REG - RHI Magnesita N.V. - 2024 Full Year Results
27/02/2025 07:15
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RNS Number : 6121Y RHI Magnesita N.V. 27 February 2025
27 February 2025
RHI Magnesita N.V.
("RHI Magnesita" or the "Company" or "Group")
2024 Full Year Results
Resilient margin and cash flow performance in very weak market conditions
RHI Magnesita, the leading global supplier of high-grade refractory products,
systems and solutions, today announces its final results for the year ended 31
December 2024 ("2024" or the "Year").
Financial results 2024 2023 Change 2023 (constant currency) Change (constant currency)
(Adjusted, €m unless stated otherwise)(1)
Revenue 3,487 3,572 (2)% 3,529 (1)%
Adjusted EBITDA 543 543 0% 571 (5)%
Adjusted EBITA 407 409 0% 439 (7)%
Adjusted EBITA margin 11.7% 11.4% 30bps 12.5% (80)bps
Adjusted EPS (€/per share) 5.32 4.98 7%
Adjusted Operating Cash Flow 419 418 0%
Net debt(2) 1,251 1,304 (4)%
Net debt to Pro Forma Adjusted 2.3 2.3
EBITDA(3)
(Reported, €m unless stated otherwise) 2024 2023
Revenue 3,487 3,572
Gross profit 848 857
EBITA 281 378
Profit before income tax 200 233
Profit after income tax 154 171
EPS (€/per share) 3.01 3.50
Dividend(4) (€/per share) 1.80 1.80
1. Adjusted figures are alternative performance measures "APMs" excluding
impairments, amortisation of intangibles and exceptional items to enable an
understanding of the underlying performance of the business. Full details are
shown in the APM section.
2. 2024 Net debt includes leases of €77 million (2023: €70 million), as
required by IFRS 16. For further details see Note 37 of the consolidated
financial statements.
3. Pro Forma Adjusted EBITDA is used to assess financial gearing and
includes a full year of Adjusted EBITDA contribution from any businesses
acquired during the year.
4. Recommended final dividend of €1.20 per share, subject to AGM approval
on 7 May 2025. Full year dividend of €1.80 per share includes the interim
dividend of €0.60 per share paid to shareholders on 26 September 2024.
Operational and strategic highlights
· Operational efficiency and cost discipline delivered robust margin
performance despite historically weak end markets
· Acquisition of Resco for enterprise value of €391 million completed
on 28 January 2025 brings total deal value of M&A completed since December
2021 to €1.2 billion
· M&A closed in 2023 contributed €77 million to 2024 Adjusted
EBITDA, in line with guidance of c.€80 million
· Customer service KPIs including net promoter score and PIFOT
("Process In Full and On Time") reached record highs
· Sustainability commitment demonstrated by record recycling rate of
14.2% (2023: 12.6 %), driving annual CO(2) emission savings of 1.8 Mt compared
to 2018 levels
· Outsourcing agreement with Capgemini from December 2024 to deliver
shared service centre efficiency gains
Financial highlights
· Sales volumes 1% lower in the base business, excluding contribution
from M&A, with continuing softness in end market demand especially in
industrial markets
· 6% lower pricing matched a 6% reduction in cost of goods sold per
tonne as pricing was reduced to protect market share
· Adjusted EBITA of €407 million (2023: €409 million) within guided
range of €400-€410 million, supported by strong trading in Q4 and margin
of 11.7% (2023: 11.4%), comprising record high refractory margin of 10.9% and
continued weak raw material contribution of 0.8%
· Total net adjustments to EBITA of €125 million (2023: €31
million) driven by costs of Group wide programmes aimed at improving operating
efficiency and future profitability through (i) €52 million expenses
relating to digital transformation and business process improvements, and (ii)
plant network optimisation, including €29 million impairment of Brazil
assets in connection with Resco and €25 million closure costs at Mainzlar
· 103% cash conversion supported by €115 million release of working
capital, due to efficient management of inventory and receivables as well as
deflationary cost development
· Net debt reduced by €53 million to €1,251 million (2023: €1,304
million) after €58 million of M&A, including prepayments of €44
million for Resco acquisition and €5 million acquisition of Refrattari
Trezzi
Outlook and guidance
Refractory demand remains weak, with no recovery in end market demand visible.
Falling domestic demand of customer industries in China results in exports of
steel and other materials from China, reducing customer output in most world
markets and therewith reducing refractory usage. 2024 was a relatively strong
year for higher margin non-ferrous metals and glass projects due to the timing
of customer investment projects. However, markedly lower capex investments by
these industrial customers will reduce demand in 2025, offsetting forecasted
growth in steel refractory demand in India, West Asia & Africa. Revenue
performance in 2025 year to date and the outlook for H1 is weak, driven by low
volumes in steel and pricing pressure in particular in cement and non-ferrous
metals.
The Adjusted EBITA performance in 2025 is therefore expected to be modestly
above 2024 levels including the acquisition of Resco. Adjusted EBITA is
expected to be weighted approximately 45% in the first half and 55% in the
second half of the year.
Stefan Borgas, CEO said: "RHI Magnesita has delivered another resilient
financial performance despite very weak market demand in most markets around
the world. At €407 million, Adjusted EBITA was within our guidance range of
€400-€410 million, reflecting the expected strong performance in the
fourth quarter for which I offer my congratulations to the team. We continue
to prioritise safety above all - this is a core value for us.
We have now completed the Resco transaction, the largest single acquisition we
have undertaken since the combination of RHI and Magnesita in 2017. In our US
business we can finally fulfil our customers' requests for significantly
higher local production. Investments into the enlarged production network are
being prepared in detail by our merged team in the USA.
We expect to incur network optimisation expenses in Europe and Brazil as a
result of plant footprint adjustments following the Resco acquisition and
other M&A transactions completed in 2022 and 2023. Total restructuring
costs of €60 million and capital expenditure of €40 million are planned
over the period 2025-27. This will deliver €10 million of EBITA benefit in
2025, €20 million in 2026 and €30 million per annum thereafter. Our
strategy to grow through acquisition in the fragmented refractory industry,
building on our strengths as a technology and sustainability leader, is
proving to be a solid approach to generating value for shareholders. We will
continue to manage the business conservatively throughout the ongoing downturn
in demand whilst delivering on our strategic objectives to generate long term
value."
For further enquiries, please contact:
Investors: Chris Bucknall, Head of Investor Relations, +43 699 1870 6490,
chris.bucknall@rhimagnesita.com (mailto:chris.bucknall@rhimagnesita.com)
Media: Hudson Sandler, +44 020 7796 4133, rhimagnesita@hudsonsandler.com
(mailto:rhimagnesita@hudsonsandler.com)
Conference call
A presentation for investors and analysts will be held on 27 February 2025
starting at 8:15am UK time (9:15am CET). The presentation will be webcast live
and details can be found on: https://ir.rhimagnesita.com/
(https://ir.rhimagnesita.com/) . Alternatively the webcast can be accessed
using the following link:
https://www.investis-live.com/rhimagnesita/67adc364242e93000e3ae4ae/hapetf
(https://www.investis-live.com/rhimagnesita/67adc364242e93000e3ae4ae/hapetf)
A replay will be available on the same link shortly after event.
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 over 20,000
employees and contractors in 65 main production sites (including raw material
sites), 12 recycling facilities 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 benefiting from more dynamic economic growth prospects.
The Group is listed within the Equity Shares (Commercial Companies) category
("ESCC") of 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 Vienna
Stock Exchange (Wiener Börse). For more information please visit:
www.rhimagnesita.com (http://www.rhimagnesita.com)
FORWARD LOOKING STATEMENTS
This announcement contains (or may contain) certain forward-looking statements
with respect to certain of the Company's current expectations and projections
about future events. These statements, which sometimes use words such as
"aim", "anticipate", "believe", "intend", "plan", "estimate", "expect" and
words of similar meaning, reflect the directors' beliefs and expectations and
involve a number of risks, uncertainties and assumptions which could cause
actual results and performance to differ materially from any expected future
results or performance expressed or implied by the forward-looking statement.
Statements contained in this announcement regarding past trends or activities
should not be taken as a representation that such trends or activities will
continue in the future. The information contained in this announcement is
subject to change without notice and, except as required by applicable law,
the Company does not assume any responsibility or obligation to update
publicly or review any of the forward-looking statements contained in it and
nor does it intend to. You should not place undue reliance on forward looking
statements, which apply only as of the date of this announcement. No statement
in this announcement is or is intended to be a profit forecast or profit
estimate or to imply that the earnings of the Company for the current or
future financial years will necessarily match or exceed the historical or
published earnings of the Company. As a result of these risks, uncertainties
and assumptions, the recipient should not place undue reliance on these
forward-looking statements as a prediction of actual results or otherwise. The
Company has no obligation or undertaking to update or revise the
forward-looking statements contained in this announcement to reflect any
change in its expectations or any change in events, conditions, or
circumstances on which such statements are based unless required to do so by
applicable regulations. The numbers presented throughout this announcement may
not sum precisely to the totals provided and percentages may not precisely
reflect the absolute figures, due to rounding.
CEO REVIEW
Safety, resilience and progress
Weak end markets continued to impact the business in 2024. The contribution
from M&A, operational excellence and network efficiencies supported
relatively stable revenues, margins and profitability. We continue to execute
on our three strategic pillars of reducing costs, expanding our business model
and growing in markets where we are underrepresented.
Health & Safety
Health and safety is our absolute priority and I am saddened to report that
two fatal incidents occurred at our production sites in H1 2024. Health and
safety improvements have been prioritised at all levels of management;
together we are undertaking a complete review of our safety standards,
culture, leadership and key serious injury and fatality risks.
During the year we established the RHI Magnesita HELP fund, a registered
association in Austria focused on providing immediate financial assistance to
individuals and families affected by workplace safety incidents across our
global network. I am proud to say that the HELP fund has been funded primarily
through voluntary contributions from RHI Magnesita staff, with a matching
contribution from the Company. From these sources the HELP fund raised over
€800,000 in its first year and payments to qualifying recipients have
already commenced.
Operational excellence
Operational excellence underpins our customer offering, our industrial
operations and financial performance. The work to drive improvements is
translating into tangible benefits in both of these areas. Our main KPIs in
2024 were PIFOT ("Process In Full On Time") and net promoter scores in
customer surveys. Both of these achieved record highs in 2024. Other
operational indicators and inventory management metrics also showed
improvements, contributing to a reduction in working capital and strong cash
flow conversion this year.
Our digital transformation is well underway, consisting of a group-wide
replacement of the core operating systems (including ERP) alongside a redesign
of our core business processes, all focused on improving customer experience.
In Q4 we entered into a business process outsourcing agreement with Capgemini
which will result in broader career opportunities for our shared service
centre colleagues, deliver cost savings and, most importantly, lead to sharper
execution of the critical processes which are the foundation of our ability to
deliver for our customers more reliably. We will be investing over €100
million into this platform to deliver greater value to customers and more
effective integration of acquisitions.
4PRO
R&D and the new '4PRO' service offering are critical to deliver
improvements to our customers. Constantly improving world-leading refractory
performance is reliant upon continuous adaptation of existing solutions
according to customer needs and the development of new technologies that will
deliver the next iteration of product performance improvements, and efficiency
gains in our own manufacturing processes. I am pleased to report strong growth
in sales of robotics solutions for automated lining repairs in 2024 and
exciting new developments in production techniques with high potential for
sustainability, cost and performance improvements. Our offering in this area
has been consolidated under a central function offering Advanced Technologies
to ensure that we can move our customers up the margin curve to higher value
added products and services.
During 2024 we expanded our solutions contract offering under the 4PRO brand.
4PRO represents a holistic approach to high-performance refractory
applications, based on closer collaboration with customers seeking continuous
improvement in production techniques as well as the pursuit of sustainability
objectives and circular economy initiatives.
Strategy update
Our M&A-led growth strategy delivered strong results despite headwinds
from weak market conditions. The six acquisitions completed in 2023
contributed Adjusted EBITDA of €77 million, in line with guidance of c.€80
million. During 2024 we completed the acquisition of Refrattari Trezzi,
expanding our recycling activities in Europe.
In the US, we reached agreement on the acquisition of Resco Group in April
2024 and successfully completed the transaction on 28 January 2025, for a
final deal value of €391 million. This acquisition is a major step forward
for our North American business. Resco's strengths in the petrochemical,
cement and aluminium industries are complementary to our existing business and
will provide opportunities in these market segment worldwide by leveraging RHI
Magnesita's global footprint. The much larger US plant footprint will allow us
to accelerate our 'local for local' production strategy, onshoring significant
manufacturing activity into the US and shortening supply chains. Resco is the
largest acquisition we have undertaken since the combination of RHI and
Magnesita in 2017 and I am excited about the prospects for our future growth
in this dynamic and valuable refractory market. The new team is fired-up!
We remain committed to our strategy to allocate capital to growth via M&A.
We note that there have been other transactions in the sector in 2024, with
Shinagawa's acquisition of Gouda Refractories Group and Vesuvius PLC's
purchase of Piromet in Türkiye. During 2025 our focus will be primarily on
network optimisation, the integration of recent acquisitions and reducing net
debt, with any additional M&A likely to be limited in scope.
We expect to incur network optimisation expenses in Europe and Brazil as a
result of plant footprint adjustments following the Resco acquisition and
other M&A transactions completed in 2022 and 2023. Total restructuring
costs in the base business of €60 million and associated capital expenditure
of €40 million are planned over the period 2025-27, to deliver €10 million
of EBITA benefit in 2025, €20 million in 2026 and €30 million per annum
thereafter.
Our people
Our greatest strength lies in our people. Every contribution matters and
strengthens our collective success, increasingly also from colleagues joining
RHI Magnesita as a result of M&A. We continue to learn more about our
industry, identifying new opportunities and benefitting from the expertise of
talented teams and individuals as we integrate acquired businesses.
Sustainability
Sustainability means the protection and preservation of resources for future
generations. Our Company traces its origins back to 1834. Today, as the
leading global supplier of refractories, which are essential for the creation
of basic building materials for modern life, we can be certain that our
industry will remain essential for many years to come. Refractory production
is CO(2) intensive and RHI Magnesita has pioneered new technologies for
reducing CO(2) emissions. Our journey to recycle secondary raw materials
increasingly requires the development of cutting edge technologies, which are
now in industrial testing. In 2025 we will be piloting a CO(2)
re-mineralisation technology together with MCi Carbon. Further progress
requires engagement with suppliers to adopt low-carbon energy sources.
Our customers are amongst the highest emitters of CO(2) globally and are
undergoing their own transformation to decarbonise. When developing new
production technologies they are increasingly turning to RHI Magnesita as
their preferred partner for refractory solutions. We have now won five major
contract awards for green steel projects; this will be an important source of
high value-add business going forwards.
RHI Magnesita has produced sustainability statements according to ESRS for the
2024 financial year. Having completed a lengthy double materiality assessment
and complied in full with the disclosure requirements, the Group is of the
view that the outcome of the ESRS process is not beneficial to stakeholders.
ESRS places an unreasonable burden in terms of financial cost and other
corporate resources which cannot be deployed to actual sustainability
improvements. RHI Magnesita urges relevant regulators and legislators to look
again at the way that ESRS has been implemented in practice to allow companies
to redirect resources from reporting to action. We note that the European
Commission has proposed a revision to ESRS through its Omnibus Directive and
we hope for improvement.
Financial performance
Our financial performance was resilient considering the challenging end market
conditions, which saw a decrease in sales volumes of 1% in the base business
and 6% lower pricing. The contribution from M&A and operational efficiency
delivered stable revenues and Adjusted EBITA of €407 million (2023: €409
million) with margin increasing to 11.7% (2023: 11.4%). It is a sign of our
strong operational performance that we were able to maintain margin in a
falling price environment, despite lower vertical integration contribution and
the additional burden from high fixed cost under-absorption due to shrinking
volumes.
Adjusted EPS increased to €5.32 (2023: €4.98) and cash generation was
strong at 103%, contributing to a reduction in net debt of €53 million to
€1,251 million and gearing of 2.3x (2023: 2.3x), in line with our target
range.
Outlook
The short-term outlook for our industry remains weak and we must be ready to
respond with fast decision making. China's necessary and clearly communicated
economic transition is the most significant factor affecting industrial
markets worldwide including refractory markets. The long term outlook for
future-oriented commodities and materials such as copper, aluminium and glass
remains strong. However, project demand in the industrial segment is expected
to decline in the near term.
Should any recovery in refractory demand occur, RHI Magnesita is well
positioned to benefit due to its high levels of operational gearing and
vertical integration capability. During this extended downturn, we have
greatly increased our customer base through the acquisition of 12 businesses
with a total deal value of €1.2 billion and we are seeing real benefits from
synergies as these acquisitions are integrated into our network. Against this
backdrop, we continue to believe that adaptability, discipline and innovation
will deliver long-term success.
FINANCIAL REVIEW
Reporting approach
The Company uses a number of alternative performance measures ("APMs") in
addition to measures reported in accordance with IFRS Accounting Standards as
adopted by the European Union ("IFRS"), which reflect the way in which the
Board and the Executive Management Team assesses the underlying performance of
the business. The Group's results are presented on an "adjusted" basis, using
APMs that are not defined or specified under the requirements of IFRS, but are
derived from the IFRS financial statements. The APMs are used to improve the
comparability of information between reporting periods and to address
investors' requirements for clarity and transparency of the Group's underlying
financial performance. The APMs are used internally in the management of our
business performance, budgeting and forecasting. A reconciliation of key
metrics to the reported financials is presented in the section titled APMs.
All references to comparative 2023 numbers in this review are on a reported
basis, unless stated otherwise. Figures presented at constant currency
represent 2023 translated numbers against average 2024 exchange rates as
disclosed in Note 3 to the Consolidated Financial Statements. All reported
volume changes year-on-year are excluding mineral sales.
Revenue
The Group recorded revenues of €3,487 million, a 1% decrease from 2023
revenues of €3,529 million on a constant currency basis. This was primarily
driven by 6% lower average pricing and a 1% decline in base business sales
volumes, offset by 6% growth in revenues from acquisitions completed in 2023.
On a reported basis, the decrease in revenue was 2% (2023: €3,572 million),
reflecting the depreciation of certain currencies against the euro (Chinese
yuan, Indian rupee, Brazilian real, Turkish lira, Canadian dollar) which
reduced revenue generated from those geographies in euro terms. The foreign
exchange impact on revenues was €43 million.
2024 2023 reported 2023 (constant currency) Change Change (constant currency)
Steel
Revenue (€m) 2,373 2,461 2,434 (4)% (3)%
Gross profit (€m) 551 550 576 0% (4)%
Gross margin 23.2% 22.3% 23.7% 90bps (50)bps
Adjusted EBITA (€m) 255 240 270 6% (6)%
Adjusted EBITA margin 10.8% 9.7% 11.1% 110bps (30)bps
Industrial
Revenue (€m) 1,114 1,111 1,094 0% 2%
Gross profit (€m) 297 307 305 (3)% (3)%
Gross margin 26.6% 27.7% 27.9% (110)bps (130)bps
Adjusted EBITA (€m) 151 169 169 (11)% 11%
Adjusted EBITA margin 13.6% 15.2% 15.4% (160)bps (180)bps
Against a backdrop of weakness in the key end markets of construction and
automotive, steel revenues decreased to €2,373 million, representing a 4%
decline on a reported basis (2023: €2,461 million) and a 3% decline in
constant currency terms (2023: €2,434 million), accounting for 68% of Group
revenue in 2024. The primary driver behind the decrease in steel revenues for
the financial year 2024 was pricing. Soft end market demand also impacted
sales volumes in North and South America. Exports of surplus steel from China
negatively affected pricing and refractory demand from domestic steel
producers in most geographies, in particular in India.
Industrial revenues were stable at €1,114 million (2023: €1,111 million)
and increased by 2% in constant currency terms (2023: €1,094 million),
outperforming steel revenue growth, supported by M&A. Cement & Lime
revenues decreased by 12% to €376 million (2023: €424 million), while
Non-ferrous metal revenues declined by 12% to €247 million (2023: €281
million). The primary factors contributing to the decline in cement, lime, and
non-ferrous metals were weaker end markets in China and South America.
Revenues in the glass business increased by 19% to €217 million (2023:
€182 million), mainly driven by a strong contribution from 2023 M&A.
Revenues from industrial applications increased by 46% to €210 million
(2023: €143 million), also due to M&A.
During 2024 the Group re-assessed its criteria for the timing of revenue
recognition for shipments delivered by sea freight with third-party carriers.
From 2024, control of refractory products is determined to transfer when the
carrier issues shipping documents that allows the customer to redirect or
otherwise control the shipped refractory products. Group revenue in 2024
increased by €42 million (and gross profit by €10 million) as a result of
this revised accounting policy. For further details refer to Note 3 of the
Financial Statements, 'Significant Accounting Policies, Judgements and
Estimates'.
Cost of goods sold
Cost of goods sold decreased by 3% to €2,639 million from €2,715 million
in 2023, primarily due to a reduction in raw material costs. The cost of
purchased raw materials fell by 7% to €1,058 million (2023: €1,139
million). Plant-related labour costs increased by 16% in 2024, rising from
€452 million to €523 million, mainly due to acquisitions and salary
increases to offset inflation. After a period of disruption and high inflation
in 2023, freight and energy costs decreased by 11% and 10%, respectively, in
2024 as both markets stabilised. Spending on general supplies, including
pallets, packaging, and spare parts were broadly flat at €169 million (2023:
€170 million).
During 2024 the Group re-assessed its criteria for inventory provisioning in
light of sustained improvements in its inventory management. Re-valuation of
stock previously written off, which is now deemed to be saleable at market
price, resulted in an €11 million reduction in cost of goods sold. For
further details refer to Note 3 of the Financial Statements, 'Significant
Accounting Policies, Judgements and Estimates'.
Raw material prices
Refractory raw material prices decreased in 2024 compared to 2023, with the
price of high-grade dead burned magnesia ("DBM") from China decreasing by 6%
and by 1% on average for medium-grade DBM from China. Lower raw material
prices usually result in lower finished goods pricing for refractories
worldwide, as production costs for non-vertically integrated competitors are
reduced. The main driver for the decrease in DBM pricing was oversupply,
combined with lower customer demand for refractories globally. Fused alumina,
a raw material that the Group does not produce and which constitutes only a
small portion of the Group's overall raw material requirements, experienced a
significant price increase towards the end of 2024, in line with the increase
in alumina prices in the fourth quarter.
Gross profit
The Group recorded gross profit of €848 million (2023: €857 million), a
decrease of 1% on a reported basis and 4% in constant currency terms. Gross
margins increased by 30bps to 24.3% (2023: 24.0%). Although refractory pricing
in the base business reduced by 8%, input costs reduced further, primarily due
to lower prices for externally purchased raw materials as well as lower energy
and freight costs.
(€m) 2024 2023 reported 2023 (constant currency) Change Change (constant currency)
Revenue 3,487 3,572 3,529 (2)% (1)%
Cost of goods sold (2,639) (2,715) (2,647) (3)% 0%
Gross profit 848 857 881 (1)% (4)%
SG&A (435) (449) (443) (3)% (2)%
R&D expenses (45) (43) (42) 5% 7%
OIE (125) (31) (32) 303% 291%
EBIT 242 333 364 (27)% (34)%
Amortisation (39) (44) (43) (11)% (9)%
EBITA 281 378 408 (26)% (31)%
Adjusted items 125 31 32 303% 291%
Adjusted EBITA 407 409 439 (1)% (7)%
Refractory EBITA 379 348 - 9% -
Vertical integration EBITA 28 61 - (54)% -
Selling, general and administrative expenses ("SG&A"), were €435
million, a 3% decrease compared to the previous reporting period (2023: €449
million), attributable to stringent cost management, lower personnel expenses
and reduced hiring levels.
Depreciation increased by 2% to €136 million (2023: €134 million) and in
2025 is expected to be around €150 million including Resco.
Amortisation of intangible assets amounted to €39 million in 2024 (2023:
€44 million) and is expected to be approximately €35 million in 2025,
subject to the purchase price allocation exercise relating to the acquisition
of Resco Group.
Adjusted EBITDA
The Group recorded Adjusted EBITDA of €543 million, flat compared to the
prior year (2023: €543 million). Adjusted EBITDA margin increased to 15.6%
(2023: 15.2%) an increase of 40bps, reflecting higher gross margins and a
decrease in SG&A expenses. Adjusted EBITDA margin decreased by 60bps on a
constant currency basis.
Adjusted EBITA
Adjusted EBITA remained broadly flat at €407 million, compared to €409
million in 2023 on a reported basis, as the contribution from M&A and
lower input costs offset weaker pricing and mix effects. Adjusted EBITA from
businesses acquired in 2023 was €65 million (or €77 million of Adjusted
EBITDA), broadly in line with guidance.
Adjusted EBITA margin increased to 11.7% (2023: 11.4%) as M&A
contributions, supported by lower input costs and SG&A reduction.
Vertical integration contributed a record low 0.8ppts of the Group's overall
Adjusted EBITA margin of 11.7%. Whilst this contribution is lower than the
1.7ppts contribution in 2023, primarily due to the decline in the market
prices for refractory raw materials, the contribution was still positive
meaning that the Group is able to source its own raw materials more cheaply
than buying in the market. Lower raw material prices negatively impact the
calculation of the contribution from the Group's raw material assets, which is
based on the theoretical cost of acquiring those raw materials in the open
market.
The Group's refractory business contributed a historic high of 10.9 ppts
towards the total Adjusted EBITA margin of 11.7%, an increase of 120 bps
compared to the 9.7 ppts contribution in 2023. Refractory margin was supported
by lower input costs, the benefits of M&A synergies and structural cost
reductions resulting from the Group's strategic cost-saving initiatives.
Adjusted EBITA and Adjusted EBITDA both exclude €125 million of net expenses
from adjusted performance (2023: €31 million), including Software as a
Service costs (largely on new SAP ERP), Mainzlar Plant closure costs and
impairment of Hexa Contagem Project, consequent on Resco acquisition as set
out in 'Items excluded from adjusted performance' below.
The Adjusted EBITA performance in 2025 is expected to be modestly above 2024
levels including the acquisition of Resco.
Items excluded from adjusted performance
In order to accurately assess the underlying performance of the business, the
Group excludes certain items from Adjusted EBITA. Sizeable charges in the year
have been driven by Group wide programmes aimed at improving operating
efficiency and future profitability through business process improvements and
plant network optimisation.
In 2024 the total net adjustments to EBITA amount to €125 million,
including:
• €14 million of amortisation of onerous contracts imposed by EU as
part of the merger with Magnesita.
• €9 million related to the disposal of the Dashiquiao plant in
China.
• €6 million related to receivables previously written down to zero.
• €3 million of other miscellaneous income.
• €(52) million of expenditure on digital architecture, previously
guided as capital expenditure. Spending on Software as a Service is classified
as an expense in IFRS and cannot be capitalised as would normally be the case
with capital expenditure. The Group incurred charges of €39 million on the
ERP upgrade in 2024 and €7 million reclassified from 2023 and €6 million
on logistics and supply chain planning software upgrades. Investments in
digital architecture are expected to deliver value through cost savings and
margin improvement, planning and operating efficiencies and improved working
capital management.
• €(39) million amortisation in intangible assets arising at the
time of the merger with Magnesita.
• €(29) million non-cash impairment of fixed assets in Brazil,
where the second stage of the Hexa Contagem expansion project will not be
advanced following the acquisition of Resco and intended transfer of
production capacity to the US. The impact of this impairment was considered as
part of the business case for the acquisition of Resco.
• €(25) million provision for restructuring expenses at the
Mainzlar, Germany plant, to be paid in 2025 following the announced closure of
the plant in line with the Group's original Production Optimisation Plan and
after an assessment of surplus production capacity in Europe.
• €(12) million of expenses related to investments in and losses
from the disposal of special Argentinian government bonds.
Net finance expenses
Net finance expenses, which includes interest payable on borrowings net of
interest income on cash balances, gains and losses relating to foreign
exchange, pension expenses, present value adjustments, factoring costs and
non-controlling interest expenses, decreased to €42 million (2023: €100
million).
Net interest expenses remained stable at €39 million (2023: €38 million)
comprising interest expenses on borrowings of €61 million (2023: €58
million) and €22 million of interest income on cash balances on deposit
(2023: €20 million).
Foreign exchange gains of €11 million were recorded in 2024 compared to
foreign exchange related losses of €30 million in 2023, mainly driven by US
dollar strength in Q4, weakness in the Brazilian Real and Mexican Peso and a
€(1) million hyperinflation adjustment related to Argentina (2023: €3
million).
Other net financial expenses amounted to €14 million (2023: €32 million)
including factoring costs of €10 million (2023: €12 million), pension
charges of €12 million (2023: €12 million) and present value adjustments
of €7 million (2023: €8 million). Net financial expenses in 2024 also
benefitted from a non-cash gain of €22 million due to the revaluation of the
Group's obligation to purchase the remaining stakes it does not already own in
Jinan New Emei and Chongqing.
Guidance for net interest expenses including Resco in 2025 is €60 million.
Guidance for other adjusted net financial expenses is €30 million, resulting
in €90 million of adjusted net finance expenses guided for 2025.
(€m) 2024 2023
Net interest expenses (39) (38)
Interest income 22 20
Interest expenses (61) (58)
FX effects 11 (30)
Balance sheet translation 29 (41)
Derivatives (18) 11
Other net financial expenses (14) (32)
Present value adjustment (7) (8)
Factoring costs (10) (12)
Pension charges (12) (12)
Capitalisation of borrowing costs 3 8
Interest expense - Transaction costs (1) (1)
Other 13 (7)
Total net finance expenses (42) (100)
Taxation
Total tax for 2024 in the income statement amounted to €46 million (2023:
€62 million), representing a 23% reported effective tax rate (2023: 27%).
Reported profit before tax amounted to €200 million (2023: €233 million).
Adjusted profit before tax amounted to €347 million (2023: €317 million),
with an adjusted effective tax rate of 24% (2023: 24%). Adjusted items include
non-taxable IFRS revenues related to put option valuation and sale of fixed
assets in China, as well as non-deductible legal restructuring costs.
The adjusted effective tax rate guidance is between 23-25% for 2025.
Profit after tax
On a reported basis the Group recorded profit after tax of €154 million
(2023: €171 million), profit attributable to shareholders of €142 million
(2023: €165 million) and earnings per share of €3.01 (2023: €3.50).
Adjusted profit after tax increased to €263 million (2023: €241 million)
and Adjusted earnings per share was €5.32 (2023: €4.98). A full
reconciliation of EBITA to EPS and Adjusted EBITA to Adjusted EPS can be found
in the table below. Items excluded from Adjusted Profit after tax included
€17 million of net financial expenses mainly arising from the revaluation of
the Group's obligation to purchase the remaining stakes it does not already
own in Jinan New Emei and Chongqing.
Profit attributable to shareholders is stated after deducting non-controlling
interests of €12 million (2023: €6 million) mainly arising from RHI
Magnesita India Ltd., in which the Group holds a stake of 56%.
