May 15, 2012.
- Group revenues in first quarter 2012 increased by 12 % to â‚¬ 113.2 million
- Operating EBIT at â‚¬ 3.5 million almost at level of previous year (â‚¬ 4.3 million)
- Improved cash flow from operating activity
- Guidance adjusted for 2012, and reiterated for 2013
The SDAX-listed specialty chemicals group SKW Metallurgie recorded another improvement in revenues in Q1 2012. As a result of the groupâ€™s global expansion and a slight increase in demand from the steel industry, consolidated revenues were up 12% to â‚¬Â 113.2 million (Q1 2011: â‚¬Â 101.0 million). In contrast, in the first half of the year EBITDA will still be substantially depressed by the start-up costs for the new plants, in particular in Bhutan. After adjustment for the non-cash one-off effect from the acquisition of a plant in Sweden, EBITDA in Q1 2011 totaled â‚¬Â 7.3 million, and in Q1 2012 it totaled â‚¬Â 6.0 million due to the start-up costs for the new plants. The new plants are only expected to record notable revenues and make a positive contribution to EBITDA in the second half of the year. However, from todayâ€™s perspective, 2012 as a whole will continue to be characterized by start-up costs for the new plants as well as macroeconomic uncertainties due to the sovereign debt crisis, in particular in Europe. As a result, the SKW Metallurgie Groupâ€™s Executive Board is forecasting EBITDA for 2012 that correspond to the previous yearâ€™s level in operating terms, but which are lower than the reported figure for 2011.
â€śIn view of the economic uncertainties, we are very pleased with our revenue growth in Q1. Our expansion projects still include start-up costs at the start of the year. This is normal for new plants. If we succeed in turning around in the second half of the year, we are confident that, given a further stabilization in the global economy in 2012, we will be able to match or even exceed the previous yearâ€™s figures for revenues and operating EBITDA,â€ť commented the SKW Metallurgie Groupâ€™s CEO Ines Kolmsee.
Expansion projects continue to impact earnings development
Expansion projects again had a strong impact on earnings in Q1 2012; start-up costs for these projects meant that the expense items showed a stronger percentage increase than revenues. In addition, figures from the same period of 2011 include a positive one-off effect from the first-time consolidation of the plant in Sweden (bargain purchase). Despite the lower amortization of intangible assets, EBIT adjusted for the bargain purchase fell from â‚¬Â 4.3 million to â‚¬Â 3.5 million. The high investments and one-off effects from restructuring borrowing were also reflected in financing costs. Earnings before taxes fell correspondingly. In addition, imputed tax expenses were high due to extraordinary tax factors, with the result that the earnings per share totaled just â‚¬Â 0.13 (Q1 2011: â‚¬Â 0.65).
End-to-end refinancing secures long-term growth perspectives
The Group optimized the structure and interest levels for its borrowing in the first quarter with extensive refinancing of the SKW Metallurgie Group by the successful placement of a promissory note loan and by signing a new master credit agreement. On the whole, the balance sheet continues to be very solid as of March 31, 2012, with an equity ratio of 39.5% (December 31, 2011: 40.7%). Net cash outflow for investments fell, as announced, compared to the same period of 2011 from â‚¬Â 12.5 million to â‚¬Â 4.6 million, and will remain substantially lower than the 2011 figures over the whole of 2012. As investments were primarily financed by borrowing in view of the gross cash flow of â‚¬Â 1.2 million (Q1 2011: â‚¬Â 3.3 million), net financial debt has increased from â‚¬Â 77.9 million at the end of 2011 to â‚¬Â 82.2 million on March 31, 2012.
Forecasts for 2012 and 2013 characterized by economic uncertainties
As a result of the general economic situation – in particular the sovereign debt crisis – and the start-up costs for the new plants, the SKW Metallurgie Groupâ€™s Executive Board believes that the good operating results of 2011 will be reached again in current fiscal year 2012, however that the recorded EBITDA will not fully reach the previous yearâ€™s figure of EUR 31.7 million, which was coined by one-offs. The Group continues to expect that the new plants (extensions to plants in Brazil and the USA, acquisition of a plant in Sweden, new plants constructed in Russian and Bhutan) will make a full contribution to earnings in 2013. Given this background, for 2013 the Executive Board is aiming, as already announced, for a significant improvement in key financial indicators and, in particular, a positive free cash flow â€“ assuming a further recovery in the global economy.
The report on Q1 2012 and further information on the Group can be found on this Website.
KPIs for SKW Stahl-Metallurgie Holding AGÂ for Q1 (in â‚¬Â million)
|Q1 2012||Q1Â 2011|
|- thereof Cored Wire||51.9||47.8|
|- thereof Powder and Granules||58.6||45.6|
|EBITDA adjusted 1||6.0||7.3|
|- thereof Cored Wire||1.4||3.3|
|- thereof Powder and Granules1||5.6||8.0|
|EBITDA adjusted 1||5.3%||7.2%|
|EBIT adjusted 1||3.5||4.3|
|Earnings before taxes||2.0||6.5|
|Consolidated earnings (excl. non-controlling interests)||0.8||4.3|
|Earnings per share in â‚¬ 2||0.13||0.65|
|Gross cash flow||1.2||3.3|
|Cash flow from operating activity||0.6||-1.1|
|Equity (incl. non-controlling interests)||126.6||128.4|
|Net financial debt||82.2||77.9|
|Equity ratio (incl. non-controlling interests) 3||39.5%||40.7%|
(1) Earnings in the Powder and Granules segment included bargain purchase income of â‚¬Â 2.7 million in Q1 2011
(2) Based on 6,544,930 shares
(3) Net financial debt to equity (incl. non-controlling interests)
SKW Stahl-Metallurgie Holding AG
Head of IR and Corporate Communications
About SKW Stahl-Metallurgie Holding AG
SKW Metallurgie is the global market leader for chemical additives for hot metal desulphurization, and for cored wire used in secondary metallurgy. The Groupâ€™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 companyâ€™s operating business is broken down into the two core segments â€śCored Wire and â€śPowder and Granulesâ€ť, and the â€śOtherâ€ť 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: new ISIN DE000SKWM021), and have been included in the SDAX index from June 23, 2008.
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.