RHI Magnesita (RHIM) Q1 2025 TU earnings summary

Executive summary

• Q1 2025 saw very difficult trading conditions, with lower sales volumes and declining project business in glass and non-ferrous metals sectors worldwide.

• EBITA margins declined due to lower high-margin project volumes, weaker pricing, and higher raw material costs.

• The business remains cash generative and is implementing cost-saving measures and a price increase programme to restore margins, while facing competitive pressure from low-cost imports and overcapacity, especially in India and West Asia.

• Plant closure in Germany and consolidation of glass refractory production announced to address low demand.

Financial highlights

• Q1 sales volumes down 2% year-on-year excluding RESCO; up 1% including RESCO.

• Pricing down 6% year-on-year, with a weaker mix due to lower non-ferrous metals and glass sales.

• Net debt rose to €1.6 billion as of 31 March 2025, mainly due to the €391 million Resco acquisition.

• Gearing (net debt to EBITDA) expected at 2.9x at half year, returning to 2.5x by year end.

• Margins in Q1 were weak due to lower volumes, lower pricing, and higher raw material costs.

Outlook and guidance

• H1 2025 expected to deliver only 35%-40% of annual result, with 60%-65% of profits weighted to H2, supported by postponed project volumes.

• Full-year guidance maintained to be modestly ahead of 2024 adjusted EBITDA/EBITA, but downside risk has increased due to macroeconomic volatility and global trade uncertainties.

• Four key drivers for H2: price increases, industrial project volume recovery, cost reductions, and SG&A savings.

• If the US dollar remains at current levels, a €15 million negative impact to adjusted EBITDA/EBITA is expected.