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Press Release

RHI Magnesita 2021 Full Year Results: Strong strategic progress and sales volumes above pre-pandemic levels

28. February 2022

RHI Magnesita, the leading global supplier of high-grade refractory products, systems and solutions, today announces its results for 2021; strong revenue momentum and strategic progress offset by higher costs due to global logistics disruption

Video of CEO Stefan Borgas and CFO Ian Botha on RHI Magnesita’s full year results:

 

Strong customer demand drives volume and revenue growth, offset by higher costs

Revenue increased by 16% to €2,551 million, with solid customer demand and sales volumes above pre-pandemic levels. At the same time, unprecedented supply chain disruptions resulted in higher freight, energy and purchased raw materials costs. To guarantee seamless deliveries to customers, the company significantly increased inventory and used air freight where necessary. Adjusted EBITA of €280 million was in line with the company’s guidance of €280 – 310 million, supported by a price increase program realized largely in Q4.

Stefan Borgas, CEO RHI Magnesita, commented on the results: “This has been a strong year of progress for RHI Magnesita in challenging conditions. Customer demand recovered much faster than was anticipated, creating an unprecedented strain on global supply chains and significant increases in costs and logistics lead times. Despite logistics difficulties and market volatility we have progressed the strategic investments which will deliver long term growth and margin improvement. We enter 2022 with restored margins and ready to build further on our sustainability and technology leadership position in the global refractory industry.”

Continued progress on strategic initiatives

Although some investment projects have been impacted by cost inflation and minor delays, logistical difficulties have not materially impacted on the delivery of RHI Magnesita’s long-term strategy. The company has improved its competitive position through SG&A savings, delivering €29 million in annual EBITA savings, and the Production Optimization Plan, which is advancing the ‘local for local’ production strategy whilst preserving scale benefits from its global footprint. RHI Magnesita has delivered further growth in its solutions business, in flow control sales and in target markets. Progress has been accelerated through M&A, a key pillar of the company’s growth ambitions, with the agreement to acquire SÖRMAŞ in Turkey and the establishment of a new joint venture in Chongqing, China, to widen the product range for cement customers in the region. Growth in new markets was also delivered organically in India (+36%) and China (+20%).

Market leader in innovation, technology and sustainability

The safety of its people is a core value for RHI Magnesita. The company has an excellent track record in health and safety, with a Lost Time Injury Frequency Rate of 0.18 in 2021, while delivering close to record high production volumes. Throughout 2021, the company increasingly added digital products alongside its core offering to differentiate from competitors and enable the offering of full heat management solutions. Solutions contracts grew to represent 29% of Group revenues in 2021.

RHI Magnesita also leads the refractory industry in all areas of sustainability. In 2021, the company announced an investment of €50 million over the next four years in the research and development of new technologies to reduce and capture CO2 emissions released during the materials manufacturing process chain. The company’s efforts to increase recycling of refractories offer major benefits through improved waste management and the avoidance of CO2 emissions that would otherwise be released in the processing of new raw material. To make this possible, RHI Magnesita has developed proprietary technology for achieving high levels of performance from recycled refractory material.

Through its product portfolio, RHI Magnesita is uniquely positioned to benefit from the shift to lower CO2 emitting processes in its customer industries. In steel, the Group is now the global leader in the supply of specialized refractories for Electric Arc Furnaces and stands to benefit from the ongoing transition towards this technology, which will be a key enabler of the decarbonisation of global steel production.

Outlook

In the steel division there is a strong order book and visibility for the first half of 2022, although the high customer demand recovery experienced in 2021 is expected to normalize in the second half. The industrial division order book covers most of 2022 and lead times in some cases exceed 12 months. Industrials division margins will continue to benefit in the first quarter of 2022 from the stronger pricing environment for cement customers compared to the prior year. Cost pressures from freight, energy and raw materials are continuing in 2022 with significant labour inflation, as high inflation leads to wage demands. Further price increases have become effective in January and more price increases are under negotiation to preserve margins in response to ongoing cost inflation.

“Whilst uncertainty and volatility will remain ongoing features of global markets, we are well positioned to navigate any new challenges that 2022 will bring. This is mainly thanks to the commitment and dedication of our employees, as well as the major investments and restructurings we have undertaken to improve the cost position and efficiency of our business over the last three years. We are uniquely positioned within the refractory industry as a leader in technology, digitalization and sustainability,” Borgas concluded.

Follow this link to read the full RNS: 2021 Full Year Results – 07:00:08 28 Feb 2022 – RHIM News article | London Stock Exchange

Follow this link to find the Annual Report and further material: Reports & Presentations – RHI Magnesita Investors

Financial results

  2021

2020

2020

 

 

(€m unless stated otherwise) 

Adjusted1

Adjusted1

Adjusted1 at constant currency

Change

Change

at constant currency

Revenue

2,551

2,259

2,201

12.9%

15.9%

Adjusted EBITA

280

260

257

7.7%

8.9%

Adjusted EBITA margin

11.0%

11.5%

11.7%

(50)bps

(70)bps

Adjusted EPS (€ per share)

€4.52

€3.28

 

38.0%

 

Net debt2

1,014

582

 

74.2%

 

Net debt to adjusted EBITDA2

2.6x

1.5x

 

1.1x

 

 

 

2021

2020

(€m unless stated otherwise) 

Reported

Reported

Revenue

2,551

2,259

EBITA

236

140

Profit before tax

289

42

EPS

€5.10

€0.51

Dividend3

€1.50

€1.50

  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, 2021 net debt includes the impact of IFRS 16 of €55.5 million. 2020 adjusted net debt figures are shown including the impact of IFRS 16 (€56.8 million) to facilitate comparison between reporting periods.
  3. Recommended final dividend of €1.00 per share subject to AGM approval on 25 May 2022. Full year dividend of €1.50 per share includes the interim dividend of €0.50 per share paid to shareholders on 14 September 2021.

About RHI Magnesita

RHI Magnesita is the leading global supplier of high-grade refractory products, systems and solutions which are critical for high-temperature processes exceeding 1,200°C in a wide range of industries, including steel, cement, non-ferrous metals and glass. With a vertically integrated value chain, from raw materials to refractory products and full performance-based solutions, RHI Magnesita serves customers around the world, with around 12,000 employees in 28 main production sites and more than 70 sales offices. RHI Magnesita intends to leverage its leadership in terms of revenue, scale, product portfolio and diversified geographic presence to target strategically those countries and regions benefitting from more dynamic economic growth prospects.

The Group maintains a premium listing on the Official list of the London Stock Exchange (symbol: RHIM) and is a constituent of the FTSE 250 index, with a secondary listing on the Vienna Stock Exchange (Wiener Börse). For more information please visit: www.rhimagnesita.com

For further enquiries, please contact:
Patrizia Pappacena
Head of Global Communications
patrizia.pappacena@rhimagnesita.com
M +43 699 1870 6443