EANS-News: RHI AG / Results of the first half of 2016

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6-month report

Revenue of the RHI Group was down 8.0% on the comparative period of
2015 and amounted to EUR 830.2 million in the first half of 2016. In
the Steel Division, revenue decreased by 5.6% especially due to a
weaker business development in South America, Europe and China. In
the Industrial Division, the decline in revenue by 14.4% compared
with the first half of 2015 is among other things attributable to
lower deliveries in the cement/lime, glass and environment, energy,
chemicals business units.

The operating EBIT amounted to EUR 70.2 million in the first half of
the year. Compared with the first half of 2015, at EUR 68.6 million,
this is an increase by 2.3% despite the decrease in revenue. This
development is primarily due to a highly satisfactory earnings
situation in the Steel Division based on positive product mix
effects, better utilization of the production capacities resulting
from the increase in sales volume as well as savings in overhead
costs. Moreover, the operating EBIT of the Raw Materials Division
improved significantly as a result of good capacity utilization at
the two Austrian raw material plants, Breitenau and Hochfilzen, which
predominantly produce basic mixes for the steel industry, especially
for the use in electric arc furnaces, and lower production costs at
the plant in Porsgrunn, Norway. In contrast, the operating EBIT of
the Industrial Division was lower than in the previous year due to a
decline in revenue. The RHI Group's operating EBIT margin rose from
7.6% in the first half of 2015 to 8.5% in the first half of 2016.

EBIT amounted to EUR 68.8 million in the first half of this year and
includes a negative earnings effect of EUR 4.6 million from the
deconsolidation of the US subsidiary RHI Monofrax, LLC resulting from
the sale to the German private equity fund Callista. On the other
hand, it also includes a positive net effect from the power supply
contract in Norway. Based on own use, the sale at market prices and
an increase in electricity future prices, financial liabilities of
roughly EUR 3.0 million were reversed and recognized through profit
or loss.

Q2/2016 In the second quarter of 2016, the RHI Group's revenue rose
to EUR 440.5 million, up 13.0% on the previous quarter. This increase
is primarily attributable to significantly higher contributions to
revenue from the Steel Division, especially in Europe, Africa and the
CIS region, and from the environment, energy, chemicals and
nonferrous metals business units.

The operating EBIT rose from EUR 30.3 million in the first quarter of
2016 to EUR 39.9 million in the past quarter, which was among other
things due to better utilization of the production capacities
resulting from the increase in sales volume. In addition, the
operating EBIT of the second quarter of 2016 is influenced by
positive currency effects resulting from the devaluation of the euro.
The operating EBIT margin of the RHI Group thus improved from 7.8% in
the first quarter of 2016 to 9.1% in the past quarter.

Working capital decreased for the fifth consecutive quarter and
amounted to EUR 495.1 million at June 30, 2016 after EUR 532.6
million at the end of the year 2015. The decline by EUR 37.5 million
is attributable to both lower inventories and lower trade
receivables.

Net cash flow from operating activities amounted to EUR 76.7 million
in the first half of 2016 after EUR 64.9 million in the same period
of 2015. After the deduction of cash flow from investing activities
of EUR (17.1) million in the first half of the year, free cash flow
amounted to EUR 59.6 million after EUR 62.8 million in the first half
of 2015. Net debt declined from EUR 397.9 million at the end of the
year 2015 to EUR 373.9 million at June 30, 2016 despite the dividend
payment of EUR 29.9 million.

Outlook Despite the challenging market environment, the Management
Board of RHI AG is increasing the outlook due to the positive
earnings development in the first half of the year. Consequently, an
operating EBIT margin of roughly 8% is expected for the full year
2016, which corresponds to an increase by roughly one percentage
point compared with the previous year.

Due to the development in the customer industries, RHI is currently
working on further optimizing the plant structure, which could lead
to an adjustment of production capacities in Europe in the current
financial year. In addition, different cost measures have been
defined in the sales and general administrative departments. The
planned continuation of the reduction of working capital should
support the generation of free cash flow and lead to a further
reduction of net debt.

in EUR million 1H/16 1H/15 Delta 2Q/16 1Q/16 Delta
Revenue 830.2 902.0 (8.0)% 440.5 389.7 13.0%
EBITDA 100.6 102.5 (1.9)% 57.4 43.2 32.9%
EBITDA margin 12.1% 11.4% 0.7pp 13.0% 11.1% 1.9pp
Operating EBIT 1) 70.2 68.6 2.3% 39.9 30.3 31.7%
Operating EBIT margin 8.5% 7.6% 0.9pp 9.1% 7.8% 1.3pp
EBIT 68.6 68.6 0.0% 41.5 27.1 53.1%
EBIT margin 8.3% 7.6% 0.7pp 9.4% 7.0% 2.4pp
Profit before income tax 62.9 63.0 (0.2)% 39.1 23.8 64.3%
Profit after income tax 38.9 44.6 (12.8)% 24.1 14.8 62.8%

1) EBIT before expenses from derivatives from supply contracts, impairment and
restructuring effects

The report on the first half of 2016 is available for download on the RHI
website: www.rhi-ag.com / Investor Relations / Financial Reports

Further inquiry note:
RHI AG
Investor Relations
Mag. Simon Kuchelbacher
Tel: +43-1-50213-6676
Email: simon.kuchelbacher@rhi-ag.com

end of announcement euro adhoc
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company: RHI AG
Wienerbergstrasse 9
A-1100 Wien
phone: +43 (0)50213-6676
FAX: +43 (0)50213-6130
mail: rhi@rhi-ag.com
WWW: http://www.rhi-ag.com
sector: Refractories
ISIN: AT0000676903
indexes: ATX Prime, ATX
stockmarkets: official market: Wien
language: English