SKW Stahl-Metallurgie Holding AG / Final Results/Forecast
26.03.2010 06:57
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Press release
Profitable growth forecast for 2010 and 2011
* Business year 2009: Adjusted EBITDA of EUR 9.4 million despite
substantial revenue downturn
* Balance sheet quality further increased: Equity ratio 47% thanks to
successful capital increase
* Return to profitable growth path from 2010:
o 2010: EBITDA of at least EUR 20 million with significantly higher
revenues
o 2011: Operating EBITDA margin approx. 9%, revenues approx. EUR 360
million
Unterneukirchen (Germany), March 26, 2010. The specialty chemicals group
SKW Metallurgie, which is included in the German SDAX index, was able to
record positive adjusted EBITDA of EUR 9.4 million in business year 2009
despite the economic and financial crisis. Revenues fell to EUR 220.6
million (2009) as a result of the global recession after sales of EUR 377.8
million in 2008. This was due to the massive slump in demand in the steel
industry, which is responsible for more than 90% of SKW Metallurgie's
revenues. In terms of earnings, 2009 was also depressed by extraordinary
one-off factors (in particular the so-called bad stock effect) of EUR 9.9
million, with the result that the disclosed EBITDA totaled EUR -0.5
million. This resulted in a consolidated net loss of EUR 5.1 million. As a
result of this net loss and the continued strong capital expenditure in
2010, no dividend is being proposed for 2009.
The course of business in the first quarter of 2010 was very satisfactory
for the SKW Metallurgie Group. In view of, first, the fact that the steel
industry is expected to undergo a strong recovery in 2010 as a whole,
second, the significant contributions to revenues and earnings from the new
acquisition Tecnosulfur (Brazil), and, third, the fact that extraordinary
one-off factors no longer apply, the SKW Metallurgie Group's consolidated
revenues and EBITDA will increase substantially in this business year. The
Managing Board is forecasting earnings (EBITDA) of at least EUR 20 million.
The Managing Board is also very confident of the Group's growing again
significantly in 2011, and confirms its guidance of an operating EBITDA
margin of 9%.
'2009 was a very difficult year for the global economy - and thus for our
company. The massive slump in demand in our customers' industries mean that
we can still be satisfied with adjusted earnings of EUR 9.4 million. In
addition, the past business year has proved how flexible our cost
structures are. We used the opportunities that presented themselves to us,
in order to consistently continue our global expansion in a year of crisis.
This will be reflected in a significant increase in revenues and earnings
in 2010 and 2011,' commented Ines Kolmsee, SKW Metallurgie's CEO.
One-off charges lead to losses after taxes
The downturn in consolidated revenues of 42% was due to the more than 30%
downturn in demand from the steel industry in Europe and North America, and
also by a strong downturn in prices for key raw materials such as magnesium
and calcium silicon. This affected both segments to a comparable extent.
Despite the weak underlying conditions, SKW Metallurgie was still able to
record an excellent gross margin of 21.5% (previous year: 25.1%). The
one-off charges were also mostly caused by raw material prices, and of this
amount EUR 7.3 million is due to a bad stock effect, and EUR 2.2 million is
due to inventory write-downs. In addition, in 2009 provisions in connection
with the European antitrust proceedings in the calcium carbide sector were
increased by EUR 0.4 million. After taxes, these one-off factors lead to a
net loss for the year of EUR 5.1 million compared to profits of EUR 9.9
million in the record-breaking 2008. Earnings per shares (EPS) based on 6.6
million shares (prior to capital increase: 4.4 million) totaled EUR -0.77
(2008: EUR 1.54).
Sustainable improvement in balance sheet quality
In view of the net proceeds of EUR 23.5 million from the capital increase
in December 2009, the Group's balance sheet quality improved again
significantly in 2009. The equity ratio increased from 42.6% to 47.0% -
despite the increase in total assets, caused, in particular, by the
acquisition of Tecnosulfur. Net financial debt was cut from EUR 44.8
million to EUR 32.8 million during the past twelve months, and the gearing
was reduced to 0.30 (previous year: 0.54), a very low level for a
manufacturing company. The Group's cash flow was characterized by the EUR
17.0 million reduction in working capital, a significantly positive effect,
and also by the record capital expenditure of EUR 27.4 million in SKW
Metallurgie's expansion into Brazil, Bhutan/India and Russia.
