DGAP-Adhoc: SKW Stahl-Metallurgie Holding AG: New Executive

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News Desk 2018

Aug 14, 2014 at 2:15 PM

DGAP-Adhoc: SKW Stahl-Metallurgie Holding AG: New Executive Board of the SKW Metallurgie Group sees significant need for impairment, and implements program for strategic realignment; revenues and EBITDA expected below previous year for H1-2014

SKW Stahl-Metallurgie Holding AG / Key word(s): Restructure of Company/Profit Warning 14.08.2014 19:59 Dissemination of an Ad hoc announcement according to Â§ 15 WpHG, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- New Executive Board of the SKW Metallurgie Group sees significant need for impairment, and implements program for strategic realignment; revenues and EBITDA expected below previous year for H1-2014 The new Executive Board of SKW Stahl-Metallurgie Holding AG is currently reviewing, in the context of a fundamental analysis, all business activities of the Group. Preliminary assessment and findings indicate significantly more conservative business developments for certain Group companies than so far expected. In this context, the Executive Board has decided to no longer foster the strategy of backward integration. The Executive Board is currently reviewing all available options for the Group companies concerned in Bhutan and Sweden. In the context of compiling the Group interim financial report as per June 30, 2014, the SKW Metallurgie Group tests for impairment pursuant to international accounting standards. In this context, extraordinary value adjustments will be required to an expected tune of EUR 84 million; the majority of those adjustments concern tangible assets in Bhutan and Sweden as well as non-tangible assets and impairments of deferred tax assets. Extraordinary adjustments are non-cash and hence do not have any immediate impact on the operative business or cash in hand of the SKW Metallurgie Group. Further extraordinary impairments are currently not expected. The new Executive Board of the SKW Metallurgie Group has implemented a comprehensive program for strategic realignment ("ReMaKe"). In the medium term, this program should on Group level increase revenues and earnings as well as ensure a sustainably positive free cash flow. The one-off expenses associated with the realignment are mainly expected in the EBITDA of H2-2014 (in the single-digit million Euro range). Positive net earnings contributions are expected as of 2015. A more detailed quantification of the effects from the program of strategic realignment is not possible at this stage and will be published after concluding corresponding analyses, at the latest with the publication of the Group interim financial report as per September 30, 2014. Based on preliminary figures now available, the SKW Metallurgie Group assumes that revenues and EBITDA in Q2-2014 and hence also in H1-2014 will not reach the levels of the previous year. Due to the aforementioned extraordinary adjustments, earnings before interest and taxes (EBIT), earnings before taxes (EBT) as well as the net result of the period and earnings per share (EPS), each for H1-2014, will be significantly negative and also lie below the figures of the previous year. For the second half of 2014 and for full year 2014, the SKW Metallurgie Group has updated its expectations, based on the current corporate structure, as follows: * Revenues of the Group in H2-2014 are expected slightly above those of H2-2013. However, the Executive Board does not assume the weak revenues of Q1-2014 to be compensated in full; hence, revenues slightly below the figures of the previous year are expected for FY-2014. * Group EBITDA (before restructuring expenses) in H2-2014 are expected above the reported figures of the comparable period of 2013. * Group EBITDA (reported, after restructuring expenses) in H2-2014 and also in FY-2014 are expected below the reported figures of the comparable period of 2013. The net result of the year and earnings per share (EPS) will be significantly negative and hence significantly below the figures of the previous year, for the aforementioned reasons. The SKW Metallurgie Group furthermore expects that in FY-2014 on the level of the parent company SKW Stahl-Metallurgie Holding AG, due to high value adjustments, equity will depreciate significantly, and the accumulated result for FY-2014 will be negative. 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. The half-year financial report of the Group, which is subject to an auditor's review, will be published on August 28, 2014. The adjournment is required in order to present the aforementioned matters comprehensively. 14.08.2014 The DGAP 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, DÃ¼sseldorf, Hamburg, MÃ¼nchen, Stuttgart End of Announcement DGAP News-Service ---------------------------------------------------------------------------

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