Guidance for non-controlling interest expense in 2025 is approximately €15
million.
(€m) 2024 reported Items excluded from adjusted performance 2024 adjusted 2023 reported Items excluded from adjusted performance 2023 adjusted
EBITA 282 125 407 378 31 409
Amortisation (39) 39 - (44) 44 -
Net financial expenses (42) (17) (60) (100) 9 (92)
Profit before tax 200 147 347 233 84 317
Income tax (46) (38) (84) (62) (14) (76)
Profit after tax 154 109 263 171 70 241
Non-controlling interest 12 - 12 6 - 6
Profit attributable to shareholders 142 109 251 165 - 235
Shares outstanding 47 - 47 47 - 47
Earnings per share 3.01 2.31 5.32 3.50 1.49 4.98
Financial guidance and outlook
Refractory demand remains weak, with no recovery in end market demand visible.
Falling domestic demand of customer industries in China results in exports of
steel and other materials from China, reducing customer output in most world
markets and therewith reducing refractory usage. 2024 was a relatively strong
year for higher margin non-ferrous metals and glass projects due to the timing
of customer investment projects. However, markedly lower capex investments by
these industrial customers will reduce demand in 2025, offsetting forecasted
growth in steel refractory demand in India, West Asia & Africa. Revenue
performance in 2025 year to date and the outlook for H1 is weak, driven by low
volumes in steel and pricing pressure in particular in cement and non-ferrous
metals.
The Adjusted EBITA performance in 2025 is therefore expected to be modestly
above 2024 levels including the acquisition of Resco. Adjusted EBITA is
expected to be weighted approximately 45% in the first half and 55% in the
second half of the year.
An increasing trade tariff environment may protect customers in certain
jurisdictions and benefit refractory producers with local for local production
in the short term but risks a medium-term negative impact on global trade.
Sales volumes in the base business are expected to remain flat. Adjusted EBITA
margin is guided to be stable at approximately 11.5%.
Gearing will rise in the short term due to the completion of the Resco
transaction but is expected to reduce back within the targeted range of c.
2.0-2.5x Pro Forma Adjusted EBITDA by the end of 2025. Capital expenditure on
fixed assets will be reduced to €145 million (below depreciation of
approximately €150 million), in favour of continuing to invest in our
digital transformation, which will incur costs of approximately €35 million
per year over the three-year period 2024-26. Capex associated with the
integration of Resco is expected to be €30 million, spread over the next two
financial years.
The Group expects to incur network optimisation expenses in Europe and Brazil
as a result of plant footprint adjustments following the Resco acquisition and
other M&A transactions completed in 2022 and 2023. Total restructuring
costs in the base business of €60 million and associated capital expenditure
of €40 million are planned over the period 2025-27, to deliver €10 million
of EBITA benefit in 2025, €20 million in 2026 and €30 million per annum
thereafter.
Working capital
Working capital decreased to €865 million (31 December 2023: €980 million)
driven by inventory reduction, lower accounts receivable and higher payables.
Working capital intensity, measured as a percentage of the last three months'
annualised revenue, decreased to 23.4% (31 December 2023: 24.4%). Accounts
receivable intensity was 12.9% (31 December 2023: 11.9%), accounts payable
intensity was 15.5% (31 December 2023: 12.4%) and inventory intensity
increased to 26.1% (31 December 2023: 24.9%).
Inventories decreased to €962 million (31 December 2023: €1001 million),
due to lower input costs, reduced inventory volumes and inventory improvement
measure implemented at plants acquired in 2023.
Accounts receivable decreased slightly to €474 million (31 December 2023:
€477 million), reflecting lower pricing. Accounts receivable is calculated
as trade receivables excluding factoring plus contract assets less contract
liabilities and downpayments received, and a full reconciliation can be found
in the APMs section.
Accounts payable increased to €572 million (31 December 2023: €498
million) due to extended payment terms and higher value raw material purchases
in the second half.
Working capital financing, used to provide low-cost liquidity and support the
Group's commercial offering to customers, was €289 million on 31 December
2024 (31 December 2023: €298 million), comprising €237 million of accounts
receivable financing (factoring) and €53 million of accounts payable
financing (forfaiting). Working capital financing levels vary according to
business activity, and the Board has set an internal limit of €320 million
on its use.
Working capital intensity is targeted to be approximately 24% in 2025.
Other assets and liabilities
Cash flows from other assets and liabilities amounted to €(93) million
(2023: €(12) million) comprising, indirect and other tax rebates of €4
million (2023: € 14 million), employee pension pay outs and pension
provision movements of €(22) million (2023: €(19) million), employee
variable remuneration and employee-related provisions of €(24) million
(2023: €29 million) and other cash flows of €(51) million (2023: € (36)
million). The €53 million difference in variable remuneration and employee
related provisions is due to a relatively high staff bonus payout in 2024
relating to 2023 performance, compared to a lower bonus payout in 2023.
Capital expenditure
The Group incurred €145 million of capital expenditure (2023: €180
million), of which €65 million was maintenance related (2023: €86million),
€68 million was expansionary capital expenditure (2023: €74 million) and
€12 million of maintenance and integration capital expenditure was incurred
at newly acquired businesses (2023: €19 million).
Capital expenditure in 2025 is expected to be around €145 million.
Maintenance capital expenditure in the base business is expected to be
approximately €75 million, with expansionary capital expenditure of €55
million and maintenance and integration capital expenditure in newly acquired
businesses of €15 million. Spending of approximately €35 million on
digital infrastructure projects will be expensed in accordance with IFRS and
will not be capitalised.
Acquisitions
In April 2024 the Group announced its intention to acquire Resco Group, a US
based producer of alumina monolithics and wide range of basic and non-basic
refractories, for an enterprise value of up to $430 million. The transaction
completed on 28 January 2025 for an enterprise value of $410 million, or
c.€391 million.
In June 2024 the Group announced the €5 million acquisition of Refrattari
Trezzi, a recycling specialist in Italy, expanding its recycling footprint in
Europe. Refrattari Trezzi has been combined into the Group's existing MIRECO
joint venture, increasing the Group's share in MIRECO to 55% (2023: 51%).
The Group incurred €58 million of cash outflow relating to acquisitions in
2024, including €44 million of prepayments for the intended acquisition of
Resco, €5 million for the acquisition of Refrattari Trezzi, €3 million for
the purchase of the remaining 49% stake in Seven Refractories Cyprus not
already owned by the Group, a €3 million deferred payment for Jinan New Emei
and €3 million purchase of additional stake in P-D Refractories.
Cash flow
Adjusted operating cash flow increased to €419 million (2023: €418
million) representing cash flow conversion from Adjusted EBITA 103% (2023:
102%), supported by the €115 million release of working capital.
Free cash flow decreased to €225 million (2023: €258 million), mainly due
to higher interest and restructuring expenses.
Cash income tax payments increased to €69 million (2023: €60 million) and
net interest paid also increased to €71 million (2023: €56 million), as a
result of higher average interest rates and borrowings.
Cash dividends paid in 2024 amounted to €87million (2023: €77 million) and
the cash change in Net debt was an increase of €80 million compared to a
decrease of €41 million in 2023.
Cash flow €m 2024 2023
Adjusted EBITDA 543 543
Shared-based payments - gross non-cash 9 9
Working capital changes 105 53
Changes in other assets and liabilities (93) (7)
Investments in PPE, IA (145) (180)
Adjusted operating cash flow 419 418
Income taxes paid (69) (60)
Cash effects of other income/expenses and restructuring (62) (32)
Investments in financial assets (19) (14)
Cash inflows from the sale of PPE, IA 16 4
Cash inflows from the sale of financial assets 11 0
Investment subsidies received 2 0
Net interest paid/received (71) (56)
Dividend payments to NCI (3) (3)
Other investing activities 1 1
Free cash flow 225 258
Investment in subsidiaries net of cash (7) (313)
Proceeds from share issue in subsidiaries 0 100
Resco prepayment (44) 0
Investments in NCI (6) (8)
Payment for share issue costs 0 (3)
Dividend payments (87) (77)
Change financial receivables from joint ventures & associates (1) 2
Cash change in net debt 80 (41)
Debt from acquisitions 0 (87)
New lease obligations (29) (15)
Exchange effects 2 (1)
Others 1 (2)
Actual change in net debt 54 (146)
Financial position
Net debt decreased to €1,251 million, comprising total debt of €1,750
million, leases of €77 million and cash and cash equivalents of €576
million.
Total leases of €77 million (2023: €70 million) are included in the
Group's Net debt position as required by IFRS 16.
The Group's gearing at the year-end was 2.3x Net debt to Pro Forma Adjusted
EBITDA (31 December 2023: 2.3x).
Available liquidity at 31 December 2024 was €1,376 million, comprising
undrawn committed facilities of €800 million and cash and cash equivalents
of €576 million.
Out of the total gross debt of €1,750 million, 98% is denominated in euro.
The floating to fixed ratio of the gross debt is 27% floating to 73% fixed and
the weighted average cost of debt as of 31 December 2024 was 2.96%, including
swaps.
The Group will seek to maintain the ratio of Net debt to Pro Forma Adjusted
EBITDA within the guided range of 2.0-2.5x or above for periods of compelling
M&A.
Return on invested capital
ROIC is used to assess the Group's efficiency in executing its capital
allocation strategy, which is aimed at enabling organic growth, disciplined
M&A and shareholder returns. ROIC is an APM, see the APM section for full
details of how ROIC reconciles to IFRS metrics.
Under the APM definition, ROIC was 9.8% in 2024 (2023: 10.7%) based on Average
Invested Capital of €3,043 million (2023: €2,854 million) and NOPAT of
€298 million (2023: €305 million). ROIC generated by the Group's raw
material assets was 3.5% (2023: 8.9%) and ROIC from the refractory business
was 11.0% (2023: 11.0%). The main drivers of the decrease in ROIC were the
increase in Average Invested Capital to €3,043 million (2023: €2,854
million) as a result of M&A transactions completed in 2023 and the
reduction in contribution from the Raw material assets, due to low market
prices for refractory raw materials. The Group intends to carry out a network
optimisation over the period 2025-27 following M&A completed in the
previous three years, reducing invested capital.
Returns to shareholders
The Board's capital allocation policy remains to support the long-term Group
strategy, providing flexibility for both organic and inorganic investment
opportunities and delivering attractive shareholder returns over the medium
term. These opportunities are assessed against a framework of strategic fit,
risk profile, rates of return, synergy potential and balance sheet strength.
In 2024, the Group invested €68 million in expansionary capital expenditure
in the base business and €12 million in the integration of newly acquired
businesses. Maintenance capital expenditure was €65 million. A further
€391 million was agreed to be allocated to the acquisition of Resco.
Following the strong profitability, cash generation and strategic progress
delivered in 2024, the Board has recommended a final dividend of €1.20 per
share for the full financial year, and €85 million in aggregate. This
represents a dividend cover of 3.0x Adjusted earnings per share. Subject to
approval at the AGM scheduled for 7 May 2025, the final dividend will be
payable on 12 June 2025 to shareholders on the register at the close of
trading on 23 May 2025. The ex-dividend date will be 22 May 2025. Together
with the interim dividend of €0.60 per share paid on 26 September 2024, the
recommended final dividend represents a full year dividend of €1.80 per
share in respect of the 2024 financial year.
The Board's dividend policy remains to target a dividend cover of below 3.0x
adjusted earnings over the medium term. Dividends will be paid on a
semi-annual basis with one third of the prior year's full year dividend being
paid at the interim.
OPERATIONAL REVIEW
Steel overview
Steel 2024 2023 reported 2023 (constant currency) Change Change (constant currency)
Revenue (€m) 2,373 2,461 2,434 (4)% (3)%
Gross profit (€m) 551 550 576 0% (4)%
Gross margin 23.2% 22.3% 23.7% 90bps (50)bps
Supplying refractory products and services to the steel industry accounted for
68% of RHI Magnesita's revenues in 2024 and the Group retained its leading
position globally with a c.13% market share, or c.20% excluding China and East
Asia. Refractory products are required to protect steel making equipment from
extremely high temperatures of up to 1,800°C, chemical corrosion and
abrasion. Refractory product applications include iron making (blast furnace
or direct reduction), primary steel-making (basic oxygen furnace or electric
arc furnace) as well as ingot and continuous casting. New applications are
under development for production of green steel and the Group was awarded five
contracts for such projects in 2024. RHI Magnesita offers a complete range of
products and solutions for the steel making process. The lifespan of
refractory products in the steel making process can range from hours to months
depending on the application, for example a slide gate is a consumable item
that may need to be replaced every four hours whilst the lining of a primary
steel making furnace could require re-lining at six month intervals.
Refractory consumption in steel making is therefore classified as an operating
expense by steel producers and usually accounts for around 2-3% of operating
costs, on average.
Steel segment revenues decreased by 4% to €2,373 million (2023: €2,461
million) and by 3% in constant currency terms (2023: €2,434 million) as a 3%
increase in sales volumes supported by M&A was offset by 6% lower pricing.
Excluding M&A, the base business increased shipped volumes by 1%, a strong
performance compared to World Steel Association data which indicates a
decrease of 0.9% in global steel output in 2024.
Global steel demand decreased in the key markets of China and North America in
2024 but grew in India, West Asia & Africa, Europe and South America.
Domestic production in some markets was displaced by exports from China where
domestic consumption of steel reduced by approximately 6% and production by
approximately 3%. The approximate 3% gap represents the increase in exports,
which increased from approximately 90 million tons in 2023 to approximately
120 million tons in 2024.
Industrial overview
Industrial 2024 2023 reported 2023 (constant currency) Change Change (constant currency)
Revenue (€m) 1,114 1,111 1,094 0% 2%
Gross profit (€m) 297 307 305 (3)% (3)%
Gross margin 26.6% 27.7% 27.9% (110)bps (130)bps
RHI Magnesita is a leading supplier of refractory products and services to
customers in the cement and lime, non-ferrous metals, glass, energy,
environmental and chemicals industries. These Industrial customers accounted
for 32% of Group revenues in 2024 and have longer replacement cycles compared
to Steel customers, ranging from one to 20 years. Refractories are classified
as capital expenditure by Industrial customers and represent between 0.2% and
1.5% of total costs over the life cycle of a facility. RHI Magnesita has a
c.25% market share globally in cement refractories, c.20% market share in
non-ferrous metals applications, c.19% in the glass industry and c.5% in other
industrial applications such as energy, environment, chemicals and foundry.
Industrial revenues were stable at €1,114 million (2023: €1,111 million)
and increased by 2% in constant currency terms, with shipped volumes
increasing by 11%, supported by M&A, whilst average pricing reduced by 9%.
Cement & Lime revenues reduced by 12% to €376 million (2023: €424
million), representing 11% of Group revenues in 2024 as pricing reduced by 7%
and sales volumes reduced by 4%. Strong growth in sales volumes in Process
Industries of 101% and Glass of 19%, mainly resulting from M&A, were
offset by the 4% decline in the larger Cement & Lime segment and 9% lower
Non-ferrous metals sales. The Non-ferrous metal business remained the highest
margin segment for the Group, with a gross margin of 44% in 2024 (2023: 42%).
Minerals
The Group sourced 42% of its raw material needs by value, in line with its
vertical integration strategy. Raw materials not utilised internally are sold
in the open market and reported under Minerals within the Industrial segment,
generating revenues of €65 million in 2024 (2023: €80 million). Mineral
sales volumes declined by 11%, coupled with lower market prices for raw
materials, leading to a reduction in revenue.
Regional business units
In 2023 RHI Magnesita established an operational governance structure
consisting of five regional business units, which continued in 2024. Managing
the business through a regional structure enables the Group to serve its
customers better through faster local decision making and improved
accountability, supporting our local for local production strategy.
Revenue 2024 2023 reported 2023 (constant currency) % change (reported) % change (constant currency)
Europe, CIS & Türkiye 926 894 884 3% 5%
Steel 558 574 564 (3)% (1)%
Industrial 368 320 319 15% 15%
North America 852 894 889 (5)% (4)%
Steel 648 673 670 (4)% (3)%
Industrial 204 221 220 (8)% (7)%
India, West Asia & Africa 744 762 757 (2)% (2)%
Steel 541 582 577 (7)% (6)%
Industrial 203 180 180 13% 13%
South America 473 522 504 (9)% (6)%
Steel 362 393 386 (8)% (6)%
Industrial 112 129 118 (13)% (6)%
China & East Asia 426 418 416 2% 3%
Steel 264 239 237 10% 11%
Industrial 163 179 178 (9)% (9)%
Minerals 65 80 78 (19)% (17)%
Total 3,487 3,572 3,529 (2)% (1)%
Europe, CIS & Türkiye
Europe, CIS & Türkiye revenues increased by 3% to €926 million (2023:
€894 million), or by 5% in constant currency terms. Average price per tonne
declined by 11% due to end market weakness in construction and automotive and
a changing product mix, but this was more than offset by a 17% increase in
shipped volumes due to the full year contribution from M&A completed in
2023. Excluding M&A, base business sales volumes reduced by 2% and price
per tonne was 14% lower, with revenues reducing by 15%.
Gross profit increased by 10% to €195 million (2023: €177 million), as
higher gross margins of 21.1% (2023: 19.8%) were supported by the contribution
from higher margin businesses acquired in 2023 and a reduction in the key
input costs of energy and purchased raw materials. In the second half of the
year, a significant increase in alumina prices drove up costs for acquiring
alumina based refractory raw materials and disruption in the global graphite
supply chain also resulted in cost increases.
Steel revenues decreased by 1% in constant currency terms on 7% higher shipped
volumes, as M&A delivered volume growth despite subdued customer demand.
Steel production in the European Union increased by 2.6% and in Türkiye by
9.4% according to WSA data, reflecting recovery from a low base in Europe and
strong growth and relative stability in Türkiye compared to the surrounding
region. Whilst steel output in the European Union increased year on year,
producers continue to face a combination of deteriorating prices, rising costs
and low demand relative to historic levels. These factors led some customers
to reduce capital expenditure in favour of running repairs and to increase
sourcing of cheaper imported refractories. The challenging market conditions
for steel customers also resulted in the delay of some green steel projects,
but these were temporary postponements and not cancellations.
Industrial segment sales volumes increased by 40% and revenues by 15% in
constant currency terms, supported by a full year contribution from process
industries focused P-D Refractories. Whilst volumes in Cement & Lime and
Non-ferrous metals reduced by 15% and 23% respectively, this was more than
offset by a 49% increase in Glass sales volumes and 216% increase in
Industrial applications, mainly due to M&A. Waste to energy is a strategic
growth focus within Industrial applications where the Group was able to
increase market share in both maintenance and greenfield project support.
Sales of digital products increased, including laser technologies for
refractory evaluation at customer sites. Such products are already widely in
use in the Cement & Lime segment and are now gaining traction with
Non-ferrous metals and Industrial applications customers.
The Europe and Türkiye region has benefited from significant inorganic growth
in recent years with the addition of MIRECO, Sörmas, Dalmia GSB, Seven
Refractories and PD Refractories in 2022 and 2023. Regional leadership have
been focused on the integration of each of these businesses and the
achievement of synergy targets. MIRECO delivered strong growth in recycling
rates, Sörmas prepared for the initial adoption of the Group's new ERP system
and the Bochum plant previously owned by Dalmia GSB completed necessary legal,
financial and operational integration processes during the year. Certain Seven
Refractories businesses now form RHI Magnesita's new Alumina Monolithics
business unit and synergy realisation is on track, despite low demand
conditions. Network optimisation in Europe is expected to be required to fully
realise the synergy benefits of M&A completed in the last three years.
The Mainzlar plant in Germany will be closed in 2025 and the Group may
consider further plant footprint optimisation in Europe following recent
M&A.
North America
Revenues in North America decreased by 5% to €852 million (2023: €894
million) or by 4% in constant currency terms, due to a 1% reduction in sales
volumes and 3% lower average pricing.
Despite lower revenues, the region grew Gross profit by 5% to €263million
(2023: €250 million) as margins were successfully increased to 30.9% (2023:
27.9%) due to effective cost management and resilient pricing in Cement &
Lime and Non-ferrous metals.
Steel volumes reduced 2% and pricing by 3% resulting in 4% lower revenues,
whilst gross margin expanded to 30.7% (2023: 28.3%). Utilisation rates in US
steel mills remained low, at approximately 76% in 2024 and reducing below this
level at the end of the year following the US election in November. North
America steel output according to WSA data declined by 4.2% in 2024 whilst RHI
Magnesita estimates that output from its customers in the region reduced by
6%, compared to the 2% decline in sales volumes. The Group continues to build
out its product offering and secured agreements with three additional tap hole
clay customers during the year. In the electric arc furnace segment, a
contract for refractory supply including an automated robotic solution for
gunning repair was awarded in Canada, by a large customer converting to EAF
from BOF steel production. Other robotics contracts were awarded in the US,
including multiple new tundish cage solutions.
Industrial sales volumes saw greater variation across segments with a weak
Cement & Lime result more than offset by strong trading in Glass and
Industrial applications, resulting in an overall increase in sales volumes of
1%. Higher pricing in Non-ferrous metals and reduced input costs were the key
drivers of the increase in Industrial Gross margin to 31.7% (2023: 27.0%).
Cement and concrete production in the US reduced by 8% and was the main driver
of a 13% reduction in Cement & Lime refractory sales volumes. The Group
continued to expand its offering to a broader range of customers and was
awarded a contract for aluminium furnace design and refractory supply, the
first of its kind in the region.
Inventory management was a key focus to minimise working capital and finished
goods inventories were successfully reduced despite falling customer demand
over the year. PIFOT and net promoter scores in customer surveys remained
close to all-time highs.
The integration of Seven Refractories' US sites is largely complete, with a
new tap hole clay line now commissioned at Plant Huron. RHI Magnesita agreed
to acquire US based Resco in April 2024 and the acquisition completed in
January 2025. The integration of Resco into the Group's North American
business and the realisation of planned synergies will now be the primary
focus for regional leadership.
The US increased its recycling rate to a new high of 14.2% (2023: 8.3%). New
health and safety reporting structures and a 'stop work' system were
implemented at the Pevely and York plants.
India, West Asia & Africa
Revenues in the India, West Asia & Africa region decreased by 2% to €744
million (2023: €762 million) or by 2% in constant currency, as a 4% increase
in sales volumes was offset by a 6% decline in average pricing due to
increased competition and product mix changes. Base business sales volumes,
excluding the full year contribution from 2023 M&A, increased by 2% with
similar pricing pressure and mix impacts.
Gross profit reduced by 17% to €155 million (2023: €187 million) as gross
margins reduced to 20.8% (2023: 24.5%), caused by the 6% reduction in average
pricing on relatively stable unit costs.
Steel revenues decreased by 7% to €541 million (2023: €582 million) with a
1% increase in sales volumes offset by an 8% decrease in prices, as the full
effect of pricing pressure fell on the Steel segment whilst Industrial pricing
was stable. The main cause of pricing pressure in Steel was the impact of
surplus low-priced imports from China entering the Indian market due to
weakening demand in China. Steel gross margins compressed to 19.2% from 22.8%
in 2023, mostly as a result of competitive pricing pressure, which outweighed
the benefit of a 4% improvement in unit costs.
Domestic steel production in India grew by 6% in 2024 according to WSA data,
however imports from China and Vietnam increased to partially satisfy growth
in local demand. In India the Group remains well positioned to benefit from
new DRI, blast furnace and coke oven projects under construction and customers
have reacted positively to the growth strategy in iron making, DRI furnace
refractories and pellet production. In the Middle East some new steel projects
were postponed due to current unfavourable market conditions but this was
offset by new business growth in induction and reheating furnaces in Iraq,
Saudi Arabia, Libya and Africa. The Group secured three new solutions
contracts in India and three in the Middle East, alongside two contract
renewals outside India.
Industrial revenues increased by 13% to €203 million (2023: €180 million)
reflecting a 13% increase in sales volumes on stable pricing. The main driver
of the increase in revenues was the Cement & Lime segment, where sales
volumes increased by 15% and revenue by 17%, with new demand coming from
greenfield and brownfield cement projects in India and North Africa.
Non-ferrous metals, the second largest segment in the region by revenue and
gross profits, saw a 22% decrease in sales volumes offset by 18% higher
pricing, translating to an overall 9% decrease in revenues.
Industrial gross margin decreased to 24.9% (2023: 30.3%) as costs increased by
7%, mainly due to high prices for alumina-based raw materials and a change in
product mix towards alumina-based refractory sales. Margins improved in
Non-ferrous metals and Glass but declined in Cement & Lime and Industrial
Applications.
Capacity utilisation remained at a low level, with space to grow in line with
forecast customer demand increases. One plant at Bhilai was closed and
production transferred to Rajgangpur, in line with the M&A integration
strategy. Supply chain reliability and efficiency was good throughout the
year.
South America
Revenues in South America decreased by 9% to €473 million (2023: €522
million) or by 6% in constant currency terms, as shipped volumes reduced by 3%
and pricing declined by 7%. Gross profit reduced by 3% to €142 million
(2023: €146 million) supported by an increase in Gross margin to 30.0%
(2023: 28.0%), driven by lower input costs.
Steel revenues decreased by 8% to €362 million (2023: €393 million) driven
by a 1% decline in shipped volumes and 7% lower average pricing. The decline
in sales volumes was slightly below the movement in steel production for the
region, which increased by 0.6% in 2024 according to WSA data. Steel gross
margin increased to 28.5% (2023: 24.5%) as the impact from lower pricing was
more than offset by an 11% improvement in unit costs. New long-term contracts
were signed with key customers and revenue derived from long-term contracts
increased to 70% of the total for the region in 2024.
Industrial revenues decreased by 13% to €112 million, with a 6% decline in
sales volumes and 7% lower average price per tonne. Volume decline was most
pronounced in the Non-ferrous metals segment, with no new greenfield projects
occurring during 2024 against a strong comparative in 2023. Pricing weakness
was most evident in Cement & Lime.
Industrial segment Gross margins reduced to 35.2% (2023: 38.7%) as the 7%
decline in average pricing was only partially offset by 2% lower costs.
During the year the Brumado rotary kiln project was completed and ramped up
production. The project will reduce costs and increase operational flexibility
considerably at this strategically important and globally significant raw
material site.
A write down of assets in Brazil of €29 million connected to the completion
of the Resco transaction has been recognised in the 2024 financial results,
reflecting the network optimisation which will result in transfer of
production capacity into the US.
China & East Asia
Revenues in China & East Asia increased by 2% to €426 million (2023:
€418 million) as strong sales volumes in Steel offset volume decline and
lower pricing in the Industrial segment. Excluding the contribution from
M&A, revenues in the base business declined by 8%, mainly due to lower
pricing and 2% lower shipped volumes. Gross margins were stable at 21.0%
(2023: 21.0%) as pricing pressure was matched by reduced input costs. Gross
profit increased slightly to €89 million (2023: €88 million) reflecting
the revenue increase and stable margins.
Steel refractory sales volumes excluding M&A increased by 5%, representing
a strong relative performance compared to WSA data for China which indicates a
1.7% decline in steel output in 2024. Shipped volumes of refractories in East
Asia excluding M&A increased by 6%, also outpacing overall steel output
growth in the region although this was largely due to the restart of a key
customer site that had been suspended in 2023.
Industrial sales volumes decreased by 5% driven by weaker demand in
construction and reduced consumption of glass refractories, partially offset
by robust Non-ferrous metal demand in China. Lower pricing resulted in
Industrial revenue decline of 9%, as weak Cement & Lime results were
offset by strong demand for Non-ferrous metals refractories in China.
Industrial gross margin in the region reduced to 27.3% (2023: 28.0%) as price
weakness outpaced the reduction in input costs.
The Group's priority in its China & East Asia business continues to be a
sustainable increase in margins to levels that are closer to the average for
the Group worldwide. The Group's strategy is to focus on higher value-added
products and services to differentiate against lower quality competing
suppliers.
ALTERNATIVE PERFORMANCE MEASURES (APMs)
Definitions of APMs used by the Group are set out below. The purpose and
usefulness of each APM and a reconciliation to the nearest IFRS equivalent
measure, or a reference to a reconciliation appearing elsewhere in this
document. In general, APMs are presented externally to meet investor and
analyst requirements for clarity and transparency of the Group's underlying
financial performance. APMs are also used internally in the management of the
Group's business performance, budgeting and forecasting. APMs are non-IFRS
measures which enable investors and other readers to review alternative
measurements of financial performance, but they should not be used in
isolation from the main financial statements. Commentary within the Annual
Report, including the Financial Review, the Consolidated Financial Statements
and the accompanying notes, should be referred to in order to fully appreciate
all the factors and context affecting the Group's financial performance.
Readers are strongly encouraged not to rely on any single financial measure
and to carefully review the Group's reporting in its entirety.
Performance APMs
Adjusted EBITDA
Adjusted EBITDA is a key non-IFRS measure that the Executive Management Team
(EMT) and Directors use internally to assess the underlying financial
performance of the Group and is viewed as relevant to capital intensive
industries. The ratio of Net Debt to Adjusted EBITDA is used as a measure of
financial gearing.
Adjusted EBITDA is defined as EBIT, as presented in the Condensed Consolidated
Statement of Profit or Loss, before amortisation, depreciation, and Excluded
Items (see definition below).
Pro Forma Adjusted EBITDA
Pro Forma Adjusted EBITDA is used to assess financial gearing and includes a
full year of Adjusted EBITDA contribution from businesses acquired during the
year.
Adjusted EBITA
Adjusted EBITA is a key non-IFRS measure that the EMT and Directors use
internally to assess the underlying performance of the Group.
Adjusted EBITA is determined consistently with Adjusted EBITDA, but includes
depreciation expense of property, plant and equipment to reflect the wear and
tear cost and future replacement of productive assets.
Adjusted EPS
Adjusted EPS is a key non-IFRS measure and one of the Group's KPIs. Adjusted
EPS is used to assess the Group's underlying operational performance, post tax
and non-controlling interests on a per share basis.
This measure is based on Adjusted EBITA after finance income and expenses,
taxes, share of profit or loss from associates and joint ventures and
non-controlling interest. Share of profit or loss from associates and joint
ventures is adjusted to exclude impairments and gains or losses recognised on
disposals.
Adjusted EPS excludes finance income and expenses and certain foreign exchange
effects, that are not directly related to operational performance. This
includes the non-cash present value adjustments for the Oberhausen provision.
Taxes are calculated by applying the effective tax rate normalised for
restructuring expenses and impairments.
Excluded items
Items that are excluded in arriving at the Group's Adjusted measures of
Adjusted EBITA, EBITDA and EPS include:
Other income, other expenses and restructuring expenses as reflected on the
Consolidated Statement of Profit or Loss as well as gains and losses within
interest income, interest expenses and other net financial expenses that are
non-recurring in nature and not reflective of the underlying operational
performance of the business. Excluded items include restructuring related
provisions, costs in relation to corporate transactions and other
non-recurring costs. The tax impacts of the above Excluded Items are also
adjusted for.
