Rhi Magnesita Nv · LSE:RHIM
Rhi Magnesita Nv — H1 2025 Earnings Presentation
39 slides from Rhi Magnesita Nv's earnings presentation, Jul 30, 2025
Slide 1: Half Year Results 2025
Half Year Results 2025 30 July 2025 2025 Half Year Results | July 2025 1
Slide 2: Agenda
Agenda 1 H1 overview 2 Strategic update 3 Financial review 4 Summary and outlook 5 Q&A 6 Appendix 2025 Half Year Results | July 2025 2
Slide 3: Health & Safety
Health & Safety A core value at RHI Magnesita Long term reduction in injury rates since 2018 Our safety culture transformation includes initiatives designed to encourage greater reporting of incidents: ⁃ LTIF increased to 0.18 (H1 2024: 0.11) TRIF LTIF ⁃ TRIF increased to 0.50 (H1 2024: 0.41) 1.07 S
Slide 4: Financial highlights
Financial highlights Adverse market environment deteriorates EBITA margin to 8.4%, strong recovery expected in H2 Revenue Adjusted EBITA Adjusted EBITA Adjusted operating Cash Conversion margin cash flow €1.7bn €141m 8.4% €175m 124% 2% constant currency (26)% (260)bps (21)% 7.8ppt Resco Adjusted EBI
Slide 5: H1 margins temporarily lower with recovery expected in H2
H1 margins temporarily lower with recovery expected in H2 EBITA uplift in H2 supported by industrial order book, price increases and cost savings Price and mix drive lower EBITA H1 25 vs H1 24 €m Record low Adjusted EBITA margin in H1 2024 197 19 ⁃ Price decline 5% ⁃ Unfavourable mix, lower value pr
Slide 6: Price and volume detail
Price and volume detail Both volume and price declined in the base business, offsetting the contribution from M&A Lower pricing offset by M&A Revenues, € million 5% decline in average prices per tonne on fixed cost base 1,710 5% 1,677 ⁃ Reflects pricing and mix changes -2% ⁃ Price competition most i
Slide 7: Steel business overview
Steel business overview Pricing declined in the base business by 5% on fixed cost base, compressing margins Revenue 1,2 Sales volumes decreased by 1% excluding M&A €m 22.6% 23.8% Heavy price competition in commoditised segments, 20.3% particularly in India, China, East Asia and META. Average pricing
Slide 8: Steel segment performance by region
Steel segment performance by region Strong growth in India but with weak pricing. All other regions saw flat or reduced WSA production volumes Steel Segment Revenue H1 2025 10% 15% China & East Asia Europe & CIS 8% Middle East, Turkiye, Africa €242m €117m 2% China & East Asia North America 18% India
Slide 9: Industrial business overview
Industrial business overview Margin reduction due to mix change towards lower value Cement segment as NFM projects move into H2 Revenue Decline in Industrial Projects revenue driven by Glass and €m NFM 27.3% 26.1% ⁃ Low glass demand reflects weak end market 21.7% conditions -2% 571 ⁃ NFM end markets
Slide 10: Industrial project deferrals weigh on H1 profitability
Industrial project deferrals weigh on H1 profitability Deferral of NFM projects to H2 leads to weakest H1 EBITA and margin for Industrial business since 2021 Industrial pricing evolution and Industrial Adjusted EBITA (€m) Industrial average NFM and Glass order book rebased to 100 price per ton NFM r
Slide 11: Management action already taken, will take effect in H2
Management action already taken, will take effect in H2 (i) Reduce costs, (ii) fulfil industrial project orders, (iii) increase prices, (iv) grow steel volumes EBITA €m 20 10 High certainty 9 230 - Likely 250 21 Uncertain 2026 onwards benefit from 50 effects of: ⁃ SAP upgrade 10 10 10 ⁃ SG&A outsour
Slide 12: Strategic update
Strategic update Stefan Borgas, CEO
Slide 13: Resco integration update
Resco integration update Integration project progressing despite complex market dynamics The Resco acquisition is a major step forward for RHI Magnesita‘s €m, 5 months to 30 June 2025 North America business and is fulfilling expectations in 2025 YTD 90 Initial integration priorities have included: ⁃
