DGAP-News: SKW Stahl-Metallurgie Holding AG: Weak steel economy depresses revenues and earnings
(firmenpresse) - DGAP-News: SKW Stahl-Metallurgie Holding AG / Key word(s): Half Year
Results
SKW Stahl-Metallurgie Holding AG: Weak steel economy depresses
revenues and earnings
13.08.2013 / 07:08
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Weak steel economy depresses revenues and earnings
* Consolidated revenues down 20% to EUR 176.2 million in H1 2013
* EBITDA lower despite high cost variability from EUR 12.9 million to EUR
9.1 million (currency-adjusted)
* Gross margin up to 31.3%
* Positive free cash flow recorded
* Outlook for 2013 as a whole adjusted to difficult market environment -
program to increase earnings launched
Unterneukirchen (Germany), August 13, 2013: In the first half of 2013, the
SKW Metallurgie Group was hit by the downturn in steel production in the EU
(-5.1%), the USA (-6.4%) and Brazil (-3.1%). In parallel, most raw
materials prices fell, which as a rule are passed on to customers. As a
result, consolidated revenues for the first six months decreased by 20%
compared to the first half of 2012, by EUR 43.7 million to EUR 176.2
million. Due to the high proportion of variable costs, it was possible to
mostly compensate for this downturn in revenues through cost cuts; however,
currency-adjusted EBITDA was still significantly lower than the previous
year's figure (EUR 12.9 million) at EUR 9.1 million. As business is not
expected to recover notably in the second half of the year, the SKW
Metallurgie Group has had to adjust its outlook and is now expecting
consolidated revenues in 2013 as a whole to be lower than in the previous
year. Despite improved contributions to earnings from the new plants, the
increase in EBITDA that had been hoped for to date is thus no longer
realistic without a substantial upturn in the economy. Given this
background, the Executive Board has launched an extensive, group-wide
program to increase earnings, which will have its full impact from 2014.
'In contrast to what was expected at the start of the year, no substantial
business recovery in the steel industry is likely to occur in the second
half of the year. Our new plants are enjoying positive growth; however,
this is not enough to surpass last year's EBITDA. In order to adjust our
global structure to the more difficult underlying conditions, the Executive
Board has launched an extensive program to increase earnings,' commented
Ines Kolmsee, SKW Metallurgie Group's CEO.
Gross margin up further to 31.3%
The Group increased its gross margin, or the ratio of total operating
revenue and material costs to revenues, substantially year-on-year from
29.0% to 31.3%. In spite of this, however, the substantial reduction in
revenues meant that EBITDA and thus also the other earnings indicators were
lower than the previous year. The strategic expansion in the previous years
has increased the level of amortization/depreciation and interest expenses
slightly; together with a temporary increase in the tax rate this led to
earnings per share in the first six months of EUR 0.07 compared to EUR 0.66
in H1 2012.
Positive free cash flow thanks to conclusion of investment phase
The conclusion of the strong phase of expansion and investment in the past
few years has resulted in a turnaround in the free cash flow from EUR-2.0
million to a positive figure of EUR+2.6 million. The quality of the balance
sheet indicators remains solid. For example, the equity ratio improved
slightly compared to December 31, 2012 from 40.2% to 40.6%. Net financial
debt totaled EUR 75.3 million (December 31, 2012: EUR 73.9 million) and
thus remained practically constant; gearing (net financial debt to equity)
is now 0.66.
Outlook for 2013 adjusted to difficult market environment - program to
increase earnings launched
The economic insecurity observed in the first half of 2013 on the markets
relevant for the SKW Metallurgie Group continued to make it difficult to
forecast business. The expert opinions that are nevertheless available are
no longer expecting a significant economic recovery this fiscal year, which
will also have a substantially negative impact on forecasts for steel
production. The increase in revenues that had been hoped for to date is
thus no longer realistic without a substantial upturn in the economy.
Despite the continued high cost variability, this anticipated downturn in
revenues will also impact EBITDA. As a result, it will only be possible to
reach the previous guidance of surpassing the previous year's figure of EUR
20.8 million, despite improved contributions to earnings from the new
plants compared to 2012, if there is a substantial economic recovery.
In order to combat the macroeconomic challenges, the SKW Metallurgie
Group's Executive Board has developed an extensive program to increase
earnings, which will lead to both higher revenues and will also cut costs.
