EANS-News

Results of the first half of 2017 - Seite 2

addition, restructuring costs of EUR 1.0 million related to changes in the
product portfolio at the site in Porsgrunn, Norway, were incurred in the first
quarter of 2017.

Net cash flow from operating activities amounted to EUR 39.8 million in the
first half of 2017 after EUR 76.7 million in the same period of 2016. Net cash
flow from investing activities amounted to EUR (4.8) million in the first half
of 2017 after EUR (17.1) million in the first half of 2016. Free cash flow thus
amounted to EUR 35.0 million in the first half of 2017 after EUR 59.6 million in
the comparative period of 2016.

Development in the second quarter of 2017
In the second quarter of 2017 the RHI Group's revenue increased by 4.3% compared
with the preceding quarter and amounted to EUR 437.0 million. This increase is
due to higher contributions to revenue by both the Steel Division and the
Industrial Division. Here, revenue growth is above all attributable to the start
of the maintenance season in the oil and gas segment in North America as well as
in Europe.

The operating EBIT amounted to EUR 21.1 million in the past quarter compared
with EUR 37.9 million in the first quarter of 2017 and includes external costs
of EUR 8.8 million related to the planned combination of RHI and Magnesita as
well negative currency effects of EUR 5.6 million resulting from the measurement
of balance sheet items. Adjusted for these two effects, the operating EBIT
amounts to EUR 35.5 million in the second quarter of 2017, which corresponds to
a margin of 8.1%.

Outlook
In its forecast published in July 2017, the International Monetary Fund predicts
global economic growth of 3.5% in the current year after 3.2% in the year 2016.
However, there is considerable uncertainty regarding the impact of the policies
of the newly elected US government. Although the environment in the advanced
economies improved, especially in Europe, the pace of growth in the emerging
markets will continue to influence the global economy to a significant extent.
Based on a current study, the research institute CRU expects a decline in steel
production in China by roughly 1% in the year 2017 and an increase in steel
production outside China by 4%. Based on these estimates, RHI expects a more
positive market environment in 2017. The focus will stay on the generation of
free cash flow in the current financial year in order to reduce net debt
further. Due to the preparations for a successful completion of the planned
combination with Magnesita and the integration of the two companies, external