Rhi Magnesita Nv · LSE:RHIM
Rhi Magnesita Nv — H1 2018 Earnings Presentation
29 slides from Rhi Magnesita Nv's earnings presentation, August 2018
Slide 1: The driving force of the refractory industry
The driving force of the refractory industry H1 2018 Half Year Results August 2018 RHI Magnesita H1 2018
Slide 2: Disclaimer
Disclaimer Financial information contained herein, as circumstances, neither the Company nor its well as other operational information, were subsidiaries, directors, officers, agents or not audited by independent auditors and employees be liable to third parties may include forward-looking statement
Slide 3: Agenda
Agenda 1 Highlights 2 Strategy and operational review 3 Financial review 4 Summary and outlook 5 Q&A 3 RHI Magnesita H1 2018
Slide 4: Highlights
Highlights RHI Magnesita H1 2018
Slide 5: H1 2018 financial highlights
Highlights H1 2018 financial highlights c. €1.5bn 25%1 €218m 88%1 H1 2018 revenue H1 2018 adjusted EBITA 14.5% 490bps 1 21.4% 80bps H1 2018 adjusted EBITA margin2 Working capital intensity 1.6x 0.3x 3 Net Debt / EBITDA 1 Represents the change between H1 2017 pro forma, at constant currency and H1 20
Slide 6: H1 2018 highlights
Highlights H1 2018 highlights Strong results in both the Steel and Industrial divisions Integration progressing well and ahead of expectations Synergy targets upgraded – at least €60m in 2018; €110 by 2020 One time costs to achieve – estimated between €110-130m Development in growth markets Investme
Slide 7: Strategy and operational review
Strategy and operational review RHI Magnesita H1 2018
Slide 8: Increased synergy potential to be realised by 2020
Strategy and operational review Increased synergy potential to be realised by 2020 €110m ⬢ At least €60m synergies in the 2018 P&L and €110m in synergies to be achieved by 2020 ⬢ Expected total cash restructuring costs are projected to be €110-130m, with €75m of cash outflows disbursed SG&A during 2
Slide 9: Integration continues ahead of original plan
Overview Integration continues ahead of original plan Achieved milestones Ongoing areas of focus ⬢ Culture Activation Program is in full roll-out, to spread the new ⬢ SAP harmonisation to follow in China, North America and South culture throughout the entire organisation America ⬢ Sales and Supply C
Slide 10: Building a global refractory leader with a differentiated customer proposition
Strategy and operational review Building a global refractory leader with a differentiated customer proposition based on technology and cost competitiveness Markets Competitiveness Worldwide presence with strong Cost competitive and safe local organisations and solid market production network support
Slide 11: High market share in Europe and Americas with opportunities in white spaces
Strategy and operational review 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 Market Share India 100m t
Slide 12: Future growth markets: China
Strategy and operational review Future growth markets: China Investment to increase raw materials and production Investing €20 million in the site in Chizhou, Anhui Province Well positioned to serve domestic Chizhou site includes a dolomite mine and production of high-quality and export markets dolo
Slide 13: Future growth markets: India
Strategy and operational review Future growth markets: India Consolidation of existing businesses to improve market position Significant government program to Well positioned business with Combination rationale develop Indian steel production longstanding client base Indian steel production (m tonne
Slide 14: Financial results
Financial results RHI Magnesita H1 2018
Slide 15: H1 2018 results
Financial results H1 2018 results Revenue (€m)1 +25% Strong revenue performance driven primarily by 1,508 price increases and robust customer demand 51 248 Price increases more than offsetting higher raw material costs 1,210 H1 2017 Steel division Industrial H1 2018 division EBITA (€m)1 +88% Margins
Slide 16: Steel division
Financial results Steel division Revenue (€m)1 +29% Outperformed broader steel production trends in North America, South America and Europe 1,094 India, Central America and Europe were also strong 846 Performance driven by – strong market conditions, price increases and cross-selling initiatives Gro
Slide 17: Industrials division
Financial results Industrials division Revenue (€m)1 +14% Strong performance with revenue up 14% 413 Glass performed strongly with demand from US 362 and Poland Nonferrous metals segment in line with expectations, but seeing some delay in new projects EEC seeing increase demand in installation busin
Slide 18: Cash flow overview
Financial results Cash flow overview Operating cash flow driven by increase in adjusted EBITA, offset by an additional €85 million working capital Whilst working capital requirements increased in absolute amounts, intensity improved to 21.4% (from 22.2%) Net interest costs of €35 million will decrea
Slide 19: Net debt reduced further in H1 2018
Financial results Net debt reduced further in H1 2018 Our financial position continues to strengthen, and our deleveraging profile is reinforced by the improving profit, synergies and interest expense reduction Net debt reduced from 1.9x adjusted pro forma EBITDA on 31 December 2017 to 1.6x adjusted
Slide 20: Capital structure
Financial Results 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 Capitalisation Table € millions revolving credit facility Schuldscheindarle
Slide 21: Summary and outlook
Summary and outlook RHI Magnesita H1 2018
Slide 22: Summary and outlook
Summary and outlook Summary and outlook Strong results in H1 2018, driven by continued strong demand from our end markets and price increases Our integration plans continue to progress ahead of original expectations and will deliver €110 million synergies in 2020 and beyond Growth rates achieved in
Slide 23: Compelling investment case
Summary and outlook Compelling investment case Solid strategy and Strong market position with 15% market share, clear leadership in Americas, 1 Europe and Middle East with broadest value-added solution offering competitive Opportunity to develop and leverage technology across regions and portfolio a
Slide 24: Q&A
Q&A 24 RHI Magnesita H1 2018
Slide 25: Appendix
Appendix RHI Magnesita H1 2018
Slide 26: Integrated offer overview
Appendix Integrated offer overview ⬢ RHIM launched a tag-along offer to Magnesita’s minority shareholders on the same terms and conditions as that made to the Control Group: ⬢ Cash + shares: R$445.6m1 + 5 million shares ⬢ Cash only: (i) R$31.091 or (ii) R$35.56 per Magnesita share whichever is highe
Slide 27: Alternative performance measures
Appendix Alternative performance measures In general, APMs are presented externally to meet investors' requirements for further clarity and transparency of the Group's underlying financial performance. The APMs are also used internally in the management of our business performance, budgeting and for
Slide 28: FX EBITDA sensitivity and exchange rates
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 28 RHI Magnesita H1 2018
Slide 29: Find out more at rhimagnesita.com
Find out more at rhimagnesita.com RHI Magnesita H1 2018