Cash flow performance measures
Adjusted operating cash flow and Free cash flow
Adjusted operating cash flow is a key non-IFRS measure used by the EMT and the
Directors to reflect the operational cash generation capacity of the Group
before the cash impacts of Excluded Items (see definition above).
Adjusted operating cash flow is defined as Adjusted EBITDA adjusted for
working capital items, changes in other assets and liabilities and capital
expenditure and other non-cash items, such as share based payments. This APM
is reconciled to Net Cash flow from operating activities as follows:
€m 2024 2023
Adjusted operating cash flow (APM) 419 418
Capital expenditure(1) 145 180
Income Taxes paid(1) (69) (60)
Other income/expenses and restructuring items(1) (62) (33)
Net cash flow from operating activities(1) 433 505
1. As reflected in the Consolidated Statement of Cash Flows
Free cash flow is determined from the IFRS measures of Net cash flow from
operating activities, net cash used in investing activities and net cash (used
in)/provided by financing activities and excludes the cash impacts of
purchases and disposals of business and subsidiaries, dividends paid to equity
shareholders of the Group, share capital transactions with shareholders,
proceeds and repayment of borrowings and current borrowings and repayment of
leases.
Free cash flow is reconciled to Cash changes in Net debt in the table in the
'Cash flow and working capital' section. Cash changes in Net debt is
reconciled to Change in cash and cash equivalents in the Net Debt APM
reconciliation.
Balance sheet
Liquidity
Liquidity comprises cash and cash equivalents, short term marketable
securities and undrawn committed credit facilities.
€m 2024 2023
Cash and cash equivalents(1) 576 704
Revolving credit facility 600 600
Syndicated term loan 200 0
Liquidity 1,376 1,304
1. As reflected in the Consolidated Statement of Financial
Position
Net Debt
Net Debt is the excess of current and non-current borrowings, associated debt
derivatives for which hedge accounting is applied and lease liabilities over
cash and cash equivalents and short-term marketable securities. The Board uses
this measure for the purpose of capital management. A reconciliation of Net
Debt is included in Note 33 to the Consolidated Financial Statements.
€m 2024 2023
Cash changes in Net debt 80 (41)
Proceeds from borrowings(1) 14 336
Repayment of borrowings(1) (174) (16)
Change in current borrowings(1) (41) (63)
Repayment of lease obligations(1) (20) (20)
Cash inflow from financial assets(1) 11 0
Change in cash and cash equivalents(1) (130) 196
1. As reflected in the Consolidated Statement of Cash Flows
Working capital
Working capital consists of inventories plus trade receivables and other
receivables minus trade payables and other payables. Working capital intensity
provides a measure of how efficient the Company is in managing operating cash
conversion cycles. It is measured as Working capital divided by trailing
three-month revenues (annualised) and is expressed as a percentage.
€m 2024 2023
Inventories (Note 21) 962 1,001
Trade receivables (Note 22) 530 538
Contract assets (Note 22) 3 4
Contract liabilities (Note 31) (59) (65)
Accounts receivable 474 477
Trade payables (Note 31) (572) (498)
Total working capital 864 980
Return on invested capital ("ROIC")
ROIC reflects the annualised return on invested capital of the Group. ROIC is
calculated as NOPAT (net operating profit after tax) divided by average
invested capital of the year.
€m 2024 2023
Revenue(1) 3,487 3,572
Cost of sales(1) (2,639) (2,715)
Selling and marketing expenses(1) (131) (153)
General and administrative expenses(1) (350) (339)
Income taxes paid(2) (69) (60)
NOPAT 298 305
€m 2024 2023
Goodwill(3) 342 339
Other intangible assets(3) 417 470
Property, plant and equipment(3) 1,285 1,360
Investments in joint ventures and associates(3) 7 6
Other non-current assets(3) 76 37
Deferred tax assets(3) 152 152
Inventories(3) 962 1,001
Trade and other receivables(3) 660 681
Income tax receivables(3) 40 43
Deferred tax liabilities(3) (64) (62)
Trade and other current liabilities(3) (843) (820)
Income tax liabilities(3) (29) (51)
Current provisions(3) (43) (34)
Invested capital 2,962 3,122
Average invested capital 3,043 2,854
Return on invested capital(4) 9.8% 10.7%
1. As reflected in the Consolidated Statement of Profit and
Loss
2. As reflected in the Consolidated Statement of Cash Flows
3. As reflected in the Consolidated Statement of Financial
Position
4. NOPAT divided by average invested capital of the year
GLOSSARY
CEO Chief Executive Officer
CFO Chief Financial Officer
CIS Commonwealth of Independent States
CO(2) Carbon dioxide
CoGS Cost of Goods Sold
DBM Dead Burned Magnesia
EAF Electric Arc Furnace
EBIT Earnings Before Interest and Taxes
EBITA Earnings Before Interest, Taxes and Amortisation
EBITDA Earnings Before Interest, Taxes, Depreciation and Amortisation
EMT Executive Management Team
EPS Earnings Per Share
EU European Union
dss+ A leading provider of operations management consulting services with the
purpose of saving lives and creating a sustainable future
FX Foreign Exchange
IFRS International Financial Reporting Standards
Jinan New Emei Jinan New Emei Industries Co. Ltd
Mt Metric Tons
M&A Mergers and Acquisitions
NOPAT Net Operating Profit After Tax
OCF Operating Cash Flow
Oberhausen provision Unfavourable contract required to satisfy EU remedies at the time of the
combination of RHI and Magnesita to form RHI Magnesita
OIE Other Income and Expenses
P-D Refractories P-D Refractories CZ a.s.
PIFOT Process In Full On Time
Process Industries Customers operating in the Glass, Environment, Energy, Chemicals, Foundry and
Aluminium Industries
Refrattari Trezzi Refrattari Trezzi S.r.l.,
Resco Resco Group
ROIC Return On Invested Capital
Seven Refractories Seven Refractories d.o.o.
SG&A Selling, General and Administrative Expenses
SÖRMAŞ Söğüt Refrakter Malzemeleri Anonim Şirketi
UK United Kingdom
US United States of America
WSA World Steel Association
Consolidated Financial Statements 2024
Consolidated Statement of Profit or Loss
for the year ended 31 December 2024
in € million Note 2024 2023
Revenue (5) 3,487 3,572
Cost of sales (5) (2,639) (2,715)
Gross profit 848 857
Selling and marketing expenses (131) (153)
General and administrative expenses (350) (339)
Restructuring (6) (24) (20)
Other income (7) 38 27
Other expenses (8) (139) (39)
EBIT 242 333
Interest income (11) 22 20
Interest expenses on borrowings (61) (58)
Net income/(expense) on foreign exchange effects (12) 11 (30)
Other net financial expenses (13) (14) (32)
Net finance costs (42) (100)
Profit before income tax 200 233
Income tax (14) (46) (62)
Profit after income tax 154 171
RHI Magnesita N.V. shareholders 142 165
Non-controlling interests (26) 12 6
in €
Earnings per share - basic (15) 3.01 3.50
Earnings per share - diluted (15) 2.94 3.42
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2024
in € million Note 2024 2023
Profit after income tax 154 171
Currency translation differences
Unrealised results from currency translation (94) (33)
Deferred taxes thereon (14) 17 0
Reclassification to profit or loss (8) 0
Cash flow hedges and costs of hedging
Unrealised fair value changes (35) 27 (25)
Reclassification to profit or loss (18) (10)
Deferred taxes thereon (14) (2) 8
Remeasurement of investments in debt instruments
Unrealised fair value changes (5) 0
Reclassification to profit or loss 5 0
Items that may be reclassified to profit or loss in later periods (78) (60)
Remeasurement of defined benefit plans
Remeasurement of defined benefit plans (29) 24 (22)
Deferred taxes thereon (14) (8) 6
Items that are not reclassified to profit or loss in later periods 16 (16)
Other comprehensive (loss)/income after income tax (62) (76)
Total comprehensive income 92 95
RHI Magnesita N.V. shareholders 74 98
Non-controlling interests (26) 18 (3)
Consolidated Statement of Financial Position
as at 31 December 2024
in € million Note 31.12.2024 31.12.2023
ASSETS
Non-current assets
Goodwill (17) 342 339
Other intangible assets (18) 417 470
Property, plant and equipment (19) 1,285 1,360
Investments in joint ventures and associates 7 6
Other financial assets (34) 42 43
Other assets (20) 76 37
Deferred tax assets (14) 152 152
2,321 2,407
Current assets
Inventories (21) 962 1,001
Trade and other receivables (22) 660 681
Income tax receivables (14) 40 43
Other financial assets (34) 17 14
Cash and cash equivalents (23) 576 704
2,255 2,443
4,576 4,850
EQUITY AND LIABILITIES
Equity
Share capital (24) 50 50
Group reserves (25) 1,152 1,152
Equity attributable to shareholders of RHI Magnesita N.V. 1,202 1,202
Non-controlling interests (26) 170 162
1,372 1,364
Non-current liabilities
Borrowings (27) 1,474 1,800
Other financial liabilities (28) 112 133
Deferred tax liabilities (14) 64 62
Net employee defined benefit liabilities (29) 257 297
Provisions (30) 71 92
Other liabilities 8 7
1,986 2,391
Current liabilities
Borrowings (27) 276 149
Other financial liabilities (28) 27 41
Trade payables and other liabilities (31) 843 820
Income tax liabilities (14) 29 51
Provisions (30) 43 34
1,218 1,095
4,576 4,850
Consolidated Statement of Cash Flows
for the year ended 31 December 2024
in € million Note 2024 2023
Cash generated from operations (32) 502 565
Income tax paid less refunds (69) (60)
Net cash flow from operating activities 433 505
Investments in property, plant and equipment and intangible assets (145) (180)
Investments in subsidiaries net of cash acquired (7) (313)
Cash inflows from the sale of property, plant and equipment 16 4
(Cash outflows) from investments in financial assets (27) (14)
Cash inflows from the sale of financial assets 30 0
Dividends received from non-consolidated entities 1 0
Investment subsidies received 2 2
Prepayments related to the acquisition of Resco Group (44) 0
Interest received 20 19
Net cash used in investing activities (154) (482)
Payment for share issue costs in subsidiary 0 (3)
Proceeds from share issue in subsidiary 0 100
Acquisition of non-controlling interests (6) (8)
Dividends paid to RHI Magnesita N.V. shareholders (87) (77)
Dividend paid to non-controlling interests (3) (3)
Proceeds from long-term financing 14 336
Repayments of long-term financing (174) (16)
Changes in current borrowings and financial liabilities to associates (41) (61)
Interest payments (89) (73)
Repayment of lease obligations (20) (20)
Interest payments from lease obligations (3) (2)
Net cash (used in)/provided by financing activities (33) (409) 173
Change in cash and cash equivalents (130) 196
Cash and cash equivalents at beginning of period 704 521
Reclassification of Cash and Cash equivalents (23) 0 (9)
Foreign exchange impact 2 (4)
Cash and cash equivalents at end of period (23) 576 704
Consolidated Statement of Changes in Equity
for the year ended 31 December 2024
Group reserves
Accumulated other comprehensive income
in € million Share Treasury shares Additional Mandatory reserve Retained earnings Cash flow hedges and costs of hedging Defined Currency translation Equity attributable Non-controlling interests Total equity
capital
paid-in
benefit plans
to shareholders
capital
of RHI Magnesita N.V.
Note (24) (25) (25) (25) (25) (25) (25) (25) (26)
31.12.2023 50 (111) 361 289 872 6 (102) (163) 1,202 162 1,364
Profit after income tax - - - - 142 - - - 142 12 154
Currency translation differences - - - - - - - (91) (91) 6 (85)
Cash flow hedges and costs of hedging - - - - - 7 - - 7 - 7
Defined benefit plans - - - - - - 16 - 16 - 16
Other comprehensive income after income tax - - - - - 7 16 (91) (68) 6 (62)
Total comprehensive income - - - - 142 7 16 (91) 74 18 92
Dividends - - - - (87) - - - (87) (3) (90)
Share transfer/vested LTIP - 3 - - (3) - - - - - -
Other changes(1)) - - - - 5 - - - 5 (7) (2)
Share-based payment expenses - - - - 9 - - - 9 - 9
Hedging gains and losses included in the initial cost of inventory purchased - - - - - (1) - - (1) - (1)
in the reporting period
- 3 - - (76) (1) - - (74) (10) (84)
31.12.2024 50 (108) 361 289 938 12 (86) (254) 1,202 170 1,372
1) This mainly comprises the effects of the acquisition of
non-controlling interests of Seven Refractories' Group and P-D-Refractories as
well as the final adjustments to the purchase price allocations of Seven
Refractories' Group and P-D Refractories, both completed in 2024.
Group reserves
Accumulated other comprehensive income
in € million Share Treasury shares Additional Mandatory reserve Retained earnings Cash flow hedges Defined Currency translation Equity attributable Non-controlling interests Total equity
capital
paid-in
benefit plans
to shareholders
capital
of RHI Magnesita N.V.
Note (24) (25) (25) (25) (25) (25) (25) (25) (26)
31.12.2022 50 (116) 361 289 620 32 (86) (148) 1,002 47 1,049
Profit after income tax - - - - 165 - - - 165 6 171
Currency translation differences - - - - - - - (24) (24) (9) (33)
Cash flow hedges - - - - - (27) - - (27) - (27)
Defined benefit plans - - - - - - (16) - (16) - (16)
Other comprehensive income after income tax - - - - - (27) (16) (24) (67) (9) (76)
Total comprehensive income - - - - 165 (27) (16) (24) 98 (3) 95
Hedging gains and losses and costs of hedging transferred to the carrying - - - - - 1 - - 1 - 1
value of inventory purchased during the year
Dividends - - - - (78) - - - (78) (3) (81)
Share transfer/vested LTIP - 5 - - (5) - - - - - -
Additions to consolidated companies and change of non-controlling interests - - - - 148 - - - 148 54 202
without a change of control
Change of non-controlling interests without a change of control - - - - 36 - - - 36 64 100
Change of non-controlling interests without a change of control - - - - 3 - - - 3 (3) -
Change of non-controlling interests without a change of control - - - - (3) - - - (3) (4) (7)
Hyperinflation adjustment - - - - - - - 9 9 - 9
Other changes(1)) - - - - (23) - - - (23) 10 (13)
Share-based payment expenses - - - - 9 - - - 9 - 9
- 5 - - 87 1 - 9 102 118 220
31.12.2023 50 (111) 361 289 872 6 (102) (163) 1,202 162 1,364
1) Mainly relating to the recognition of the financial liability and
derecognition of the non-controlling interests related to the acquisition of
Jinan New Emei, the recognition of the non-controlling interests related to
the acquisition of Seven Refractories Group as well as P-D Group and the
impacts of the fair value changes resulting from the completion of purchase
price allocation related to the acquisition of Sörmaş.
Notes to the Consolidated Financial Statements 2024
1. Authorisation of Consolidated Financial Statements and Statement of
Compliance with the IFRS Accounting Standards
The Consolidated Financial Statements of RHI Magnesita N.V. and its
subsidiaries (collectively referred to as "RHI Magnesita" or "the Group") for
the year ended 31 December 2024 were approved and authorised for issue by the
Board of Directors on 26 February 2025 and will be submitted for adoption to
the Annual General Meeting ("AGM") in May 2025. RHI Magnesita is a public
limited company incorporated under the laws of the Netherlands (naamloze
vennootschap), having its official seat (statutaire zetel) in Arnhem, the
Netherlands, and its office at Kranichberggasse 6, 1120 Vienna, Austria. It is
registered with the Dutch Trade Register under number 68991665 and listed on
the London Stock Exchange, with a secondary listing on the Vienna Stock
Exchange (Wiener Börse).
The Group is a global industrial group whose core activities include the
development and production, sale, installation and maintenance of high-grade
refractory products and systems used in industrial high-temperature processes
exceeding 1,200°C.
Basis for preparation
The Consolidated Financial Statements of the Group have been prepared in
accordance with IFRS Accounting Standards as adopted by the European Union.
The Consolidated Financial Statements also comply with the financial reporting
requirements included in Title 9 of Book 2 of the Dutch Civil Code.
The accounting policies that follow have been consistently applied to all
years presented, except where otherwise indicated. With the exception of
specific items such as derivative financial instruments, plan assets for
defined benefit obligations, financial assets measured at Fair Value through
Profit or Loss (FVPL) or Other Comprehensive Income (FVOCI) and financial
liabilities measured at FVPL, the Consolidated Financial Statements are
prepared on a historical cost basis.
Certain comparative figures in the Consolidated Financial Statements and
accompanying Notes have been revised to conform to the current year
presentation as a result of certain improvements in presentation. These
improvements include:
· Presentation of defined employee benefit liabilities in the
Consolidated Statement of Financial Position in a single line item labelled
'net employee defined benefit liabilities'. Previously, these were presented
in separate line items, namely 'provisions for pensions' and 'other personnel
provisions'.
· Presentation of the effects of translating the financial statements of
foreign operations and subsidiaries with a functional currency other than the
Euro into the Group's presentation currency in the Consolidated Statement of
Comprehensive Income in a single line item. Previously, these were presented
in separate line items, namely 'unrealised results from currency translation'
and 'unrealised results from net investment hedge and foreign operations'.
· Purchased emission rights which represent the permission to emit
specified tons of carbon dioxide (CO(2)) in a specified time period have been
reclassified to Inventories in the Consolidated Statement of Financial
Position. Previously, these were presented as trade and other current
receivables. Due to this reclassification the comparative figure for
inventories increased by €5 million and the comparative figure for trade and
other current receivables decreased by the same amount.
· Realised gains and losses from settled foreign currency forward
contracts have been reclassified to the cash flow from operating activities in
the Consolidated Statement of Cash Flows. Previously, these were presented as
part of the cash flow from financing activities. Due to this reclassification,
the comparative figure for cash flow from financing activities decreased by
€5 million and the comparative figure for cash flow from operating
activities increased by the same amount.
· The number of reportable segments increased from two to five and the
disclosures were extended to match the new segment reporting structure. Refer
to Note (5) for further details.
The financial year of RHI Magnesita N.V. and the Group corresponds to the
calendar year. Subsidiaries with a financial year different to the Group, due
to local legal requirements, provide financial information to allow
consolidation consistent with the Group's financial year. The Consolidated
Financial Statements are presented in Euros, and all values are rounded to the
nearest € million, except where otherwise indicated. The Group has availed
of the exemption provided by section 264 paragraph 3 HGB of the German
Commercial Code for the following entities: RHI Urmitz AG & Co. KG
(Mülheim-Kärlich), RHI Magnesita Sales Germany GmbH (Wiesbaden), RHI
Refractories Site Services GmbH (Wiesbaden), RHI Magnesita Deutschland AG
(Wiesbaden), RHI Magnesita Wetro GmbH (Puschwitz) and RHI Magnesita Bochum
GmbH (Bochum). According to this provision, the mentioned companies are exempt
from preparing statutory financial statements, where required by the German
Commercial Code, since they are included in the Consolidated Financial
Statements of the Group.
Basis of consolidation
The Consolidated Financial Statements consolidate the Financial Statements of
RHI Magnesita N.V. and its subsidiaries. Subsidiaries are consolidated from
the date on which the Group obtains control, including when control is
obtained via potential voting rights, and continue to be consolidated until
the date that control ceases.
The financial information of subsidiaries is prepared for the same reporting
year as the parent company, using consistent accounting policies. When the
Group ceases to have control, any retained interest in the entity is
remeasured to its fair value, with the change in carrying amount recognised in
the Statement of Profit or Loss. The fair value is the initial carrying amount
for the purposes of subsequently accounting for the retained interest as an
associate, joint venture or financial asset. In addition, any amounts
previously recognised in Other Comprehensive Income (OCI) in respect of that
entity are accounted for as if the Group had directly disposed of the related
assets or liabilities. This treatment may mean that amounts previously
recognised in OCI are recycled through the Statement of Profit or Loss.
Intercompany balances and transactions, including unrealised profits arising
from intragroup transactions, are eliminated in full. Unrealised losses are
eliminated in the same way as unrealised gains except that they are only
eliminated to the extent that there is no evidence of impairment.
Non-controlling interests represent the equity in subsidiaries that is not
attributable, directly or indirectly, to the Group's shareholders.
Please refer to the Company Financial Statements of RHI Magnesita N.V. for a
list of the Company's subsidiaries, joint ventures and associates in which it
holds more than 20%. Please refer to page 304 for more detail.
Going concern
In considering the appropriateness of adopting the going concern basis in
preparing the Consolidated Financial Statements, the Directors have assessed
the potential cash generation of the Group and considered a range of downside
scenarios that model different degrees of potential economic downturn, using
the same model performed for the viability assessment. This assessment covers
at least 12 months from the date of approval of the Consolidated Financial
Statements.
The scenarios considered by the Directors include a severe but plausible
downside and a reverse stress test which determines the level of EBITDA that
could breach the financial debt covenant of the Group's principal borrowing
facilities. Further mitigating actions within management control would be
undertaken in such scenarios, including but not limited to: working capital
and SG&A reduction, deferring capital expenditure, or reducing or
cancelling the dividend, but these were not incorporated in the downside
modelling.
The Directors have also considered the Group's current liquidity and available
facilities. As of 31 December 2024, the Consolidated Statement of Financial
Position reflects cash and cash equivalents of €576 million (2023: €704
million). In addition, the Group has access to a €600 million (2023: €600
million) Revolving Credit Facility (RCF), which is currently undrawn and not
relied upon for the purpose of the going concern assessment. In 2024 and the
previous reporting period, the Group complied with the financial covenant of
the Group's principal borrowing facilities (refer to Note (27)).
In the scenarios assessed and taking into account liquidity, available
resources and before the inclusion of all mitigating actions, the Directors
consider it is appropriate to continue to adopt the going concern basis in
preparing the Consolidated Financial Statements for the period ended 31
December 2024.
2. Impact of new financial reporting standards and interpretations
Management has assessed the impact of new or amended IFRS Accounting Standards
as adopted by the European Union effective on or after 1 January 2024. Except
for the amendments to IAS 7 and IFRS 7 including new disclosure requirements
for the Group's existing liabilities related to supplier finance arrangements
and their effects on the Group's liabilities, cash flows and exposure to
liquidity risk, management assessed that the application of these has not had
a material impact on the Consolidated Financial Statements for 2024. Refer to
Note (31) for the new disclosures on the Group's existing supplier finance
arrangements.
Furthermore, management has assessed the impact of new or amended IFRS
Accounting Standards issued by the IASB that have not yet become effective. No
new or amended IFRS Accounting Standards have been adopted early. Except for
newly issued IFRS 18, the potential impact of which is currently being
assessed, management does not anticipate any significant impact on the
Consolidated Financial Statements in the period of initial application after
the adoption of these amendments.
IFRS 18 'Presentation and Disclosure of Financial Statements' was published in
April 2024 with the aim to enhance comparability of financial statements. The
key changes introduced by IFRS 18 relate to the structure of the Consolidated
Statement of Profit or Loss, disclosures related to management-defined
performance measures (MPMs), aggregation and disaggregation of information
disclosed in the Notes and minor changes in the Consolidated Statement of Cash
Flows. IFRS 18 will replace existing guidance in IAS 1 'Presentation of
Financial Statements' and some of the guidance in IAS 7 'Statement of Cash
Flows'. IFRS 18 becomes effective for financial years beginning on or after
January 1, 2027. European Union endorsement is still pending.
IFRS 18 introduces a defined structure for the Consolidated Statement of
Profit or Loss including five categories, namely operating, investing,
financing, income tax and discontinued operations. Entities are required to
classify their expenses and income to these categories mainly based on the
main business activities and additional guidance provided by IFRS 18. In
addition, according to IFRS 18 two subtotals must be presented on the face of
the Consolidated Statement of Profit or Loss after the first two categories
(i.e. operating profit or loss and profit or loss before financing and income
tax).
IFRS 18 stipulates new disclosure requirements related to alternative
performance measures that meet the definition of MPMs according to IFRS 18.
According to the new guidance, disclosures related to MPMs include, but are
not limited to, a reconciliation from the MPMs to the most directly comparable
IFRS 18 specific subtotal or total presented in the Consolidated Statement of
Profit or Loss need to be disclosed in a single note within the Notes.
A review of the impact of IFRS 18 is being undertaken, and the impact of
adopting the standard will be determined once this review has been completed.
In particular the classification of expenses and income to the five P&L
categories and the introduction of (new) subtotals will require an assessment
at general ledger account level per legal entity. In addition, the impact of
the MPM related disclosures requires an assessment of which of the Group's
alternative performance measures meet the definition of MPMs according to IFRS
18 and how they can be reconciled to the most comparable IFRS 18 specific
total or subtotal. Therefore, the impact of adopting IFRS 18 cannot be
reliably estimated until this work is substantially complete.
3. Significant Accounting Policies, Judgements and Estimates
Business combinations
Business combinations are accounted for using the acquisition method. The
identifiable assets acquired, and liabilities assumed, including any
contingent consideration, are recognised at their fair values at the
acquisition date. The amount of the purchase consideration and value of
non-controlling interest on acquisition, if any, above the fair value of
assets and liabilities is recognised as goodwill. A bargain purchase gain, if
any, is recognised within other income immediately. Transaction costs related
to a business combination are expensed as incurred. The acquisition of a
non-controlling interest in a subsidiary and the sale of an interest are
accounted for as transactions within equity unless they result in the loss of
control. Sales of interests accounted for as equity transactions also include
share issues in subsidiaries which dilute RHI Magnesita N.V.'s share in the
subsidiary's net assets and where the dilution does not result in the loss of
control. The difference between the purchase consideration or sale proceeds
after tax and the relevant proportion of the non-controlling interest,
measured by reference to the carrying amount of the interest's net assets at
the date of acquisition or sale, is recognised in retained earnings as a
movement in equity attributable to the shareholders of RHI Magnesita N.V.
Where the Group acquires less than 100% of shares in a business combination,
there is an accounting policy choice whereby non-controlling interest is
either reflected at the proportionate share of the acquired identifiable net
assets (excluding goodwill) or at fair value. This accounting policy choice
can be exercised individually for each acquisition. If a non-wholly owned
subsidiary of RHI Magnesita N.V. is the deemed acquirer in a business
combination, goodwill is measured either as the excess of the full
consideration transferred plus non-controlling interests, if any, over the
acquired identifiable net assets or as the excess of RHI Magnesita N.V.'s
share in the consideration transferred plus non-controlling interests, if any,
over the acquired identifiable net assets. This accounting policy choice can
be exercised individually for each acquisition too. For business combinations
achieved in stages, the Group's previously held equity interest is remeasured
to fair value at the acquisition date. Any gains and losses arising from such
remeasurement are recognised in profit or loss.
Net assets of subsidiaries not attributable to the shareholders of RHI
Magnesita N.V. are shown separately in equity as non-controlling interests.
As part of a business acquisition or subsequently, the Group may enter into
agreements with non-controlling interests in the form of a call option, a put
option or a forward contract to acquire the outstanding shares. A call option
provides the Group with the right to acquire the outstanding shares not
already owned, while a written put option allows the non-controlling interest
to sell their shares to the Group. A forward contract creates a commitment for
the Group to purchase and for the non-controlling interest to sell the
outstanding shares at a later date. The option or forward price may be based
on an earnings multiple such as EBITDA subject to contractual limits, if any,
or may be fixed and exercisable at a future date. A financial liability is
recognised on the written put option or forward contract at the present value
of the estimated redemption amount. Where the option is assessed to result in
the non-controlling interest transferring the risks and rewards of ownership
to the Group, on acquisition, the financial liability forms part of the
purchase consideration with no value assigned to non-controlling interests.
For fixed price call and put options or fixed price forward contracts, the
risks and rewards of ownership relating to the outstanding shares are assumed
to have transferred to the Group.
Where the risks and rewards of ownership under the option or forward contract
are not transferred to the Group, the financial liability is not considered as
part of the purchase consideration and a non-controlling interest is
recognised on acquisition. The financial liability is initially recognised
against equity attributable to shareholders of RHI Magnesita N.V.
Subsequently, the Group derecognises the non-controlling interest to the
extent that it is equal or less than the financial liability, against equity
attributable to shareholders of RHI Magnesita N.V.
The subsequent measurement of the financial liability is conditional on the
nature of the underlying cash consideration. If the option or forward contract
will be settled at a fixed cash consideration, the financial liability is
subsequently measured at amortised cost. If the option or forward contract
will be settled at a variable cash consideration (e.g. EBITDA multiple or
similar profit or loss measures) the financial liability is subsequently
measured at FVPL. Fair value changes resulting from the remeasurement of the
financial liability are reflected within other net financial expenses.
If a financial liability is recognised for an option or a forward contract
over outstanding shares, dividends paid to non-controlling interest are
reflected as an expense within other net financial expenses unless there is a
contractual right to reduce the financial liability. Dividend payments to
non-controlling interest without such a financial liability reduce the
non-controlling interests presented in equity without impacting the
Consolidated Statement of Profit or Loss.
Goodwill may also arise upon investments in joint ventures and associates,
being the surplus of the cost of investment over the Group's share of the net
fair value of the identifiable net assets. Any such goodwill is recorded
within the corresponding investment in joint ventures and associates.
Significant judgement: Control over Horn & Co Minerals Recovery
At the end of the reporting period, the Group holds a 55.0% interest in Horn
& Co Minerals Recovery ("Mireco"). The Group assessed its respective
shareholding rights and power to control in terms of the purchase agreements,
founding documents of Mireco and relevant corporate laws. Based on this
assessment, the Group determined that it controls Mireco and consolidated it
from the date of control. The Group exercises control over Mireco as it has
the power to steer the relevant activities of the business and can use this
power to affect the variable returns that it is exposed to. In determining
that the Group controls Mireco, judgement is applied which takes into account
the Group's voting rights, management representation and the governance
structure of Mireco. Control is achieved above all through the Group's voting
rights and the resulting influence on directing the relevant activities of the
business.
Goodwill and Other intangible assets
Goodwill
Goodwill arising on consolidation represents the excess of the cost of
acquisition over the Group's interest in the fair value of the identifiable
assets, liabilities and contingent liabilities of a subsidiary at the date of
acquisition. Goodwill is initially recognised at cost and is subsequently
measured at cost less any accumulated impairment losses. Goodwill recognised
as an asset is reviewed for impairment at least annually.
On disposal of a subsidiary, the attributable amount of goodwill is included
in the determination of the profit or loss on disposal.
Other intangible assets
Mining rights
Mining rights were recognised in the course of the purchase price allocation
for former Magnesita Group and are amortised based on the depletion of the
related mines. Depletion is calculated based on the volume mined in the period
in proportion to the total estimated economically viable volume.
Customer relationships
Customer relationships arise from the acquisition of business and are measured
at assigned fair values on acquisition, less accumulated amortisation and
impairments. These intangibles are amortised on a straight-line basis over
their expected useful lives.
