Preliminary results RHI Group 2003: earnings increase by 55% (ad hoc)

23. March 2004

In the financial year 2003, RHI reported net income after minorities in the amount of EUR 72.9 million (2002: EUR 46.9 million), an improvement by 55.4%. The undiluted earnings per share amounted to EUR 3.65 (2002: EUR 2.35). RHI is presenting the results for 2003 according to IFRS for the first time; the figures for 2002 were also converted to IFRS.

The improvement in the results of 2003 is essentially due to three effects: EBIT rose by 3.7% to EUR 122.0 million (2002: EUR 117.6 million), the EBIT margin thus amounts to 9.9% (2002: 8.7%). The financial result improved by 35.1% to EUR -30.2 million (2002: EUR -46.5 million). Income taxes were reduced by 26.6% and amounted to EUR -18.8 million (2002: EUR -25.6 million). RHI thus confirms its sustainable return to the profit zone. At the same time, RHI substantially reduced interest-bearing liabilities to banks again in 2003; the reduction of debt by EUR 74 million to EUR 297 million means that the company is 1.5 years ahead of the restructuring plan.

RHI reported consolidated sales revenues of EUR 1,232.6 million in 2003 (2002: EUR 1,358.0 million); the decline by 9% is primarily due to the sale of the divisions Engineering in mid-2002 and Waterproofing in 2003. The RHI Group’s concentration on the core business Refractories and the Insulating division has thus been largely completed.

EUR 1,033.6 million (2002: EUR 1,068.1 million) of consolidated sales revenue, i.e. nearly 85%, were accounted for by Refractories. The decline in sales revenue on the previous year is attributable to the significantly changed relation of Euro and US dollar. Sales volume increased by 2.6%, and adjusted for foreign currency translation, sales revenue also rose by 2.4% to EUR 1,093.6 million. RHI’s core business generated EBIT of EUR 115.9 million in 2003 (2002: EUR 98.9 million) and another improved EBIT margin of 11.2%.

Insulating reported sales revenues of EUR 166.9 million (2002: EUR 168.8 million). Portfolio adjustments in the weak markets of Germany and Austria were nearly compensated by good growth in Eastern Europe and other export markets. As a result of cost cuts and the success of the new product line Heradesign, EBIT rose by 69% to EUR 7.1 million (2002: EUR 4.2 million); the EBIT margin amounted to 4.3%.

The level of incoming orders in the RHI Group in 2004 remains good worldwide.