EANS-News: Results of the first half of 2017

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Mid Year Results

Vienna -

* Positive economic environment strengthens business development
* M&A costs and currency effects weigh on margins
* Adjusted operating EBIT exceeds first half of 2016

In the first half of 2017, the RHI Group's revenue was up 3.1% on the
comparative period of 2016 and amounted to EUR 855.8 million. Revenue of the
Steel Division rose by 2.9%, among other things thanks to a positive business
development in the US. The increase in revenue by 2.0% in the Industrial
Division is among other things due to higher project deliveries of the glass
business unit and a satisfactory repair business in the cement/lime business
unit.

Stefan Borgas, CEO of RHI and designated CEO of RHI-Magnesita, comments on the
half-year result: "In the first half of the year, we got many issues on the
right track, even though the figures were somewhat mixed due to one-off
effects. We expect a strong third quarter and are confident to achieve the
goals we set."

The operating EBIT amounted to EUR 59.0 million in the first half of 2017 after
EUR 70.2 million in the first half of 2016 and includes external costs of EUR
12.6 million related to the planned combination of RHI and Magnesita as well as
negative currency effects of EUR 9.2 million resulting from the measurement of
balance sheet items. Adjusted for these two effects, the operating EBIT amounts
to EUR 80.8 million in the first half of 2017, which corresponds to a margin of
9.4%. This positive development is among other things attributable to a more
favorable market environment in many customer industries, the associated
improved order situation and the resulting higher utilization of production
capacities. The higher raw material costs resulting from a shortage of supply
could so far not be fully passed on to customers.

EBIT amounted to EUR 49.6 million in the first half of the year and includes
impairments of EUR 5.5 million as a result of the planned sale or closure of
the plant in Aken, Germany. The imminent sale of the Italian San Vito plant and
the Russian Podolsk plant, which produce fused cast refractories for the use in
the glass industry led to impairments of EUR 1.7 million. The negative net
effect from the power supply contract in Norway of EUR 1.2 million resulting
from declining electricity future prices also had a negative impact on EBIT. In
addition, restructuring costs of EUR 1.0 million related to changes in the
product portfolio at the site in Porsgrunn, Norway, were incurred in the first
quarter of 2017.

Net cash flow from operating activities amounted to EUR 39.8 million in the
first half of 2017 after EUR 76.7 million in the same period of 2016. Net cash
flow from investing activities amounted to EUR (4.8) million in the first half
of 2017 after EUR (17.1) million in the first half of 2016. Free cash flow thus
amounted to EUR 35.0 million in the first half of 2017 after EUR 59.6 million
in the comparative period of 2016.

Development in the second quarter of 2017 In the second quarter of 2017 the RHI
Group's revenue increased by 4.3% compared with the preceding quarter and
amounted to EUR 437.0 million. This increase is due to higher contributions to
revenue by both the Steel Division and the Industrial Division. Here, revenue
growth is above all attributable to the start of the maintenance season in the
oil and gas segment in North America as well as in Europe.

The operating EBIT amounted to EUR 21.1 million in the past quarter compared
with EUR 37.9 million in the first quarter of 2017 and includes external costs
of EUR 8.8 million related to the planned combination of RHI and Magnesita as
well negative currency effects of EUR 5.6 million resulting from the
measurement of balance sheet items. Adjusted for these two effects, the
operating EBIT amounts to EUR 35.5 million in the second quarter of 2017, which
corresponds to a margin of 8.1%.

Outlook In its forecast published in July 2017, the International Monetary Fund
predicts global economic growth of 3.5% in the current year after 3.2% in the
year 2016. However, there is considerable uncertainty regarding the impact of
the policies of the newly elected US government. Although the environment in
the advanced economies improved, especially in Europe, the pace of growth in
the emerging markets will continue to influence the global economy to a
significant extent. Based on a current study, the research institute CRU
expects a decline in steel production in China by roughly 1% in the year 2017
and an increase in steel production outside China by 4%. Based on these
estimates, RHI expects a more positive market environment in 2017. The focus
will stay on the generation of free cash flow in the current financial year in
order to reduce net debt further. Due to the preparations for a successful
completion of the planned combination with Magnesita and the integration of the
two companies, external costs will be incurred.

Closing of the combination with Magnesita expected for late October The planned
combination of RHI and Magnesita has obtained all merger control clearances.
The company is currently working intensively on the preparations for the
share's listing in the Premium Segment of the London Stock Exchange. The first
trading day in London and the closing of the transaction are scheduled for late
October 2017.

Stefan Borgas adds: "London offers the company as the global market leader in
the refractories segment access to an important capital market. At the same
time we will stay loyal to the Vienna Stock Exchange via the new Global Market.
With the combination of the two companies we will open a new chapter in the
long history of RHI."

Financial key figures

in EUR million           1H/17 1H/16 Delta    2Q/17 1Q/17 Delta
Revenue                  855.8 830.2 3.1%     437.0 418.8 4.3%
EBITDA                   89.2  100.6 (11.3)%  40.7  48.5  (16.1)%
EBITDA margin            10.4% 12.1% (1.7)pp  9.3%  11.6% (2.3)pp
Operating EBIT1)         59.0  70.2  (16.0)%  21.1  37.9  (44.3)%
Operating EBIT margin    6.9%  8.5%  (1.6)pp  4.8%  9.0%  (4.2)pp
EBIT                     49.6  68.6  (27.7)%  17.0  32.6  (47.9)%
EBIT margin              5.8%  8.3%  (2.5)pp  3.9%  7.8%  (3.9)pp

Profit before income tax 45.9 62.9 (27.0)% 15.7 30.2 (48.0)% Profit after
income tax 25.7 38.9 (33.9)% 7.2 18.5 (61.1)%

1) EBIT before expenses from derivatives from supply contracts, impairment and
   restructuring effects

The half-year report 2017 is now available for download on the RHI website
www.rhi-ag.com [http://www.rhi-ag.com/] under Investor Relations / Financial
Reports.

Further inquiry note:
RHI AG  
Investor Relations
Mag. Simon Kuchelbacher
Tel: +43-1-50213-6676
Email: [email protected]

end of announcement euro adhoc
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issuer:       RHI AG Wienerbergstrasse 9 A-1100 Wien
phone:        +43-1-50213-6676
mail:         [email protected]
WWW:          http://www.rhi-ag.com
ISIN:         AT0000676903
indexes:      ATX
stockmarkets: Wien
language:     English

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