Development costs
Research costs are expensed in the year incurred and included in general and
administrative expenses. Development costs, including internally developed
software controlled by the Group, are only capitalised as internally generated
intangible assets if the costs can be measured reliably and are expected to
result in future economic benefits either through use or sale. Capitalisation
will also only arise when the product or process development can be clearly
defined and is feasible in technical, economic and capacity terms. For
internally developed software controlled by the Group, costs are capitalised
when these can be directly and conclusively allocated to individual programmes
and represent a significant extension or improvement on existing software. All
other internally developed software costs are expensed. Development costs are
amortised on a straight-line basis over their expected useful lives of up to
ten years, with internally developed software amortised over a period of up to
four years. Amortisation is recognised in cost of sales.
Other intangible assets
These mainly represent purchased third-party software controlled by the Group,
land-use rights and patent fees and are recognised when future associated
economic benefits are expected to accrue to the Group. These intangibles are
initially measured at their acquisition cost and amortised over their expected
useful lives.
Where the Group does not have control of cloud-based third-party software, the
configuration and customisation costs as well as the recurring service
subscription fee are typically expensed in the reporting period the services
are received.
The useful lives of the Group's main classes of intangible assets are:
Customer relationships 6 to 20 years
Internally generated intangible assets 4 to 18 years
Other intangible assets 4 to 65 years
The useful economic lives of intangible assets are reviewed regularly and
adjusted if necessary.
The carrying values of other intangible assets are assessed at each reporting
period for indicators of impairments. See below for the accounting policy
relating to impairment of non-current assets other than goodwill and
intangible assets with indefinite useful life.
Property, plant and equipment
Property, plant and equipment is measured at acquisition or construction cost,
less accumulated depreciation and accumulated impairment losses. These assets
are depreciated on a straight-line basis over their expected useful life to
their estimated residual values, if any, and from when they are available for
use in the manner intended by management.
Construction costs of assets comprise direct costs as well as a proportionate
share of capitalisable overhead costs and borrowing costs. If borrowed funds
are directly attributable to an investment, borrowing costs are capitalised as
a cost of the assets. If no direct connection between an investment and
borrowed funds can be demonstrated, the weighted average rate on borrowed
capital of the Group amounting to 2.95% (2023: 3.07%) is used as the
capitalisation rate due to the central funding of the Group.
Expected demolition and disposal costs at the end of an asset's useful life
are capitalised as part of its acquisition cost and recorded as a provision.
The recognition criteria are: (i) a legal or constructive obligation towards a
third-party and (ii) the ability to reliably estimate future cost.
Land and plant under construction are not depreciated. Depreciation of
property, plant and equipment is based on the following useful lives:
Real estate, land and buildings 8 to 60 years
Technical equipment and machinery 8 to 50 years
Other plant, office equipment, furniture and fixtures 3 to 35 years
The carrying value of property, plant and equipment is assessed at each
reporting period for indicators of impairments. See below for accounting
policy relating to impairment of non-current assets other than goodwill and
intangible assets with indefinite useful life.
The residual values and economic useful lives of property, plant and
equipment, are reviewed regularly and adjusted if necessary.
When components of plant or equipment have to be replaced at regular
intervals, the relevant replacement costs are capitalised when economic
benefits are expected to arise for the Group. The carrying amount of the
replaced components is derecognised. Regular maintenance and repair costs are
expensed as incurred.
Gains or losses from the disposal of property, plant and equipment, which
result from the difference between the net realisable value and the carrying
amount, are recognised as income or expense in the Consolidated Statement of
Profit or Loss.
Significant estimate: Useful lives of property, plant and equipment and intangible assets
Management uses its experience to estimate the remaining useful life of an
asset. The actual useful life of an asset may be impacted by an unexpected
event that may result in an adjustment to the carrying amount of the asset. No
such events are expected to arise which would have a material impact on
carrying values within 12 months from the reporting date.
Leases
A contract, or part of a contract, which conveys the right to control the use
of an identified asset for a period of time in exchange for payments to be
made to the owners (lessors) is accounted for as a lease. Contracts are
assessed to determine whether it is or contains, a lease at inception or when
the terms and conditions of a contract are significantly changed. The lease
term is the non-cancellable period of a lease, together with contractual
options to extend or to terminate the lease early, where it is reasonably
certain that an extension option will be exercised, or a termination option
will not be exercised. At the commencement of a lease contract, a right-of-use
asset and a corresponding lease liability are recognised, except for low-value
items or for lease terms of less than 12 months. The commencement date of a
lease is the date on which the underlying asset is made available for use. The
lease liability is measured at an amount equal to the present value of the
lease payments during the lease term that are not paid at that date. The lease
liability includes contingent rentals and variable lease payments that depend
on an index, rate, or where they are fixed payments in substance.
The lease liability is remeasured when the contractual cash flows of variable
lease payments change due to a change in an index or rate when the lease term
changes following a reassessment. Lease payments are discounted using the
interest rate implicit in the lease. If that rate is not readily available,
the incremental borrowing rate is applied. The incremental borrowing rate
reflects the rate of interest that the lessee would have to pay to borrow over
a similar term and similar security, the funds necessary to obtain an asset of
a similar nature and value to the right-of-use asset in a similar economic
environment.
In general, a corresponding right-of-use asset is recognised for an amount
equal to each lease liability, adjusted by the amount of any pre-paid lease
payment relating to the specific lease contract, less any lease incentives,
and for any estimated restoration and removal costs. Right of use assets are
depreciated on a straight-line basis over the useful life of the leased asset
or, if this is shorter, over the lease term. The depreciation on right-of-use
assets is recognised in the Consolidated Statement of Profit or Loss.
Right-of-use assets are assessed for impairment indicators (see accounting
policy on impairment of non-current assets).
Impairment of goodwill, property, plant and equipment and other intangible assets
Goodwill
Goodwill is reviewed at least annually for impairment. Any impairment loss is
recognised as an expense immediately. For the purpose of impairment testing,
goodwill is allocated to the individual Cash-Generating Units (CGUs) expected
to benefit from the business combination. If the recoverable amount of the CGU
is less than the carrying amount of the CGU (including goodwill) allocated to
it, the resulting impairment loss is applied first to the allocated goodwill
and then to the other assets on a pro-rata basis of the carrying amount of
each asset. Reversals of impairment losses on goodwill are not permitted.
Significant estimate: Determination of recoverable amounts of CGUs which include goodwill
Management makes use of various estimates and assumptions in determining the
cash flow forecasts used to determine the recoverable amounts of CGUs to which
goodwill is allocated for the annual impairment test. Key assumptions include
discount rates used to discount cash flows, the perpetual annuity growth rate,
projected revenue and projected EBIT margin of the associated CGU. For further
details on impairment tests for CGUs which include goodwill, refer to Note
(17).
Property, plant and equipment and other intangibles
Property, plant and equipment, including right-of-use assets and intangible
assets are tested for impairment if there is any indication that the value of
these items may be impaired. An asset is considered to be impaired if its
recoverable amount is less than its carrying amount. In the Group, individual
assets do not generate cash inflows independent of one another and assets are
combined in CGUs, which largely generate independent cash inflows. These CGUs,
which are combined in two strategic business units, Steel and Industrial,
reflect the market presence and appearance and drive cash inflows. The
organisational structures of the Group reflect these units. In addition to the
joint management and control of the business activities in each unit, the
sales know-how, the knowledge of the long-standing customer relationships or
knowledge of the customer's production facilities and processes further
support these units. Product knowledge is manifested in the
application-oriented knowledge of chemical, physical and thermal properties of
RHI Magnesita products. The services offered extend over the life cycle of
products at the customer's plant, from the appropriate installation and
support of optimal operations to environmentally sound disposal with the
customer or sustainable reuse in the Group's production process. These factors
determine cash inflow to a significant extent and consequently form the basis
for the CGU structures.
The CGUs of the Steel business correspond to the operating segments Linings
and Flow Control. These two CGUs are determined according to the production
stages in the process of steel production. Each operating segment included in
the Industrial business unit (Cement &Lime, Non-Ferrous Metals, Glass and
Industrial Applications) corresponds to a separate CGU. All raw material
producing facilities are combined in one CGU named Minerals. The new segment
reporting structure, which is disclosed in Note (5), has not changed the
composition or number of the Group's CGUs.
The recoverable amount of a CGU is defined as the higher of its fair value
less costs of disposal and its value in use (present value of future cash
flows). For the purpose of testing CGUs for impairment the Group determines
the recoverable amount of the CGUs solely on the basis of value in use. In
assessing value in use, the estimated future cash flows of the CGU in its
present condition are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of
money and the risks, including country, specific to the CGU.
The cash flows projections used for impairment testing are based on the
strategic business and financial planning model of the Group including the
2025 budget, as approved by the Board, and the Long-Term Plan covering a
subsequently following four-year period. The terminal value is based on a
growth rate derived from the difference of the current and the possible degree
of utilisation of the assets. To forecast the CGUs' cash flows, management
predicts the growth rate using external sources for the development of the
customers' industries and expert assumptions, including forecasts about the
regional growth of steel production and the output of the non-steel clients.
Growth rates are also influenced by the development of the specific refractory
consumption patterns, including technological improvements.
If the carrying amount is higher than the recoverable amount, an impairment
loss equivalent to the resulting difference is recognised in the Consolidated
Statement of Profit or Loss. If the reason for an impairment loss recognised
in the past for property, plant and equipment or for other intangible assets
ceases to exist, a reversal of the impairment is recognised in profit or loss.
An impairment loss is reversed only to the extent that the CGUs' carrying
amount does not exceed the carrying amount that would have been determined,
net of depreciation or amortisation, if no impairment loss had been recognised
in prior years.
Significant judgement: Identification of impairment indicators related to individual assets and CGUs without goodwill
Management reviewed individual assets and CGUs without goodwill for indicators
of impairment. These indicators included both external factors affecting the
recoverable amounts, such as laws and regulations in specific countries and
global and local economic conditions and internal factors, including but not
limited to, useful lives of assets, major breakdowns or decisions to divest
from certain businesses or abandon investment projects. Based on the
impairment indicator review, certain impairment indicators were identified in
the reporting period that led to impairment losses at the level of individual
assets totalling € 42 million. Refer to Notes (6), (8), (18) and (19) for
details.
Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
In general, financial instruments can be classified to be measured
subsequently at amortised cost, fair value through profit or loss or fair
value through other comprehensive income. Classification of financial assets
depends on the contractual terms of the cash flows as well as on the entity's
business model for managing the financial assets. The business model
determines whether cash flows will result from collecting contractual cash
flows, selling the financial assets, or both.
Financial assets are classified as amortised cost, if the contractual cash
flows include solely payments of principal and interest and which are held in
order to collect the contractual cash flows. If the contractual cash flows
include solely payments of principal and interest, but are held to collect
both the contractual cash flows and sell the financial asset, then they are
classified as fair value through other comprehensive income. If the
contractual cash flows do not solely include payments of principal and
interest, then they are classified as fair value through profit or loss.
The Group initially recognises securities on the trading date when it becomes
a party to the contractual provisions of the instruments. All other financial
assets and financial liabilities are initially recognised on the date when
they are originated. Financial instruments, except for trade receivables, are
initially recognised at fair value. Financial assets are derecognised if the
entity transfers substantially all the risks and rewards or if the entity
neither transfers nor retains substantially all the risks and rewards and has
not retained control. Financial liabilities are derecognised when the
contractual obligations are settled, withdrawn or have expired.
Investments in debt securities are subsequently measured at fair value through
profit and loss if the contractual terms of cash flows do not solely include
payments of principal and interest. Otherwise, they are subsequently carried
at amortised cost.
Investments in equity securities, including non-consolidated subsidiaries, are
of minor importance and recognised and measured either at fair value through
profit or loss, or at fair value through OCI, if the latter option was
exercised.
Financial assets at amortised costs are measured by applying the effective
interest method.
Significant judgement: Presentation of cash flows related to investments in and divestments of special national government bonds
The Group maintains business operations in Argentina. In 2019, the Argentinian
Central Bank imposed several foreign exchange restrictions on import payments,
essentially preventing the Argentinian subsidiary's ability to honour its
payment obligations to suppliers outside of Argentina in the usual manner.
Given a change in legislation in December 2023, Argentinian companies are now
allowed to settle their previously restricted import payment obligations by
purchasing U.S. dollar-denominated securities issued by the Central Bank of
Argentina, also called BOPREAL bonds, which can be held to maturity,
transferred or sold in the secondary market. In 2024 the Group has invested
€19 million in these BOPREAL bonds all of which have been sold or
transferred before the reporting date. The cash proceeds realised from the
sales, amounting to €13 million, were used to settle intercompany and
third-party trade liabilities. The cash flows arising from the investment in
and divestment of the BOPREAL bonds are presented within the investing
category in the Consolidated Statement of Cash Flows. Judgement is applied in
determining that this presentation is appropriate, by taking into account the
IFRS Accounting Standard requirements to classify cash flows and the fact that
each of the above transactions is a separate unit of account.
Trade and other current receivables
Trade receivables are recognised initially at the amount of consideration that
is unconditional, unless they contain significant financing components when
they are recognised at fair value and, depending on the business model,
subsequently carried either at amortised cost minus any valuation allowances
or at fair value through other comprehensive income minus any valuation
allowances for expected or incurred credit losses. Irrespective of the
measurement category, any impairment losses are recognised in the Consolidated
Statement of Profit or Loss. Valuation allowances for expected credit losses
are calculated in accordance with the simplified approach of the impairment
model for financial instruments (see accounting policy on impairment of
financial assets below).
The Group sells trade receivables to financial institutions in the scope of
factoring arrangements on a recurring basis based on its liquidity needs.
Prospectively, the extent and the specific trade receivables impacted by
future sales cannot be identified. Therefore, trade receivables which qualify
for a future sale under the terms of existing factoring agreements are
allocated to a portfolio whose objective is collecting the contractual cash
flows and selling them. These trade receivables are carried at fair value
through other comprehensive income minus any valuation allowances. Whereas
trade receivables which do not qualify for a future sale under the terms of
existing factoring agreements are allocated to a portfolio whose only
objective is to collect the contractual cash flows and are therefore carried
at amortised cost minus any valuation allowances.
In factoring arrangements, trade receivables are derecognised where the Group
transfers substantially all the risks and rewards associated with the
financial assets. Payments received from customers following the sale are
recognised in current borrowings until repaid to the factorer.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, cheques received, cash at
banks and short-term cash deposits with an original term of up to three
months. Moreover, investments in money market funds exposed to insignificant
value fluctuations due to their high credit rating and investments in
short-term money market instruments that can be converted to defined cash
amounts within a few days at any time, are also reflected as cash equivalents.
Borrowings
Financial liabilities include liabilities to financial institutions and other
lenders and are measured at fair value less directly attributable transaction
costs at initial recognition. In subsequent periods, these liabilities are
measured at amortised cost applying the effective interest rate method.
A financial liability is derecognised when the obligation under the liability
is discharged (by payment or legal release), cancelled or expires.
When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new
liability. The terms are substantially different if the discounted present
value of the cash flows under the new terms, including any fees paid net of
any fees received and discounted using the original effective interest rate,
is at least 10% different from the discounted present value of the remaining
cash flows of the original financial liability. The difference in the
respective carrying amounts is subsequently recognised in the Consolidated
Statement of Profit or Loss, including any costs or fees.
Trade payables and other current liabilities
These liabilities are initially recognised at fair value and subsequently
measured at amortised cost. The Group enables selected suppliers to
participate in a variety of supplier finance arrangements which include
forfaiting and other supplier finance arrangements. Supplier finance
arrangements give suppliers the option to receive early payment by selling
their receivables to a financial institution at a discount. The Group settles
the invoice by paying the financial institution in line with the payment terms
according to the supplier finance arrangements. These settlements are
presented in the operating category within the Consolidated Statement of Cash
Flows. Liabilities subject to supplier chain finance arrangements continue to
be classified as trade payables since they represent liabilities to pay for
goods or services, are invoiced or formally agreed with the supplier and are
part of the working capital used in the Group's normal operating cycle.
Derivative financial instruments and hedging activities
Derivative financial instruments not designated as hedges
Derivative contracts are used in the management of interest rate risk,
commodity price risk and foreign currency risk. These derivative financial
instruments, which are not designated in an effective hedging relationship,
are recognised initially at fair value on the date on which a derivative
contract is entered into and subsequently remeasured at fair value with
changes in fair value reflected in the Consolidated Statement of Profit or
Loss. Derivatives are carried as assets when the fair value is positive and as
liabilities when the fair value is negative.
Derivative financial instruments include forward exchange contracts and
embedded derivatives in open orders denominated in a currency other than the
functional currency of either contracting party, with the assessment made on a
case-by-case basis at the respective forward rate on the reporting date. These
forward rates are based on spot rates, including forward premiums and
discounts. Unrealised valuation gains or losses and results from the
realisation are recognised in the Consolidated Statement of Profit or Loss in
net expense on foreign currency effects.
Forward purchase or sale arrangements for the physical delivery of
non-financial assets that are entered into in line with the Group's expected
purchase, sale or usage requirements ('own use') and are normally entered into
to hedge the associated price risk are not recognised or measured at fair
value. These forward contracts are assessed to be off-balance-sheet executory
contracts due to their own use features. If the own use exemption is not met,
the forward contracts will be recognised at fair value, with fair value
remeasurement recorded in the Consolidated Statement of Profit or Loss.
Significant Judgement: Own use exemption on gas and power forward purchase and physical delivery CO(2)-certificate forward contracts
Due to the reduction of free CO(2) emission certificates and the expected
increase in CO(2) market prices, the Group hedges the associated price risk by
use of physical delivery forward purchases for own use. The Group also enters
into fixed price and quantity forward gas and power contracts to secure supply
for its production process and reduce price volatility. The own use exemption
does not require fair value recognition and measurement of the forward
purchases and thus volatility in the Consolidated Statement of Profit or Loss
can be avoided. The own use exemption requires contracts to be entered into
and continued to be held for delivery and usage requirements of the Group. The
Group settles most of these forward contracts through physical delivery and
does not expect to sell any (unexpected) surplus quantities of either gas,
power or CO(2) emission certificates. Management have judged that these
forward purchases based on current and expected future requirements satisfy
the own use exemption and have not applied fair value recognition and
measurement. However, if surplus quantities of either gas, electricity or
CO(2) emission certificates are expected to be sold, the corresponding forward
contracts are accounted for as derivative financial instruments whose changes
in fair value are recognised in the Consolidated Statement of Profit and Loss.
Derivative financial instruments designated as cash flow hedges
For derivative financial instruments which are designated as an effective cash
flow hedge, hedge accounting is applied. The hedging instruments, used to
hedge the underlying items, are measured at fair value with the effective part
of the fair value changes recorded in OCI as an unrealised gain or loss. At
the time of the realisation of the underlying transaction, the fair value
changes of the hedging instrument recognised in OCI is recycled to the
Consolidated Statement of Profit or Loss. Ineffective parts of the cash flow
hedges are recognised immediately in the Consolidated Statement of Profit or
Loss. Where the hedged item is a non-financial asset or liability, the amount
accumulated in OCI is transferred to the initial carrying amount of the asset
or liability. If the hedged transaction is no longer expected to take place,
the accumulated amount recorded in OCI is reclassified to the Consolidated
Statement of Profit or Loss. All relationships between hedging instruments and
hedged items are documented, as well as risk management objectives and
strategies for undertaking hedge transactions. The effectiveness of hedges is
also continually assessed, and hedge accounting is discontinued when
there is a change in the risk management strategy.
Impairment of financial assets
Impairment of certain financial assets is based on expected credit losses
(ECL). ECL is defined as the difference between all contractual cash flows the
entity is entitled under the contract and the cash flows expected to be
received. The measurement of expected credit losses is generally a function of
the probability of default, loss given default and the exposure at default.
Loss allowance is measured for expected credit losses on debt instruments,
trade receivables and contract assets measured at amortised cost. The amount
of ECL is updated at each reporting date to reflect changes in credit risk
since initial recognition of the respective financial instrument.
The Group recognises lifetime ECL for trade receivables and contract assets by
applying the simplified approach. The ECL on these financial assets are
generally estimated using a provision matrix based on the Group's historical
credit loss experience for customer groups located in different geographic
regions. Forward-looking information is incorporated in the determination of
the applicable loss rates for trade receivables. For the Group, the general
economic development of the countries in which it sells its goods and services
is relevant in determining if the adjustment of the historical loss rates is
necessary.
For all other financial instruments, the Group recognises lifetime ECL when
there has been a significant increase in credit risk since initial
recognition. However, if the credit risk on the financial instrument has not
increased significantly since initial recognition, the Group measures the loss
allowance for that financial instrument at an amount equal to 12-month ECL.
Lifetime ECL represents the expected credit losses that will result from all
possible default events over the expected life of a financial instrument. In
contrast, 12-month ECL represents the portion of lifetime ECL that is expected
to result from default events on a financial instrument that are possible
within 12 months after the reporting date.
The Group makes use of the practical expedient for financial instruments with
an 'investment grade' rating which are assumed to be of low credit risk and
have no significant increase in the credit risk. Under the practical
expedient, the expected credit loss is calculated using the 12-month ECL.
Among other factors, the Group considers a significant increase in credit risk
to have taken place when contractual payments are more than 30 days past due.
The Group assumes that a default event has occurred when trade receivables are
180 days past due unless reasonable and supportable information confirms
otherwise. For those financial instruments where objective evidence of default
is present, an individual assessment of ECL takes place.
Generally, financial instruments are written off when there is no reasonable
expectation of recovering amounts due.
Inventories including purchased emission rights
Inventories are stated at the lower of cost or net realisable value as of the
reporting date. The determination of acquisition cost of purchased materials
is based on the average cost. Finished goods and work in progress are valued
at fixed and variable production cost. The net realisable value is the
estimated selling price in the ordinary course of business minus any estimated
cost to complete and to sell the goods. Impairments due to reduced
recoverability are reflected in the calculation of the net realisable value.
In 2024, some of the inputs and assumptions used in the net realisable value
calculation in relation to reduced recoverability were revised resulting in
lower impairments on inventories. This constitutes a change in an accounting
estimate that led to a reduction in the cost of sales of €11 million and a
corresponding increase in inventories in 2024 compared to the previous
calculation. The impact of this change on future periods cannot be estimated
reliably.
Purchased emission allowances are presented as inventory and are initially
recognised at cost und subsequently measured at the lower of cost and net
realisable value. The consumption of the purchased emission allowances based
on the tons of CO(2) emitted is recorded as expense in the cost of sales.
Those allowances that the Group received free of charge under the respective
EU trading schemes are not recognised in the Consolidated Financial
Statements.
To the extent that the CO(2) emissions emitted exceed the emission cap under
the free of charge and purchased emission allowances, the Group recognises a
provision calculated based on the deficit of emission allowances and measured
at the market price of emission allowances prevailing at the reporting date.
Provisions
Provisions are recognised when the Group incurs a legal or constructive
obligation as a result of past events, it is probable that an outflow of
resources will be required to meet this obligation, and the amount of the
obligation can be reliably estimated.
Provisions for warranties are created for individual contracts at the time of
the sale of goods or after the service has been provided. The amounts of the
provisions are based on the expected or actual warranty claims.
Provisions for restructuring are recognised once a detailed formal
restructuring plan has been developed and announced prior to the reporting
date or whose implementation was commenced prior to the reporting date.
The Group recognises provisions for demolition and disposal costs and
environmental damages. The Group's facilities and its refractory, exploration
and mining operations are subject to environmental and governmental laws and
regulations in each of the jurisdictions in which it operates. These laws
govern, among other things, reclamation or restoration of the environment in
mined areas and the clean-up of contaminated properties. These provisions
include the estimated demolition and disposal costs of plants and buildings as
well as environmental restoration costs arising from mining activities, based
on the present value of estimated cash flows of the expected costs. The
estimated future costs of asset retirements are reviewed annually and
adjusted, if appropriate.
A provision for an onerous or unfavourable contract is recognised when the
expected benefits to be derived from a contract are lower than the unavoidable
cost of meeting its obligations under the contract. Provisions are measured at
the present value of the unavoidable costs of meeting the obligation under the
contract which exceed the economic benefits expected to arise from that
contract.
Provisions for labour and civil contingencies are recognised for all risks
relating to legal proceedings that represent a probable loss. Assessment of
the likelihood of loss includes an analysis of available evidence, including
the opinion of internal and external legal advisors of the Group.
Provisions are measured at their discounted settlement value as of the
reporting date if the discounting effect is material.
If maturities cannot be estimated, they are shown within current provisions.
Significant estimate: Measurement of other provisions
The recognition and measurement of other provisions disclosed in Note (30) are
based on best estimates using the information available at the reporting date.
The estimates take into account the underlying legal or constructive
obligation and are performed by internal experts or, when appropriate, also by
external experts. Despite the best possible assumptions and estimates, cash
outflows expected at the reporting date may deviate from actual cash outflows.
As soon as additional information is available, the estimates made are
reviewed and provisions are also adjusted. The majority of other provisions
refers to an unfavourable contract which was recognised in the course of
acquiring the former Magnesita Group and is mainly based on an estimate of
foregone profit margins compared to market conditions. Moreover, restructuring
provisions and provisions related to the rehabilitation and restoration of the
mining sites or for environmental damages are recorded within other
provisions. These are subject to measurement uncertainties in terms of the
estimated costs to settle the obligation, estimated term until rehabilitation
and restoration, discount rate and inflation rate. Changes in these parameters
may result in higher or lower provisions.
Net employee defined benefit liabilities
Provisions for post-employment benefits
Pension plans
With respect to post-employment benefits relating to pensions, a
differentiation is made between defined contribution and defined benefit
plans.
Defined contribution plans limit the Group's obligation to the agreed
contributions to earmarked pension schemes. The contributions are expensed as
incurred.
Defined benefit plans require the Group to provide agreed benefits to active
and former employees and their dependents.
Pension obligations are measured using the projected unit credit method and is
netted against the fair value of the plan assets, if any. If the plan assets
are not sufficient to cover the obligation, the net obligation is recognised
as a liability. However, if the plan assets exceed the obligations, the net
surplus recognised is limited to reductions of future contribution payments to
the plan and is presented as other non-current assets in the Consolidated
Statement of Financial Position. The Group restricts recognition of the net
surplus by applying an asset recognition ceiling where the Group does not have
an unconditional right to a refund, assuming full settlement of the
liabilities. Changes in the asset ceiling are recorded in OCI.
The present value of defined benefit obligations is determined separately for
each plan, annually, by independent qualified actuaries. The present value of
future benefits is based on the length of service, expected wage/salary
developments and pension adjustments.
The expense to be recognised in a period includes current and past service
costs, settlement gains and losses, interest expenses from the interest
accrued on obligations, interest income from plan assets and administration
costs paid from plan assets. The net interest expense is shown separately in
net finance costs. All other expenses related to defined benefit plans are
allocated to the costs of the relevant functional areas.
Actuarial assumptions required to calculate these obligations include the
discount rate, increases in wages/salaries and pensions, retirement starting
age and probability of employee turnover and actual claims. The calculation is
based on local demographic parameters.
Interest rates, which are based on high-quality corporate bonds issued with
comparable maturities and currencies, are applied to determine the present
value of pension obligations. In countries where there is not a sufficiently
liquid market for high-quality corporate bonds, the returns on government
bonds are used as a basis.
The rates of increase for wages/salaries are based on an average of past
years, which is also considered to be realistic for the future, while the
retirement age is based on the respective statutory provisions of the country
concerned.
Remeasurement gains and losses are recorded net of deferred taxes under OCI in
the period incurred.
Other post-employment benefits
Other post-employment benefits include provisions for termination benefits
primarily related to obligations to employees whose employment is subject to
Austrian law.
Employees who joined an Austrian company before 31 December 2002 receive a
one-off lump-sum termination benefit as defined by the Austrian labour
legislation if the employer terminates the employment or when the employee
retires. It is regarded as a post-employment benefit and classified as a
defined benefit plan. The termination payment depends on the relevant salary
at the time of the termination as well as the number of years of service and
ranges between two and 12 monthly salaries. These defined benefit obligations
are measured using the projected unit credit method applying an accumulation
period of 25 years. Remeasurement gains and losses are recorded directly in
OCI after considering tax effects.
For employees who joined an Austrian company after 31 December 2002,
employers are required to make regular contributions equal to 1.53% of the
monthly wage/salary to a statutory termination benefit scheme. The Company has
no further obligations. Claims by employees to termination benefits are filed
with the statutory termination benefit scheme, while the continuous
contributions are treated as defined contribution plans and included in the
personnel expenses of the functional areas.
Significant estimate: Pension plans and other post-employment benefits
classified as defined benefit plans
The measurement of defined benefit obligation and plan assets requires use of
estimates such as discount rates, mortality rates, salary increases and
inflation. These estimates are reviewed and updated when a valuation is
performed by third-party experts. Further details of the estimates and
assumptions together with sensitivities on changes to assumptions is reflected
in Note (29). Changes in these assumptions may result in differences between
cash outflows expected at the reporting date and actual cash outflows.
Other employee benefits
This includes service anniversary bonuses, payments to semi-retirees and
lump-sum settlements.
Service anniversary bonuses are one-time special payments that are dependent
on the employee's wage/salary and length of service. The employer is required
by collective bargaining agreements or company agreements to make these
payments after an employee has reached a certain number of years of
uninterrupted service with the same company. Obligations are mainly related to
service anniversary bonuses in Austrian and German group companies. Provisions
for service anniversary bonuses are calculated based on the projected unit
credit method. Remeasurement gains or losses are recorded in the personnel
costs of the functional areas.
Local labour laws and other similar regulations require individual group
companies to create provisions for semi-retirement obligations. The
obligations are partially covered by qualified plan assets and are reported on
a net basis in the Consolidated Statement of Financial Position.
Contingent liabilities
A contingent liability is disclosed, where material, if the existence of the
obligation will only be confirmed by future events or where the amount of the
obligation cannot be measured with reasonable reliability. A contingent
liability is not disclosed if the likelihood of a material cash outflow is
considered remote. The Group's contingent liabilities are reviewed on a
regular basis.
Income taxes
Income tax expense represents the sum of current tax and deferred tax.
Income tax is recognised in the Consolidated Statement of Profit or Loss,
except to the extent that it relates to items recognised in OCI or directly in
equity, including tax-related impacts.
Current tax is based on the taxable profit for the period and is determined in
accordance with the rules applicable in the relevant jurisdictions and
includes taxes relating to prior periods. The liability for current tax is
calculated using tax rates and laws that have been enacted or substantively
enacted at the reporting date.
