Rhi Magnesita Nv · LSE:RHIM
Rhi Magnesita Nv — H1 2024 Earnings Presentation
54 slides from Rhi Magnesita Nv's earnings presentation, August 2024
Slide 1: RHI Magnesita Investor Presentation August 2024
3 RHI MAGNESITA RHI Magnesita Investor Presentation August 2024
Slide 2: Content
» RHI MAGNESITA Content @ Introduction to RHI Magnesita ©) Hy 2024 financial results . 3) Appendix 2024 Half Year Results| August 2024
Slide 3: Refractories are essential for our modern world
» RHI MAGNESITA Refractories are essential for our modern world Concrete Copper Steel Glass Aluminium 1,500°C 1,350°C 1,760°C 1,650°C 1,250°C N CN CN 1 tonne of STEEL 1 tonne of CEMENT 1 tonne of GLASS 1 tonne of ALUMINIUM 1 tonne of COPPER demands ~10-15 Kg demands ~1 Kg demands ~4 Kg demands ~6 Kg
Slide 4: Refractory applications
Refractory applications Customer industries’ Main application Lifetime and costs Refractory characteristics Industrial division Project businesses Steel 69% of revenues Cement/Lime 1 2% of revenues Non-ferrous metals 8% of revenues Glass? & Energy, Environmental, Chemicals2 9% of revenues 2024 Half
Slide 5: Leading global supplier of refractories
» RHI MAGNESITA Leading global supplier of refractories Example - Electric Arc Furnace (“EAF”) Key product ranges refractories Roof centre piece Bricks Mixes SSreotproductrovenve 257 productrevenue ‘erageseling pce ‘rerageseling pce C£1800per tonne c€800perionne Injector area Slag door area Flow Ser
Slide 6: End markets and customer industries
» RHI MAGNESITA End markets and customer industries Cement/ Non-ferrous Lime Steel Glass &EEC metals Customer 12% 69% 9% 8% industries % of 2023 revenue. End markets 45% 7% 10% 15% 8% 5% Construction Transportation Machinery Electronicsand Other Energy consumer goods 2024 Half Year Results | August
Slide 7: Raw material and refractory process overview
» Raw material and refractory process overview Rar mnnesiTs Raw material production Heat management solutions os on, a ; ‘im Gp lad £ a e co Mining rushing i v Refractory production R Logistics -tiilt ? — hdl ~ 7 a v > 7 Dimosa 0s (ee ea Bact 2024 Half Year Results| August 20:
Slide 8: Solutions contracts
» RHI MAGNESITA Solutions contracts RHI Magnesita offers full heat management solutions to its customers Client benefit v Reduced downtime v Lower refractory consumption v Lower energy and other raw materials consumption v Higher productivity and cost savings RHI Magnesita benefit v Market share gai
Slide 9: Vertical integration benefits
» RHI MAGNESITA Vertical integration benefits Our magnesite raw material assets are amongst the lowest cost globally DBM 98: Indicative cost curve EBITA margin contribution RHI standalone RHI Magnesita 13.9% 14.0% > H Eskisher Brumado 2016 2017 2018 H12024 HB ERHIM assets I Vertical integration marg
Slide 10: Raw material vertical integration benefits
} Raw material vertical integration benefits RHI MAGNESITA Extent of vertical integration Key raw materials sites and shipment routes 2023 % % Magnesite-and dolomite-based Internal raw materials (basic) raw material volume > External raw materials Lo ~~ Total volume of raw material usage Plants Tota
Slide 11: Global refractory production network
Global refractory production network Regional finished goods production - local versus imports Europe finished goods exports A A P % value by destination region, 2023 @ %imported © % produced in region Europe &qiirkiye China finished goods exports 445kt %value by destination region, 2023 North Ameri
Slide 12: Low carbon steel production
