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

DGAP-News: SKW Stahl-Metallurgie Holding AG / Key word(s): Restructure of Company/Profit Warning SKW Stahl-Metallurgie Holding AG: SKW Metallurgie commences strategic realignment 14.08.2014 / 20:11 --------------------------------------------------------------------- SKW Metallurgie commences strategic realignment * New Executive Board implements program for strategic realignment aimed at a sustainable increase of earnings * Focus on profitable core business and enhancement of market position in key markets * Significant need for impairment identified Unterneukirchen (Germany), August 14, 2014. The global specialty chemicals Group SKW Metallurgie has commenced a wide-ranging, strategic realignment. To this end, the new Executive Board headed by CEO Dr. Kay Michel, after careful analysis of the Group companies, has implemented the program "ReMaKe" (Business REstructuring - Efficiency MAnagement - Growth in KEy Markets) in order to increase earnings and free cash flow sustainably, and has already enacted initial measures. In particular, the strategy of vertical integration for Group-internal supply of raw materials calcium carbide in Europe and calcium silicon shall not be fostered any longer, inter alia since the profitability expectations associated with said investments have failed to materialize. The Executive Board is currently reviewing all available options for the Group companies concerned in Bhutan and Sweden. "By focusing on our profitable core business as well as enhancing our position in key markets we will sustainably strengthen SKW Metallurgie for the future. With our specialized products and solutions for the steel industry, we are already firmly entrenched in growth markets. It is now up to expanding that market position, and at the same time optimizing our results", comments Dr. Kay Michel, CEO of SKW Metallurgie. The now implemented ReMaKe program aims at strengthening the profitable SKW Metallurgie core business, and to expand the market position in key markets (in particular in Asia). Moreover, more synergies among the affiliates shall be realized, as well as structures and processes adapted in order to increase efficiency. In the SKW Metallurgie Group, ReMaKe shall in the medium term increase revenues and EBITDA significantly, as well as yield a sustainably positive free cash flow. SKW Stahl-Metallurgie Holding AG is obliged by international accounting standards to conduct impairment tests. In this context preliminary assessment and findings of the Executive Board showed that based on current macroeconomic conditions, significantly weaker business than previously forecast is to be expected for certain Group companies. Hence, impairments in the interim financial statements as per June 30, 2014 are required; these mainly concern tangible assets in Bhutan und Sweden as well as non-tangible assets and deferred tax assets. In this context, SKW Stahl-Metallurgie Holding AG announced by ad-hoc release of August 14, 2014 that in the interim financial statement as per June, 30, 2014 extraordinary value adjustments in the expected tune of EUR 84 million have to be recorded. The aforementioned impairment charges are non-cash and hence do not have any immediate influence on the operative business or cash on hand of the SKW Metallurgie Group. Additional extraordinary impairments are not expected currently. For Q2-2014 and hence H1-2014, the SKW Metallurgie Group assumes according to preliminary figures now available revenues and EBITDA below the comparable figures of the previous year. Due to the aforementioned extraordinary adjustments, earnings before interest and taxes (EBIT), earnings before taxes (EBT) as well as net result of the period and earnings per share (EPS), each for H1-2014, will be significantly negative and hence below the levels of the previous year. 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. For H2-2014, the SKW Metallurgie Group is expecting revenues slightly above those of the second half of 2013. However, the Executive Board does not assume that the weak revenues of Q1-2014 can be fully compensated; hence, for FY-2014 revenues are expected slightly below the level of the previous year. Group EBITDA (before restructuring expenses) in H2-2014 are expected to be above the reported levels of the previous year. Reported Group EBITDA (after restructuring expenses) in H2-2014 as well as in FY-2014 will be below the reported figures of the comparable period of 2013 due to one-off expenses in connection with the strategic realignment. For 2015, the SKW Metallurgie Group is expecting positive net effects for Group earnings, through the consequent continuation of the strategic realignment ("ReMaKe").   Contact SKW Stahl-Metallurgie Holding AG Christian Schunck Head of IR and Corporate Communications Rathausplatz 11 84579 Unterneukirchen Germany Phone IR/Press: +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 and the SKW Metallurgie Group The SKW Metallurgie Group is the global market leader for chemical additives for hot metal desulphurization, and for cored wire and other products for 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 venture). Shares of SKW Stahl-Metallurgie Holding AG have been listed in Frankfurt Stock Exchange's Prime Standard since December 1, 2006 with ISIN DE000SKWM013 (since August 15, 2011: new ISIN DE000SKWM021 due to switch to name shares). Disclaimer This press release may include certain forward-looking statements which are based on currently available assumptions and predictions of the SKW Metallurgie Group's management as well as on other currently available information. Various identified as well as unidentified risks and uncertainties as well as other factors may result in a deviation of actual results, financial situation, development or achievement of the company compared to the assessments made herein. SKW Stahl-Metallurgie Holding AG does not intend and assumes no liability to update such forward-looking statements and to adjust them to future events and developments. --------------------------------------------------------------------- 14.08.2014 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. 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, Düsseldorf, Hamburg, München, Stuttgart End of News DGAP News-Service --------------------------------------------------------------------- 282432 14.08.2014