Deferred tax is provided, using the liability method, on temporary differences
at the reporting date between the tax bases of assets and liabilities and
their carrying amounts for financial reporting purposes. Deferred tax
liabilities are recognised for all taxable temporary differences except:
· Where the deferred tax liability arises on initial recognition of
goodwill
· Where the deferred tax liability arises on the initial recognition of
an asset or liability in a transaction that is not a business combination, at
the time of the transaction, affects neither accounting profit nor taxable
profit or loss and, at the time of the transaction, does not give rise to
equal taxable and deductible temporary differences
· In respect of taxable temporary differences associated with investments
in subsidiaries and associates and interest in joint arrangements, where the
Group is able to control the timing of the reversal of the temporary
differences and it is probable that the temporary differences will not reverse
in the foreseeable future
· For financial instruments which were issued by subsidiaries to
non-controlling interests, and which are classified as a financial liability
in accordance with IFRS Accounting Standards
Deferred tax assets are recognised for deductible temporary differences,
carry-forward of unused tax credits and unused tax losses, to the extent that
it is probable that taxable profit will be available against which these can
be utilised, except where the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction that is not a
business combination and at the time of the transaction, affects neither
accounting profit nor taxable profit and loss and, at the time of the
transaction, does not give rise to equal taxable and deductible temporary
differences.
In respect of deductible temporary differences associated with investments in
subsidiaries, associates and interest in joint arrangements, deferred tax
assets are recognised only to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable
profit will be available against which the temporary differences can be
utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date
and reduced to the extent that it is no longer probable or increased to the
extent that it is probable that sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply in the period when the asset is realised or the liability is
settled, based on tax rates and tax laws that have been enacted or
substantively enacted at the reporting date. Deferred taxes of the Group's
Austrian subsidiaries are determined at the corporation tax rate which is
expected to be applicable when the temporary differences reverse (23.0% if the
temporary difference reverses in 2025 or later). Deferred tax assets and
liabilities of the Group's Brazilian subsidiaries are measured at 34.0%.
Deferred tax assets and liabilities are offset only when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when the deferred tax assets and liabilities relate to income
taxes levied by the same taxation authority on either the same taxable entity
or different taxable entities where there is an intention to settle the
current tax assets and liabilities on a net basis or to realise the assets and
settle the liabilities simultaneously.
Where tax legislation may not be clear or result in uncertainty, the Group
will determine its tax obligations and resulting income tax expense using an
approach which it believes has a probable chance of being accepted by the tax
authorities based on historical experience, legal advice and communication
with the tax authorities, as appropriate. Where the Group adopts an approach
to an uncertain tax position that it regards as having a less than probable
chance of being accepted by the tax authorities, the income tax expense and
resulting income and deferred tax balances are adjusted to reflect this
uncertainty using either the most likely outcome method or the expected value
method.
The global minimum top-up tax payable under the Pillar Two legislation is
recognised as a current income tax expense when it is incurred. In accordance
with the temporary exception, the Group does not recognise deferred taxes in
respect of the top-up tax under the Pillar Two legislation.
Significant judgement: Uncertain tax treatments and recognition of deferred tax assets
Management makes judgements in relation to the recognition of current and
deferred income taxes. In making judgements, management believes that the tax
positions the Group adopts are in line with the applicable legislation and
reflect the probable outcome. The tax obligations and receivables, upon audit
by the tax authorities at a future date, may differ as a result of differing
interpretations. These interpretations may impact the expected timing and
quantum of taxes payable and recoverable.
Significant estimates: Recognition of deferred tax assets
Income tax expense is based on the tax laws applicable in the individual
countries. Due to their complexity, the tax items presented may be subject to
different interpretations by local tax authorities. When determining the
amount of the deferred tax assets to be recognised, mainly relating to tax
losses, an estimate is required of future taxable income which is influenced
by factors such as prices, gross profit margins and interest rates. A 10%
change in the future taxable profit from the assumption made on the reporting
date within the planning period defined for the accounting and measurement of
deferred taxes would not result in a significant change in the carrying amount
of deferred tax assets on recognised tax losses, over a 12-month period from
the date of these Consolidated Financial Statements. Refer to Note (14) for
details on recognised deferred tax assets.
Revenue, income and expenses
Revenue from contracts with customers
Revenue from the sale of goods and services is recognised at an amount that
reflects the consideration to which the Group expects to be entitled in
exchange for those goods or services. Revenue is recognised to the extent that
it is highly probable that there will not be a significant reversal of revenue
in future periods. If the consideration in a contract includes a variable
amount, the Group estimates the amount of consideration to which it will be
entitled at inception and limits the recognition of revenue subject to the
variability, until it is highly probable that a significant reversal of
cumulative revenue recognised will not occur. The Group does not recognise the
impact of financing for payment terms as the average credit terms is currently
60 days. At contract inception, the Group identifies the goods or services
promised in the contract and assesses which of the promised goods or services
shall be identified as separate performance obligation. Promised goods or
services give rise to separate performance obligations if they are capable of
being distinct. Revenue is recognised as control is transferred, either over
time or at a point of time. Control is defined as the ability to direct the
use of and obtain substantially all of the economic benefits from an asset.
Unless refractory products are delivered under specific customer contracts,
whose transaction price depends on the customer's production output, revenue
from the delivery of refractory products is recognised at a point in time,
i.e. at the time of transfer of control. Control of the refractory products is
typically passed to the customer when physical possession has been
transferred. Consistent with this principle, in previous reporting periods,
control of refractory products subject to a CFR ('Cost and Freight') or CIF
('Cost, Insurance and Freight') shipping agreement was determined to transfer
upon arrival of the cargo at the port of destination. A thorough analysis
conducted by management in 2024 due to the Red Sea crisis led to a
reassessment of the timing of transfer of control for shipments delivered by
sea freight with third party carriers. Accordingly, from 2024, control is
determined to transfer as soon as the third-party carrier has issued the
shipping document, if any, that allows the customer to redirect or otherwise
control the shipped refractory products. As a result of this revised
accounting policy, which is applied prospectively due to the immaterial impact
on the comparative figures, the Group's revenue and gross profit increased by
€42 million and €10 million respectively in 2024.
The transport service does not give rise to a separate performance obligation
to which a part of revenue would have to be allocated, as this service is
usually performed before control of the products is transferred to the
customer.
In consignment arrangements, the Group retains control of the goods generally
until a withdrawal of the products from the consignment occurs. Most of the
products within consignment arrangements have a high stock turnover rate.
The Group provides services (e.g. supervision, installation) that are either
sold separately or bundled together with the sale of products to a customer.
Contracts for bundled sales of products and installation services usually
comprise of two performance obligations being (i) the promise to transfer
products and (ii) provide services which are capable of being distinct and
separately identifiable in the context of the contract. Accordingly, the
transaction price is allocated based on the relative stand-alone selling
prices of the product and service. Revenue from services is recognised over
time using an input method to measure progress towards completion of the
service as the customer simultaneously receives and consumes the benefits
provided by the Group.
Contracts for bundled sales of refractory products and non-refractory products
(e.g. machines) provided to the customer free of charge comprise two
performance obligations that are separately identifiable. Consequently, the
Group allocates the transaction price based on the relative stand-alone
selling prices of these performance obligations and allocates revenue to the
non-refractory product which is delivered free of charge.
Expected penalty fees from guaranteed durabilities on refractory products are
considered as a variable consideration in the form of a contract or a refund
liability. However, the estimation of the variable consideration is not
subject to a constraint as the Group has significant experience with promising
durabilities and as a consequence does not expect significant reversal of
revenue recognised in prior periods. All other product warranties issued by
the Group guarantee that the transferred products correspond to the
contractually agreed specifications and are classified as assurance type
warranties. Consequently, no separate distinct performance obligation to the
customer exists.
If transfer of goods or services to a customer is performed before the
customer pays consideration or before payment is due and is conditional on
something other than the passage of time, a contract asset, excluding any
amounts presented as a receivable, is recognised.
If a customer pays consideration before the entity transfers a good or service
to the customer, the entity shall present the contract as a contract liability
when the payment is made.
Contract costs, which are defined as the incremental costs of obtaining a
contract, are recognised as an asset where the Group expects to recover those
costs, except for those costs which are expected to be recovered within 12
months.
As the term of customer contracts is less than one year, the Group adopted the
practical expedient not to disclose performance obligations for contracts with
original expected duration of less than one year.
Significant Judgement: Revenue recognition
For specific customer contracts in the reportable segment Steel with variable
payment arrangements where the transaction price depends on the customer's
production output, (e.g. quantity of steel produced) management has determined
that the commitment to transfer each of the products and services to the
customer is not separately identifiable from the other commitments in the
context of such contracts. The customer expects complete refractory management
for the agreed product areas in the steel plant in order to enable steel
production. Thus, only one performance obligation, being the performance of a
management refractory service, exists. Revenue from the delivery of management
refractory services is recognised over time and, by applying the practical
expedient, corresponds to the amounts that the Group is entitled to invoice to
the customer on a regular basis according to the contract terms.
Cost of sales
Cost of sales comprises the production cost of goods sold as well as the
purchase price of merchandise sold. In addition to direct material and
production costs, it also includes overheads including depreciation charges on
production equipment, amortisation charges of intangible assets as well as
impairment losses and reversals of impairment losses of inventories. Moreover,
cost of sales also includes the costs of services provided by the Group or
services received.
Selling and marketing expenses
This item includes personnel expenses for the sales staff as well as
depreciation charges and other operating expenses related to the market and
sales processes.
General and administrative expenses
General and administrative expenses primarily consist of personnel expenses
for the administrative functions, legal and other consulting costs, expenses
for research and non-capitalisable development costs.
Interest income and expenses
Interest income and expenses are recognised in accordance with the effective
interest method.
Foreign currency translation and hyperinflation accounting
Functional currency and presentation currency
The Consolidated Financial Statements are presented in Euro, which represents
the functional and presentation currency of RHI Magnesita N.V.
Consolidated subsidiary financial information is based on the currency of the
primary economic environment in which it operates (functional currency).
Hyperinflation accounting
Financial Statements of subsidiaries which operate in a country whose
functional currency is considered hyperinflationary are restated for the
changes in the general purchasing power before translation to the reporting
currency of the Group and before consolidation in order to reflect the same
value of money for all items. Currently only the Financial Statements of the
subsidiary operating in Argentina, Refractarios Argentinos S.A, Industrial
Comercial Y Minera (I.C.M.), are restated for hyperinflation effects.
The closing balances of the non-monetary items as well as all items of the
Statement of Profit or Loss are restated for the changes in the general
purchasing power of its functional currency in 2024 as follows. All
non-monetary items recognised in the Statement of Financial Position which are
not measured at the measuring unit applicable on the reporting date are
restated for the changes in the general price index from the later of the
transaction date or the first-time application date to the reporting date.
Non-monetary items include property, plant and equipment, intangible assets,
inventories, and allocated goodwill. Monetary items are not restated. All
items of the Statement of Profit or Loss are restated for the changes in the
general price index from the date of initial recognition to the reporting
date. Gains or losses resulting from the net monetary position are reported in
the Consolidated Statement of Profit or Loss in net expense on foreign
currency effects. The Financial Statements of Refractarios Argentinos S.A,
Industrial Comercial Y Minera (I.C.M.) are therefore reported at the
applicable measuring unit on the reporting date.
The price index, IPIM (Internal Index Wholesale Prices), published by the
Argentinian National Institute of Statistics and Censuses is applied to
determine the changes in the general purchasing power. The following table
provides the level and changes of the price index for the current and the
previous reporting period:
31.12.2024 31.12.2023
Price level 7,694.01 3,533.19
Index movement (in %) 118 211
Foreign currency transactions and balances
In individual subsidiaries, joint ventures and associates, transactions in
foreign currency are translated into the functional currency at the rate of
exchange prevailing on the dates of the transaction. Gains and losses
resulting from the settlement of such transactions and the translation of
monetary assets and liabilities denominated in foreign currencies into the
respective functional currency at the closing rate are recognised in the
Consolidated Statement of Profit or Loss as net expense on foreign currency
effects. In deviation from this, the Group designates certain intragroup
monetary assets and liabilities denominated in foreign currencies such as
non-current receivables or loans as part of a net investment in a foreign
operation if the corresponding balances are not expected to be settled. In
accordance with IFRS Accounting Standards, gains or losses from the
translation of these intragroup monetary assets and liabilities into the
respective functional currency are recognised in OCI. Non-monetary items,
other than those measured at fair value, are carried at historical rates and
not retranslated subsequent to initial recognition.
Group companies
Financial information of foreign subsidiaries with a functional currency
different to the Euro are translated as follows:
Assets and liabilities of foreign subsidiaries outside the scope of
hyperinflation accounting are translated at the closing rate on the reporting
date, while monthly income and expenses as presented in the Statement of
Profit or Loss are translated at the respective closing rates of the previous
month. Differences resulting from this translation process and differences
resulting from the translation of amounts carried forward from the prior year
are recorded in OCI without impact on profit or loss. Monthly cash flows are
translated at the respective closing rates of the previous month. Goodwill and
adjustments to the fair value of assets and liabilities related to the
purchase price allocations of a subsidiary outside the European currency area
are treated as assets and liabilities of the respective subsidiary and
translated at the closing rate.
Following the restatements in accordance with hyperinflation accounting, the
assets and liabilities of foreign subsidiaries in the scope of hyperinflation
accounting, as well as their income and expenses, are translated at the
respective closing rate on the reporting date.
On disposal of a non-Euro functional currency subsidiary, joint venture or
associate, the related accumulated foreign currency gains and losses
recognised in equity are reclassified to the Consolidated Statement of Profit
or Loss. In addition, when monetary items cease to form part of a net
investment in a foreign operation or when in case of a net investment hedge
the foreign operation is disposed, the currency translation differences
previously recognised in OCI are reclassified to the Consolidated Statement of
Profit or Loss.
The Euro exchange rates of the currencies of the Group's significant
operations are shown in the following table:
Closing rate Average rate(1))
Currencies 1 € = 31.12.2024 31.12.2023 2024 2023
Brazilian Real BRL 6.46 5.37 5.79 5.42
Canadian Dollar CAD 1.50 1.46 1.48 1.46
Chinese Renminbi Yuan CNY 7.61 7.87 7.79 7.65
Indian Rupee INR 89.11 92.58 90.68 89.20
US Dollar USD 1.04 1.11 1.09 1.08
1) Arithmetic mean of the monthly closing rates.
4. Climate change and energy transition
In 2019 the Group announced its commitment to reduce Scope 1, 2 and 3 (raw
materials) CO(2) emissions intensity by 15% by 2025, compared to a 2018
baseline. The Group has adopted a theoretical decarbonisation pathway that is
not aligned with a 1.5-degree scenario as set out in the Paris agreement. The
below describes how the Group has considered climate related impacts in key
areas of the Consolidated Financial Statements and how this translates into
the valuation of its assets and measurement of liabilities.
Note (3) includes the significant accounting estimates, judgements and key
sources of estimation uncertainties and how those uncertainties have the
potential to have a material effect on the Consolidated Statement of Financial
Position in the next 12 months. This note describes the key areas of climate
impacts that may have longer-term effects on amounts recognised at 31 December
2024.
Financial planning assumptions
As disclosed in the Sustainability Statement, climate-related risks faced by
the Group include physical and transitional risks. The most material
transitional risk impact is expected to be higher operating costs due to an
increase in the level or scope of carbon pricing. This risk is most prominent
in Europe where the existing system of allowances is to be replaced by the
Carbon Border Adjustment Mechanism ('CBAM'), with all free CO(2) emission
allowances currently expected to be progressively phased out by 2034.
The Group is currently already subject to the first phase ('Transitional
Period') of the CBAM. Currently, the Group fully complies with the CBAM
regulation on imported consumables made from steel. Management is pursuing a
number of strategies to accommodate the additional impact of CBAM to its EU
assets, such as considering carbon pricing in our financial planning, actively
managing a hedging program to fix future prices related to the forward
purchase of emission rights, increasing the use of secondary raw materials,
investing in fuel switching, renewable energy and focusing on energy
efficiency.
The Group has also identified climate-related opportunities, such as increased
demand for its products arising from the transition by its customers to
lower-carbon emitting industrial processes and increased demand for refractory
products that are produced with a lower-carbon footprint.
The Consolidated Financial Statements are based on reasonable and supportable
assumptions that represent management's current best estimate of the range of
economic conditions that may exist in the foreseeable future. The Group has
decided to use Paris-aligned Mitigation and Hot House World Limited mitigation
scenarios to assess the potential impact of climate change on its Consolidated
Financial Statements. The largest impact from higher carbon prices as
contained in these scenarios is from 2026 onwards. The negative impacts are
concentrated within the Group's assets located in Europe whilst opportunities
are expected to be global in nature.
The Group is investing in the research and development of new technologies for
the manufacturing of refractories which may enable it over the long term to
avoid or capture its CO(2) emissions and thereby mitigate the impact of higher
carbon prices.
Impairment of CGUs and goodwill
The nominal growth rate used in the value in use determination is equal to the
long-term rate of growth in steel/cement and/or inflation (depending on the
country and business involved) and in any case no higher than the average
long-term growth rate of the reference market. The Group has also taken
account of the long-term impact of climate change, in particular by
considering in the estimation of the terminal value a long-term growth rate in
line with the change in steel/cement demand in 2030-2050 based on the specific
characteristics of the businesses involved.
The expected CO(2) emission costs are considered in the 2025 budget and in the
Long-Term Plan, insofar as CO(2) emissions are taxed in the respective
jurisdictions, and at fixed prices, insofar as fixed price forward contracts
to purchase emission rights have been contracted. In the terminal value, these
CO(2) emission costs are recognised at the same level as assumed in the last
year of the Long-Term Plan. Due to planning uncertainty inherent in the
Group's climate transition phase which includes the extent to which CBAM will
be relevant to the Group's operations, no additional carbon emission costs
have been included in the terminal value; that is to say, the phasing out of
the free CO(2) emission allowances is not included.
In absence of any mitigating action by management, the gross profit could
reduce by 31% from 2030, on average across the EU assets, of which 24% would
be offset in regions outside the EU in a scenario where the impact of a
production shift from Europe to regions outside Europe due to additional
carbon tax is analysed in isolation. This scenario would not cause impairment
losses for the respective CGUs in their current state due to sufficient
headroom.
The Sustainability Statement outlines the theoretical path to complete
decarbonisation of the Group's business activities. To achieve this, the Group
would need to make significant investments in property, plant and equipment
that go far beyond the investments already considered in relation to the
committed reduction in Scope 1, 2 and 3 emissions by 2025. At present, neither
the investments needed to achieve complete decarbonisation, nor their
potential positive effects have been included in the value in use
determination since the Group has not committed to complete decarbonisation
and alternatives to complete decarbonisation exist.
Useful lives of property, plant and equipment
Additionally, management has assessed the useful lives of property, plant and
equipment and these continue to be appropriate due to the limited refractory
and other product alternatives available and considering that the customer
industries that the Group serves, continue to play a significant part in the
transition towards sustainable output and the transition to a green economy.
Restoration provisions
Management recognises liabilities that are expected to be incurred in relation
to rehabilitation and restoration of the mining sites. As of the reporting
date, the Group's mines have an expected life between eight and 100 years. The
introduction of more stringent legislation could result in our mining
operations becoming uneconomical earlier than anticipated, thus affecting the
timing of our restoration liabilities. The discount rate used to measure asset
restoration provisions is between 8-37 years term, in line with available
government bond rates.
Management does not expect any reasonably possible change in the expected
timing of restoration of our mines to have a material effect on the Group
total provisions, assuming cash flows remain unchanged.
Deferred tax assets
In jurisdictions where new or additional climate change related legislation is
enacted, our taxable profits could be affected thereby impacting the
recoverability of deferred tax assets. It is expected that sufficient deferred
tax liabilities and forecasted taxable profits are available for recovery of
the deferred tax assets recognised at 31 December 2024. The assessment of
deferred taxes is described in Note (14). For certain deferred tax assets
recognised in Brazil, the period extends beyond five years. Currently, no
legislation is in place in Brazil that could limit the timing and /, or the
extent of the recognised deferred tax assets.
ESG-linked loans
The Group has taken out loans from financial institutions based on terms which
are linked to the Group's EcoVadis ESG rating performance. On the reporting
date the carrying amount of such ESG-linked financial liabilities amounts to
€1,383 million (31.12.2023: €1,512 million). The financing costs may
increase or decrease depending on future changes in the Group's ESG rating.
The ESG rating is determined by multiple criteria covering not only the
climate-related aspects but also sustainability and governance related
aspects. A downgrading of the Group's ESG rating below a certain target ESG
rating would lead to higher financing costs. Such a downgrade is currently not
foreseeable due to sufficient headroom.
5. Segment reporting
The Group's business activities are organised according to the customer
industries it serves and by region based on the Group's sales markets.
Customer industries are defined as Steel, Cement & Lime, Non-Ferrous
Metals, and Process Industries which comprises several customer industries
addressing industrial applications. The regions comprise EU & CIS and
Türkiye, North America, South America, China & East Asia and India, West
Asia & Africa. The management structure including the internal reporting
to the Executive Management Team follows this two-dimensional organisation and
provides for distinct responsibilities for the customer industry related
functions and regional functions.
The customer industry forms the basis for determining the Group's operating
and reportable segments. Each customer industry is assigned to one reportable
segment. In addition, the business activities subsumed into the organisational
unit Minerals are designated as a further reportable segment. The Group
therefore has five reportable segments.
The Steel reportable segment aggregates two operating segments, namely Steel
Linings and Steel Flow Control, which are named after the two most important
product lines. In determining that aggregation is appropriate, judgement is
applied which considers the economic characteristics of these operating
segments which include a similar nature of products, customers, production
processes and long-term average gross margins. The Steel reportable segment
provides refractory products with a lifetime ranging from hours to several
months, services and technologies that are essential for steel production and
the steel-processing industry. The Steel Linings product line comprises
refractory bricks in various shapes and chemical compositions, as well as
mixes and castables lining the customers' furnaces, ladles, and converters.
The Steel Flow Control refractory products are used primarily in the final
stages of the steel production process and include specialised refractory
products and systems including slide gate systems, plates and submerged entry
nozzles. In addition to refractory products, the Steel reportable segment
delivers services such as refractory engineering solutions (drawings or design
of a Linings concept), installation, supervision, maintenance and recycling.
Beyond traditional refractory solutions, a growing portfolio of advanced
technologies is offered to customers, including systems, sensors, machinery
and digital products.
The Cement & Lime reportable operating segment provides refractory
products with a lifetime of one year, services and technologies that are
essential to produce cement and lime.
The Non-Ferrous Metals reportable operating segment provides refractory
products with a lifetime ranging from one year to ten years, services and
technologies that are essential to produce base metals and ferroalloys for the
production from primary (ores, concentrates) or secondary (recycling) raw
materials.
The Process Industries reportable segment, with its two operating segments
Glass and Industrial Applications, provides refractory products with a
lifetime ranging from one to twenty years, services and technologies for
customers operating in the Glass, Environment, Energy, Chemicals, Foundry and
Aluminium Industries.
The refractory products offered to customers in the Cement & Lime,
Non-Ferrous Metals and Process Industries reportable segments include
refractory bricks in various shapes and chemical compositions, as well as
mixes, mortars and castables and other specialised refractory products lining
customer industry specific furnace types and aggregates. In addition to
refractory products, services such as refractory engineering solutions
(drawings or design of a Linings concept), installation, supervision,
maintenance and recycling are delivered. Beyond traditional refractory
solutions, a growing portfolio of advanced technologies is offered to
customers, including systems, sensors, machinery and digital products.
In addition, the Group engages in the sale of internally produced raw
materials such as magnesite ore, dead-burned magnesia and fused magnesia
within the Group and to external customers to the extent that these are not
utilised internally. These business activities are subsumed into the
organisational unit Minerals, which is designated as a reportable segment.
The Chief Executive Officer has the responsibility over allocation of
resources and evaluates the performance of each operating segment and is
therefore the Chief Operating Decision Maker ("CODM") at Group level. Revenue
and Gross Profit are the key internal performance measures provided to and
used by the CODM to evaluate performance on operating segment level and
allocate resources. These are prepared using the same accounting policies as
the Consolidated Financial Statements and reported after elimination of any
inter-segment transactions.
Each reporting period the appropriateness and decision usefulness of the
Group's segment reporting structure is reassessed. This reassessment has
resulted in a change of the Group's segment reporting structure which aims to
provide a more detailed insight into the financial performance of the Cement
& Lime, Non-Ferrous Metals and Process Industries reportable segments,
which had formed part of the former Industrial reportable segments until the
previous reporting period. The comparative figures have been restated in
accordance with IFRS 8 to reflect the new segment reporting structure.
The following tables show the financial information for the reportable
segments for the year 2024 and the previous year:
Steel Industrial Minerals
2024 in € million Cement & Lime Non-Ferrous Metals Process Industries Group 2024
Revenue 2,373 376 247 426 65 3,487
Gross profit 551 83 110 101 3 848
EBIT 242
Net finance costs (42)
Profit before income tax 200
Steel Industrial Minerals
2023 in € million Cement & Lime Non-Ferrous Metals Process Industries Group 2023
Revenue 2,461 424 281 326 80 3,572
Gross profit 550 105 119 74 9 857
EBIT 333
Net finance costs (100)
Profit before income tax 233
No single customer contributed 10% or more to consolidated revenue in 2024 and
in 2023. Companies that are known to be part of a group are treated as one
customer.
In the below breakdown of revenue by type of product or service, a distinction
is made in refractory products between shaped (e.g. hydraulically pressed
bricks, fused cast bricks, isostatically pressed products), unshaped (e.g.
repair mixes, building mixes and casting mixes), flow control (e.g.
distributors, ladle slides, ladles) and other refractory products.
In the reporting year, revenue is classified by type of product or service as
follows:
Steel Industrial Minerals
in € million Cement & Lime Non-Ferrous Metals Process Industries Group 2024
Shaped refractory products 1,097 311 204 314 0 1,926
Unshaped refractory products 579 51 21 57 0 708
Flow control refractory products 553 0 0 0 0 553
Other refractory products 27 5 3 18 0 53
Systems, sensors, machinery and digital products 19 3 8 5 0 35
Services 88 6 9 32 0 135
Raw materials 10 0 2 0 65 77
Revenue 2,373 376 247 426 65 3,487
In 2023, revenue was classified by type of product or service as follows:
Steel Industrial Minerals
in € million Cement & Lime Non-Ferrous Metals Process Industries Group 2023
Shaped refractory products 1,177 340 231 233 0 1,981
Unshaped refractory products 591 63 32 45 0 731
Flow control refractory products 555 0 0 0 0 555
Other refractory products 32 6 3 15 0 56
Systems, sensors, machinery and digital products 21 4 7 3 0 35
Services 71 10 6 30 0 117
Raw materials 14 1 2 0 80 97
Revenue 2,461 424 281 326 80 3,572
The revenue is based on the locations of the customers.
in € million 2024 2023
Netherlands 15 14
USA 584 612
India 445 477
Brazil 353 371
China 260 260
Other countries 1,830 1,838
Revenue 3,487 3,572
The carrying amounts of goodwill, other intangible assets and property, plant
and equipment are classified based on the location of the Group companies:
in € million 31.12.2024 31.12.2023
Brazil 407 503
India 392 383
Austria 343 368
USA 235 225
Germany 205 212
China 188 201
Other countries 274 277
Goodwill, intangible assets and property, plant and equipment 2,044 2,169
6. Restructuring
Summary of restructuring and write-down expenses/income recognised as follows:
in € million 2024 2023
Restructuring (expenses) (32) (20)
Restructuring income 8 0
Restructuring (expenses) - net (24) (20)
2024
Restructuring expenses mainly relate to the €25 million provision associated
with the closure of the Mainzlar plant in Germany. This includes the provision
of impairment losses on property, plant and equipment in the amount of €5
million. The impaired assets mainly formed part of the Non-Ferrous Metals and
Process Industries reportable segments. The recoverable amount of zero was
based on fair value less costs of disposal.
The €8 million gains were recognised from the sale of property, plant and
equipment, as well as other intangible assets, resulted from the plant
closures in Kruft, Germany and Dashiqiao, China, which were announced in the
previous years.
2023
Restructuring includes €12 million of termination costs following the
transfer of certain global functions to the regions. In addition, it includes
€5 million of plant closure costs, which mainly reflect €2 million of
costs in Dashiqiao plant, China.
In Brazil, an impairment loss was recognised on fixed assets of €1 million
which was partially caused by a flood at the Contagem plant.
7. Other income
in € million 2024 2023
Net amortisation of Oberhausen provision 14 11
Gains from the disposal of non-current assets 6 3
Bargain purchase gain 0 8
Miscellaneous income 18 5
Other income 38 27
The net amortisation of the Oberhausen provision includes a utilisation of
€10 million (2023: €10 million) for the performance against the onerous
contract, and €4 million (2023: €1 million) arising from updated
estimates. In 2024, miscellaneous income mainly includes €9 million related
to the disposal of the Dashiqiao plant in China and a cash inflow of €6
million related to receivables previously written down to zero.
8. Other expenses
in € million 2024 2023
Expenses for strategic projects (75) (16)
Impairment of property, plant and equipment and intangible assets (37) 0
Losses from the disposal of non-current assets (3) (7)
Miscellaneous expenses (24) (16)
Other expenses (139) (39)
Expenses for strategic projects amounting to €24 million (2023: €16
million) mainly include legal and consulting fees related to M&A
activities and integration costs for newly acquired businesses. Additionally,
the Group incurred Software as a Service costs, which are expensed as
incurred, amounting to €45 million and costs amounting to €6 million to
develop an integrated supply chain planning solution.
An impairment loss of €29 million corresponds to a full write-down of
property, plant and equipment under construction of a project in Brazil which
was abandoned in 2024 consequent of the Resco Group acquisition. The impaired
assets formed part of the Steel and Cement & Lime reportable segments. The
recoverable amount of zero was based on fair value less costs of disposal. In
addition, the Group recorded an impairment loss of €8 million for
capitalised development costs recognised as intangible assets. This impairment
loss is due to the reduction of the project scope. The impaired intangible
assets formed part of all reportable segments except Minerals. The recoverable
amount of €14 million was based on value in use.
Miscellaneous expenses mainly consist of €12 million of expenses related to
investments in and losses from the disposal of special Argentinian government
bonds (refer to Note (3)) and €4 million from pre-merger related litigation
costs.
9. Expense categories
The presentation of the Consolidated Statement of Profit or Loss is based on
the function of expenses. The following table shows a classification by
expense category for 2024 and the previous year:
in € million 2024 2023
Cost of materials (1,352) (1,375)
Personnel costs (806) (747)
Energy costs (225) (257)
Freight expenses (201) (229)
Depreciation and amortisation charges (175) (178)
External services (173) (164)
Changes in inventories, own work capitalised (11) (54)
Write-down expenses (42) (1)
Other income and expenses (260) (234)
Total expenses (3,245) (3,239)
Cost of materials includes expenses for raw materials and supplies and
purchased goods of €1,307 million (2023: €1,311 million) and expenses for
services received amounting to €45 million (2023: €64 million). Research
and development costs amounted to €51 million (2023: €51 million), of
which €5 million (2023: €8 million) in development costs were capitalised.
Amortisation and impairment of development costs recognised within cost of
sales was €10 million (2023: €3 million).