Outlook: 2010 and 2011 to enjoy strong increases in revenues and earnings
The underlying conditions for this year and next year are brightening
significantly in particular for the steel industry, which is a key customer
for SKW Metallurgie: The World Steel Association forecast a 9.2% increase
in global steel demand in its October analysis in view of a substantial
recovery in the global economy in 2010. The anticipated increases are even
higher for the EU (up 12.4%) and NAFTA countries (up 17.1%) even though
these are based on a relatively low starting level. In addition, the
Brazilian subsidiary Tecnosulfur acquired at the end of 2009 will be
consolidated for a full year for the first time and make a significant
contribution to revenues and earnings. From the current perspective, no
extraordinary negative factors are to be expected. The SKW Metallurgie
Group's Managing Board is thus forecasting EBITDA of at least EUR 20
million in 2010, which means that it can be assumed that the payment of a
reasonable dividend will be proposed for business year 2010. In 2010, the
SKW Metallurgie Group is also expecting the completion of its calcium
silicon and cored wire plant in Bhutan and its cored wire plant in Russia.
These new plants in high-growth markets also bolster hopes for a successful
year of growth in 2011. The SKW Metallurgie Group's Managing Board has for
long forecast revenues of EUR 360 million with an operating EBITDA margin
of 9%, and is reiterating these targets.
Further details on the Group and the full annual financial statements and
the annual report for business year 2009 can be found online at
www.skw-steel.com
KPIs for SKW Stahl-Metallurgie Holding AG
(in EUR million, unless otherwise stated)
|[![CDATA[|[pre|]]]|]
2009 2008
Consolidated revenues 220.6 377.8
- thereof Cored Wire 92.6 152.1
- thereof Powders and Granules 112.3 201.6
Gross margin 21.5% 25.1%
EBITDA -0.5 26.0
- thereof Cored Wire -3.0 11.0
- thereof Powders and Granules 3.6 15.5
EBITDA (adjusted) 9.4 32.2
EBITDA margin (adjusted) 4.3% 8.5%
EBIT -7.0 19.7
EBIT (adjusted) 2.9 25.9
Pre-tax earnings -9.5 17.0
Consolidated earnings for the year (before minority interests) -5.1 9.9
Earnings per share in EUR 1 -0.77 1.54
Dividend per share in EUR ² 0.00 0.50
31.12.2009 31.12.2008
Total equity and liabilities 213.7 196.8
Equity (incl. minority interests) 109.0 83.8
Net financial debt 32.8 44.9
Gearing ³ 0.30 0.54
Equity ratio (incl. minority interests) 47.0% 42.6%
Operating cash flow for business year 18.5 5.0
Employees (year end) 715 516
|[![CDATA[|[/pre|]]]|]
(1) Based on new total of 6.6 million shares
(2) 2009: Proposal to General Meeting
(3) Net financial debt to equity
Contact person:
SKW Stahl-Metallurgie Holding AG
Christian Schunck
Head of IR and Group Communication
FabrikstraÃe 6
84579 Unterneukirchen
Germany
Tel: +49 8634-62720-15
Fax: +49 8634-62720-16
E-mail: schunck@skw-steel.com
Internet: www.skw-steel.com
About SKW Stahl-Metallurgie Holding AG
SKW Metallurgie is the global market leader for chemical additives for hot
metal desulfurization, 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, 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, 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.
SKW Stahl-Metallurgie Holding AG
Christian Schunck
Head of IR and Group Communication
FabrikstraÃe 6
84579 Unterneukirchen
Germany
Tel: +49 8634-62720-15
Fax: +49 8634-62720-16
E-mail: schunck@skw-steel.com
Internet: www.skw-steel.com
26.03.2010 06:57 Ad hoc announcement, Financial News and Media Release distributed by DGAP. Medienarchiv at |[![CDATA[|[a href="http://www.dgap-medientreff.de"|]www.dgap-medientreff.de|[/a|]]]|] and |[![CDATA[|[a href="http://www.dgap.de"|]www.dgap.de|[/a|]]]|]
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Language: English
Company: SKW Stahl-Metallurgie Holding AG
Fabrikstrasse 6
84579 Unterneukirchen
Deutschland
Phone: +49 (0)8634 61 511
Fax: +49 (0)8634 61 513
E-mail: info@skw-steel.com
Internet: www.skw-steel.com
ISIN: DE000SKWM013
WKN: SKWM01
Indices: SDAX
Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr
in Berlin, München, Düsseldorf, Stuttgart, Hamburg
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DGAP-News: SKW Stahl-Metallurgie Holding AG: Profitable growth forecast for 2010 and 2011
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