RHI AG: Revenues continue to increase in the first quarter and investment programme of EUR 130 million in 2011 (ad hoc)

12. May 2011

Revenues of the RHI Group amounted to € 413.8 million in the first quarter of 2011, up 20.9% on the reference quarter of 2010. In the Steel Division revenues grew by 20.1%, in the Industrial Division by 23.3%. The Group’s sales volume amounted to 466,526 tonnes (reference period 2010: 412,183 tonnes). The operating result of the first quarter declined in comparison with the same quarter of 2010 due to negative currency effects, and was down 13.1% to € 29.2 million and also corresponds to EBIT as no restructuring costs were incurred in the first quarter. The EBIT margin thus deteriorated from 9.8% to 7.1%. Tax expenses equalled € 5.4 million in the first quarter, which corresponds to a tax rate of 22.8%.

Compared to the fourth quarter of 2010 the RHI Group raised its revenues by 3.2%, while EBIT, at € 29.2 million, was slightly below the figure of the previous quarter of € 29.3 million. The EBIT margin of 7.1% fell short of the EBIT margin of the fourth quarter of 2010, which amounted to 7.3%.

The equity ratio was increased from 22.2% as of 31 December 2010 to 22.5% as of 1 April 2011. Compared to the end of the year 2010, cash and cash equivalents rose by € 27.9 million to € 86.7 million, causing net debt, which amounted to € 318.3 million, to fall significantly below the figure of € 341.0 million at 31 December 2010.

Net cash flow from operating activities rose to € 26.8 million in the first quarter of 2011 (Q1/2010: € 22.4 million), net cash flow from investing activities remained stable at € -2.8 million, after € -2.9 million in the reference quarter of 2010.

1st Quarter
in € million 2011 2010 Change
Revenues 413.8 342.2 20.9%
EBITDA 42.4 44.9 -5.6%
EBITDA margin 10.2% 13.1% -22.1%
Operating result 1) 29.2 33.6 -13.1%
Operating result margin 7.1% 9.8% -27.6%
EBIT 29.2 31.7 -7.9%
EBIT margin 7.1% 9.3% -23.7%
Profit before income taxes 23.7 26.8 -11.6%
Profit for the period 18.3 21.5 -14.9%
Net cash flow from operating activities 26.8 22.4 19.6%
Capital expenditure -4.9 -5.2 -5.8%
Number of employees at end of quarter 7,344 7,279 0.9%

1) EBIT before restructuring costs

Steel Division

In RHI’s Steel Division, which due to is structure measures itself against world steel production ex China, revenues did not match the growth levels of world steel production. Due to price increases, which were related to higher costs for Chinese raw materials, revenues were raised by 2.3% in comparison with the fourth quarter of 2010, while sales volume declined by 3.5%.As a result of the strong USD movement between 31 December 2010 and 1 April 2011, the operating result dropped to € 6.1 million, which corresponds to a margin of only 2.3%.Overall, RHI increased revenues of the Steel Division in the first quarter of 2011 by 20.1% to € 262.7 million (Q1/2010: € 218.8 million). EBIT, at € 6.1 million, fell below the figure of the first quarter of 2010 of € 14.8 million.

Industrial Division

In the Industrial Division, the first quarter of 2011 was characterised by a strong cement season. Both sales volume and revenues are back to pre-crisis levels. This indicates a recovery of the construction industry, which, however, still shows regional differences. The development in the glass segment also indicates that the investment climate is slowly improving.Revenues of the Industrial Division amounted to € 144.6 million in the first quarter of 2011, thus exceeding the figures of both the fourth quarter of 2010 of € 135.4 million and of the first quarter of 2010 of € 117.3 million. EBIT amounted to € 15.8 million; the EBIT margin equalled 10.9%, after 14.8% in the previous quarter. In addition to glass revenues, which grew slightly below the average margin of the division, the strong changes in the USD also had a negative effect in this context.

Raw Materials Division

The Raw Materials Division realised revenues of € 50.6 million in the first quarter of 2011, after € 37.1 million in the prior-year period. This increase was attributable to a significant increase in intragroup demand. EBIT amounted to € 7.3 million in the reporting period, which corresponds to an increase by 247.6% compared to the first quarter of 2010 and an EBIT margin of 14.4%. The division’s EBIT included the proceeds on the sale of a property amounting to € 1.9 million.

Investment programme 2011

RHI will invest roughly € 130 million in the plant in Brazil, in the raw materials plant in Norway, in a fourth tunnel kiln in China and in other smaller-scale projects in 2011.


RHI expects a further increase in revenues in the Steel Division in the second quarter and a similarly good development in the Industrial Division. In the second half of the year RHI expects flat revenues due to the competitive situation in the Steel Division. In the Industrial Division revenues should match the high level of the first half of the year. The price increases initiated in the Steel Division in the past year and the higher share of the industrial business will have a positive effect on the margin in the course of the year.