» RHI MAGNESITA Low carbon steel production Transition to EAF, DRI and ESF is a strong positive growth driver for RHI Magnesita Scrap steel Tonnes of CO, per tonne of steel } EAF BOF EAF s Ss 0.66 BOF BF: Blast furnace 1. Electric smelting furnace (“ESF”) is required to be paired with a Direct Reduc
Slide 13: HY 2024 financial results
3 RHI MAGNESITA 2. HY 2024 financial results
Slide 14: Q1 Q2 Q3 Q4 Q1 Q2 ⁃
⁃ 100 95 90 ⁃ ⁃ 85 ⁃ 80 Q1 Q2 Q3 Q4 Q1 Q2 ⁃ 2023 2023 2023 2023 2024 2024
Slide 15: Health & Safety
Health & Safety A core value at RHI Magnesita Improvement in injury rates since 2018 -@ TRF -@-LTIF 1.07 2018 2019 2020 2021 2022 2023 Hi2024 1. Lost time injury frequency rate per 200,000 hours 2.Total recordable injury frequency rate per 200,000 hours 2024 Half Year Results | August2024 » RHI MAGN
Slide 16: Financial highlights
Financial highlights » RHI MAGNESITA EBITA margin impacted by lower raw material contribution. Strong cash conversion at 123% Revenue Adjusted EBITA Adjusted EBITA margin €1.7bn €190m ==11.0% 1% constant BH% sy (60)bps currency M&A Adjusted Dividend Working Capital EBITDA contribution! intensity? €5
Slide 17: Steel business overview
Steel business overview Gross margin improved vs H1 2023, pricing prioritised over market share Revenue <€m ease 23.0% 22.6% o © 1.203 hess 1185 —® Gross margin (%) Hl Revenue H1 2023 2024 Half Year Results | Augu H2 2023 +2024 7 H1 2024 1. Denoted on a reported basis 2. Excludes recycling » RHI MAG
Slide 18: Steel segment performance by region
Steel segment performance by region » RHI MAGNESITA M&A drives strong volume growth in Europe and China/East Asia, India temporarily lower North America €329m -5% -5% -5% H1 2024 versus Hi 2023 HH RHIM Base Volumes I RHIM incl M&A Volumes HB RHIM Revenue incl M&A (constant currency) 2024 Half Year R
Slide 19: Regional steel production trends
NAM: stable situation with weak SAM: stable domestic output Europe & Türkiye: no recovery outlook YoY despite increased imports forecast in 2024 12 Monthly steel production, million tons 5 24 Monthly steel production, million tons Monthly steel production, million tons 20 10 4 16 8 3 2010-2023 steel
Slide 20: Industrial business overview
Industrial business overview » RHI MAGNESITA Sequentially lower revenues, gross margin declined to 27.2% from strong H1 2023 Revenue 531 543 210 214 ies 317 370 355 H1 2023 H2 2023 H1 2024 2024 Half Year Results | Augu 7 +2024 Hl Cement/Lime Hl Industrial Projects —® Gross margin (%) ® Revenues incr
Slide 21: Strategic update
Strategic update Stefan Borgas, CEO
Slide 22: Ongoing expansion opportunity
» Ongoing expansion opportunity muanaonesr Strengthening a global leadership position in the refractory industry Europe India | China 3 oR Areas of focus for a & 8 future M&A H OF . ° Oo £ = v East Asia g ee % v Middle East cc = = = a a i v Alumina based (non-basic) refractories v Growth in under-re
Slide 23: Local for local strategy
» RHI MAGNESITA Local for local strategy Resco acquisition seeks to reduce imports by growing NAM local manufacturing presence © Yimported @ % produced in region (FY 2023) * Resco acquisition now subject to phase 2 antitrust review, completion expected end H2 2024 or early 2025 - Willincrease local
Slide 24: Sustainability leadership
» RHI MAGNESITA Sustainability leadership Continued increase in recycling rate delivers significant CO, savings Use of secondary raw material * Recycling now 13.2% despite dilution from new M&A, 15% target % of total raw material used for 2025 maintained - New business unit established to pursue ext
Slide 25: MCi Carbon