The cost cuts relate, in particular, to spot increases in production
capacity and cuts in the cost of materials. Some of the activities will
bear fruit in the current fiscal year; the bulk of the additional
contributions to revenues and earnings from this program is expected from
2014.
The report on H1 2013 and further information on the Group can be found
online at: www.skw-steel.com.
Contact
SKW Stahl-Metallurgie Holding AG
Christian Schunck
Head of IR and Corporate Communications
Rathausplatz 11
84579 Unterneukirchen
Germany
Telephone IR/Press: +49 89 5998923-22
Fax: +49 89 5998923-29
E-mail: schunck(at)skw-steel.com
Internet: www.skw-steel.com
About SKW Stahl-Metallurgie Holding AG
The SKW Metallurgie Group is the global market leader for chemical
additives for hot metal desulphurization, and for cored wire used in
secondary metallurgy. The Group's products enable steel-makers to
efficiently manufacture high-quality steel products. Clients include the
world's leading companies in the steel industry. The SKW Metallurgie Group
has more than 50 years of metallurgical know how, and currently operates in
more than 40 countries. What is more, the Group is a leading supplier of
Quab specialty chemicals, which are mainly used in the global production of
industrial starch for the paper industry. The company's operating business
is broken down into the two core segments 'Cored Wire' and 'Powder and
Granules', and the 'Other' segment. The SKW Metallurgie Group is
headquartered in Germany with production facilities in France, the US (6),
Canada, Mexico, Brazil, South Korea, Sweden, Bhutan, Russia, the Peoples'
Republic of China (2) and India (2 via joint ventures).
Shares of SKW Stahl-Metallurgie Holding AG have been listed in Frankfurt
Stock Exchange's Prime Standard since December 1, 2006 with ISIN
DE000SKWM013 /since August 15, 2011: DE000SKWM013), and have been included
in the SDAX index from June 23, 2008.
DISCLAIMER
This press release contains statements on future developments that are
based on currently available information and involve risks and
uncertainties that could cause the actual results to differ from these
forward-looking statements. These risks and uncertainties include, for
example, unpredictable changes in political and economic conditions,
particularly in the steel and paper industry, the competitive situation,
interest and currency risks, technological development as well as other
risks and unexpected circumstances. SKW Stahl-Metallurgie Holding AG and
its Group companies accept no obligation to update such forward-looking
statements.
KPIs for the SKW Metallurgie Group
for the first six months (in EUR million)
H1-2013 H1-2012Taking the changes under IAS 19 into account, figures for 2012 adjusted
External revenues 176.2 219.9
- thereof Cored Wire 81.0 102.0
- thereof Powder and Granules 83.3 103.4
Gross margin 31.3% 29.0%
EBITDA 8.7 13.5
- thereof Cored Wire 4.2 2.6
- thereof Powder and Granules 4.2 10.2
EBITDA margin 4.9% 6.1%
EBIT 3.2 8.6
Earnings before taxes 0.8 6.6
Consolidated net result for the period -0.6 3.7
Earnings per share in EUR 1 0.07 0.66
Cash flow from operating activities 4.1 6.3
Free cash flow 2.6 -2.0
June 30, 2013 Dec. 31, 2012
Total assets 280.2 299.6
Equity ratio (incl. non-controlling interests) 113.7 120.66
Net financial debt 75.3 73.9
Gearing 2 0.66 0.61
Equity ratio (incl. non-controlling interests) 40.6% 40.2%
Employees 1,018 1,011
accordingly
(1) Based on 6,544,930 shares
(2) Net financial debt to equity (incl. non-controlling interests)
End of Corporate News
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13.08.2013 Dissemination of a Corporate News, transmitted by DGAP - a
company of EQS Group AG.
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Language: English
Company: SKW Stahl-Metallurgie Holding AG
Rathausplatz 11
84579 Unterneukirchen
Germany
Phone: +49 (0)8634 62720-15
Fax: +49 (0)8634 62720-16
E-mail: info(at)skw-steel.com
Internet: www.skw-steel.com
ISIN: DE000SKWM021
WKN: SKWM02
Indices: SDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, München,
Stuttgart
End of News DGAP News-Service
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225468 13.08.2013
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