DGAP-News: SKW Stahl-Metallurgie Holding AG: SKW Metallurgie commences strategic realignment

| Source: EQS Group AG
DGAP-News: SKW Stahl-Metallurgie Holding AG / Key word(s): Restructure
of Company/Profit Warning
SKW Stahl-Metallurgie Holding AG: SKW Metallurgie commences strategic

14.08.2014 / 20:11


SKW Metallurgie commences strategic realignment
* New Executive Board implements program for strategic realignment aimed at
a sustainable increase of earnings
* Focus on profitable core business and enhancement of market position in
key markets
* Significant need for impairment identified

Unterneukirchen (Germany), August 14, 2014. The global specialty chemicals
Group SKW Metallurgie has commenced a wide-ranging, strategic realignment.
To this end, the new Executive Board headed by CEO Dr. Kay Michel, after
careful analysis of the Group companies, has implemented the program
"ReMaKe" (Business REstructuring - Efficiency MAnagement - Growth in KEy
Markets) in order to increase earnings and free cash flow sustainably, and
has already enacted initial measures. In particular, the strategy of
vertical integration for Group-internal supply of raw materials calcium
carbide in Europe and calcium silicon shall not be fostered any longer,
inter alia since the profitability expectations associated with said
investments have failed to materialize. The Executive Board is currently
reviewing all available options for the Group companies concerned in Bhutan
and Sweden.

"By focusing on our profitable core business as well as enhancing our
position in key markets we will sustainably strengthen SKW Metallurgie for
the future. With our specialized products and solutions for the steel
industry, we are already firmly entrenched in growth markets. It is now up
to expanding that market position, and at the same time optimizing our
results", comments Dr. Kay Michel, CEO of SKW Metallurgie.

The now implemented ReMaKe program aims at strengthening the profitable SKW
Metallurgie core business, and to expand the market position in key markets
(in particular in Asia). Moreover, more synergies among the affiliates
shall be realized, as well as structures and processes adapted in order to
increase efficiency. In the SKW Metallurgie Group, ReMaKe shall in the
medium term increase revenues and EBITDA significantly, as well as yield a
sustainably positive free cash flow.

SKW Stahl-Metallurgie Holding AG is obliged by international accounting
standards to conduct impairment tests. In this context preliminary
assessment and findings of the Executive Board showed that based on current
macroeconomic conditions, significantly weaker business than previously
forecast is to be expected for certain Group companies. Hence, impairments
in the interim financial statements as per June 30, 2014 are required;
these mainly concern tangible assets in Bhutan und Sweden as well as
non-tangible assets and deferred tax assets. In this context, SKW
Stahl-Metallurgie Holding AG announced by ad-hoc release of August 14, 2014
that in the interim financial statement as per June, 30, 2014 extraordinary
value adjustments in the expected tune of EUR 84 million have to be

The aforementioned impairment charges are non-cash and hence do not have
any immediate influence on the operative business or cash on hand of the
SKW Metallurgie Group. Additional extraordinary impairments are not
expected currently.

For Q2-2014 and hence H1-2014, the SKW Metallurgie Group assumes according
to preliminary figures now available revenues and EBITDA below the
comparable figures of the previous year. Due to the aforementioned
extraordinary adjustments, earnings before interest and taxes (EBIT),
earnings before taxes (EBT) as well as net result of the period and
earnings per share (EPS), each for H1-2014, will be significantly negative
and hence below the levels of the previous year.

The currently expected results of the Group profit and loss statement as
per June 30, 2014 and their implications for the Group balance sheet as per
June, 30, 2014 would result in SKW Stahl-Metallurgie Holding AG's not
meeting certain financial covenants from current financing contracts, which
would, in turn, result in rights to
terminate for the lenders. Currently, constructive discussions are taking
place with the financing banks.

The loan-providing banks have signed a waiver agreement for the framework
credit contract regarding the covenant breach as of June 30, 2014; this
waiver is, for the time being, going to last until September 30, 2014.

For H2-2014, the SKW Metallurgie Group is expecting revenues slightly above
those of the second half of 2013. However, the Executive Board does not
assume that the weak revenues of Q1-2014 can be fully compensated; hence,
for FY-2014 revenues are expected slightly below the level of the previous

Group EBITDA (before restructuring expenses) in H2-2014 are expected to be
above the reported levels of the previous year. Reported Group EBITDA
(after restructuring expenses) in H2-2014 as well as in FY-2014 will be
below the reported figures of the comparable period of 2013 due to one-off
expenses in connection with the strategic realignment.

For 2015, the SKW Metallurgie Group is expecting positive net effects for
Group earnings, through the consequent continuation of the strategic
realignment ("ReMaKe").


SKW Stahl-Metallurgie Holding AG
Christian Schunck
Head of IR and Corporate Communications
Rathausplatz 11
84579 Unterneukirchen

Phone IR/Press: +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 and the SKW Metallurgie Group
The SKW Metallurgie Group is the global market leader for chemical
additives for hot metal desulphurization, and for cored wire and other
products for 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 venture).
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 due to switch to
name shares).

This press release may include certain forward-looking statements which are
based on currently available assumptions and predictions of the SKW
Metallurgie Group's management as well as on other currently available
information. Various identified as well as unidentified risks and
uncertainties as well as other factors may result in a deviation of actual
results, financial situation, development or achievement of the company
compared to the assessments made herein. SKW Stahl-Metallurgie Holding AG
does not intend and assumes no liability to update such forward-looking
statements and to adjust them to future events and developments.


14.08.2014 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
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Language:    English                                               
Company:     SKW Stahl-Metallurgie Holding AG                      
             Rathausplatz 11                                       
             84579 Unterneukirchen                                 
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,  
End of News    DGAP News-Service  
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