Rhi Magnesita Nv · LSE:RHIM
Rhi Magnesita Nv — Non-Deal Roadshow (September 2018)
38 slides from Rhi Magnesita Nv's roadshow presentation, September 2018
Slide 1: The driving force of the refractory industry
The driving force of the refractory industry Roadshow September 2018 RHI Magnesita September 18 Roadshow
Slide 2: Disclaimer
Disclaimer The consolidated financial statements to subscribe for or purchase any securities, presented here are consistent with the and neither any part of this presentation nor criteria of international accounting standards any information or statement contained - IFRS issued by the International
Slide 3: Summary and outlook: Compelling investment case
Summary and outlook Compelling investment case Clear strategy and Strong market position with 15% global market share, clear leadership in Americas, 1 Europe and Middle East with broadest value-added solution offering strong competitive Opportunity to develop and leverage technology across regions a
Slide 4: Refractory industry
Refractory industry RHI Magnesita September 18 Roadshow
Slide 5: Refractories are critical to all high-temperature industrial processes
Refractory industry Refractories are critical to all high-temperature industrial processes ⬢ Refractories are critical consumable or Main end markets investment goods for high-temperature €20 billion worldwide industry manufacturing processes ⬢ Fireproof materials consumed whilst ◼ Steel 7% protecti
Slide 6: Refractories are continuously consumed during finished goods production
Refractory industry Refractories are continuously consumed during finished goods production Key industries Applications Replacement % of clients’ Refractory characteristics costs Basic oxygen-, 20 minutes to ~3.0% Consumable product Steel electric arc furnace 2 months casting ladles Systems and solu
Slide 7: A complex range of tailored refractory products are required for each application
Refractory industry A complex range of tailored refractory products are required for each application Bricks Example of refractory application for steel ladle 2 3 1 Permanent lining 2 Non-basic, 3 Basic, ex. ex. Alumina Mag-Carbon 4 1 Monolothics and pre casts 5 6 8 4 Mixes 5 Pre Castables Functiona
Slide 8: The driving force of the refractory industry
The driving force of the refractory industry RHI Magnesita September 18 Roadshow
Slide 9: Providing everything, for everyone, everywhere
The driving force of the refractory industry Providing everything, for everyone, everywhere €2.7bn 10,000 14,000 2017 adjusted pro-forma revenue Customers served globally Employees spread over 37 countries 35 180 Main production sites across Countries shipped worldwide 16 countries 13 €37m Raw mater
Slide 10: Adding value through a full suite of products and services
The driving force of the refractory industry Adding value through a full suite of products and services Iron Ore Steel Refining Facility Technology Flow Solutions Coal Control Injection Natural Electric Arc Gas Furnace Direct Reduction Coal Scrap Basic Oxygen Continuous Furnace Casting Blast Coke Ov
Slide 11: Serving all blue chip clients in every industry
The driving force of the refractory industry Serving all blue chip clients in every industry Steel Cement Glass Metals Serving 1376 Serving 800 Serving 650 Serving 1060 of 1250 plants1 of 1537plants1 of 900 plants1 of 2000 plants1 1ex-China 11 RHI Magnesita September 18 Roadshow
Slide 12: Optimally positioned to reach clients everywhere
The driving force of the refractory industry Optimally positioned to reach clients everywhere Europe 23% North America 24% APAC 20% MEA-CIS 15% South America 18% Production facilities + More than 70 sales Raw material sites offices worldwide % revenues (2017) 12 RHI Magnesita September 18 Roadshow
Slide 13: Amongst the leading FTSE 250 industrial companies
