DGAP-News: SKW Stahl-Metallurgie Holding AG: SKW Metallurgie hit by hard winter in North America and negative currency effects in Q1 2014

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DGAP-News: SKW Stahl-Metallurgie Holding AG / Key word(s): Quarter
Results
SKW Stahl-Metallurgie Holding AG: SKW Metallurgie hit by hard winter
in North America and negative currency effects in Q1 2014

15.05.2014 / 07:03

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SKW Metallurgie hit by hard winter in North America and negative currency
effects in Q1 2014

* Consolidated revenues down from EUR 88 to EUR 84 million due to hard
winter in North America
* EBITDA of EUR 3.0 million, characterized by negative non-cash FX effects
* Outlook 2014: Cautious optimism for steel production - new Executive
Board has started to analyze the Group

Unterneukirchen (Germany), May 15, 2014. The global specialty chemicals
group SKW Metallurgie was hit by the hard winter in its key sales region of
North America and also by negative FX effects in Q1 2014. Despite upswings,
for example in Europe, consolidated revenues fell from EUR 87.8 million to
EUR 83.9 million. As a result of the mostly non-cash FX result, which was
down by EUR 2.3 million, EBITDA fell from EUR 5.0 million to EUR 3.0
million; without this effect EBITDA would have increased by 6%. Based on
EBITDA of EUR 3.0 million, the other earnings indicators were also lower
than the comparable figures from the previous year, which led to earnings
after taxes of EUR -1.3 million for the parent company (Q1 2013: EUR 1.2
million). In operating terms, the Group believes that there is positive
impetus for sales volumes for the rest of the year in view of the
anticipated increase in steel production. In order to bring about a
sustainable increase in profitability, the new Executive Board is currently
carrying out a fundamental analysis of the SKW Metallurgie Group. One-off
effects, which might result from future action programs, might influence
the net result.
"The SKW Metallurgie Group must and will sustainably increase its
profitability and free cash flow. The new Executive Board has therefore
started to analyze the Group in detail and to develop action plans. We will
issue further details on the results of this analysis in the coming
months", commented Dr. Kay Michel, the SKW Metallurgie Group's CEO.



Gross margin up to 31.0% 
The gross margin, as an indicator of operating performance, increased from
30.6% to 31.0% in Q1 2014. The downturn in the net currency result from EUR
+1.7 million in Q1 2013 to EUR -0.6 million in Q1 2014 is due in particular
to a non-operating factor, namely non-cash FX conversion results from the
valuation of intra-group loans.

Balance sheet continues to be solid
In view of its equity ratio of 41.6% (end of 2013: 41.3%) the SKW
Metallurgie Group continues to have an excellent balance sheet structure.
The free cash flow in the quarter under review was negative at EUR -2.0
million, as was also the case in Q1 2013 (EUR -0.2 million). The downturn
in the free cash flow is due to slightly higher net working capital. As
announced, the Group continues to focus its capital expenditure on
maintenance. Due to the negative changes in the free cash flow, net
financial debt as of March 31, 2014 increased slightly compared to the end
of 2013 from EUR 63.8 million to EUR 66.5 million, and gearing increased
from 0.60 to 0.64.

Outlook: Increasing steel production is a positive impetus for the 
SKW Metallurgie Group
The SKW Metallurgie Group records 85-90% of its revenues with the steel
industry. The revenues recorded with this customer industry correlate
closely with the quantity of steel produced in the key geographic markets
for the SKW Metallurgie Group (EU28, NAFTA, Brazil). Based on the updates
to the World Steel Association's forecasts for steel use, steel production
is expected to grow by a low single-digit percentage in all of the relevant
regions in 2014.
In the current fiscal year 2014, as a result of the anticipated increase in
steel production, sales volumes of SKW Metallurgie's products are expected
to grow slightly. One-off effects from the potential activities to improve
efficiency and to restructure may, however, have a short-term negative
impact on EBITDA.
The report on Q1 2014 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 8634 62720-15
Fax: +49 89 5998923-29
E-mail: schunck@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, 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 SKW Stahl-Metallurgie Holding AG 
(in EUR million)

<pre>
 Q1 2014 Q1 2013 
Revenues 83.9 87.8
      - thereof Cored Wire 38.9 40.2
      - thereof Powder and Granules  37.6 41.9
Gross margin  31.0% 30.6%
EBITDA 1 3.0 5.0
EBITDA margin  3.6% 5.7%
EBIT 1 0.0 2.3
Earnings before taxes -1.2 1.0
Consolidated net income/loss for the period (SKW Metallurgie) -1.3 1.2
Earnings per share in EUR 2 -0.20 0.19
Cash flow from operating activities -1.1 1.4
Free cash flow -2.0 -0.2
March 31, 2014   M. 31, 2013
Total assets 250.6 255.1
Equity ratio (incl. non-controlling interests)   104.1 105.5
Net financial debt 66.5 63.8
Gearing 3 0.64 0.60
Equity ratio (incl. non-controlling interests)   41.6% 41.3%
Number of employees 1,031 1,010
</pre>

(1) Q1 2014: Downturn in net currency result by EUR 2.3 million (from EUR
1.7 million to EUR -0.6 million)
(2) Based on the unchanged number of 6,544,930 shares
(3) Net financial debt to equity (incl. non-controlling interests)      


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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@skw-steel.com                                    
Internet:    www.skw-steel.com                                     
ISIN:        DE000SKWM021                                          
WKN:         SKWM02                                                
Listed:      Regulierter Markt in Frankfurt (Prime Standard);      
             Freiverkehr in Berlin, Düsseldorf, Hamburg, München,  
             Stuttgart                                             
 
 
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268586 15.05.2014