RHI Update on the Planned Combination with Magnesita
RHI/AT filed for merger control clearance with the competition authorities in Brazil at the end of March and in Europe at the beginning of May and expects to have a clearer picture of the outcome of the proceedings around the end of the first half of 2017. Based on their financial statements for the year 2016, the combined revenue of RHI and Magnesita amounted to approximately EUR 2,5 billion.
RHI has revised ist aspirational financial targets for the combined group in the course of a corporate strategy update. These targets replace any earlier financial targets (which are thus withdrawn) for the combined group and include the following. In the medium term, RHI’s aspiration for the combined group is to have organic revenue growth in line with the volume growth in its customers’ industries and an operating EBIT margin of more than 12 % after capturing the combined group’s envisaged net synergies of approximately EUR 70 million in case of a delisting of Magnesita. RHI’s aspiration for the combined group is to pay stable dividends in 2017 and 2018, in line with RHI’s previous years’ payment levels. In the mid- to longterm, however, RHI’s aspiration is to increase dividend payments from the combined group, as a result of stronger cash flow generation resulting from synergies, organic growth and de-leveraging of the company’s capital structure.