EANS-Adhoc: RHI AG / RHI increases earnings again in the third quarter of 2012

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quarterly report

06.11.2012

Revenues of the RHI Group increased by 7.0% in the third quarter of
2012 in comparison to the same quarter of 2011 and amounted to EUR
459.9 million. While revenues in the Steel Division dropped by 3.7%
in a market environment still characterized by uncertainty, the
Industrial Division recorded growth of 25.8% as some major projects
were delivered. The operating result of the third quarter was up
28.3% on the comparable period of 2011 and amounted to EUR 50.3
million, thus again exceeding the high level of the previous quarter.
Positive restructuring effects of EUR 6.3 million resulted from the
sale of the plant in South Africa. The Group's EBIT amounted to EUR
56.6 million in the third quarter, exceeding the figure of the third
quarter of 2011 by 44.4%. The EBIT margin rose significantly from
9.1% to 12.3%.

Equity amounted to EUR 492.8 million at September 30, 2012, after EUR
471.1 million at June 30, 2012. Cash and cash equivalents rose from
EUR 107.1 million at the end of the second quarter of 2012 to EUR
234.2 million as a "Schuldscheindarlehen" of EUR 130 million was
issued. Net debt remained nearly constant at EUR 424.4 million
despite high investments in Norway and Turkey. The gearing ratio
improved from 90.2% in the second quarter of 2012 to 86.1%.

Net cash flow from operating activities amounted to EUR 43.0 million
in the third quarter despite an increase in working capital by EUR
10.2 million higher due to reduced trade payables and added up to an
accumulated EUR 91.4 million.

Q1 - Q3
in EUR million 2012 2011 Change
Revenues 1,372.7 1,280.7 7.2%
EBITDA 181.0 148.0 22.3%
EBITDA margin 13.2% 11.6% 1.6pp
Operating result 1) 132.6 108.4 22.3%
Operating result margin 9.7% 8.5% 1.2pp
EBIT 134.3 108.4 23.9%
EBIT margin 9.8% 8.5% 1.3pp
Profit before income taxes 124.0 88.9 39.5%
Profit for the year 85.6 90.0 (4.9)%
Net cash flow from
operating activities 91.4 74.9 22.0%
Investments in property,

plant and equipment and

intangible assets 106.3 32.2 230.1%

Number of employees
at end of quarter 8,097 8,001 1.2%
Average number of
employees Q1-Q3 8,115 7,711 5.2%

1) before reversal of impairment losses/impairment losses and
restructuring costs

Steel Division Due to weaker demand in Europe during the summer
months, revenues in the Steel Division, at EUR 272.1 million in the
third quarter of 2012, fell significantly short of revenues in the
second quarter of 2012 at EUR 296.8 million and revenues in the 2011
reference period at EUR 282.5 million. The operating result dropped
from EUR 21.6 million in the second quarter of 2012 to EUR 16.5
million in the third quarter of 2012 and was also lower than in the
prior-year period of EUR 20.2 million. The operating result margin,
at 6.1%, was below the 7.3% of the previous quarter and also lower
than in the prior-year reference period.

Industrial Division Due to the very positive business development in
the nonferrous metals business unit, revenues in the Industrial
Division, at EUR 174.8 million in the third quarter of 2012, slightly
exceeded the strong revenues of EUR 169.2 million in the second
quarter of 2012 and significantly exceeded the figure of the 2011
reference period of EUR 138.9 million. The operating EBIT improved
from EUR 21.7 million in the second quarter of 2012 to EUR 29.1
million in the third quarter of 2012 due to a shift in product mix,
also exceeding the operating EBIT of EUR 14.4 million in the
comparable quarter of 2011. The operating result margin, at 16.6%,
exceeded that of the previous quarter at 12.8% as well as that of the
comparative period of 2011.

Raw Materials Division Revenues of the Raw Materials Division, at EUR
59.7 million in the third quarter of 2012, were slightly below the
figure of EUR 62.0 million in the second quarter of 2012, but
significantly exceeded revenues of the same period in 2011, at EUR
48.0 million, due to the acquisition of Premier Periclase Ltd. (PPL)
in Ireland in September of the previous year. Operating EBIT
decreased slightly from EUR 5.4 million in the second quarter of 2012
to EUR 4.7 million in the third quarter of 2012, slightly exceeding
the value of EUR 4.6 million the comparable period of 2011. The
operating result margin amounted to 7.9%, falling short of both the
figure of 8.7% in the previous quarter and that of the 2011 reference
period.

Investments The projects designed to increase backward integration of
magnesia raw materials to some 80% are largely going according to
plan. The second rotary kiln in Turkey, with an annual capacity of
70,000 tons of high-grade sinter magnesia, was completed in the past
quarter, and the gradual commissioning of the fusing lines in Norway
with an annual capacity of approximately 80,000 tons of
seawater-based fused magnesia was started; consequently, RHI will
effectively be self-sufficient outside China. In Brazil, changed
political framework conditions made it necessary to revise RHI's
plans for a production site in the federal state of Rio de Janeiro.
At present, the planned refractory product portfolio and the sourcing
of local raw material are evaluated.

Vision 2020 In the course of the strategy process and of revising the
Vision, the RHI Management Board defined financial targets which
provide for revenues of EUR 3 billion and an EBIT margin of 12% or
above. The revenue target is to be accomplished through organic
growth and acquisitions.

Outlook Although the economic environment is weakening, RHI expects a
slightly higher level of revenues and a higher EBIT margin in the
year 2012 than in the previous financial year. Despite indications
that the economy is slowing down, RHI expects revenues for the year
2013 to reach a similar level as in 2012. The EBIT margin should
continue to improve further due to a higher level of backwards
integration and consistent cost management.

The report on the third quarter of 2012 is available on RHI's website
www.rhi-ag.com.

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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issuer: RHI AG
Wienerbergstrasse 9
A-1100 Wien
phone: +43 (0)50213-6123
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