SKW Stahl-Metallurgie Holding AG / Final Results 20.03.2009 Release of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- Press release 2008 breaks records - medium-term guidance confirmed Guidance for 2008 fully reached o Consolidated revenues up almost 60% to EUR 377.8 million o Operating EBITDA almost doubled to EUR 32.2 million Plans to disburse a constant dividend of EUR 0.50 per share Medium-term operating EBITDA margin of 9% confirmed Unterneukirchen (Germany), March 20, 2009. SKW Stahl-Metallurgie Holding AG was able to significantly exceed its excellent revenue and earnings growth in 2007 once again in business year 2008. In so doing, it substantially exceeded its guidance, which it increased twice during the course of the year under review. Consolidated revenues were up almost 60% to EUR 377.8 million (previous year: EUR 239.0 million) - despite the significant downturn in the economic environment at the end of the fourth quarter. Operating EBITDA almost doubled from EUR 16.7 million to EUR 32.2 million and was thus higher than the guidance, which was initially increased in August to EUR 28-30 million and then in November to at least EUR 32 million. In view of the ongoing investigations by the European Commission, management resolved to form a provision of EUR 6.2 million, with the result that the disclosed EBITDA totaled EUR 26.0 million; in the previous year disclosed earnings totaled EUR 21.1 million including extraordinary income of EUR 4.4 million. In view of the excellent 2008 results, the Managing and Supervisory Boards intend to make a proposal to the General Meeting on June 4, 2009 to pay a gross dividend of EUR 0.50, unchanged year-on-year, per dividend-entitled share for business year 2008. The SKW Metallurgie Group, too, has been affected by the current economic crisis. However, management believes that the high proportion of variable costs means that the group is well equipped to record positive results also in 2009. The business year will focus, in particular, on efficient cash flow management. Subject to normalization of the underlying economic conditions, the management has confirmed its medium-term target of an operating EBITDA margin of 9% for 2011. The group's international expansion, which it is consistently continuing, will contribute to achieving this target. 'The SKW Metallurgie Group is characterized by a very high proportion of variable costs compared to total costs, and can thus react significantly more flexibly to lower demand than a company with a high proportion of fixed costs. That makes us confident of recording a positive result also in 2009,' commented SKW Metallurgie's CEO Ines Kolmsee. Earnings per share at EUR 2.28 The increase in revenues of almost 60% in 2008 was boosted by the first time full-year consolidation of the ESM subsidiaries (Powder and Granules segment). However, even on a pro forma basis without the ESM Group, revenues would have been up by around 10%. However, profits before and after taxes were reduced by the provision detailed above. This results in earnings per share of EUR 2.28 (previous year: EUR 2.78). Continued solid balance sheet structure The SKW Metallurgie Group was able to further improve its balance sheet structure in 2008. For example, the equity ratio (including minority interests) improved from 42.0% to 42.6%. The net financial position changed from EUR -41.8 million to EUR -44.9 million; the SKW Metallurgie Group's debt is thus still very moderate. As a result of the excellent business growth, the gross cash flow increased from EUR 14.4 million to EUR 18.3 million. In contrast, the net cash flow from operating activities totaled EUR 5.0 million as a result of the increase in net working capital in 2008, and was thus lower than in the previous year (EUR 11.7 million). International expansion consistently continued despite the global recession In 2009 and 2010 the SKW Metallurgie Group is going to consistently continue the expansion that the group initiated in previous years into high-growth emerging nations: - In Brazil, SKW Metallurgie is planning to enter the market for hot metal desulphurization mixes in 2009, and will in particular supply the steel plant that the ThyssenKrupp Group is currently building. - India is covered by the Jamipol joint venture already in place for hot metal desulphurization agents; re cored wire, it will be covered by the new joint venture in Bhutan from 2010. The SKW Metallurgie Group is setting up a production furnace for calcium silicon in Bhutan in addition to cored wire production. - SKW Metallurgie has already had a successful presence in China, the world's largest steel market, since 2007 with two of its own subsidiaries. Reserved optimism for 2009 - return to previous profit targets over the medium term Business year 2009 will be a very difficult year for the steel industry, which is the SKW Metallurgie Group's most important customer industry. This will certainly also have a negative impact on demand for the SKW Metallurgie Group's products. However, it will be possible to mostly balance this effect thanks to the fact that variable costs account for a high proportion of total costs. The company is thus confident that it will also record positive results in the current year. Over the medium term, i.e., after the underlying economic conditions have normalized, the operating EBITDA margin is going to total 9%, as already announced for 2011. You can find SKW Stahl-Metallurgie Holding AG's annual report and additional information on our company on our Web site: www.skw-steel.com SKW Stahl-Metallurgie Holding AG KPIs (in EUR million)<TABLE_SATRT> 2008 2007 Change Revenues with third parties 377.8 239.0 +58% - thereof cored wire 152.1 134.8 +13% - thereof powder and granules 1 201.6 77.3 +161% Gross margin 25.1% 24.2% +90 BP EBITDA 26.0 21.1 +23% - thereof cored wire 11.0 11.8 -7% - thereof powder and granules 1 15.5 4.3 +260% EBITDA (comparable) 32.2 16.7 +93% EBITDA margin (comparable) 8.5% 7.0% +150 BP EBIT 19.7 17.7 +11% EBIT (comparable) 25.9 13.3 +95% Earnings before taxes 17.0 16.9 +1% Consolidated net income for the year (without minority interests) 10.1 12.3 -18% Earnings per share in EUR 2 2.28 2.78 -18% Dividend per share in EUR 3 0.50 0.50 +-0 Dec. 31, 2008 Dec. 31, 2007 Total assets 196.8 181.3 Equity (including minority interests) 83.8 76.2 Net financial debt 44.9 41.8 Gearing 4 0.54 0.55 Equity ratio 42.6% 42.0% Gross cash flow in business year 18.3 14.3 Employees 516 563</pre> (1) ESM consolidated since October 4, 2007 (2) Based on an unchanged 4,422,250 shares in circulation (3) Payment in following year, this shows the gross amount per dividend-entitled share; 2008: Planned proposal to the General Meeting (4) Net financial debt to equity Contact person: SKW Stahl-Metallurgie Holding AG Christian Schunck Head of IR and Group Communication Fabrikstrasse 6 84579 Unterneukirchen Germany Tel.: +49 8634 -617596 Fax: +49 8634-617594 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 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 Group's activities comprise three segments: Cored Wire, Powder and Granules and Other. The SKW Metallurgie Group is headquartered in Germany with production facilities in France, the US (6), Canada, Mexico, 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 Fabrikstrasse 6 84579 Unterneukirchen Germany Tel.: +49 8634 -617596 Fax: +49 8634-617594 E-Mail: schunck@skw-steel.com Internet: www.skw-steel.com DGAP 20.03.2009 --------------------------------------------------------------------------- Language: English Issuer: SKW Stahl-Metallurgie Holding AG Fabrikstrasse 6 84579 Unterneukirchen Deutschland Phone: +49 (0)8634 61 7596 Fax: +49 (0)8634 61 7594 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, Stuttgart, München, Hamburg, Düsseldorf End of News DGAP News-Service ---------------------------------------------------------------------------
DGAP-News: SKW Stahl-Metallurgie Holding AG: 2008 breaks records - medium-term guidance confirmed
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