Payments associated with short-term leases of equipment and vehicles and all
leases of low-value assets are recognised as an expense in the Consolidated
Statement of Profit or Loss. Short-term leases are leases with a lease term of
12 months or less. Low-value assets comprise IT equipment, office furniture
and other small items. Expenses for short-term, low-value and variable lease
payments in 2024 amount to €7 million (2023: €5 million).
Please refer to Note (8) for details on write-down expenses.
Other income of €53 million (2023: €36 million) mainly comprises gains on
disposal of non-current assets, income from research grants which amounted to
€4 million (2023: €4 million), insurance reimbursements and amortisation
of grants related to assets; also included are €9 million related to the
disposal of Dashiqiao plant in China and €6 million related to receivables
previously written-down. Other expenses mainly consist of external consulting
fees, IT costs, travel expenses and repairs and maintenance expenditure.
10. Personnel costs
Personnel costs consist of the following components:
in € million 2024 2023
Wages and salaries (634) (579)
Social security contribution (121) (113)
Fringe benefits (32) (33)
Pension and other post-employment benefits
Defined contribution plans (12) (11)
Defined benefit plans (4) (4)
Other expenses termination benefits (3) (7)
Personnel expenses (without interest expenses) (806) (747)
Average employee numbers
The average number of employees of the Group based on full time equivalents
amounts to:
2024 2023
Salaried employees 7,426 7,063
Waged workers 8,626 7,953
Number of employees on annual average 16,052 15,016
108 full time equivalents of salaried employees work in the Netherlands (2023:
120 employees).
11. Interest income
Includes interest income on cash at banks and similar income amounting to
€22 million (2023: €19 million).
12. Net income/(expense) on foreign exchange effects
The net income comprises the foreign exchange effects from translating foreign
currency balances into the functional currency, the results from derivative
financial instruments, such as forward exchange contracts and derivatives in
open orders, as well as the loss on the net monetary position related to
hyperinflation accounting (IAS 29) and can be detailed as follows:
in € million 2024 2023
Foreign exchange gains/(losses) 30 (44)
(Losses)/gains on forward exchange contracts and derivatives in open orders (18) 11
(Loss)/gain on net monetary position (1) 3
Net income/(expense) on foreign exchange effects 11 (30)
The foreign exchange gains in the current reporting period mainly result from
the depreciation of the functional currencies of subsidiaries with a net asset
foreign currency exposure against USD and the appreciation of the functional
currencies of subsidiaries with a net liability foreign currency exposure
against USD.
13. Other net financial expenses
Other net financial expenses consist of the following items:
in € million 2024 2023
Net interest expense relating to personnel provisions (12) (12)
Unwinding of discount of provisions and payables (7) (8)
Interest income/(expense) on non-controlling interest liabilities 1 (7)
Interest expense on lease liabilities (3) (2)
Income from the revaluation of NCI put options 21 7
Other interest and similar income and expenses(1)) (14) (10)
Other net financial expenses (14) (32)
1) Mainly includes costs associated with the trade receivables factoring
programme of €10 million (2023: €12 million).
14. Taxation
Income tax
Income tax consists of the following items:
in € million 2024 2023
Current tax expense (51) (67)
Deferred tax (expense)/income relating to
temporary differences (4) 9
tax loss carryforwards 9 (4)
5 5
Income tax (46) (62)
The current tax expense includes tax income for prior periods of €5 million
(2023: €5 million net expense).
In recognising deferred tax assets, the Group has considered (i) the impacts
of the global economic environment in which it operates, (ii) uncertainties
and potential adverse effects of economic volatility and (iii) the Group's
latest forecasts and assumptions used for goodwill impairment testing and
viability statement assessment. The Group's forecast period is four years with
the fifth year being the final year, consistent with goodwill impairment
testing. In Brazil, a longer time frame is used due to the annual limitation
for use of losses (30% of the taxable profits of the relevant year) which
requires a longer-term prediction. Information on tax contingencies is
provided under Note (38).
In addition to the income taxes recognised in the Consolidated Statement of
Profit or Loss, a tax income of €7 million (2023: €15 million tax), was
recognised in OCI mainly relating to currency translation cash flow hedges and
measurement gains and losses on post-employment employee benefits.
A reconciliation of the difference between the income tax expense, which would
result from the application of the Austrian corporate tax rate of 23% on the
profit before income tax (the Austrian tax rate being used as holding company
RHI Magnesita N.V. is tax resident in Austria), and the income tax reported is
shown below:
in € million 2024 2023
Profit before income tax 200 233
Income tax expense calculated at 23% (2023: 24%) 46 56
Different foreign tax rates 8 2
Expenses not deductible and additions to tax base, non-creditable taxes 22 28
Non-taxable income and tax benefits (30) (28)
Tax losses and temporary differences of the financial year not recognised 5 1
Utilisation of previously unrecognised loss carryforwards and temporary (5) (1)
differences
Deferred tax expense due to tax rate changes 1 2
Deferred income tax relating to previous periods 4 (7)
Income tax relating to foreign currency translation of local currency to 0 4
functional currency
Current income tax relating to prior periods (5) 5
Recognised tax expense 46 62
Effective tax rate (in %) 23.0% 26.7%
Below is the summary of major effects on the effective tax rate
reconciliation:
In 2024, expenses not deductible and additions to the tax base include:
transfer pricing adjustments mainly related to Argentina of €4 million
(2023: transfer pricing adjustments and inventory revaluation in Brazil of
€5 million); share-based payments and other employee costs and write-up of
treasury shares in Austria of €3 million (2023: €5 million);
non-creditable withholding taxes in Austria of €2 million (2023: €2
million) and non-deductible subsidiary related expenses of €3 million (2023:
€1 million).
In 2024, non-taxable income and tax benefits mainly include: tax incentives in
Brazil of €2 million (2023: €8 million); additional tax depreciation in
Austria of €7 million (€2023: €7 million) relating to historical
acquisitions; inflationary adjustments in South America and Türkiye of €6
million (2023: €4 million); gains on the measurement of liabilities related
to the fixed term or puttable non-controlling interests of €6 million;
income of €2 million related to receivables previously written down to zero
and gains from the disposal of foreign operations of €2 million.
Tax losses and temporary differences of the financial year for which no
deferred tax assets have been recognised because sufficient taxable profits
are not expected in the near future include a tax loss realised in China of
€4 million (2023: €1 million) and the utilisation of previously
unrecognised temporary differences in China of €5 million (2023: €1
million).
In the United States a change in the tax rate from 24.19% to 24.57% led to a
deferred tax expense of €1 million (2023: deferred tax income due to a tax
rate change from 25.65% to 24.19% amounting to €1 million). The tax rate
change in Slovenia from 19% to 22% led to a deferred tax expense of €1
million (2023: no tax rate change in Slovenia).
Deferred taxes expense relating to prior periods based on information obtained
in the reporting period arises mainly from Mexico amounting to a deferred tax
expense of €2 million (2023: deferred tax expense of €1 million) and from
India amounting to a deferred tax expense of €3 million.
The current tax income relating to prior periods of €5 million mainly
relates to Peru (€3 million) and Chile (€2 million) where, respectively,
there was a reversal of a tax risk provision due to a court case judgement,
and return-to-provision reconciliations.
Deferred taxes
Deferred taxes are related to the following significant balance sheet items
and tax loss carryforwards:
31.12.2024 2024 31.12.2023 2023
in € million Deferred tax assets Deferred tax liabilities (Expense)/Income Deferred tax assets Deferred tax liabilities (Expense)/Income
Property, plant and equipment, intangible assets 28 107 8 29 121 3
Inventories 26 10 4 24 10 0
Trade receivables, other assets 14 22 (10) 12 9 12
Pensions and other personnel provisions 35 0 (1) 45 0 (5)
Other provisions 23 0 (2) 30 0 2
Trade payables, other liabilities 39 5 (3) 28 6 (3)
Tax loss carried forward 67 0 9 67 0 (4)
Offsetting (80) (80) 0 (83) (83) 0
Deferred taxes 152 64 5 152 63 5
For temporary differences and tax loss carryforwards of subsidiaries which
have generated tax losses either in the current or previous reporting period
deferred tax assets amounting to €101 million (2023: €5 million) have been
recognised in the Consolidated Statement of Financial Position, as sufficient
taxable income is expected to be generated in the future.
The total tax loss carryforwards of the Group amount to €347 million at 31
December 2024 (2023: €402 million). For tax loss carryforwards of €235
million (2023: €221 million) deferred tax assets are recognised while no
deferred tax assets are recognised for the remaining amount of €112 million
(2023: €181 million).
The following table shows the origin of tax loss carryforwards per country for
which no deferred tax assets are recognised:
in € million 31.12.2024 31.12.2023
Country
Brazil 51 61
Luxembourg 0 61
China 37 24
UK 6 18
Dubai 4 4
Germany 6 6
France 5 4
Others 3 3
Total 112 181
The following table shows the tax loss carryforwards by year of expiry:
in € million 31.12.2024 31.12.2023
Year of expiry
2024 0 6
2025 1 2
2026 2 2
2027 10 8
2028 6 6
2029 19 0
2030 or later 0 1
Not subject to expiration 74 156
Total unrecognised tax losses 112 181
No deferred tax assets were recognised on temporary differences totalling
€123 million (2023: €176 million), which are expected to reverse by 2034.
These temporary differences mainly relate to Austria: €120 million (2023:
€151 million).
Taxable temporary differences of €1,477 million (2023: €1,241 million) and
temporary deductible differences of €96 million (2023: €50 million) were
not recognised on shares in subsidiaries as the distributions of profit or the
sale of the investments are controlled by the Group.
The Group is subject to global minimum tax rules (i.e., OECD Pillar Two). The
calculation following the OECD Pillar Two rules as well as the newly enacted
local legislation of Austria (where the ultimate parent entity is resident)
has not led to inclusion of additional tax expense for the countries the Group
operates in.
Income tax receivables
Income tax receivables amounting to €40 million (2023: €44 million) are
mainly related to tax prepayments and deductible withholding taxes.
Income tax liabilities
Income tax liabilities amounting to €29 million (2023: €51 million)
primarily include income taxes for the current year and previous years.
15. Earnings per share
Earnings per share is calculated by dividing the profit or loss attributable
to the shareholders of the Group by the weighted average number of shares
outstanding during the financial year.
2024 2023
Profit after income tax attributable to RHI Magnesita N.V. shareholders (in 142 165
€ million)
Weighted average number of shares for basic EPS 47,170,570 47,078,254
Effects of dilution from share options 1,154,648 1,014,964
Weighted average number of shares for dilutive EPS 48,325,218 48,093,218
Earnings per share basic (in €) 3.01 3.50
Earnings per share diluted (in €) 2.94 3.42
The weighted average number of shares for basic and dilutive EPS considers the
effect of changes in treasury shares during the reporting period.
16. Dividend payments and proposed dividend
The final proposed dividend is subject to the approval of the AGM in May 2025
and was not recognised as a liability in these Consolidated Financial
Statements. The final proposed dividend for 2024 will amount to €1.20 per
share (2023: €1.25 per share).
In line with the Group's dividend policy, the Board paid out an interim
dividend in the second half of 2024 of €0.60 per share for the first half of
2024 amounting to €28 million. The total dividend for 2024, which includes
the proposed final dividend, yet to be approved by shareholders, amounts to
€1.80 per share (2023: €1.80 per share).
Based on a resolution adopted by the AGM in May 2024, the final dividend for
2023 amounted to €1.25 per share and was paid out in June 2024, amounting to
€59 million. The total dividend for 2023 amounted to €1.80 per share.
17. Goodwill
in € million 2024 2023
Carrying amount at beginning of year 339 137
Business combinations and PPA finalisation 3 197
Currency translation (3) (2)
Hyperinflation adjustment 3 7
Carrying amount at year-end 342 339
Impairment of CGUs with significant goodwill
Goodwill is tested for impairment at least annually based on the CGU to which
it is allocated. The Group's significant goodwill is assigned to the Steel
CGUs and to the Industrial Cement & Lime CGU as shown in the table below.
The impairment test is based on the value in use; the recoverable amount is
determined using the discounted cash flow method and incorporates the terminal
value. The Group is subject to environmental and other laws and regulations
and has established environmental policies and procedures aimed at compliance
with these laws. Impairment testing incorporated considerations for increased
energy and raw material prices in its budget and the Long-Term Plan and
estimates the total increase in investments in research and development costs
at approximately €48 million. Current technology used by the customer
industries requiring advanced heat-resistant materials for their production
depend on refractory materials and in our view will remain in use in the
observable future.
The cash flows projections used for impairment testing are based on the
strategic business and financial planning model of the Group including the
2025 budget, as approved by the Board, and the Long-Term Plan, covering a
four-year period. The cash flows are geared to a steady-state business
development, which balances out possible economic or other non-sustainable
fluctuations in the detailed planning period and forms the basis for the
calculation of the terminal value.
The key assumptions used in determining the value in use are:
· Revenue: projected sales were built up with reference to markets and
product categories incorporating projections of developments in key markets.
· EBIT margin: projected margins reflect historical performance, our
expectations for future cost inflation and the impact of all completed
projects to improve operational efficiency.
· Discount rate before tax: a discount rate that is calculated taking
into account the weighted average cost of capital of comparable companies; the
corresponding parameters are derived from capital market information. In
addition, country-specific risk premiums are considered in the weighted
average cost of capital.
· Perpetual annuity growth rate: for the purposes of the Group's value in
use calculations, a long-term growth rate into perpetuity was applied
immediately at the end of the fifth-year detailed planning period comprising
the 2025 budget and the subsequent four-year period covered by the Long-Term
Plan. As in the previous year, the terminal value is based on a growth rate
derived from the difference between the current and possible degree of asset
capacity and utilisation.
Forecast EBIT has been projected using:
· Expected future sales are based on the strategic plan, which was
constructed at a market level with input from regional commercial managers. An
assessment of the market using external sources for the development of the
customer's industries; regional growth rates of the steel production and
output of the non-steel clients in combination with the development of the
specific refractory consumption including technological improvements.
· Current cost structure and production capacity, which include our
expectations for future cost inflation. The assumptions were updated
considering the latest economic developments, including energy, freight, and
raw material prices. The forecasts include cash flows from future investments
related to capacity maintenance while expansion investments are excluded.
Working capital is included in the carrying amount of the CGUs; therefore, the
recoverable amount only takes into account changes in working capital.
The following table shows the perpetual annuity growth rates and discount
rates before tax applied in the value in use determination for CGUs to which
significant goodwill is allocated:
2024 2023
Discount rate before Tax Perpetual annuity growth rate Goodwill Discount rate before Tax Perpetual annuity growth rate Goodwill
in € million
in € million
Steel - Linings 9.7% 0.9% 218 9.9% 0.9% 213
Steel - Flow Control 10.3% 0.9% 67 10.0% 0.9% 67
Industrial - Cement & Lime 10.7% 0.9% 56 10.5% 0.9% 55
As a sensitivity, the effect of the following downside scenarios to the key
assumptions would, in isolation, not result in an impairment of the above CGUs
to which significant goodwill is allocated:
· increase of the estimated discount rate by 10%
· decrease of the perpetual annuity growth rate by 50%
· decrease of EBIT margin by 10%
· decrease of revenue by 2.5%
18. Other intangible assets
in € million Mining rights Customer relationship Internally generated intangible assets Other intangible assets Prepayments made and intangible assets under construction Total
Cost at 31.12.2023 152 284 87 170 22 715
Currency translation (10) 3 (1) 0 0 (8)
Additions 0 0 5 1 0 6
Initial consolidation and PPA finalisation 0 (2) 0 0 0 (2)
Retirements and disposals 0 0 (1) (16) 0 (17)
Reclassifications 3 0 0 3 (6) 0
Cost at 31.12.2024 145 285 90 158 16 694
Accumulated amortisation 31.12.2023 17 64 53 111 0 245
Currency translation (1) 0 0 (1) 0 (2)
Amortisation charges 2 20 3 14 0 39
Impairment charges 0 0 7 0 0 7
Retirements and disposals 0 0 0 (12) 0 (12)
Accumulated amortisation 31.12.2024 18 84 63 112 0 277
Carrying amounts at 31.12.2024 127 201 27 46 16 417
in € million Mining rights Customer relationship Internally generated intangible assets Other intangible assets Prepayments made and intangible assets under construction Total
Cost at 31.12.2022 152 132 79 157 0 520
Currency translation 1 (5) 0 (2) 0 (6)
Additions 0 0 8 2 0 10
Additions initial consolidation 0 159 0 6 8 173
Retirements and disposals (1) 0 0 (1) 0 (2)
Reclassifications 0 (2) 0 8 14 20
Cost at 31.12.2023 152 284 87 170 22 715
Accumulated amortisation 31.12.2022 15 45 49 94 0 203
Currency translation (1) (1) 0 1 0 (1)
Amortisation charges 3 20 4 17 0 44
Reclassifications 0 0 0 (1) 0 (1)
Accumulated amortisation 31.12.2023 17 64 53 111 0 245
Carrying amounts at 31.12.2023 135 220 34 59 22 470
Internally generated intangible assets comprise capitalised software and
product development costs. Other intangible assets include in particular
acquired patents, trademark rights, software, and land-use rights.
The following table shows the individually material intangible assets acquired
and their remaining useful lives:
in € million Remaining 31.12.2024 31.12.2023
useful life
Net book value
Net book value
in years
Mining rights
Brazil 49 63 77
US 46 61 58
Customer relationships
RHI Magnesita India Refractories Ltd and RHI Magnesita Seven 8-18 91 95
Refractories Ltd
Former Magnesita Group 4-8 48 55
Seven Refractories Group 14 21 26
RHI Magnesita India / Hi-Tech Chemicals Ltd 4 21 22
Land use rights 13-53 20 24
There are no restrictions on the sale of intangible assets.
19. Property, plant and equipment
in € million Real Technical Other plant, furniture and fixtures Prepayments Right-of-use assets Total
estate,
equipment,
made and
land and
machinery
plant under
buildings
construction
Cost at 31.12.2023 758 1,231 417 267 134 2,807
Currency translation (13) (10) (9) (25) (3) (60)
Additions(1)) 6 49 9 68 29 161
Initial consolidation and PPA finalisation 5 (2) 0 (1) 0 2
Retirements and disposals (31) (97) (42) (6) (13) (189)
Reclassifications 26 106 32 (167) 0 (3)
Cost at 31.12.2024 751 1,277 407 136 147 2,718
Accumulated depreciation 31.12.2023 304 814 271 1 57 1,447
Currency translation (1) (2) (3) (1) (3) (10)
Depreciation charges 21 61 32 0 22 136
Impairment charges 0 9 0 26 0 35
Retirements and disposals (29) (93) (41) 0 (12) (175)
Accumulated depreciation 31.12.2024 295 789 259 26 64 1,433
Carrying amounts at 31.12.2024 456 488 148 110 83 1,285
1) Including €3 million capitalised borrowing costs.
in € million Real Technical Other plant, furniture and fixtures Prepayments Right-of-use assets Total
estate,
equipment,
made and
land and
machinery
plant under
buildings
construction
Cost at 31.12.2022 712 1,143 393 232 112 2,592
Currency translation (1) (2) 1 3 0 1
Additions(1)) 14 19 11 127 14 185
Additions initial consolidation 52 51 6 6 22 137
Retirements and disposals (35) (24) (15) 0 (14) (88)
Reclassifications 16 44 21 (101) 0 (20)
Cost at 31.12.2023 758 1,231 417 267 134 2,807
Accumulated depreciation 31.12.2022 317 768 252 1 50 1,388
Currency translation 0 0 0 0 1 1
Depreciation charges 17 67 30 0 20 134
Impairment charges 0 0 1 0 0 1
Retirements and disposals (30) (21) (13) 0 (14) (78)
Reclassifications 0 0 1 0 0 1
Accumulated depreciation 31.12.2023 304 814 271 1 57 1,447
Carrying amounts at 31.12.2023 454 417 146 266 77 1,360
1) Including €8 million capitalised borrowing costs.
Prepayments made and plant under construction includes €106 million (2023:
€259 million) mainly relating to the expansion and production optimisation
of the plants in Brazil during 2024. The spend in 2023 mainly related to the
expansion of a production plant in Austria and a magnesite plant in Brazil.
Please refer to Note (27) for the restrictions on the sale of property, plant
and equipment. Significant capital expenditure contracted for at the end of
the reporting period but not recognised as liabilities amounts to €6 million
(2023: €9 million).
Please refer to Note (8) for details regarding the impairment charges.
The Right-of-use assets per category developed as follows as of 31 December
2024:
in € million Right-of-use assets Right-of-use assets Right-of-use assets Total
land and buildings
technical equipment and machinery
other equipment, furniture and fixtures
Cost at 31.12.2023 91 30 13 134
Currency translation (1) (2) 0 (3)
Additions 17 3 9 29
Retirements and disposals (5) (5) (3) (13)
Cost at 31.12.2024 102 26 19 147
Accumulated depreciation 31.12.2023 30 20 7 57
Currency translation 0 (2) (1) (3)
Depreciation charges 12 5 5 22
Retirements and disposals (5) (5) (2) (12)
Accumulated depreciation 31.12.2024 37 18 9 64
Carrying amounts at 31.12.2024 65 8 10 83
The Right-of-use assets per category developed as follows as of 31 December
2023:
in € million Right-of-use assets Right-of-use assets Right-of-use assets Total
land and buildings
technical equipment and machinery
other equipment, furniture and fixtures
Cost at 31.12.2022 69 33 10 112
Additions 9 1 4 14
Additions initial consolidation 21 1 0 22
Retirements and disposals (8) (5) (1) (14)
Cost at 31.12.2023 91 30 13 134
Accumulated depreciation 31.12.2022 25 19 6 50
Currency translation 0 1 0 1
Depreciation charges 12 5 3 20
Retirements and disposals (7) (5) (2) (14)
Accumulated depreciation 31.12.2023 30 20 7 57
Carrying amounts at 31.12.2023 61 10 6 77
The average lease term is 10 years for land and buildings, five years for
technical equipment and machinery and four years for other equipment,
furniture and fixtures. Impacts resulting from extension and termination
options, as well as residual value guarantees are immaterial. Detail on lease
liabilities is in Note (28).
20. Other assets
in € million 31.12.2024 31.12.2023
Prepayments related to the acquisition of Resco Group 46 0
Deferred mine stripping costs 13 12
Tax receivables 11 14
Other non-current assets 6 11
Other non-current assets 76 37
21. Inventories
in € million 31.12.2024 31.12.2023
Raw materials and supplies 264 274
Work in progress 215 220
Finished products and goods 464 489
Prepayments made 14 13
Emission rights(1)) 5 5
Inventories 962 1,001
1) With effect from 1 January 2024 "Other current receivables" excludes
"Emission rights" which are now presented in "Inventories". Prior period
comparatives have been revised to conform with current year presentation.
Net write-down expenses amount to €0 million (2023: €12 million). Please
refer to Note (3) for details on the change in an accounting estimate related
to the calculation of net realisable value in relation to reduced
recoverability.
22. Trade and other receivables
in € million 31.12.2024 31.12.2023
Trade receivables 530 538
Contract assets 3 4
Other tax receivables 87 95
Prepaid expenses 9 8
Other current receivables(1)) 31 36
Trade and other current receivables 660 681
thereof financial assets 533 542
thereof non-financial assets 127 139
1) With effect from 1 January 2024 "Other current receivables" excludes
"Emission rights" which are now presented in "Inventories". Prior period
comparatives have been revised to conform with current year presentation.
The Group enters into factoring agreements and sells trade receivables to
financial institutions. Trade receivables sold at the end of the year was
€237 million (2023: €259 million). These have been derecognised as
substantially all risks and rewards as well as control have been transferred.
Payments received from customers following the sale are recognised in current
borrowings until repaid to the factorer.
Other tax receivables include primarily VAT, as well as receivables from
energy tax refunds, and tax research subsidies.
Other current receivables mainly relate to advances for insurance, IT services
as well as custom and import-related services and costs.
23. Cash and cash equivalents
in € million 31.12.2024 31.12.2023
Cash at banks and in hand 530 644
Money market funds 46 60
Cash and cash equivalents 576 704
Cash and cash equivalents include amounts not available for use by the Group
totalling €3 million at 31 December 2024 (2023: €10 million). Cash not
available for use by the Group is mainly comprised of deposits for credit
lines and bank guarantees.
24. Share capital
At 31 December 2024, the authorised share capital of RHI Magnesita N.V.
amounts to €100,000,000 divided into 100,000,000 ordinary shares and
remained unchanged compared to prior year. Thereof 47,195,936 (2023:
47,130,338) fully paid-in ordinary shares are issued. In addition, there are
2,281,769 (2023: 2,347,367) treasury shares held by the Company. All issued
RHI Magnesita shares grant the same rights. The shareholders are entitled to
dividends and have one voting right per share at the AGM. There are no shares
with special control rights.
25. Group reserves
Treasury shares
At 31 December 2024, RHI Magnesita treasury shares amount to 2,281,769 (2023:
2,347,367).
Additional paid-in capital
At 31 December 2024, as well as at 31 December 2023, additional paid-in
capital comprised premiums on the issue of shares less issue costs by RHI
Magnesita N.V.
Mandatory reserve
The Articles of Association stipulate a mandatory reserve of €288,699,231
which was created in connection with the merger between former RHI Group and
former Magnesita Group in 2017. No distributions, allocations or additions may
be made, and no losses of the Company may be allocated to the mandatory
reserve.
Retained earnings
Retained earnings includes the result of the financial year and results that
were earned by consolidated companies during prior periods but not
distributed. The difference between the purchase consideration or sale
proceeds after tax and the relevant proportion of the non-controlling
interest, measured by reference to the carrying amount of the interest's net
assets at the date of acquisition or sale, is recognised in retained earnings
too.
Accumulated other comprehensive income
Cash flow hedge reserves include gains and losses from the effective part of
cash flow hedges less tax effects. The accumulated gain or loss from the hedge
allocated to reserves is only reclassified to the Statement of Profit or Loss
if the hedged transaction also influences the result or is terminated.
Reserves for defined benefit plans include the gains and losses from the
remeasurement of defined benefit pension and termination benefit plans taking
into account tax effects. No reclassification of these amounts to the
Statement of Profit or Loss will be made in future periods.
Currency translation includes the accumulated currency translation differences
from translating the Financial Statements of foreign subsidiaries, unrealised
currency translation differences from monetary items which are part of a net
investment in a foreign operation, net of related income taxes, as well as the
effective portion of foreign exchange gains or losses when a financial
instrument is designated as the hedging instrument in net investment hedge in
a foreign operation.
26. Non-controlling interests
Subsidiaries with material non-controlling interests
RHI Magnesita India Ltd., based in New Delhi, India, is a listed company on
the BSE Limited and NSE Limited. RHI Magnesita India Ltd. is the (direct or
ultimate) parent company of RHI Magnesita India Refractories Ltd., RHI
Magnesita Seven Refractories Ltd. and Intermetal Engineers (India) Private Ltd
which together form the Subgroup India. The Subgroup India is included in all
reportable segments of the Group and the share of the non-controlling
interests amounts to 43.9% (2023: 43.9%). Aggregated financial information of
the Subgroup India as of 31 December 2024 is provided below:
in € million 31.12.2024 31.12.2023
Non-current assets 432 420
Current assets 260 258
Non-current liabilities (24) (18)
Current liabilities (123) (152)
Net assets before intragroup eliminations 545 508
Intragroup eliminations (1) (2)
Net assets 544 506
Carrying amount of non-controlling interests 162 149
The aggregated Statement of Profit or Loss and Statement of Comprehensive
Income of the Subgroup India for financial year 2024 are shown below:
in € million 2024 2023
Revenue 430 427
Operating expenses, net finance costs and income tax (406) (410)
Profit after income tax before intragroup eliminations 24 17
Intragroup eliminations 1 (2)
Profit after income tax 25 15
thereof attributable to non-controlling interests 11 6
in € million 2024 2023
Profit after income tax 24 15
Other comprehensive income/(expense) 26 (33)
Total comprehensive income 50 (18)
thereof attributable to non-controlling interests 22 (8)
The following table shows the summarised Statement of Cash Flows of the
Subgroup India for financial year 2024:
in € million 2024 2023
Net cash flow from operating activities 38 38
Net cash flow from investing activities (13) (123)
Net cash flow from financing activities (26) 75
Total cash flow (1) (10)
Net cash flow from financing activities includes dividend payments to
non-controlling interests amounting to €2 million (2023: €3 million).
Change of non-controlling interests without a change of control
In April 2024, the Group acquired non-controlling interests of Seven
Refractories' Group for a cash consideration of €3 million with the
difference between the carrying amount of the non-controlling interests'
portion of equity acquired and the consideration paid recorded in retained
earnings within equity.
In July 2024, the Group acquired non-controlling interests of P-D Group for a
cash consideration of €3 million with the difference between the carrying
amount of the non-controlling interests' portion of equity acquired and the
consideration paid recorded in retained earnings within equity.
27. Borrowings
Borrowings include all interest-bearing liabilities due to financial
institutions and other lenders.
In March 2024, the Group successfully raised a €200 million syndicated term
loan with a tenor of five years. Loan proceeds were used for the acquisition
of the Resco Group (refer to Note (42) for details). The term loan remained
fully undrawn per 31 December 2024.
In April 2024, the Group prepaid €100 million from a €150 million
bilateral term loan, which matures in April 2026, to optimise the Group's
capital structure, maturity profile, and reduce excess cash.
Resulting from the Group's strong EcoVadis ESG rating upgrade in June 2024,
with an improvement by four points to a total score of 76, the margin payable
on the Group's ESG-linked financings amounting to €1,983 million (including
the fully undrawn €600 million RCF) was reduced by 3bps,
The principal borrowing facilities, including the Syndicated & Term Loan
as well as the Bonded Loans, are subject to a financial covenant, being the
ratio of net debt excluding lease liabilities to Adjusted EBITDA of a maximum
of 3.5 times. Compliance with the financial covenant is measured on a
semi-annual basis and its calculation is shown in Note (37). If the financial
covenant of the Syndicated & Term Loans is breached, the lenders have the
right for immediate loan repayment. If repayment of the Syndicated & Term
Loans is demanded, the Bonded Loans will also become due. If the Syndicated
& Term loans' financial covenant is breached but the full repayment is
waived, the Bonded Loans interest margin payable will increase.
The Group complied with the financial covenant in 2024 and 2023. There are no
indications that the Group will have difficulties complying with the financial
covenant in the 12 months following the reporting date. The breakdown of
borrowings is presented in the following table:
Total
in € million 31.12.2024 Current Non-current
Syndicated & Term Loan 976 233 743
Bonded loans ("Schuldscheindarlehen") 720 0 720
Other credit lines and other loans 44 42 2
Total liabilities to financial institutions 1,740 275 1,465
Other financial liabilities 11 1 10
Capitalised transaction costs (1) 0 (1)
Borrowings 1,750 276 1,474
Total
in € million 31.12.2023 Current Non-current
Syndicated & Term Loan 1,114 45 1,069
Bonded loans ("Schuldscheindarlehen") 755 35 720
Other credit lines and other loans 63 60 3
Total liabilities to financial institutions 1,932 140 1,792
Other financial liabilities 18 9 9
Capitalised transaction costs (1) 0 (1)
Borrowings 1,949 149 1,800
Including interest swaps, 73% (2023: 69%) of the liabilities to financial
institutions carry fixed interest and 27% (2023: 31%) carry variable interest.