The driving force of the refractory industry Amongst the leading FTSE 250 industrial companies Revenue (€ Bn) 3.7 2.7 2.7 2.6 3.7 2.5 2.0 2.01.9 1.7 1.7 2.6 1.7 2.5 1.2 1.2 1.2 1.1 1.1 1.1 1.0 2.0 1.1 1.0 0.80.8 0.8 0.7 0.7 0.6 0.6 1.7 0.6 Weir RHI Magnesita Imi Vesuvius Spectris Morgan Halma Spirax
Slide 14: Strategy
Strategy RHI Magnesita September 18 Roadshow
Slide 15: Build a global refractory leader with a distinctive customer proposition
Strategy Build a global refractory leader with a distinctive customer proposition based on technology and cost competitiveness to ensure manufacturing of essential materials for the world Markets Competitiveness Cost competitive and safe Worldwide presence with strong production network supported lo
Slide 16: Markets: opportunities in India, China and CIS
Markets High market share in Europe and Americas with opportunities to occupy ‘white spaces’ in India, China and CIS RHI Magnesita revenue by region vs market size Steel Production South America HIGH MEA 800m tonnes Europe North RHI Magnesita America India Market Share 100m tonnes LOW Other CIS Asia
Slide 17: Extend market position in high quality applications and strengthen non-basic mixes
Portfolio Extend market position in high quality applications and strengthen non-basic mixes and functional products Portfolio Main Applications Opportunity ⬢ Great capability and logistics: Production in all continents and short lead-time to everyone, everywhere ⬢ Steel: converters and ladles Basic
Slide 18: Top solution provider investing in innovative technologies and digitalization
Technology Top solution provider in the industry, investing in innovative technologies and digitalization Continue investing in R&D Develop into a system 1 to create products, which 3 supplier based on R&D, have a distinct competitive partnerships and selective advantage by costs or by acquisitions
Slide 19: The industry's largest dedicated research team
Technology The industry’s largest dedicated research team, pushing the boundaries of what is possible We drive innovation in every aspect of our Global research team of 270+ employees, of which 98 have masters and PHDs, working out of 2 research hubs and 3 business, from materials, robotics and Big
Slide 20: On-site technical experts consult, develop and deliver innovative solutions
Technology On-site technical experts consult, develop and deliver innovative solutions directly to clients 340+ technical engineers across 90 countries, working on-site with clients to provide custom-made solutions, installation support, recycling, post-mortem analysis and more. A combination of… …e
Slide 21: Cost competitive and safe production network supported by lowest cost G&A services
Competitiveness Cost competitive and safe production network supported by lowest cost G&A services ⬢ Reduce conversion & logistics costs and optimize FX changes tactically through the most efficient usage of the global production footprint ⬢ Run the lowest cost G&A services to support the daily busi
Slide 22: Unrivalled competitive advantage through vertical integration
Competitiveness Unrivalled competitive advantage through vertical integration, in multiple sites 1.6 million 70% tonnes of raw vertical integration in materials produced dolomite and magnesite and Main raw material sites per year 50% for all raw materials Certainty of supply High quality materials C
Slide 23: Increased synergy potential to be realised by 2020
Competitiveness Increased synergy potential to be realised by 2020 ⬢ At least €60m synergies in the 2018 P&L €110m and €110m in synergies to be achieved by 2020 ⬢ Expected total cash restructuring costs are projected to be €110-130m, with SG&A €75m of cash outflows disbursed during 2018 €60m+ ⬢ Inte
Slide 24: Synergy opportunities across a range of business activities
Competitiveness Synergy opportunities across a range of business activities Opportunities SG&A ⬢ Rationalization of sales network ⬢ Streamlining corporate management and back-office ⬢ Ramp-up of shared service centers Procurement ⬢ Best sourcing prices in overlapping countries and spend categories ⬢
