RHI Magnesita A resilient performance in difficult market conditions

RHI Magnesita

RHI Magnesita N.V. (LON:RHIM) today announced its 2019 full year results for the year ended 31 December 2019.

Financial results20192018 
(€m unless stated otherwise) Adjusted1Adjusted at constant currencyChange
Adjusted EBITA408448(8.9)%
Adjusted EBITA margin14.0%14.3%(30 bps)
Adjusted EPS5.575.314.9%
Net debt2650697(6.7)%
Net debt to adjusted EBITDA21.2x1.3x(0.1)x
(€m unless stated otherwise) ReportedReported
Profit before tax200246

1 Adjusted figures are alternative performance measures “APM” excluding impairments, amortisation of acquisition intangibles and exceptional items to enable an understanding of the underlying performance of the business. Full details are shown in the APM section.

2 Following the introduction of IFRS 16 Leases, 2019 net debt includes the impact of IFRS 16 of €62 million. 2018 adjusted net debt figures are shown including the impact of IRFS 16 (€58 million) to facilitate comparison between reporting periods.


  • Resilient performance in difficult markets
  • Steel Division revenue down 10.4% at constant currency reflecting weak end markets and customer destocking
  • Industrial Division revenue up 3.6% at constant currency with strong performance through the year
  • Significant fall in raw material pricing, back to long-term average levels
  • Robust margin performance
  • 14.0% adjusted EBITA margin despite lower contribution from raw materials in H2
  • Solid cash flow generation
  • FY19 Operating free cash flow of €359 million
  • Integration of RHI and Magnesita complete in 2019
  • Operating systems in place and single Group culture fully embedded
  • €90 million of synergies extracted
  • Well executed price rise programme
  • Sustained growth in target markets – revenue growth on a reported basis in China up 10.9%; India up 2.7%
  • Continued development of solutions model and digital offering
  • Established Production Optimisation Plan and Sales Strategies to drive next phase of margin improvement – on track to deliver EBITA benefit of €70-€80 million by 2022
  • Strong balance sheet, supporting potential for further investment and M&A
  • Net debt reduced by 0.1x (1.2x net debt to EBITDA)
  • Strong liquidity position with cash and available facilities of €1.1 billion
  • No final dividend for 2019, to preserve financial flexibility

Commenting on the results, RHI Magnesita Chief Executive Officer, Stefan Borgas said:

“In 2019, RHI Magnesita has further demonstrated strong progress in executing our strategy, resolving previously identified operational issues and implementing the initiatives that will underpin our long-term growth. We have delivered a resilient financial performance in the year, despite difficult market conditions and lower raw material prices, particularly in our Steel Division in the second half.

“Looking forwards, we will benefit from the steps we have taken to strengthen the business, particularly from the Production Optimisation Plan. However, the difficult market environment in the second half of 2019 has continued in the first quarter of 2020. Whilst COVID-19 has not had a material financial impact on the business to date, we have seen a recent slowdown in customer activity, particularly in our Steel Division, and the future demand environment is very uncertain. We have undertaken extensive scenario testing, factoring in a range of potential outcomes, which indicate that the Company has sufficient liquidity to withstand an extended period of uncertainty.

“Longer term we see clear opportunities to further progress our refractory margin, whilst also continuing to benefit financially and strategically from our backward integration. The business benefits from a strong financial position, with low leverage and significant liquidity, and is well positioned to take advantage of growth opportunities when markets improve.”

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