DGAP-News: SKW Stahl-Metallurgie Holding AG: SKW

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 --------------------------------------------------------------------- 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) End of Corporate News --------------------------------------------------------------------- 15.05.2014 Dissemination of a Corporate News, transmitted by DGAP - a company of EQS Group AG. The issuer is solely responsible for the content of this announcement. DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------- 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 End of News DGAP News-Service --------------------------------------------------------------------- 268586 15.05.2014