strengthen the segment of special products for the steel and nonferrous metal production, net cash flow from investing activities increased to € (41.9) million, after € (2.8) million in the first quarter of 2011.
| 1st Quarter | |||
| in € million | 2012 | 2011 | Change |
| Revenues | 436.9 | 413.8 | 5.6% |
| EBITDA | 47.6 | 42.4 | 12.3% |
| EBITDA margin | 10.9% | 10.2% | 0.7pp |
| Operating result1) | 33.6 | 29.2 | 15.1% |
| Operating result margin | 7.7% | 7.1% | 0.6pp |
| EBIT | 33.6 | 29.2 | 15.1% |
| EBIT margin | 7.7% | 7.1% | 0.6pp |
| Profit before income taxes | 35.4 | 23.7 | 49.4% |
| Profit | 32.0 | 18.3 | 74.9% |
| Net cash flow from operating activities | 45.0 | 26.8 | 67.9% |
| Investments in property, plant and equipment and intangible assets | (30.5) | (4.9) | (522.4)% |
| Number of employees at end of quarter | 8,182 | 7,344 | 11.4% |
| Average number of employees Q1 | 8,091 | 7,319 | 10.5% |
1) before reversal of impairment losses/impairment losses and restructuring costs
Steel Division
While sales volume in the Steel Division fell slightly by 1.3% in comparison with the first quarter of 2011, revenues were up 6.2% as price increases were implemented. Further price adjustments, which became necessary due to an increase in input costs, were successfully negotiated in the past quarter and will continue to improve the earnings situation starting in the second quarter of 2012. Revenues in the Steel Division, at € 279.1 million in the first quarter of 2012, were far higher than the revenues of the first quarter of 2011 of € 262.7 million and slightly below the figure of the fourth quarter of 2011 of € 281.5 million. EBIT amounted to € 12.8 million in the first quarter, after € 6.1 million in the prior-year reference period. The EBIT margin improved from 2.3% to 4.6% due to price adjustments, but was affected by negative foreign currency effects.
Industrial Division
The sales volume in the Industrial Division dropped 5.9% in comparison with the first quarter of 2011 because the cement business was weaker. The recovery of the markets back to pre-crisis levels is proceeding, but they still show a highly diverse picture depending on region and industry segment. Revenues of the Industrial Division, at € 143.0 million in the first quarter of 2012, fell slightly short of the revenues of € 144.6 million recorded in the first quarter of 2011 and were significantly lower than the record revenues of € 181.1 million in the fourth quarter of 2011 as fewer projects were invoiced. EBIT amounted to € 13.1 million in the first quarter, after € 15.8 million in the prior-year reference period. The EBIT margin decreased from 10.9% to 9.2% due to a massive increase in costs of raw materials containing zirconium and to negative foreign currency effects.
Raw Materials Division
The Raw Materials Division generated revenues of € 60.2 million in the first quarter of 2012, after € 50.6 million in the comparable period of the previous year. The main reason for the increase were the significantly higher external revenues related to the acquisition of Premier Periclase Ltd. in September of the past year; these revenues amounted to € 14.8 million in the first quarter of the reporting year, after € 6.5 million in the first quarter of 2011. Internal demand within the group was roughly at the level of the prior-year reference period. EBIT amounted to € 7.7 million in the first quarter, after € 7.3 million in the comparable period of the previous year, and corresponds to an EBIT margin of 12.8% and 14.4%, respectively.
Outlook
In a stable macroeconomic environment and with unchanged foreign currency exchange rates, RHI expects a similar level of revenues in the Steel Division in the second quarter, significantly higher revenues in the Industrial Division as well as a higher EBIT margin than in the first quarter of 2012. Price increases and the cost cutting program initiated in 2012 in combination with a positive contribution to earnings of the higher level of backward integration lead us to expect a higher margin for the entire year 2012 than in the past financial year.