EANS-Adhoc: RHI AG / Problems in Norway strain earnings situation

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Financial Figures/Balance Sheet/quarterly report 05.11.2013

3rd Quarter In the third quarter of 2013, revenues fell to EUR 427.4 million, down 4.0% on the previous quarter. While the revenues of the Steel Division declined by 3.6% because business in Europe was weaker than expected, the Industrial Division's revenues fell by 4.7% especially due to the postponement of projects in the business unit glass.

The operating result in the past quarter amounted to EUR 32.2 million and is burdened by technical problems in the newly constructed fusion plant in Norway totaling roughly EUR 12 million, and by negative currency effects. Compared with the operating result of the second quarter of 2013, which was adversely affected by negative one-off effects of EUR 11 million, this corresponds to an increase by 18.4%. The operating result margin rose from 6.1% to 7.5%.

EBIT amounted to EUR 30.7 million in the third quarter of 2013 and was influenced by write-offs of EUR 1.9 million in China resulting from product and process enhancements. The decline in EBIT compared to the previous quarter is primarily attributable to the positive effects from the termination of the US Chapter 11 proceedings recorded in the second quarter of 2013. The EBIT margin amounted to 7.2% in the past quarter. The tax rate stood at 28.4%.

Equity amounted to EUR 525.6 million at the balance sheet date on September 30, 2013, after EUR 480.5 million at December 31, 2012. The equity ratio thus rose from 26.0% at the end of the financial year 2012 to 28.9% as of September 30, 2013. Cash and cash equivalents rose from EUR 121.3 million in the second quarter of 2013 to EUR 170.3 million due to strong cash flow generation.

Net cash flow from operating activities amounted to EUR 53.7 million and cash flow from investing activities to EUR (14.1) million in the past quarter. Consequently, net debt fell from EUR 464.2 million to EUR 430.8 million. The gearing ratio declined from 88.3% to 82.0%.

in EUR million Q3/2013 Q2/2013 Delta Q3/2012 Delta Revenues 427.4 445.2 (4.0)% 459.9 (7.1)% EBITDA 50.2 102.2 (50.9)% 72.8 (31.0)% EBITDA margin 11.7% 23.0% (11.3)pp 15.8% (4.1)pp Operating result 1) 32.2 27.2 18.4% 50.3 (36.0)% Operating result margin 7.5% 6.1% 1.4pp 10.9% (3.4)pp EBIT 30.7 84.0 (63.5)% 56.6 (45.8)% EBIT margin 7.2% 18.9% (11.7)pp 12.3% (5.1)pp Profit before income taxes 25.0 75.6 (66.9)% 50.5 (50.5)% Profit 17.9 60.5 (70.4)% 23.3 (23.2)%

1) EBIT before restructuring costs and result from Chapter 11 proceedings

9M/2013 Revenues in the first nine months of the year 2013 fell by 5.4% compared with the same period of 2012 and amounted to EUR 1,298.1 million. Although sales volume in the Steel Division dropped by 6.3% in a weak economic environment, the decline in revenues was more moderate at 3.4% due to the consistent implementation of a sales strategy focusing on profitability and an improved product mix. Revenues in the Industrial Division decreased by 8.0% because of weaker project business in the segment environment, energy, chemicals, and due to project postponements in the business unit glass.

The decline in the operating result by 17.9% to EUR 108.8 million is attributable to the technical problems which occurred during the start-up phase of the newly established fusion plant in Norway, lower capacity utilization at the production sites and negative exchange rate effects.

Due to one-off effects related to the termination of the Chapter 11 proceedings and the closure of the site in Duisburg, Germany, EBIT rose from EUR 134.3 million to EUR 164.1 million. The EBIT margin thus increased from 9.8% to 12.6%.

in EUR million 9M/2013 9M/2012 Delta Revenues 1,298.1 1,372.7 (5.4)% EBITDA 218.3 181.0 20.6% EBITDA margin 16.8% 13.2% 3.6pp Operating result 1) 108.8 132.6 (17.9)% Operating result margin 8.4% 9.7% (1.3)pp EBIT 164.1 134.3 22.2% EBIT margin 12.6% 9.8% 2.8pp Profit before income taxes 141.4 124.0 14.0% Profit 101.2 85.6 18.2%

1) EBIT before restructuring costs and result from Chapter 11 proceedings

Outlook Provided that the macroeconomic environment remains stable and with no changes in exchange rates, RHI expects the fourth quarter of 2013 to be the strongest quarter of the Industrial Division in terms of revenues due to delays of deliveries in the third quarter, and revenues to increase slightly in the Steel Division in comparison with the third quarter of 2013. The operating result is expected to be negatively affected by roughly EUR 10 million in the fourth quarter due to the technical problems in Norway, which are still unresolved. As soon as the results of the analyses currently carried out are available, RHI will report on them.

For the full year 2013, RHI expects revenues to be slightly below the level of the previous year. The operating result margin is expected to fall significantly short of that of the year 2012 due to insufficient coverage of fixed costs resulting from low capacity utilization, negative currency effects and the above-mentioned burden on the result in Norway.

The report on the third quarter of 2013 is available on RHI's website www.rhi-ag.com.

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   November 05, 2013 01:44 ET (06:44 GMT)- - 01 44 AM EST 11-05-13