MCi Ca rbon RHI MAGNESITA Promising technology to create saleable materials through CO, remineralisation * MCi technology creates saleable products through the remineralisation of CO emissions ® Ore samples for remineralisation testing obtained from RHI Magnesita sites and nearby external sources ®
Slide 26: Green steel opportunity
Green steel opportunity » RHI MAGNESITA RHI Magnesita has the capability to develop new technologies for decarbonisation * Over 20 green steel projects are in various stages of development worldwide ® Multiple technologies are being deployed to reduce or eliminate CO, from steel production, which ac
Slide 27: Financial Review
Financial Review Ian Botha, CFO
Slide 28: Profit and loss summary
2024 Half Year Results | August 2024 Profit and loss summary Adjusted EPS growth of 2.2% as lower net finance charges offset reduced Adjusted EBITA margin €m H12024 H12023' Change Revenue 1,728 1,734 0.3% Gross profit 416 414 0.5% Gross margin (%) 241% 23.9% 20bps Adjusted EBITDA 258 265 -2.6% EBITD
Slide 29: H1 2024 revenue bridge
» H1 2024 revenue bridge RH MAGNESIA M&A contribution offsets volume and price driven decline in base business revenues €m 1,734 3 1,728 H1 2023 Revenue FX effect H12023 Revenue at Sales volumes Price and mix M&A H12024 Revenue constant currency 2024 Half Year Results | August 20; 29
Slide 30: H1 2024 EBITA bridge
» RHI MAGNESITA H1 2024 EBITA bridge Volume, price and mix impacts exceeded benefits from reduced input costs and M&A €m 2000S 207 me = |S 190 4 i 74 H12023 FX effect H12023 Sales volumes Price andmix COGSmix Inputcosts Fixed cost Other M&A H12024 EBITA EBITA at and other absorption completed EBITA
Slide 31: Consistent margin resilience, minimum 11% since merger
Consistent margin resilience, minimum 11% since merger Vertical integration margin declined to 0.8 ppts due to low raw material prices and low fixed cost absorption Refractory margin further improved due to synergies and production optimisation benefits
Slide 32: Cost detail
» Cost detail aa waonerra Lower input costs for refractory producers, but freight and some raw materials increasing Cost of goods sold €m Raw materials Energy DBM prices low compared to 2022 but up off low base in H1 Gas prices normalized, oil price stable 24 Rebased to 100 epee? t0100 — DBM 97% (Ch
Slide 33: Synergy target of 30-50% mostly delivered within first two years
Synergy target of 30-50% mostly delivered within first two years Full year annualization effect of 2023 M&A in 2024, synergies weighted to H2
Slide 34: Working capital
» RHI MAGNESITA Working capital Reduced by €46m YoY to €894m, reflecting inventory reduction over L12M and higher AP Working capital balances %ofl3Mennuaisedrovenue Inventory. sa.2% “> %of aM annyaligd revenue e 2 oe 26.0% 243% 25.3% — . 1.250 1S H12023 H12024 excluding M&A HI2024 310 289 112023 H12
Slide 35: Capital expenditure
» RHI MAGNESITA Capital expenditure Guidance unchanged, digital upgrade investment to be classified as Other Expenses @H1 2024 capex was £68 million, H2 weighting 252 expected ® Brumado project now completed and in ramp up ® Of the €30 million guided for M&A capex, €10 million ua 170 is recurring ma
Slide 36: Working capital increase H1/H2
H1: €(80)m H2: €230m Working capital increase
Slide 37: Undrawn facilities, cash and debt
⁃ Undrawn facilities Cash and cash equivalents Debt
Slide 38: ,
» RHI MAGNESITA,
Slide 39: Trading outlook and 2024 guidance updates
Trading outlook and 2024 guidance updates » RHI MAGNESITA M&A annualisation will be offset by lower vertical integration margin and pricing pressure e Refractory demand remains subdued in all key geographies with the exception of India: = H12024 steel output weaker than expected = Reduced project ac
Slide 40: Full year annualization effect of 2023 M&A
