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• Revenue: EUR1.728 billion, broadly flat compared to EUR1.734 billion in the first half of last year.

• EBITA: EUR190 million, a 5% year-on-year reduction.

• EBITA Margin: 11%, down from 11.6% in the first half of last year.

• Cash Flow: Record adjusted operating cash flow of EUR233 million.

• Cash Conversion: 123% of EBITA.

• Working Capital Release: EUR86 million reduction.

• EPS: EUR2.59 per share, a 2% increase.

• Interim Dividend: EUR0.60 per share.

• Steel Sales Volumes: Down 1% like-for-like.

• Industrial Sales Volumes: Down 10% like-for-like.

• Pricing: Average 4% lower across businesses.

• M&A Contributions: EUR34 million to EBITDA in the first half.

• Net Debt: Reduced by EUR30 million to EUR1.274 billion.

• Capital Expenditure: EUR68 million spent in the first half, with full-year guidance at EUR170 million.

• Warning! GuruFocus has detected 6 Warning Signs with WBO:RHIM.

Release Date: July 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• RHI Magnesita NV (WBO:RHIM) delivered a resilient set of results despite a challenging global demand environment.

• The company achieved a strong cash flow performance, with a cash conversion rate of 123% of EBITA and EUR233 million in operating cash flow, marking the highest since its listing in 2017.

• RHI Magnesita NV maintained stable revenues compared to the first half of 2023, supported by contributions from acquisitions.

• The company is actively transforming its business through strategic acquisitions, sustainability leadership, and the development of new products and technologies.

• RHI Magnesita NV is making significant progress in sustainability, with increased recycling rates and a notable reduction in CO2 emissions, positioning itself as a leader in the refractory industry.

Negative Points

• Global demand remains weak, with no short-term catalysts expected to drive a significant recovery in the second half of 2024.

• Steel sales volumes decreased by 1%, and industrial sales volumes were down by 10% compared to the previous period.

• Pricing has trended lower for both steel and industrial divisions, with an average reduction of 4% across the businesses.

• The company reported a tragic fatality at one of its plants in China, highlighting ongoing challenges in workplace health and safety.

• RHI Magnesita NV faces competitive pressures, particularly from Chinese imports affecting market share in regions like India and Southeast Asia.

Q & A Highlights

Q: What gives you confidence that the export flood from China will reduce in the second half, and does this also apply to raw materials? A: Stefan Borgas, CEO: Many geographies are implementing import tariffs, making domestic steel production more competitive against Chinese imports. This trend is evident globally. Historically, Chinese steel exports decrease in the second half of the year. Regarding raw materials, there's a focus on quality and environmental improvements in China, particularly affecting alumina prices. However, magnesite-based raw materials remain abundant, with slight recent increases not factored into 2024 projections.