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RHI Increased Revenues and Profit in the First Nine Months 2011

The operating result amounts to EUR 108,4 million, up roughly EUR 1,1 million on the 2010 reference period. In the third quarter of 2011, revenues declined by 1,7 % in comparison with the second quarter of 2011 due to the traditionally weaker steel business in the summer months and the seasonal effect in the cement industry. The operating result dropped 2 % to EUR 39,2 million and the operating result margin of 9,1 % is slightly below the figure of 9,2 % in the second quarter. Compared with the reference quarter of 2010, revenues of the RHI rose by 12,7 % to EUR 429,8 million in the third quarter of 2011. The operating result of the third quarter, at EUR 39,2 million, exceeds the level of the reference period of 2010 of EUR 32,8 million; the operating result margin was thus half a percentage point higher than in the third quarter of 2010. At 30 September 2011 the equity ratio amounted to 24,5 %, which corresponds to an increase by 2 % points on the second quarter of 2011. Cash and cash equivalents declined from EUR 86,6 million to EUR 74,6 million, which was primarily due to the purchase consideration payments for the acquisitions in Norway and Ireland. At the same time, net debt rose from EUR 346,9 million on July 1, 2011 to EUR 356,6 million. In the first three quarters of 2011, the Steel Division realized an increase in revenues of 14,6 % compared to same period of 2010. The operating result, at EUR 47,1 million, slightly exceeded the prior-year reference figure of EUR 46,3 million. Despite a decline in world steel output by 2,4 %, RHI’s Steel Division increased its revenues by roughly 1 % in comparison with the previous quarter, which was due to further price increases related to higher raw material costs. The operating result, at EUR 20,4 million, was only slightly lower than in the previous quarter, when it amounted to EUR 20,6 million. Revenues of the Industrial Division, at EUR 432,8 million in the first three quarters, clearly exceeded the prior-year figure of EUR 382,4 million. For seasonal reasons revenues in the Industrial Division are generally weaker in the third quarter than in the rest of the year. At EUR 138,9 million, revenues of the third quarter of 2011 were down approx. 7 % on the previous quarter. The decline in the margin to 9,9 %, versus 12,2 % in the second quarter, is largely due to higher raw material costs, and here especially to the prices of zirconium sand, which is applied for refractory products for the glass industry. In the third quarter of 2011 two important steps were taken to improve the backward integration of the Group: with effect from 30 September 2011, RHI acquired Premier Periclase Ltd./IE. Premier Periclase produces roughly 70000 t/a of seawater-based large crystal sintered magnesia in the north of Dublin with 109 employees. The closing of the acquisition of SMA Mineral Magnesia AS/NO also took place with effect from 30 September 2011. Following these acquisitions and the capacity expansion at the production site Eskisehir in Turkey, RHI will reach a self-sufficiency level for magnesia raw materials of roughly 80 % in mid-2012. Based on the capacity reduction in the steel industry as well as the conservative investment and ordering behavior of customers in the industrial segment, RHI expects business to slow down moderately in the coming months. However, this trend could come to an end again in the second quarter of 2012. The World Steel Association forecasts an increase in steel output of approx. 5,4 % for the year 2012. The volume produced in China will continue to grow above average at 6 % and Europe will, despite major regional differences, reach the record production level of 2007 with a growth rate of 2,5 %. RHI is confident that the Group‘s revenues of the second half of the year will match the revenues of the first half, despite a decline in steel production. In the fourth quarter, the Group’s EBIT will remain at the level of the third quarter due to lower capacity utilization at the RHI plants (11/2011).  

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