Slide 14: US tariffs
US tariffs Dynamic outlook on announced tariffs of Europe and Brazil imports Expected tariff rates effective 1 August 2025 Current ‘reciprocal’ tariff rates at 10% on nearly all 15% trading partners Announced updated tariff rates on select trading 0%, critical mineral partners take effect in August
Slide 15: US recycling
US recycling BPI Inc. joint venture opportunity to raise US recycled raw material usage rates New recycling joint venture agreed with BPI, Inc. In June 2025, Targeted to 22,5% subject to normal closing conditions increase to c.20% BPI, Inc. was founded in 1982 and is a well-established industrial 18
Slide 16: Financial Review
Financial Review Ian Botha, CFO 2025 Half Year Results | July 2025 16
Slide 17: Profit and loss summary
Profit and loss summary Lower gross margin due to decline in pricing on fixed cost base €m H1 2025 H1 20241 Change Revenue 1,677 1,728 -2.9% Competitive pricing environment and drop in Industrial projects demand are key drivers of weaker P&L Gross profit 348 416 -16.2% performance in the period Gros
Slide 18: H1 2025 revenue bridge
H1 2025 revenue bridge Base business revenue declined by 2% excluding Resco contribution and adjusting for FX €m 1,728 18 1,710 31 1,677 91 90 H1 2024 Revenue FX headwind H1 2024 Revenue at Lower sales volumes Price and mix Resco H1 2025 Revenue constant currency 2025 Half Year Results | July 2025 1
Slide 19: H1 2025 EBITA bridge
H1 2025 EBITA bridge Competitive price environment and drop in Industrial Projects demand key drivers of decline in EBITA €m 197 190 7 17 13 7 10 141 -47 11 Steel €m 49 India -17 32 Meta -13 3 0 Europe & -52 -7 CIS RoW -10 Industrial €m Industrial -49 Projects Cement & -3 lime H1 2024 FX tailwind H1
Slide 20: Low refractory margin of 7.3ppts in H1 2025
Low refractory margin of 7.3ppts in H1 2025 Full year Group margin guidance reduced to 10.5 – 11.0%, from 11.5% original guidance FY FY H1 H2 FY H1 2022 2023 2024 2024 2024 2025 RHI standalone RHI Magnesita Refractory EBITA (€m) 298 348 176 203 379 122 13.9% 14.0% Vertical integrated EBITA (€m) 84 6
Slide 21: Cost detail
Cost detail High alumina prices in Q4 2024 impacted COGS in H1 2025. Gas, freight and labour also rising in 2025 YTD Cost of goods sold Raw materials Energy €m DBM prices low compared to 2024 Gas prices normalized, oil price stable Rebased to 100 Rebased to 100 1.200 DBM 97% (China) Gas (NL TTF) 1,3
Slide 22: Working capital
Working capital Closely managed according to inventory coverage and revenue intensity targets Inventory Working capital balances % of L3M annualised revenue % of L3M annualised revenue 27.9% 29.5% 28.9% €m 22.7% 23.9% 23.4% 997 944 987 1,183 H1 2024 H1 2025 excluding M&A H1 2025 1,068 1,102 Accounts
Slide 23: Capital expenditure
Capital expenditure Guidance reduced to €130 million following review of projects €m Capital expenditure guidance for FY 2025 reduced from €145 million to €130 million 252 Total capex in H1 was €45 million, consisting of €27 million of project capex and €18 million maintenance 2025 capex guidance no
Slide 24: Network optimisation investments
Network optimisation investments Planned restructuring and capital expenditure to realise benefits of 2022-23 M&A and Resco Network optimisation investment 2025-27 Planned network optimisation expenses in Europe, South €m America and USA plant footprint adjustments, following 60 Resco acquisition an
Slide 25: Cash flow
Cash flow Strong cash conversion of EBITA at 124%, driven by reduced working capital in base business Adjusted operating cash flow and cash Conversion Net debt bridge Dec 24 - Jun 25 €m1 €m 1,583 102% 88% 111% 102% 103% 124% 40% -84% 438 418 419 359 290 333 155 175 1,252 1,250 14 13 -236 57 153 2018
Slide 26: Net debt and gearing
