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SKW Metallurgie’s business performance stabilized with moderate growth


  • First quarter 2017 marked by trend reversals in steel production in the USA and Europe
  • Margin pressure withstood, operationally stronger performance in the market compared with competitors
  • Balance sheet restructuring as the prerequisite for strategically sustainable growth
  • Investor process leads to postponement of the annual shareholders’ meeting in the interest of the company

Munich (Germany), May 24, 2017. SKW Metallurgie’s performance in the first quarter of 2017 was affected by trend reversals in steel production in the United States and Europe and a positive business performance in Brazil. The SKW Group generated revenues in the core business of EUR 64.5 million and an operating EBITDA of EUR 3.4 million in the first three months of the year. These results were improved from the first three months of last year (revenues EUR 59.0 million, operating EBITDA EUR 2.6 million).

“We mastered the crisis in 2016 and our operational performance in the market was stronger than that of many competitors,” said Dr. Kay Michel, CEO of SKW Stahl-Metallurgie Holding AG. “On the one hand, we benefited from the upward trend in our core markets since late 2016; on the other hand, we must also withstand further intensifying margin pressure. Our resilient market position can be credited in no small part to the prior-year effects of our internal continuous improvement program ReMaKe, which contributed an amount in the double-digit millions. In the current year, we anticipate a further earnings effect of an amount in the single-digit millions.”

Thanks to the automotive industry, the construction sector and the mechanical engineering industry, the Group’s worldwide capacities are better utilized again. Due to tremendous surplus capacities primarily in China, however, the state of the global steel market is still critical and the massive pressure on prices in SKW’s customer industries will therefore continue. Bucking this trend, SKW improved its gross profit margin from 32.3% in the first quarter of last year to 32.7% in the current reporting period, thanks to procurement successes and an optimized product mix. These effects, combined with a 6.9% production increase over Q1 2016 and the above-mentioned efficiency gains, led to the positive development of earnings.

In view of its more efficient operational alignment, SKW is now confident that it will be able to seize opportunities in its core markets and improve its competitive position. Assuming a continuation of the positive development of basic operating conditions, the company expects that it will be able to increase its operating EBITDA well above the guidance level for fiscal year 2017 (revenues approx. EUR 230 million and operating EBITDA EUR 9 million).

As the company has already stated multiple times in the past, it must restructure its balance sheet and strengthen its capital in accordance with the conditions agreed with its lenders as a prerequisite for strategically sustainable further development. “This is the fundamental prerequisite for implementing our medium-term plan and sustainably repositioning our company,” CEO Michel said.

SKW is currently holding talks with interested investors. “The potential investors are studying our Group as quickly as possible and as thoroughly as necessary,” Michel said. “This effort in the interest in SKW Metallurgie is certainly worthwhile.”

In light of this interest, SKW Metallurgie has postponed the original annual general meeting that was originally scheduled for early July 2017. The company will announce a new date in due course. The annual general meeting should be able to duly consider the outcome of the ongoing investor process. The overriding goal is to demonstrate a path of adequate and sustainable financial restructuring to the shareholders at the annual general meeting.

Contact
Thomas Schulz
Telephone: +49 171 86 86 482
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
Internet: www.skw-steel.com

About SKW Stahl-Metallurgie Holding AG and the SKW Metallurgie Group
The SKW Metallurgie Group is the world leader in the market for chemical additives used for pig iron desulphurization and in the market for cored wires and other secondary metallurgy products. The Group’s products enable steel makers to produce high-grade steel products efficiently. The Group’s customers include the world’s leading steel companies. The SKW Metallurgie Group’s metallurgical expertise is the result of more than 50 years’ experience in this field. The Group is active in more than 40 countries today. The headquarters of SKW Metallurgie Group is located in Germany; its production facilities are located in France, the United States, Canada, Mexico, Brazil, South Korea, Russia, the People’s Republic of China and India (joint venture). The Group generated revenues of roughly EUR 230 million in 2016. It had approximately 560 employees at December 31, 2016.
The shares of SKW Stahl-Metallurgie Holding AG have been listed on the Prime Standard segment of the Frankfurt Stock Exchange (Germany) since December 1, 2006; they have been listed under WKN SKWM02 and ISIN DE000SKWM021 since 2011, when the shares were converted to registered shares.

Disclaimer
This press release may contain forward-looking statements that are based on the current assumptions and forecasts of the Management of the SKW Metallurgie Group and other currently available information. Due to various known and unknown risks and uncertainties, the company’s actual results, financial position, development or performance could differ significantly from the estimates expressed herein. SKW Stahl-Metallurgie Holding AG does not intend and assumes no obligation whatsoever to update such forward-looking statements and adapt them to future events or developments.