RHI Magnesita (RHIM) H2 2023 earnings summary

Executive summary

• FY 2023 revenue rose 8% to €3.572bn; adjusted EBITDA increased 9% to €543m and adjusted EBITA rose 7% to €409m.

• Strong profitability and a €123m base-business working capital release supported €413m adjusted operating cash flow; acquisitions and pricing offset lower organic volumes.

Financial highlights

• Gross profit increased 12% to €857m; gross margin rose 100bps to 24.0%, mainly on restored industrial pricing.

• Adjusted profit after tax was €241m and adjusted EPS €4.98, up 2% YoY; adjusted finance charges increased to €92m from €66m.

• Adjusted operating cash flow was €413m versus €155m in 2022; free cash flow was €258m versus €43m.

• Revenue grew 10% in constant currency; acquisitions contributed 9% of revenue growth and €56m of EBITDA, above the ~€40m guidance.

Outlook and guidance

• 2024 base-business sales volumes are assumed flat YoY; the full-year effect of 2023 acquisitions is expected to add up to 10% to shipped volumes and €80m of EBITDA.

• 2024 adjusted EBITA guidance is ~€410m, with an adjusted EBITA margin of ~11.0%; pricing pressure is expected to partly offset M&A benefits.

• 2024 guidance includes capex of €170m, working capital intensity of ~24%, gearing of 2.0–2.5x and adjusted tax rate of 23–25%.

• Depreciation guidance is ~€140m; adjusted finance charges are guided at ~€85m, including ~€50m net interest expense.