Slide 25: Additional 'below the line' synergies are expected post-integration
Competitiveness Additional ‘below the line’ synergies are expected post-integration Opportunities Capex ⬢ Footprint optimization to reduce maintenance capex over next 2-3 years ⬢ Shift overall capex towards higher share of value & growth projects Working Capital ⬢ Reallocate production and shorten s
Slide 26: Financials
Financials RHI Magnesita September 18 Roadshow
Slide 27: Resilient business model with little volatility across the cycle
Financials Resilient business model with little volatility across the cycle and low level of commoditisation Historic Gross Margin¹ Basic Materials 40% RHI Magnesita Markets 30% ⬢ Commoditized ⬢ Lower volatility 20% in cost due to Raw ⬢ Price takers of significant 10% Materials key raw vertical RHI
Slide 28: 2017 adjusted pro-forma revenue breakdown
Financials 2017 adjusted pro-forma revenue breakdown Total Revenue: c.€2.7 bn by Industry1 by Geography ◼ North America 46% Cement / Lime ◼ Europe ◼ Asia Pacific ◼ South America Non Ferrous Metals ◼ MEA-CIS 26% Other Process Industries 28% 15% 26% 24% 18% 74% 23% 20% ◼ Industrial ◼ Steel 1 Revenue s
Slide 29: Adjusted pro-forma results
Financials Adjusted pro-forma results Revenue (€m) EBITA (€m) 11.4% 14.5% 11% 9.1% 9.6% 25% 39% 2,677 88% 2,409 1,259 1,369 1,210 1,508 304 219 218 116 2016 2017 H1 2017 H1 2018 2016 2017 H1 2017 H1 2018 Leverage (€m) Working Capital Intensity1 (€m) 1.9 27.8% 1.6 22.2% 21.8% 751 741 656 668 610 470
Slide 30: Capital structure
Financials Capital structure Solid credit profile and commitment to de-leveraging the current business On 3 August 2018 the company successfully raised a new unsecured US$600 million 5-year term loan and multicurrency revolving credit facility Proceeds of the new facility will be used to redeem the
Slide 31: Capital strategy
Financials Capital strategy Dynamic capital allocation over time, supporting long term strategy, providing flexibility for market opportunities and increasing shareholder returns Dividends Shareholder Returns Share buybacks Delever Operating Cash Flow Sustainability Capex Capital Allocation Drivers:
Slide 32: Summary and outlook: Compelling investment case
Summary and outlook Compelling investment case Clear strategy and Strong market position with 15% global market share, clear leadership in Americas, 1 Europe and Middle East with broadest value-added solution offering strong competitive Opportunity to develop and leverage technology across regions a
Slide 33: Taking innovation to 1200ºC and beyond
Taking innovation to 1200ºC and beyond RHI Magnesita September 18 Roadshow
Slide 34: Appendix
Appendix RHI Magnesita September 18 Roadshow
Slide 35: Driving client performance improvements
Appendix Driving client performance improvements Equipment/Application Service Starting point End game Improvement Client A (Integrated) Basic Oxygen Furnace (B.O.F.) Refractories 1,900 heats 7,200 heats +385% Assembly 145 h 40 h 3.8X faster Blast Furnace Runners 1,600 h 330 h 4.8X faster Torpedo Ca
Slide 36: Management team
Appendix Management team Executive Management Team Joined Background Stefan Borgas 2016 ⬢ Former CEO of Israel Chemicals Ltd and Lonza Group CEO ⬢ Several management positions at BASF Octavio Lopes 2012 ⬢ Former CEO of Magnesita and Equatorial Energia CFO ⬢ Several management positions at GP Investm
Slide 37: FX
Appendix FX EBITDA Sensitivity on an annualised basis H1 2018 Exchange Rates ∆ in EBITDA vs € Unit 1€= Closing Rate Average rate (€m) USD +1 cent 4.30 USD 1.16 1.21 CNY +0.01 yuan -0.24 CNY 7.70 7.70 BRL +0.10 reais 2.12 BRL 4.49 4.08 INR +1 rupee 0.58 INR 79.78 79.13 37 RHI Magnesita September 18 R
Slide 38: Find out more at rhimagnesita.com
Find out more at rhimagnesita.com RHI Magnesita September 18 Roadshow