The following table shows the fixed interest terms and conditions, including
interest rate swaps, without liabilities from deferred interest:
Interest terms fixed until Effective annual interest rate Currency 31.12.2024 Interest terms fixed until Effective annual interest rate Currency 31.12.2023
Carrying amount
Carrying amount
in € million
in € million
2025 EURIBOR + margin EUR 444 2024 EURIBOR + margin EUR 573
0.50% EUR 150 3.10% EUR 35
Various - Variable rate Various 35 Various - Variable rate Various 34
2026 3.61% EUR 264 2025 0.50% EUR 150
2027 2.41% EUR 715 2026 3.63% EUR 264
2028 1.87% EUR 119 2027 2.44% EUR 744
2029 1.52% EUR 8 2028 1.90% EUR 119
2031 1.25% EUR 5 2029 1.52% EUR 8
2031 1.28% EUR 5
1,740 1,932
The table above shows how long the interest rates are fixed for, rather than
the maturity of the underlying instruments.
Shares of Jinan New Emei Industries Co Ltd. in the amount of €13 million
have been pledged as security for a local loan in China.
28. Other financial liabilities
Other financial liabilities include the negative fair value of derivative
financial instruments as well as lease liabilities and fixed-term and puttable
non-controlling interests payable in Group companies. Additional explanation
on derivative financial instruments is provided under Note (35).
31.12.2024 31.12.2023
in € million Current Non-current Total Current Non-current Total
Forward exchange contracts 1 0 1 1 0 1
Interest rate derivatives 0 4 4 0 2 2
Commodity swaps 2 3 5 1 10 11
Derivatives in open orders 0 0 0 3 0 3
Derivative financial liabilities 3 7 10 5 12 17
Lease liabilities 17 60 77 18 52 70
Fixed-term or puttable non-controlling interests 7 45 52 18 69 87
Other financial liabilities 27 112 139 41 133 174
In line with the Group's accounting policy, the carrying amount of
non-controlling interest is reduced to nil and replaced with a financial
liability where the Group has provided a written put option (usually together
with a call option) or has entered into a forward contract to acquire the
shares not controlled by the Group. The carrying amount of the financial
liabilities represents the discounted value of the expected settlement for the
following non-controlling interest:
in € million Ownership interest held by NCI 31.12.2024 31.12.2023
Horn & Co. Minerals Recovery GmbH & Co.KG 45.00% 4 8
RHI Magnesita Czech Republic a.s. 3.13% 1 0
RHI Magnesita (Chongqing) Refractory Materials Co., Ltd. 49.00% 11 15
Jinan New Emei Industries Co. Ltd. 35.00% 21 30
Liaoning RHI Jinding Magnesia Co., Ltd. 16.67% 4 23
RHI Refractories Liaoning Co., Ltd. 34.00% 11 11
Liabilities to fixed-term or puttable non-controlling interests 52 87
The following table shows the reconciliation from the opening balances to the
closing balances of the liabilities to the fixed-term or puttable
non-controlling interests:
in € million 31.12.2024 31.12.2023
Liabilities at beginning of the year 87 68
Currency translation(1)) 2 (5)
Interest accrued(2)) (1) 7
Remeasurement gains(2)) (21) (7)
Dividends paid (6) (8)
Additions 1 0
Additions from initial consolidation 0 32
Derecognition related to Liaoning RHI Jinding Magnesia Co., Ltd. (10) 0
Liabilities at year-end 52 87
1) Recognised in OCI.
2) Recognised in profit or loss as other net financial expenses.
In 2024 the termination of the Joint Venture Agreement related to Liaoning RHI
Jinding Magnesia Co., Ltd was confirmed in an arbitration procedure that was
initiated by the Group in the previous reporting period. Due to this
confirmation the termination has become legally effective and allows
derecognition of the portion of the financial liability towards the minority
shareholder that is no longer payable as a result of the confirmed
termination. The derecognised amounts include accrued dividend payments
related to previous periods, the value of the outstanding shares held by the
minority shareholder subject to an expired call option and a liability related
to land-use-rights.
Sensitivities in respect of the significant non-observable inputs used to
measure the fair value of the financial liabilities related to fixed-term or
puttable non-controlling interests are presented below. These sensitivities
show the hypothetical impact of a change in each of the listed inputs in
isolation.
in € million Financial liabilities increase by Financial liabilities decrease by
Profit measure increases by 15% 6
Profit measure decreases by 15% 6
29. Net employee benefit liabilities
Pension provisions
The net liability from pension obligations in the Consolidated Statement of
Financial Position is as follows:
in € million 31.12.2024 31.12.2023
Present value of pension obligations 377 421
Fair value of plan assets (182) (186)
Deficit of funded plans 195 235
Asset ceiling 5 5
Net liability from pension obligations 200 240
Overfunded pension plans (1) (2)
Other pension plans 201 242
The present value of pension obligations by beneficiary groups is as follows:
in € million 31.12.2024 31.12.2023
Active beneficiaries 62 62
Vested terminated beneficiaries 41 44
Retirees 274 315
Present value of pension obligations 377 421
The pension obligations are measured using the following actuarial assumptions
for the key countries in which the Group operates:
in % 31.12.2024 31.12.2023
Interest rate
Austria and Germany 3.4% 3.3%
Brazil 12.2% 10.1%
United Kingdom 5.5% 4.5%
USA 5.5% 4.8%
Future salary increase
Austria 2.7% 3.9%
Germany 2.5% 2.5%
Brazil 5.8% 4.5%
United Kingdom(1)) n/a n/a
USA 3.3% 3.3%
Future pension increase
Austria 3.3% 5.3%
Germany 2.0% 2.2%
Brazil 4.3% 4.5%
United Kingdom 3.1% 3.0%
USA 2.0% 2.0%
1) No active plan members.
These are average values which were weighted with the present value of the
respective pension obligation.
The calculation of the actuarial interest rate for the Eurozone countries is
based on a yield curve for returns of high-quality corporate bonds denominated
in EUR with an average rating of AA, which is derived from pooled index
values. The calculation of the actuarial interest rate for the USD and GBP
currency area is based on a yield curve for returns of high-quality corporate
bonds denominated in USD and GBP with an average rating of AA, which is
derived from pooled index values. Where there are very long-term maturities,
the yield curve follows the performance of bonds without credit default risk.
The interest rate is calculated annually at 31 December, taking into account
the expected future cash flows which were determined based on the current
personal and commitment data.
The calculation in Austria was based on the AVÖ 2018-P demographic
calculation principles for salaried employees from the Actuarial Association
of Austria. In Germany, the Heubeck Richttaffeln 2018 G actuarial tables were
used as a basis. In the other countries, country-specific mortality tables
were applied.
The main pension regulations are described below:
The Austrian group companies account for €68 million (2023: €80 million)
of the present value of pension obligations and for €8 million (2023: €9
million) of the plan assets. The agreed benefits include pensions, invalidity
benefits and benefits for surviving dependents. Commitments in the form of
company or individual agreements depend on the length of service and the
salary at the time of retirement. For the majority of commitments, the amount
of the pension subsidy is limited to 75% of the final remuneration including a
pension pursuant to the General Social Insurance Act (ASVG). The Group has
concluded pension reinsurance policies for part of the commitments. The
pension claims of the beneficiaries are limited to the coverage capital
required for these commitments. Pensions are predominantly paid in the form of
annuities and are partially indexed. For employees joining the company after 1
January 1984, no defined benefits were granted. Rather, a defined contribution
pension model is in place. In addition, there are commitments based on the
deferred compensation principle, which are fully covered by pension
reinsurance policies and commitments for preretirement benefits for employees
in mining operations.
The pension plans of the German group companies account for €113 million
(2023: €119 million) of the present value of pension obligations and for
€1 million (2023: €1 million) of the plan assets. The benefits included in
company agreements comprise pensions, invalidity benefits and benefits for
surviving dependents. The amount of the pension depends on the length of
service for the majority of the commitments and is calculated as a percentage
of the average monthly wage/salary of the last 12 months prior to retirement.
In some cases, commitments to fixed benefits per year of service have been
made. The pensions are predominantly paid in the form of annuities and are
adjusted in accordance with the development of the consumer price index for
Germany. The pension plans are closed for new entrants, except one
contribution-based plan. There is no defined contribution model on a voluntary
basis. Individual commitments have been made, with major part of them being
retired beneficiaries.
The pension plan of the US group company Magnesita Refractories Company, York,
USA, accounts for €71 million (2023: €71 million) of the present value of
pension obligations and for €69 million (2023: €63 million) of the plan
assets. The pension plan is a non-contributory defined benefit plan covering a
portion of the employees of the company. The plan is subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA). Effective 21
June 1999, the company offered the participants the opportunity to elect to
participate in a single enhanced defined contribution plan. Participants who
made this election are no longer eligible for future accruals under this plan.
All benefits accrued as of the date of transfer will be retained. Employees
hired after 21 June 1999 and employees that did not meet the plan's
eligibility requirements as of 21 June 1999 are not eligible for this plan.
The pensions are predominantly paid in the form of annuities and are adjusted
annually based on the US consumer price index.
The pension plan of the UK group company Magnesita Refractories Ltd.,
Dinnington, United Kingdom, accounts for €37 million (2023: €42 million)
of the present value of pension obligations and holds €42 million (2023:
€46 million) of assets, although no plan assets are reflected on the balance
sheet due to the application of International Financial Reporting
Interpretations Committee 14 (IFRIC 14) (asset ceiling). The company sponsors
a funded defined benefit pension plan for qualifying UK employees. The plan is
administered by a separate Board of Trustees which is legally separate from
the company. The trustees are composed of representatives of both the employer
and employees, plus an independent professional trustee. The trustees are
required by law to act in the interest of all relevant beneficiaries and are
responsible for the investment policy with regard to the assets plus the
day-to-day administration of the benefits. Under the plan, employees are
entitled to annual pensions on retirement at age 65. During 2022, the Board of
Trustees agreed to a buy-in of the defined benefit obligation with a
third-party insurer in the United Kingdom. In terms of the buy-in, the insurer
assumed the obligations relating to the plan from July 2022 while the plan
assets were liquidated and transferred to the insurer at a value of around
€62 million. Until the defined benefit scheme is wound up (the buy-out), the
Group will continue to recognise the pension obligation and the value of the
insurance policy as a plan asset equal to the pension obligation. The surplus
plan assets of €5 million, at 31 December 2024 are not recognised due to the
application of IFRIC 14 and the asset ceiling requirements. It is expected
that the remaining surplus, net of adjustments, tax payments and other minor
expenses will be refunded to the Group once the plan will be wound up.
The pension liabilities of the Brazilian group company Magnesita Refratários
S.A. account for €35 million (2023: €55 million) of the present value of
pension obligations and for €25 million (2023: €31 million) of the plan
assets. These liabilities relate to a Defined Benefit (DB) plan, which was
frozen in 2009. The obligations correspond to the accrued rights of the
remaining plan participants. The agreed benefits include lifetime retirement
pensions, disability benefits, and benefits for surviving dependents.
Currently, the Brazilian group companies offer their employees a defined
contribution plan as an optional benefit. Under this plan, employees
contribute a percentage of their salary, and the company matches these
contributions at a rate of 1.5 times the employee's contribution. Employees
who leave the plan before retirement may be entitled to receive up to 75% of
the company's final contribution, depending on their length of service. Upon
retirement, employees can choose to receive a portion of the total
contribution amount as a lump sum or in proportional monthly instalments, with
various payout options available. The defined contribution plan is structured
on a fully funded basis, ensuring that payouts are exclusively derived from
accumulated contributions and their respective investment returns. This
structure effectively eliminates the risk of deficits or the creation of
long-term financial obligations.
The following table shows the development of net liability from pension
obligations:
in € million 2024 2023
Net liability from pension obligations at beginning of year 240 213
Currency translation (5) 2
Additions initial consolidation 0 11
Pension cost 12 12
Remeasurement (gains)/losses (25) 23
Benefits paid (19) (17)
Employers' contributions to external funds (3) (4)
Net liability from pension obligations at year-end 200 240
The present value of pension obligations developed as follows:
in € million 2024 2023
Present value of pension obligations at beginning of year 421 396
Currency translation (5) 4
Additions initial consolidation 0 11
Current service cost 2 2
Interest cost 18 19
Remeasurement losses/(gains)
from changes in demographic assumptions 0 (1)
from changes in financial assumptions (25) 28
due to experience adjustments (3) (3)
Benefits paid (32) (35)
Employee contributions to external funds 1 1
Plan amendments 0 (1)
Present value of pension obligations at year-end 377 421
The movement in plan assets is shown in the table below:
in € million 2024 2023
Fair value of plan assets at beginning of year 186 187
Currency translation 0 1
Interest income 9 9
(Losses)/gains on plan assets less interest income (3) 3
Benefits paid (14) (19)
Employers' contributions to external funds 3 4
Employee contributions to external funds 1 1
Fair value of plan assets at year-end 182 186
The changes in the asset ceiling are shown below:
in € million 2024 2023
Asset ceiling at beginning of year 5 4
Losses from changes in asset ceiling less interest expense 0 1
Asset ceiling at year-end 5 5
At 31 December 2024, the weighted average duration of pension obligations
amounts to 10.3 years (2023: 10.5 years).
The following amounts were recorded in the Consolidated Statement of Profit or
Loss:
in € million 2024 2023
Current service cost 2 2
Interest cost 19 19
Interest income (9) (9)
Pension expense recognised in profit or loss 12 12
The remeasurement results recognised in OCI are shown in the table below:
in € million 2024 2023
Accumulated remeasurement losses at beginning of year 118 95
Remeasurement (gains)/losses on present value of pension obligations (28) 24
Losses/(gains) on plan assets less interest income 3 (2)
Losses from changes in asset ceiling less interest expense 0 1
Accumulated remeasurement losses at year-end 93 118
The present value of plan assets is distributed to the following classes of
investments:
31.12.2024 31.12.2023
in € million Active market No active market Total Active market No active market Total
Insurances 0 73 73 22 55 77
Equity instruments 46 0 46 40 0 40
Debt instruments 41 1 42 44 0 44
Cash and cash equivalents 12 0 12 9 1 10
Other assets 9 0 9 15 0 15
Fair value of plan assets 108 74 182 130 56 186
The present value of the insurances to cover the Austrian pension plans
corresponds to the coverage capital. Insurance companies predominantly invest
in debt instruments and to a low extent in equity instruments and properties.
Plan assets do not include own financial instruments or assets utilised by the
Group.
The Group works with professional fund managers for the investment of plan
assets. They act on the basis of specific investment guidelines adopted by the
pension fund committee of the respective pension plans. The committees consist
of management staff of the finance department and other qualified executives.
They meet regularly in order to approve the target portfolio with the support
of independent actuarial experts and to review the risks and the performance
of the investments. In addition, they approve the selection or the extension
of contracts of external fund managers.
The largest part of the other assets is invested in pension reinsurance, which
creates a low counterparty risk towards insurance companies. In addition, the
Group is exposed to interest risks and longevity risks resulting from defined
benefit commitments.
The Group generally endows the pension funds with the amount necessary to meet
the legal minimum allocation requirements of the country in which the fund is
based. Moreover, the Group makes additional allocations at its discretion from
time to time. In the financial year 2025, the Group expects employer
contributions to external plan assets to amount to €4 million and direct
payments to entitled beneficiaries to €18 million. Employer contributions of
€5 million and direct pension payments of €17 million had been expected
for the financial year 2024.
The following sensitivity analysis shows the change in present value of the
pension and termination benefit obligations if one key parameter changes,
while the other influences are maintained constant. In reality, it is rather
unlikely that these influences do not correlate. The present value of the
pension obligations for the sensitivities shown was calculated using the same
method as for the actual present value of the pension obligations (projected
unit credit method).
31.12.2024 31.12.2023
in € million Change of assumption Pension plans Termination benefits Pension plans Termination benefits
in percentage points
or years
Present value of the obligations 377 39 421 36
Interest rate +0.25 (9) (1) (10) (1)
(0.25) 10 1 10 1
Salary increase +0.25 1 1 1 1
(0.25) (1) (1) 0 (1)
Pension increase +0.25 6 8
(0.25) (7) (7)
Life expectancy + 1 year 6 3
(1) year (5) (2)
These changes would have no immediate effect on the result of the period as
remeasurement gains and losses are recorded in OCI without impact on profit or
loss. The assumptions regarding the interest rate are reviewed semi-annually;
all other assumptions are reviewed at the end of the year.
Other personnel provisions
in € million 31.12.2024 31.12.2023
Termination benefits 35 34
Service anniversary bonuses 20 19
Semi-retirements 4 2
Other personnel provisions 59 55
Provisions for termination benefits
The provision for termination benefits relates mainly to employees that joined
an Austrian company before 1 January 2003 and are subject to a one-off
lump-sum termination benefit under Austrian legislation. This is regarded as a
post-employment benefit and accounted for consistently with pensions benefits
described above.
Provisions for the Austrian termination benefits, which account for over 83.0%
of the balance (2023: 81.0%) were based on the following measurement
assumptions:
in % 31.12.2024 31.12.2023
Interest rate 3.4% 3.3%
Future salary increase 3.4% 3.3%
The interest rate for the measurement of termination benefit obligations in
the Eurozone was determined taking into account the Company specific duration
of the portfolio.
Provisions for termination benefits developed as follows:
in € million 2024 2023
Provisions for termination benefits at beginning of year 34 32
Additions initial consolidation 0 2
Current service cost 1 2
Interest cost 1 1
Remeasurement losses 1 0
Benefits paid (2) (3)
Provisions for termination benefits at year-end 35 34
Payments for termination benefits are expected to amount to €2 million in
the year 2025. In the previous year, the payments for termination benefits
expected for 2024 amounted to €2 million.
The following remeasurement gains and losses were recognised in OCI:
in € million 2024 2023
Accumulated remeasurement losses at beginning of year 18 18
Remeasurement losses 1 0
Accumulated remeasurement losses at year-end 19 18
At 31 December 2024 the average duration of termination benefit obligations
amounted to 10.5 years (2023: 10.6 years).
Provisions for service anniversary bonuses
The measurement of provisions for service anniversary bonuses relating to
employees in Austria and Germany is based on an interest rate of 3.4% (2023:
3.3%) in Austria and 3.4% (2023: 4.2%) in Germany and considers salary
increases of 5.1% (2023: 5.2%) in Austria and 2.5% in Germany (2023: 2.5%).
Provisions for semi-retirement
The funded status of provisions for obligations to employees with
semi-retirement contracts is shown in the table below:
in € million 31.12.2024 31.12.2023
Present value of semi-retirement obligations 5 4
Fair value of plan assets (1) (1)
Provisions for semi-retirement obligations 4 3
External plan assets are ring-fenced from all creditors and exclusively serve
to meet semi-retirement obligations.
30. Provisions
The development of provisions is shown in the tables below for 2024 and 2023:
in € million Onerous/unfavourable contracts Labour and civil contingencies Demolition/disposal costs, Restructuring costs Other Total
environmental damages
31.12.2023 67 11 30 9 9 126
Currency translation (9) (2) (1) 0 0 (12)
Reversals (6) (3) (2) 0 (3) (14)
Additions 2 3 6 16 3 30
Additions interest 5 1 1 0 0 7
Use (13) (2) (1) (5) (3) (24)
Reclassifications 0 0 0 0 1 1
31.12.2024 46 8 33 20 7 114
non-current 35 8 28 0 0 71
current 11 0 5 20 7 43
in € million Onerous/unfavourable contracts Labour and civil contingencies Demolition/disposal costs, Restructuring costs Other Total
environmental damages
31.12.2022 62 9 23 12 4 110
Currency translation 3 0 0 0 0 3
Reversals (2) (3) (1) (1) (1) (8)
Additions 11 6 8 3 7 35
Additions interest 6 1 1 0 0 8
Use (13) (2) (1) (5) (1) (22)
Reclassifications 0 0 0 0 0 0
31.12.2023 67 11 30 9 9 126
non-current 52 11 28 0 0 91
current 15 0 2 9 9 35
In November 2017, the Group sold a plant located in Oberhausen, Germany, in
order to satisfy the conditions imposed by the European Commission in their
approval of the merger of RHI Refractories and Magnesita. Under the terms, the
Group remains obligated to provide raw materials at cost and recognised a
provision for unfavourable contracts as part of the purchase price allocation
to reflect the foregone profit margin. The non-current portion of this
contract obligation amounts to €32 million as of 31 December 2024 (2023:
€48 million) and the current portion to €9 million (2023: €11 million).
In addition, provisions for other unfavourable contracts amount to €5
million (2023: €8 million), mainly in Türkiye and Europe.
The provision for labour and civil contingencies primarily comprises labour
and civil litigation amounting to €8 million (2023: €8 million) arising
mainly in Brazil.
The provision for demolition and disposal costs and environmental damages
primarily includes provisions for the estimated costs of mining site
restoration of several mines in Brazil amounting to €7 million (2023: €9
million), various sites in Europe amounting to €15 million (2023: €10
million) and in the USA amounting to €7 million (2023: €6 million).
Provisions for restructuring costs amounting to €20 million at 31 December
2024 (2023: €9 million) primarily consist of estimated benefit obligations
to employees due to termination of employment and dismantling costs. €15
million (2023: €3 million) relates to the remaining redundancy costs at
Mainzlar, Germany, €3 million (2023: €3 million) relates to the plant
closure in Trieben, Austria and €1 million (2023: €2 million) pertains to
the termination of employment as a result of the Group's reorganisation of
certain global functions to regional ones.
Other consists mainly of provisions for claims arising from warranties and
other similar obligations from the sale of refractory products.
31. Trade payables and other liabilities
in € million 31.12.2024 31.12.2023
Trade payables 455 414
Trade payables subject to supplier finance arrangements 117 84
Contract liabilities 59 65
Liabilities to employees 111 136
Taxes other than income tax 31 33
Capital expenditure payable 22 33
Payables from commissions 10 9
Other current liabilities 38 46
Trade payables and other current liabilities 843 820
thereof financial liabilities 619 561
thereof non-financial liabilities 224 259
The payment terms of trade payables subject to supplier finance arrangements
other than forfaiting lie within a range of 60 to 150 days compared to the
range of payment terms of 30 to 120 days for trade payables not subject to
supplier finance arrangements. The payment terms of trade payables subject to
forfaiting extend up to 360 days. The carrying amount of trade payables
subject to supplier finance arrangements of which suppliers have received
payment from financial institutions amounts to €98 million. The Group
provides corporate parental guarantees, disclosed as part of the Group's
contingent liabilities, to the financial institutions as security for supplier
finance arrangements.
Contract liabilities mainly consist of prepayments received on orders. In 2024
€65 million (2023: €62 million) revenue was recognised that was included
in the contract liability balance at the beginning of the period.
The item liabilities to employees primarily consists of obligations for wages
and salaries, payroll taxes and employee-related duties, performance bonuses,
unused vacation and flextime credits. The increase in liabilities to employees
is primarily driven by the newly acquired entities, higher bonus accruals and
underlying inflationary effects in wages and salaries.
32. Cash generated from operations
in € million 2024 2023
Profit after income tax 154 171
Adjustments for
income tax 46 62
depreciation 136 134
amortisation 39 44
impairment of property, plant and equipment and intangible assets 42 1
(income) / expense from financial assets excluding trade and other receivables 3 (23)
(gains)/losses from the disposal of property, plant and equipment (5) 4
(gains)/losses from the disposal of foreign operations (8) 1
net interest expense, interest rate derivatives and remeasurement of 43 63
liabilities to the fixed-term or puttable non-controlling interest
other non-cash changes (10) 42
Changes in working capital
inventories 25 183
trade receivables 2 2
trade payables 83 (118)
contract liabilities (5) (14)
Changes in other assets and liabilities
other receivables and assets 7 13
provisions (28) (25)
other liabilities (22) 25
Cash generated from operations 502 565
Other non-cash changes include share-based payments of €9 million (2023:
€9 million), net interest expenses for defined benefit obligations amounting
to €12 million (2023: €12 million) and the unrealised portion of the net
income on foreign exchange effects amounting to €31 million (2023: the
unrealised portion of the net expense on foreign exchange effects of €36
million). Refer to Note (12) for details on the compositions of the net income
or expense on foreign exchange effects.
33. Net cash flow from financing activities
The reconciliation of movements of financial liabilities and assets to cash
flows arising from financing activities for the current and the prior year is
shown in the tables below:
Cash changes Non-cash changes
in € million 31.12.2023 Changes in foreign exchange rates Interest and other fair value changes Reclassifications Additions from initial consolidation Additions and modifications of leases (IFRS 16) 31.12.2024
Borrowings (1,949) 201 (1) (1) 0 0 0 (1,750)
Lease liabilities (70) 20 2 0 0 0 (29) (77)
Cash and cash equivalents 704 (130) 2 0 0 0 0 576
Marketable securities 11 (10) (1) 0 0 0 0 0
Net debt (1,304) 81 2 (1) 0 0 (29) (1,251)
Liabilities to fixed-term or puttable non-controlling interests(1)) (87) 6 (2) 22 9 0 0 (52)
1) Refer to Note (28) for details.
Cash changes Non-cash changes
in € million 31.12.2022 Changes in foreign exchange rates Interest and other fair value changes Reclassifications Additions from initial consolidation Additions and modifications of leases (IFRS 16) 31.12.2023
Borrowings (1,620) (257) 1 1 0 (74) 0 (1,949)
Lease liabilities (64) 23 1 (3) 0 (12) (15) (70)
Cash and cash equivalents 521 196 (4) 0 (9) 0 0 704
Marketable securities 0 11 0 0 0 0 0 11
Net debt (1,163) (27) (2) (2) (9) (86) (15) (1,304)
Liabilities to fixed-term or puttable non-controlling interests(1)) (68) 8 5 0 0 (32) 0 (87)
1) Refer to Note (28) for details.
34. Additional disclosures on financial instruments
The following tables show the carrying amounts and fair values of financial
assets and liabilities by measurement category and the allocation to the
measurement category. In addition, carrying amounts are shown aggregated
according to measurement category.
in € million Cash flow hedge At fair value through profit or loss At fair value through OCI At amortised cost Not a financial instrument Book value as of 31.12.2024 Fair value as of 31.12.2024
Financial assets
Non-current financial assets 12 15 7 8 0 42 42
Trade and other receivables 0 0 46 487 127 660 660
Current financial assets 13 4 0 0 0 17 17
Cash and cash equivalents 0 0 0 576 0 576 576
25 19 53 1,071 127 1,295 1,295
Financial liabilities
Borrowings 0 0 0 1,750 0 1,750 1,737
Other financial liabilities 9 38 0 92 0 139 139
Trade payables and other liabilities 0 0 0 619 224 843 843
9 38 0 2,461 224 2,732 2,719
in € million Cash flow hedge At fair value through profit or loss At fair value through OCI At amortised cost Not a financial instrument Book value as of 31.12.2023 Fair value as of 31.12.2023
Financial assets
Non-current financial assets 21 14 5 3 0 43 43
Trade and other receivables 0 0 31 510 139 681 681
Current financial assets 0 12 0 2 0 14 14
Cash and cash equivalents 0 0 0 704 0 704 704
21 26 36 1,219 139 1,441 1,441
Financial liabilities
Borrowings 0 0 0 1,949 0 1,949 1,937
Other financial liabilities 13 58 0 103 0 174 174
Trade payables and other liabilities 0 0 0 561 259 820 820
13 58 0 2,613 259 2,943 2,931
Non-current financial assets as well as current financial assets comprise
marketable securities, derivative financial instruments, shares and other
interests. Marketable securities, derivative financial instruments and shares
are measured at fair value.
Borrowings and other financial liabilities excluding liabilities related to
fixed-term or puttable non-controlling interests are carried at amortised cost
in the Consolidated Statement of Financial Position. Liabilities related to
fixed-term or puttable non-controlling interests based on a fixed
consideration are recognised at amortised cost whereas those liabilities based
on a variable consideration are recognised at fair value. The carrying amount
of other financial liabilities approximate their fair value at the reporting
date.
Trade and other current receivables, trade payables and other liabilities as
well as cash and cash equivalents are predominantly short-term. Therefore, the
carrying amounts of these items approximate fair value at the reporting date.
Fair value is defined as the amount for which an asset could be exchanged, or
a liability settled, between market participants in an arm's length
transaction on the day of measurement. When the fair value is determined it is
assumed that the transaction in which the asset is sold or the liability is
transferred takes place either in the main market for the asset or liability,
or in the most favourable market if there is no main market. The Group
considers the characteristics of the asset or liability to be measured which a
market participant would consider in pricing. It is assumed that market
participants act in their best economic interest.
The Group takes into account the availability of observable market prices in
an active market and uses the following hierarchy to determine fair value:
Level 1: Prices quoted in active markets for identical financial instruments.
Level 2: Measurement techniques in which all important data used are based on
observable market data.
Level 3: Measurement techniques in which at least one significant parameter is based on
non-observable market data.
The table below analyses the fair value of financial instruments held by the
Group by measurement technique:
31.12.2024 31.12.2023
in € million Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Assets
Non-current financial assets 12 12 8 32 12 20 5 37
Current financial assets 0 16 0 16 11 1 0 12
Liabilities
Borrowings 0 1,727 0 1,727 0 1,920 0 1,920
Other financial liabilities 0 10 52 62 0 17 87 104
The fair value of securities and shares is based on price quotations at the
reporting date (Level 1), where such quotations exist. In other cases, a
valuation model (Level 3) would be used for such instruments with an exception
if such instruments are immaterial to the Group, in which case cost serves as
an approximation of fair value.
The fair value of interest derivatives in a hedging relationship (interest
rate swaps) is determined by calculating the present value of future cash
flows based on current yield curves taking into account the corresponding
terms (Level 2).
The fair value of foreign currency derivative contracts corresponds to the
market value of the forward exchange contracts and the embedded derivatives in
open orders denominated in a currency other than the functional currency.
These derivatives are measured using quoted forward rates that are currently
observable (Level 2).
The fair value of commodity swaps for natural gas reflects the difference
between the fixed contract price and the closing quotation of the natural gas
price (EEX Base) as of the respective due date of the transaction. The closing
price on the stock exchange is used as the input (Level 2).
The fair value of liabilities related to fixed-term or puttable
non-controlling interests based on a variable consideration is measured at the
present value of the expected redemption amount based on the relevant earnings
measure and the current business plan of the respective company which is not
observable (Level 3). The fair value of borrowings is only disclosed and
corresponds to the present value of the discounted future cash flows using
yield curves that are currently observable (Level 2).