• ⁃ ⁃ Full year annualization effect of 2023 M&A in ⁃ 2024, synergies • weighted to H2 ✓ ✓ ✓ ✓ ✓ ✓
Slide 41: Appendix
RHI MAGNESITA
Slide 42: RHI Magnesita
3 RHI MAGNESITA
Slide 43: Leverage
Leverage 1.0 – 2.0x ~2.5x for M&A Resilient margins through the cycle
Slide 44: H1 2024 EBITA - Adjusted items
» RHI MAGNESITA H1 2024 EBITA - Adjusted items Restructuring costs (Q) Digital architecture update (15) Plant closures (3) Disposal of Argentinian bonds (9) M&A related costs 7”) M&A related costs iva) €m Oberhausen provision 5 Other (2) Others @) FX gains from disposal of assets 9 Hl Other Operatin
Slide 45: Cash flow reconciliation
» RHI MAGNESITA Cash flow reconciliation €m H1 2024 H1 2023 Adjusted EBITDA 258 265 Share based payments - gross non-cash 5 4 Working capital changes 86 41 Changes in other assets and liabilities (47) (18) Investments in PPE, IA (68) (63) Adjusted operating cash flow 233 228 Income taxes paid (36) (
Slide 46: Net financial expenses
» RHI MAGNESITA Net financial expenses €m H1 2024 H1 2023 Net interest expenses (19) (18) Interest income 14 9 Interest expenses (32) (27) FX effects 14 (15) Balance sheet translation 23 (23) Derivatives (9) 8 Other net financial expenses (8) (19) Present value adjustment (4) (4) Factoring costs (5)
Slide 47: Reconciliation of adjusted earnings
Reconciliation of adjusted earnings Items excluded Items excluded from adjusted H12024 H12023 from adjusted H12023 (€m) H12024 performance _adjusted reported performance __adjusted EBITA! 174 16 190 184 16 200 Amortisation (19) 19 2 (22) 22 = Net financial expenses (12) (5) (17) (51) 10 (41) Profit
Slide 48: Impact of foreign currency movement
» RHI MAGNESITA Impact of foreign currency movement EBITA sensitivity in H1 2024 2023 add H1 2024 exchange rates Appreciation vs EUR Depreciation vs EUR Increase / Increase / H12023 H12023 H12023 H12024 (decrease) (decrease) Opening Closing Average Average Unit in EBITA (€m) Unit in EBITA (€m) EUR:
Slide 49: Return on invested capital
Return on invested capital » RHI MAGNESITA Group ROIC! H1 2024 H1 2023 Average Invested Capital (€m) 3,056 2,780 NOPAT (€m) 136 154 ROIC (%) 8.8% NA% Vertical integration ROIC H12024 H1 2023 Average Invested Capital (€m) 495 466 NOPAT (€m) 6 17 ROIC (%) 2.6% 7.3% Refractory ROIC H1 2024 H1 2023 Aver
Slide 50: H1 2024 guidance updates detail
H1 2024 guidance updates detail P&L H1 2024 update FY 2024 guidance » RHI MAGNESITA 2023 actual Revenues (i) Volumes - Base business flat volumes, M&A full year effect adds 10% 3% revenue decline from volumes Revenues (ii) Pricing - Pricing pressure to offset benefit of M&A. 13% revenue growth from
Slide 51: Europe/Türkiye, China, India M&A focus
Europe/Türkiye China Industrial Non-basic v Recycling Flow Control ⁃ Lances, pre-casts ⁃ India ⁃ Non-basic Industrial ⁃ ⁃ Non-basic, Industrial v Flow Control ⁃ Recycling ⁃ ⁃
Slide 52: Our performance in context
» Our performance in context sv nenrera RHIM has navigated the recent downturn in steel production without margin decline, whilst executing significant M&A at the bottom of the refractory market — EBITDA margin Global China COVID-19 Energy Hl World Steel Production YoY change financial downturn cris
Slide 53: Important notice
» RHI MAGNESITA 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
Slide 54: Investor Relations
Investor Relations Chris Bucknall Head of Investor Relations and Sustainability +43 699 1870 6490 | chris.bucknall@rhimagnesita.com Biko Hüster Investor Relations Manager +43 699 1870 6128 | biko.huester@rhimagnesita.com investor.relations@rhimagnesita.com RHI Magnesita Kranichberggasse 6 1120 Vienn