RHI Magnesita today announces its results for the financial year 2022. Market share gains and price increases led to strong revenue growth, offsetting higher costs.
RHI Magnesita delivered a solid performance in 2022. Revenue increased by 30% to €3.3 billion. During a period of ongoing supply chain disruption and cost inflation, RHI Magnesita focused on seamless supply to its customers and benefited from its local-for-local strategy. The Company was able to increase its market share, with RHI Magnesita’s shipped volumes in the steel segment broadly flat compared to a 7% decline in world steel production, excluding China. Margins remained stable, with higher selling prices offsetting significantly higher costs for energy, raw materials and sea freight. This underlines the resilience of RHI Magnesita’s business, as the Company was able to maintain its profitability and margins throughout a challenging economic cycle.
Commenting on the results, Stefan Borgas, CEO RHI Magnesita, said: “In 2022 we demonstrated the benefits of focusing on our customers, as the investment we made in higher working capital enabled us to both gain market share and increase prices, adding around €600 million to revenues as higher costs were passed on. I am pleased to report growing progress on our M&A strategy with acquisitions in India, China, Türkiye and Europe agreed or completed during the year. Whilst the outlook for 2023 is more uncertain than prior years due to slowing demand for refractories and softer pricing in certain regions, RHI Magnesita is able to face these challenges in a much stronger condition as a result of the implementation of its strategic cost savings and sales strategies over the past four years.”
Through strong M&A progress in 2022, RHI Magnesita will be able to increasingly serve customers with materials from local production and supply them with the broadest range of products and services while delivering revenue growth in key regions. RHI Magnesita reports strong progress in its target regions of China, Türkiye and India. The Company acquired SÖRMAS in Türkiye and established the leading secondary raw material producer in Europe, MIRECO. Through two targeted acquisitions in India, Dalmia OCL and Hi-Tech, RHI Magnesita has strengthened its business in industrial markets and in flow control, whilst in China the Company has added flow control capacity through the agreed acquisition of Jinan New Emei.
RHI Magnesita has also continued to transform its production network through ongoing investments into its refractory plants and raw material sites, including plant expansions, modernisation and the scale-up of automation and digitalisation of its sites. The efficiencies from the Production Optimisation Plan have contributed to maintaining the Company’s margins. The indispensability of RHI Magnesita’s products in high-temperature processes, combined with low production costs and strong focus on customer service, have been and will continue be the driving factors behind the Company’s long-term track record of profitability.
RHI Magnesita has made great strides towards achieving its sustainability objectives: The Company’s target to increase the recycling rate in its products from 3.8% in 2018 to more than 10% in 2025 has been achieved three years early in 2022. This was accelerated by the acquisition of a 51% stake in a new joint venture with Horn & Co Group, MIRECO, to combine recycling activities in Europe. RHI Magnesita has also achieved its lowest absolute CO2 emissions and CO2 emissions intensity since the merger of RHI and Magnesita in 2017, largely due to fast delivery of the recycling target. In recognition of the Company’s sustainability efforts, it has been awarded an ‘A-’ rating from the Carbon Disclosure Project and received a sector leader status from Sustainalytics.
In 2023, the Company intends to build on its technological leadership through additional investments in trials of low-carbon manufacturing processes and products.
RHI Magnesita expects volatility and uncertainty across global markets to persist in 2023. With a decline in construction activity which will affect steel, cement, lime, non-ferrous metals and glass demand globally, RHI Magnesita anticipates lower sales volumes in 2023. However, demand softness will be offset by continued strong growth in India. Costs are expected to remain broadly flat as higher energy and labour costs offset lower sea freight and purchased raw materials. The Company will also benefit from additional earnings from new acquisitions and cost savings from its strategic initiatives.
In 2023, the Company will continue to focus on growing its business especially in the attractive markets of China, India and Türkiye. Supported by the earnings from acquisitions and the cost savings from strategic initiatives, RHI Magnesita is well positioned for the coming years.
Read the full RNS here.
About RHI Magnesita
RHI Magnesita is the leading global supplier of high-grade refractory products, systems and solutions which are critical for high-temperature processes exceeding 1,200°C in a wide range of industries, including steel, cement, non-ferrous metals and glass. With a vertically integrated value chain, from raw materials to refractory products and full performance-based solutions, RHI Magnesita serves customers around the world, with around 13,500 employees in 33 main production sites and more than 70 sales offices. RHI Magnesita intends to leverage its leadership in terms of revenue, scale, product portfolio and diversified geographic presence to target strategically those countries and regions benefitting from more dynamic economic growth prospects.
The Group maintains a premium listing on the Official list of the London Stock Exchange (symbol: RHIM) and is a constituent of the FTSE 250 index, with a secondary listing on the prime segment of the Vienna Stock Exchange (Wiener Börse). For more information please visit: www.rhimagnesita.com