SKW Stahl-Metallurgie Holding AG / Final Results/Forecast 26.03.2010 06:57 Dissemination of a Corporate News, transmitted by DGAP - a company of EquityStory AG. The issuer / publisher is solely responsible for the content of this announcement. --------------------------------------------------------------------------- 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|]]]|] --------------------------------------------------------------------------- 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 End of News DGAP News-Service ---------------------------------------------------------------------------
DGAP-News: SKW Stahl-Metallurgie Holding AG: Profitable growth forecast for 2010 and 2011
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