Net debt and gearing Pro forma leverage maintained within guided range for M&A, significant available liquidity Net debt and liquidity Pro forma leverage of 3.1x4 (H1 2024: 2.4x), temporarily €m 3.1x above target gearing range 2.3x 2.3x Leverage expected to reduce in H2 2025 given Liquidity1 managem
Slide 27: Summary & outlook
Summary & outlook
Slide 28: Outlook and guidance summary
Outlook and guidance summary Strong H2 uplift expected despite extremely challenging external market conditions P&L 2025 guidance H1 2025 update External market conditions are challenging due to weak end markets, trade and FX uncertainties, cyclicality in the industrial business and Weak demand, no
Slide 29: Investment case
Investment case Industry leader with significant value generation potential from M&A led growth strategy ✓ Strategy to grow through M&A in the fragmented global refractory market is by far the best route to generate value for shareholders in a low growth environment ✓ Strong momentum in transaction
Slide 30: Q&A
Q&A 2025 Half Year Results | July 2025 30
Slide 31: Appendix
Appendix 2025 Half Year Results | July 2025 31
Slide 32: Cash flow reconciliation
Cash flow reconciliation €m H1 2025 H1 2024 Adjusted EBITDA 211 258 Share based payments - gross non-cash 1 5 Working capital changes 57 86 Changes in other assets and liabilities (49) (60) Investments in PPE, IA (45) (68) Adjusted operating cash flow 175 221 Income taxes paid (33) (36) Cash effects
Slide 33: Net financial expenses
Net financial expenses €m H1 2025 H1 2024 Net interest expenses (22) (19) Interest income 7 14 Interest expenses (29) (32) FX effects (13) 14 Balance sheet translation (27) 23 Derivatives 14 (9) Other net financial expenses (12) (8) Present value adjustment (1) - Factoring costs (5) (5) Pension char
Slide 34: Reconciliation of adjusted earnings
Reconciliation of adjusted earnings Items excluded Items excluded Items excluded from adjusted EPS: from adjusted H1 2025 from adjusted H1 2024 (€m) H1 2025 performance adjusted H1 2024 performance adjusted EBITA1 87 54 141 174 16 190 ⁃ €(25) million in restructuring expenses related to plant closur
Slide 35: Impact of foreign currency movement
Impact of foreign currency movement EBITA sensitivity in H1 2025 2024 and H1 2025 exchange rates Appreciation vs EUR Depreciation vs EUR Increase / Increase / H1 2024 H1 2024 H1 2024 H1 2025 (decrease) (decrease) Opening Closing Average Average Unit in EBITA (€m) Unit in EBITA (€m) EUR: Rate Rate Ra
Slide 36: Return on invested capital
Return on invested capital Group ROIC1 H1 2025 H1 2024 Average Invested Capital (€m) 3,021 3,089 NOPAT (€m) 82 136 ROIC (%) 5.5% 8.8% Vertical integration ROIC H1 2025 H1 2024 Average Invested Capital (€m) 443 495 NOPAT (€m) 9 6 ROIC (%) 4.2% 2.6% Refractory ROIC H1 2025 H1 2024 Average Invested Cap
Slide 37: Our performance in context
Our performance in context RHIM has navigated the downturn in steel production without margin decline, whilst executing significant M&A at the bottom of the refractory market EBITDA margin Global financial China China raw COVID-19 Energy crisis/ World Steel Production YoY change crisis downturn mate
Slide 38: Peer group benchmarking
Peer group benchmarking (i) EBITDA and free cash flow comparable to FTSE 100 peers; (ii) highest free cash flow yield in the sector; (iii) compelling M&A growth story; (iv) high operational gearing to market recovery EBITDA 20241 Free cash flow 20241 Free cash flow yield 1 €m RHI Magnesita €m %, 202
Slide 39: Important notice
Important notice Financial information contained herein, as well as other operational information, were not audited by independent auditors and may include forward-looking statements and reflects the current views and perspectives of the management on the evolution of macro-economic environment, con