No contractual netting agreement of financial assets and liabilities were in
place as at 31 December 2024 and 31 December 2023.
Net results by measurement category in accordance with IFRS 9
The effect of financial instruments on the income and expenses recognised in
2024 and 2023 is shown in the following table, classified according to the
measurement categories defined in IFRS 9:
in € million 2024 2023
Net gain from financial assets and liabilities measured at fair value through 5 18
profit or loss
Net (loss) from financial assets and liabilities measured at amortised cost (1) (4)
The net gain from financial assets and liabilities measured at fair value
through profit or loss includes income from securities and shares, income from
the disposal of securities and shares, impairment losses and income from
reversals of impairment losses, fair value gains and losses on the measurement
of liabilities to fixed-term or puttable non-controlling interests, fair value
gains and losses and realised results of derivative financial instruments
outside the scope of hedge accounting.
The net loss from financial assets and liabilities measured at amortised cost
includes changes in valuation allowances and losses on derecognitions. Net
finance costs include interest income amounting to €22 million (2023: €20
million) and interest expenses of €76 million (2023: €75 million), which
result from financial assets and liabilities measured at amortised cost.
Other financial assets
Other financial assets consist of the following items:
31.12.2024 31.12.2023
in € million Current Non-current Total Current Non-current Total
Marketable securities and shares 0 20 20 11 17 28
Interest rate derivatives and commodity swaps 0 12 12 0 21 21
Restricted cash 0 8 8 0 3 3
Other interests 0 2 2 0 2 2
Loans 0 0 0 2 0 2
Derivatives in open orders and forward exchange contracts 17 0 17 1 0 1
Other financial assets 17 42 59 14 43 57
The marketable securities and shares include €7 million (2023: €5 million)
investment representing a minority stake in MCi Carbon Pty Ltd..
35. Derivative financial instruments
Interest rate derivatives
The Group has concluded interest rate swaps and one interest rate collar to
hedge the cash flow risk associated with financial liabilities carrying
variable interest rates. The combination of the interest rate swaps, and the
underlying variable interest debt instruments creates synthetic fixed interest
debt instruments without exposure to variability in cash flows due to changes
of interest rates. The combination of the interest rate collar and the
underlying variable interest debt instruments limits the variability of the
debt instruments' cash flows due to changes of interest rates to a
predetermined range. The Group has designated all interest rate swaps and the
interest rate collar as hedging instruments with the variable interest cash
flows of the underlying debt instruments as hedged items in individual hedging
relationships recognised as cash flow hedges. The economic relationship
between the hedging instrument and the hedged item is determined by comparing
the critical terms (nominal value, currency, interest payment date, interest
reset dates, etc.) of both items. If the critical terms of the hedging
instrument and the hedged item are either the same or closely aligned an
economic relationship is assumed to exist. The Group has established a hedge
ratio of 1:1 and the cash flow changes of the underlying hedged items are
balanced out by the cash flow changes of the hedging instruments. Potential
hedge ineffectiveness could arise out of differences in critical terms between
the hedging instruments and hedged items. Credit risk may affect hedge
effectiveness. However, this risk is assessed to be very low as only
international banks with high credit ratings are the counterparties to the
hedging instruments.
The fair value of all interest rate derivatives was €6 million at the
reporting date (2023: €18 million) and is shown in other non-current
financial assets in the Consolidated Statement of Financial Position. For the
reporting period of 2024, €6 million gain (2023: €15 million loss) has
been recognised in OCI as fair value movements of the hedging instrument and
€18 million (2023: €10 million) has been reclassified from OCI to profit
or loss and recognised within other net financial expenses reflecting the
settlement of the hedging instrument when interest on the underlying debt
instrument is paid. No ineffectiveness has been recognised in the Consolidated
Statement of Profit or Loss.
The financial effect of the hedged item and the hedging instrument for the
year 2024 and 2023 is shown as follows:
in € million Carrying amount Statement of Financial Position Change in fair value recognised in Other Comprehensive Income Nominal amount
2024 6 Other non-current 6 EUR 1,052 million
financial assets (liabilities)
2023 18 Other non-current (15) EUR 1,081 million
financial assets (liabilities)
in € million Cash flow hedge reserve within Equity Balance net of deferred tax
2024 6 5
2023 18 14
Commodity swaps
In order to hedge the cash flow risk associated with commodity price of gas
and oil, the Group has entered into financial commodity swaps. The Group has
designated all commodity swaps as hedging instruments with expected purchases
of commodities used in production as hedged items in individual hedging
relationships recognised as cash flow hedges. The economic relationship
between the hedged item and the hedging instrument is deemed upfront based on
the expectations that the values of the hedged item and the hedging instrument
will typically move in opposite directions in response to the hedged risk
determined by comparing the critical terms (nominal value, currency, commodity
purchase date, commodity swaps settlement dates, etc.) of both items. If the
critical terms of the hedging instrument and the hedged item are either the
same or closely aligned an economic relationship is assumed to exist. The
Group has established a hedge ratio of 1:1 and the cash flow changes of the
underlying hedged items are balanced out by the cash flow changes of the
hedging instruments. Potential hedge ineffectiveness could arise out of
differences in critical terms between the hedging instruments and the hedged
items. For oil hedges a source of potential ineffectiveness is different but
similar underlying (crude oil vs fuel oil). Credit risk may affect hedge
effectiveness. However, this risk is assessed to be very low as only
international banks with high credit ratings are the counterparties to the
hedging instruments.
The fair value of all commodity swaps was negative €3 million at the
reporting date and is shown in other non-current and current financial
liabilities in the Consolidated Statement of Financial Position. For the
reporting period of 2024, a €8 million gain has been recognised in OCI as
fair value movements of the hedging instrument and €1 million has been
removed from cash flow hedge reserve and included directly in the carrying
amount of the inventory reflecting the net settlement of the hedging
instrument when the underlying inventory is purchased. No ineffectiveness has
been recognised in the Consolidated Statement of Profit or Loss.
The financial effect of the hedged items and the hedging instruments for the
year 2024 is shown as follows:
in € million Carrying amount Statement of Financial Position Change in fair value recognised in Other Comprehensive Income Nominal amount
2024 (3) Other current and non-current 8 Gas 1,536 GWh
financial assets (liabilities)
Oil 624,033 bbl
Power 117 GWh
2023 (11) Other current and non-current (11) Gas 1,141 GWh
financial assets (liabilities)
Oil 700,297 bbl
Power 30 GWh
in € million Cash flow hedge reserve within Equity Balance net of deferred tax
2024 (3) (2)
2023 (11) (8)
The average commodity prices hedged by the commodity swaps derivatives are as
follows:
31.12.2024
Hedging instrument up to 1 year 1 to 5 years
Commodity swaps - gas Notional amount (Gwh) 214 1,322
Average hedged price per MWh 53.15 34.93
Commodity swaps - oil Notional amount (bbl) 346,342 277,691
Average hedged price per bbl 75.14 73.47
Commodity swaps - power Notional amount (Gwh) 117
Average hedged price per MWh 72.10
31.12.2023
Hedging instrument up to 1 year 1 to 5 years
Commodity swaps - gas Notional amount (Gwh) 20 1,121
Average hedged price per MWh 58.40 40.17
Commodity swaps - oil Notional amount (bbl) 406,324 293,973
Average hedged price per bbl 76.67 75.28
Commodity swaps - power Notional amount (Gwh) 30
Average hedged price per MWh 89.45
Forward exchange contracts
Foreign exchange forward contracts are entered into to reduce the Group's cash
flow exposure to currency movements based on the internal risk assessment and
analysis conducted. Hedge accounting is not applied to these economic hedges.
The nominal value and fair value of forward exchange contracts as of
31 December 2024 are shown in the table below:
31.12.2024
Purchase Sale Nominal in Nominal value Fair value
in million
in € million
MXN USD MXN 420 0
EUR USD USD 75 0
USD INR USD 15 0
EUR ZAR ZAR 175 0
USD BRL USD 7 0
CLP USD USD 17 0
EUR INR EUR 26 0
CZK EUR EUR 11 (1)
Forward exchange contracts (1)
The nominal value and fair value of forward exchange contracts as of
31 December 2023 are shown in the table below:
31.12.2023
Purchase Sale Nominal in Nominal value Fair value
in million
in € million
EUR ZAR ZAR 175 0
MXN USD MXN 670 0
USD INR USD 20 0
EUR USD USD 150 (1)
BRL USD USD 30 0
CLP USD USD 19 0
EUR INR EUR 33 0
CZK EUR EUR 16 0
Forward exchange contracts (1)
In 2024, the Group signed a share purchase agreement with the intention to
acquire the Resco Group. The acquisition was closed after the reporting date
(refer to Note (42) for details). The cash outflow related to the acquisition
is payable in USD but is funded in EUR. This exposes the Group to foreign
currency risk in the form of potential variability in the EUR equivalent of
the USD cash outflow due to changes in the USD/EUR exchange rate between the
signing date and the closing date of this acquisition. To hedge this foreign
currency exposure, the Group entered a deal contingent forward exchange
contract ('deal contingent forward') with a nominal value of USD 360 million
at the time of signing the share purchase agreement. The Group has designated
the deal contingent forward as hedging instrument with the EUR equivalent of
the USD cash outflow stemming from the intended acquisition as hedged item in
a hedging relationship recognised as cash flow hedge.
In terms of its structure, the deal contingent forward is a 'plain vanilla'
forward exchange contract buying USD and selling EUR at a fixed exchange rate,
whose settlement is conditional on the successful closing of the acquisition,
providing protection against USD/EUR exchange rate movements until the
acquisition closed. When the business combination was closed, the forward
exchange contract was settled as it would usually be on the closing date of
the acquisition, by applying an off market forward exchange rate at the
closing date. However, had closing failed, the rights and obligations
associated with the forward exchange contract would have disappeared at no
cost and there would have been no obligation for the Group and the
counterparty to settle it, which would have allowed the Group to exit the
forward contract at zero cost. The disappearance of the forward exchange
contract's rights and obligations in a scenario where closing would have
failed is referred to as a 'knock-out' feature. The forward exchange rate
considering the knock-out feature amounted to USD/EUR 1.0834 on the reporting
date.
The method for assessing hedge effectiveness applied for commodity hedges is
applied analogously to this hedging relationship. The main source of hedge
ineffectiveness is the 'knock-out' feature embedded in the deal contingent
forward, which does not exist in the hedged item.
The fair value of the deal contingent forward amounts to €13 million at the
reporting date and is shown in other current financial assets in the
Consolidated Statement of Financial Position. For the reporting period of
2024, a hedging gain of €13 million has been recognised in OCI as fair value
movement of the hedging instrument. The corresponding balance of the cash flow
hedge reserve, net of tax, amounts to €10 million at the reporting date.
36. Financial risk management
Financial risks are incorporated in the Group's corporate risk management
framework and are centrally controlled by Corporate Treasury.
None of the following risks have a significant influence on the going concern
premise of the Group.
Credit risks
The maximum credit risk from recognised financial assets amounts to €1,168
million (2023: €1,302 million) and is primarily related to investments with
banks and receivables due from customers.
The credit risk with banks related to investments (especially cash and cash
equivalents) is reduced as business transactions are only carried out with
prime financial institutions with a good credit rating. Individual counterpart
exposures limits are assigned to each financial institution based on a matrix
composed of the credit rating (S&P or Moody's) and balance sheet assets.
Trade receivables are hedged as far as possible through credit insurance and
collateral arranged through banks (guarantees, letters of credit) in order to
mitigate credit and default risk. Credit and default risks are monitored
continuously, and valuation allowance are recognised for risks that have
occurred and are identifiable.
The credit exposure from trade receivables and contract assets, which is
partially hedged by existing credit insurance and letters of credit, is shown
in the following table:
in € million 31.12.2024 31.12.2023
Trade receivables and contract assets - gross 533 542
Credit insurance and letters of credit (258) (235)
Trade receivables and contract assets - net 275 307
The movement in the valuation allowance in respect of trade receivables and
contract assets during the year and the previous year was as follows:
2024 2023
in € million Individually assessed - Collectively assessed - Individually assessed - Collectively assessed -
credit impaired
not credit impaired
credit impaired
not credit impaired
Accumulated valuation allowance at beginning of year 52 1 29 1
Currency translation (2) 0 0 0
Additions initial consolidation 0 0 9 0
Addition 3 0 19 0
Use (2) 0 (4) 0
Reversal (4) 0 (1) 0
Accumulated valuation allowance at year-end 47 1 52 1
For trade receivables and contract assets, for which no objective evidence of
impairment exists, lifetime expected credit losses have been calculated using
a provision matrix as shown below. To measure the expected credit losses,
trade receivables and contract assets have been grouped based on shared
credit risk characteristics and the days past due.
in € million Trade receivables and contract assets
31.12.2024 not past due less than 30 days more than 31 days Collectively assessed - Individually assessed - Total
not credit impaired
credit impaired
Expected credit loss rate in % 0.03 - 0.54% 0.09-1.24% 0.77 - 85.52%
Gross carrying amount invoiced 371 25 19 416 122 538
Lifetime expected credit loss (1) 0 0 (1) (1)
Valuation allowance - credit impaired (47) (47)
Carrying amount with either expected credit loss or incurred loss allowance 490
Carrying amount without expected credit loss or incurred loss allowance 43
Total trade receivables and contract assets 533
in € million Trade receivables and contract assets
31.12.2023 not past due less than 30 days more than 31 days Collectively assessed - Individually assessed - Total
not credit impaired
credit impaired
Expected credit loss rate in % 0.01 - 0.57% 0.05-1.22% 0.30 - 59.13%
Gross carrying amount invoiced 414 28 17 459 90 549
Lifetime expected credit loss (1) 0 0 (1) (1)
Valuation allowance - credit impaired (52) (52)
Carrying amount with either expected credit loss or incurred loss allowance 496
Carrying amount without expected credit loss or incurred loss allowance 46
Total trade receivables and contract assets 542
Liquidity risk
Liquidity risk refers to the risk that financial obligations cannot be met
when due. The Group's financial policy is based on long-term financial
planning and is centrally controlled and monitored continuously at the Group.
The liquidity requirements resulting from budget and medium-term planning are
secured by concluding appropriate financing agreements. As of 31 December
2024, the Group has a committed RCF of €600 million, which was unutilised
(2023: committed RCF was €600 million and was also unutilised). The RCF is a
syndicated facility with multiple international banks and matures in 2028. The
liquidity of the Group's subsidiaries is managed regionally but with central
steering. Access to liquidity and optimised cash levels is ensured by
Corporate Treasury, which supports business needs and lowers borrowing costs.
Refer to Note (27) for a description of the consequences if financial
covenants embedded in loan agreements are breached. Refer to Note (4) for a
description of the potential impacts on the finance costs of ESG-linked loans
if the Group's ESG rating gets downgraded.
Non-derivative financial liabilities
An analysis of the terms of non-derivative financial liabilities based on
undiscounted cash flows including the related interest payments shows the
following expected cash outflows:
Remaining term
in € million Carrying amount 31.12.2024 Cash up to 1 year 1 to 5 years over 5 years
outflows
Borrowings
fixed interest 403 417 157 252 8
variable interest 1,337 1,466 167 1,269 30
Other financial liabilities 10 10 1 9 0
Lease liabilities 77 87 19 41 27
Liabilities to fixed-term or puttable non-controlling interests 52 84 7 27 50
Trade payables and other current liabilities 619 619 619 0 0
Non-derivative financial liabilities 2,498 2,683 970 1,598 115
Remaining term
in € million Carrying amount 31.12.2023 Cash up to 1 year 1 to 5 years over 5 years
outflows
Borrowings
fixed interest 433 455 49 391 15
variable interest 1,499 1,736 154 1,364 218
Other financial liabilities 17 23 14 9 0
Lease liabilities 70 77 18 34 25
Liabilities to fixed-term or puttable non-controlling interests 87 181 18 13 150
Trade payables and other current liabilities 561 561 561 0 0
Non-derivative financial liabilities 2,667 3,033 814 1,811 408
Derivative financial instruments
The remaining terms of derivative financial instruments as of 31 December
2024 and 31 December 2023 are shown in the table below:
Remaining term
in € million Carrying amount 31.12.2024 Cash flows up to 1 year 1 to 5 years over 5 years
Receivables from derivatives with net settlement
Interest rate swaps 10 10 0 10 0
Commodity swaps 2 2 0 2 0
Forward exchange contracts 14 14 14 0 0
Derivatives in open orders 3 3 3 0 0
Liabilities from derivatives with net settlement
Commodity swaps 5 5 2 3 0
Interest rate derivatives 4 4 0 4 0
Forward exchange contracts 1 1 1 0 0
Remaining term
in € million Carrying amount 31.12.2023 Cash flows up to 1 year 1 to 5 years over 5 years
Receivables from derivatives with net settlement
Interest rate derivatives 20 20 0 20 0
Commodity swaps 1 1 1 0 0
Forward exchange contracts 0 0 0 0 0
Liabilities from derivatives with net settlement
Commodity swaps 11 11 1 10 0
Derivatives in open orders 3 3 3 0 0
Interest rate derivatives 2 2 0 1 1
Forward exchange contracts 1 1 1 0 0
Foreign currency risks
Foreign currency risks arise where business transactions (operating
activities, investments, financing) are conducted in a currency other than the
functional currency of a company. They are monitored at Group level and
analysed with respect to hedging options. Usually, the net position of the
Group in the respective currency serves as the basis for decisions regarding
the use of hedging instruments.
Foreign currency risks arise in financial instruments which are denominated in
a currency other than the functional currency and are monetary in nature.
These include trade receivables and payables, cash and cash equivalents as
well as financial liabilities as shown in the Consolidated Statement of
Financial Position. Investments in equity instruments are not of a monetary
nature, and therefore not linked to a foreign currency risk in accordance with
IFRS 7 'Financial Instruments: Disclosures'.
The majority of foreign currency financial instruments in the Group result
from operating activities and intragroup financing transactions. Significant
provisions denominated in foreign currencies are also included in the analysis
of risk.
The following table shows the foreign currency positions in the Group's major
currencies as of 31 December 2024 and 31 December 2023:
31.12.2024 in € million USD EUR ZAR TRY Other Total
Financial assets 579 82 11 22 15 709
Financial liabilities, provisions (426) (44) 0 (6) (20) (496)
Net foreign currency position 153 38 11 16 (5) 213
31.12.2023 in € million USD EUR GBP INR Other Total
Financial assets 729 60 8 3 48 848
Financial liabilities, provisions (470) (95) (15) (1) (22) (603)
Net foreign currency position 259 (35) (7) 2 26 245
The disclosures required by IFRS 7 for foreign exchange risks include a
sensitivity analysis that shows the effects of hypothetical changes in the
relevant risk variables on profit or loss and equity. The relevant risk
variables are the financial assets and financial liabilities recognised on the
reporting date that are denominated in a currency other than the functional
currency of the respective reporting entity. The effects on a particular
reporting period are determined by applying the hypothetical changes in these
risk variables to the financial instruments held by the Group as of the
reporting date. It is assumed that the positions on the reporting date are
representative for the entire year. The sensitivity analysis does not include
the foreign exchange differences that result from translating the net asset
positions of the group companies with a functional currency other than Euro
into the Group's reporting currency, the Euro.
A 10% appreciation or devaluation of the relevant functional currency against
the following major currencies as of 31 December 2024 would have had the
following effect on profit or loss and equity (both excluding income tax):
Appreciation of 10% Devaluation of 10%
31.12.2024 in € million (Loss)/gain Equity Gain/(loss) Equity
USD (14) (14) 17 17
EUR (3) 1 4 (1)
ZAR (1) (1) 1 1
TRY (1) (1) 2 2
Other currencies 0 0 (1) (1)
A 10% appreciation or devaluation of the relevant functional currency against
the following major currencies as of 31 December 2023 would have had the
following effect on profit or loss and equity (both excluding income tax):
Appreciation of 10% Devaluation of 10%
31.12.2023 in € million (Loss)/gain Equity Gain/(loss) Equity
USD (22) (20) 27 25
EUR 2 6 (2) (7)
Other currencies (2) (2) 2 2
The effect in equity also includes the foreign exchange effects related to
certain intragroup monetary assets and liabilities recorded directly in OCI
(refer to Note (3) for details.
Interest rate risks
The interest rate risk in the Group is primarily related to debt instruments
carrying variable interest rates, which may lead to fluctuations in results
and cash flows. At 31 December 2024, one interest rate collar with a nominal
value of €180 million (2023: €180 million) and interest rate swaps with a
nominal value of €872 million (2023: €901 million) existed with the
interest rate swaps converting the variable interest rate of the hedged debt
instrument into a fixed interest rate. Further information is provided in Note
(35).
The exposure to interest rate risks is presented through sensitivity analysis
in accordance with IFRS 7. This analysis shows the effects of changes in
market interest rates on interest payments, interest income and interest
expense and on equity.
The Group measures fixed interest financial assets and financial liabilities
at amortised cost and did not use the fair value option - a hypothetical
change in the market interest rates for these financial instruments at the
reporting date would have had no effect on profit and loss or equity.
Changes in market interest rates on debt instruments designated as cash flow
hedges to protect against interest rate-related payment fluctuations within
the scope of hedge accounting have an effect on equity and are therefore
included in the equity-related sensitivity analysis. If the market interest
rate as of 31 December 2024 had been 25 basis points higher or lower, equity
would have been €2 million (2023: €2 million) higher or lower considering
tax effects.
Changes in market interest rates have an effect on the interest result of
primary variable interest debt instruments whose interest payments are not
designated as hedged items as a part of cash flow hedge relationships against
interest rate risks and are therefore included in the calculation of the
result-related sensitivities. If the market interest rate as of 31 December
2024 had been 25 basis points higher or lower, the interest result would have
been €0 million (2023: €0 million) lower or higher.
Commodity price risk
The Group manages its exposure to commodity prices, namely gas and electricity
purchases in Europe, by entering into forward fixed price take or pay
contracts with various suppliers to mitigate and reduce the impact of price
volatility and secure the energy supply for its production process. These
contracts are mainly accounted for as executory contracts as the commodities
purchases are for own use purposes. The Group's Energy Risk policy sets out
thresholds for fixing quantities based on the expected usage which is usually
over a five-year period with lower levels of forward purchases in the outer
years.
In line with the above strategy, the Group may also enter into financial
commodity swap contracts to fix prices for expected purchases not covered by
the fixed price take or pay contracts within the overall defined thresholds.
Further information is provided under Note (35).
Other market price risk
The Group holds certificates in an investment fund amounting to €12 million
(2023: €12 million) in order to provide the legally required coverage of
personnel provisions of its Austrian subsidiaries. The market value of these
certificates is influenced by fluctuations of the worldwide volatile stock and
bond markets.
37. Capital management
The objectives of the capital management strategy of the Group are to continue
as a going concern and to provide a capital base from which to finance growth
and investments, to service debt, and to increase shareholders value,
including the payment of dividends to shareholders.
The Group manages its capital structure through careful monitoring and
assessment of the overall economic framework conditions, credit, interest rate
and foreign exchange risks and the requirements and risks related to
operations and strategic projects.
31.12.2024 31.12.2023
Net debt (in € million)(1)) 1,251 1,304
Net gearing ratio (in %) 91.2% 95.6%
Net debt to Adjusted EBITDA 2.30x 2.40x
1) Further information is provided under Note (33).
Net debt, which reflects borrowings and lease liabilities net of cash and cash
equivalents, and short-term marketable securities held for trading, is managed
by Corporate Treasury. The main task of the Corporate Treasury department is
to execute the capital management strategy, secure liquidity to support
business operations on a sustainable basis, use banking and financial services
efficiently and limit financial risks while at the same time optimising
earnings and costs.
The net gearing ratio is the ratio of net debt to total equity.
Net debt excluding lease liabilities/Adjusted EBITDA is the main financial
covenant of loan agreements. The key performance indicator for net debt in the
Group is the group leverage, which reflects the ratio of Net debt to Adjusted
EBITDA, including lease liabilities. It is calculated as follows:
in € million 31.12.2024 31.12.2023
EBIT 242 333
Amortisation 40 44
Restructuring and write-down expenses 24 20
Other operating income and expenses 101 12
Adjusted EBITA 407 409
Depreciation 136 134
Adjusted EBITDA 543 543
Total debt 1,750 1,949
Lease liabilities 77 70
Less: Cash and cash equivalents 576 704
Less: Marketable securities 0 11
Net debt 1,251 1,304
Net debt excluding IFRS 16 lease liabilities 1,174 1,234
Net debt to Adjusted EBITDA 2.30x 2.40x
Net debt to Adjusted EBITDA excluding IFRS 16 lease liabilities 2.16x 2.27x
In both 2024 and the previous reporting period, the Group complied with the
financial covenant of the Group's principal borrowing facilities (refer to
Note (27)). The Group has sufficient liquidity headroom within its committed
debt facilities.
Alternative Performance Measures (APMs) are non-IFRS measures which enable
investors and other readers to review alternative measurements of financial
performance, but they should not be used in isolation from the main financial
statements. Adjusted EBITA and adjusted EBITDA are key non-IFRS measures that
the Executive Management Team and Directors use internally to assess the
underlying performance of the Group. Adjusted EBITDA is defined as EBIT, as
presented in the Condensed Consolidated Statement of Profit or Loss, before
amortisation, depreciation, and excluded Items. Adjusted EBITA is determined
consistently with Adjusted EBITDA, but includes depreciation expense of
property, plant and equipment to reflect the wear and tear cost and future
replacement of productive assets on the Group. Excluded items are other
income, other expenses and restructuring expenses as reflected on the
Statement of Consolidated Profit or Loss, which are non-recurring in nature
and not reflective of the underlying operational performance of the business.
The excluded items presented as other income, and other expenses are explained
and broken down in Notes (7) and (8).
38. Contingent liabilities
Contingent liabilities have a remaining term of between one and five years.
Based on historical experience, the future probability that contingent
liabilities are realised is considered to be low.
At 31 December 2024, warranties, performance guarantees and other guarantees
amount to €78 million (2023: €71 million). The Group is subject to
lawsuits and disputes in the normal course of the business; the Group has
assessed these positions and recorded provisions where necessary.
Uncertain tax treatments
The calculation of income taxes is based on the tax laws applicable in the
individual countries in which the Group operates. Due to their complexity, the
tax items presented in the Consolidated Financial Statements may be subject to
different interpretations by local finance authorities. In this context it
should be noted that a tax provision is generally recognised when the Group
has a present obligation as a result of a past event, and when it is
considered probable that there will be a future outflow of funds.
The Group is continually adapting its global presence to improve customer
service and maintain its competitive advantage, and leads open discussions
with tax authorities about, for example, transfer of functions and related
profit between related parties and exit taxation. In this regard, disputes may
arise, where the Group management's understanding differs from the positions
of the local tax authorities. In such cases, where an appeal is available,
management's judgements are based on a likely outcome approach, taking into
consideration previous experience and advice from professional firms when
assessing the risks.
The Group is party to several tax proceedings in Brazil which involve
estimated contingent liabilities amounting to €117 million (2023: €272
million). These tax proceedings are as follows:
Income Tax relating to historical corporate transactions
There were three proceedings in which Brazilian Federal Tax Authorities issued
tax assessments which rejected the deduction of goodwill generated in two
corporate transactions that were undertaken in 2007 and 2008, for Corporate
Income Taxes. The tax authorities issued assessments arguing that such
transactions cannot generate deductions as they do not fulfil the requirements
provided by law. Those three proceedings ended in administrative courts in
2024, reducing the cash exposure to €33 million (2023: €177 million). Such
exposure is limited to the fiscal tax years up to 2018 at which stage all
available goodwill tax deductions had been made, and the Group is currently
disputing the remaining amounts in the judicial courts. The proceedings are
expected to last for at least five years.
Royalties
The Group is party to 38 proceedings where the Brazilian Mining Authorities
("ANM") challenged the criteria used for calculating and paying the Financial
Compensation for Exploration of Mineral Resources, which are mining royalties
payable by every mining company. The authorities have mainly disputed the
basis of production costs estimates used in the determination of the royalties
that are payable. The claims relate to fiscal years up to 2017, following
which the legislation for royalties was changed. The Group, together with its
technical and legal advisors continues to challenge ANM assessments. Most of
the procedures are ongoing within the ANM administrative courts. Final
decisions of the first cases are expected within three to four years. At 31
December 2024, the potential risk amounts to €28 million (2023: €32
million), including interest and penalties.
Corporate income and other taxes
There are several tax audits ongoing in Brazil mainly relating to: offsetting
federal tax payables and receivables, social security contributions, as well
as offsetting certain federal tax debts with corporate income tax credits. The
potential cash outflow resulting from the outcome of these tax audits amount
to €57 million (2023: €63 million).
39. Independent Auditor's remuneration
in € million 2024 2023
Fees in respect of the audit of the Consolidated and Parent Company Financial (1) (1)
Statements(1))
Other audit fees, in respect of subsidiaries' audit, to PwC network firms (2) (2)
Total audit fees (3) (3)
Other non-audit services(1)2)) (1) (1)
Total fees (4) (4)
1) Total fees to PricewaterhouseCoopers Accountants N.V. totalled €1
million (2023: €1 million).
2) Other non-audit services mainly include Interim review fees of €0.3
million (2023: €0.2 million) and fees for limited assurance on
Sustainability Statement of €0.3 million (2023: €0.0 million).
40. Business Combinations
Acquisitions completed in 2023
In July 2023 the Group completed the acquisition of Seven Refractories Group.
The purchase price allocation is final. Compared to the preliminary amounts
recognised for the acquired assets and liabilities in last year's Consolidated
Financial Statements, the intangible asset related to identified customer
relationships decreased by €3 million accompanied by a reduction in deferred
tax liabilities of €1 million. These adjustments were reflected against
goodwill and non-controlling interests, in line with IFRS 3, and mainly result
from the reassessment of valuation parameters used in the measurement of the
intangible asset.
In October 2023 the Group completed the acquisition of P-D Refractories. The
purchase price allocation is final and does not materially differ from the
purchase price allocation disclosed in the last year's Consolidated Financial
Statements.
Acquisitions completed in 2024
In June 2024 the Group, through its non-wholly owned subsidiary Horn & Co.
RHIM Minerals Recovery GmbH, completed the acquisition of 100% of the equity
shares of Refrattari Trezzi S.r.l., a company engaged in the refractory
recycling business. The acquisition means that a strategic production facility
has been added to the Group's existing plant network. The strengthened
presence in Italy will enable an increased supply of high-value secondary raw
materials and customised services to extend the Group's full-line services
portfolio for the customers. The consideration paid in cash amounts to €5
million.
41. Transactions with related parties
Related companies include joint ventures, associates and MSP Stiftung,
Liechtenstein, as a shareholder of RHI Magnesita N.V., since it exercises
significant influence based on its shareholding of more than 25%. The
personnel welfare foundation of Stopinc AG, Switzerland, as well as Chestnut
Beteiligungs GmbH, Germany and FEWI Beteiligungs GmbH, Germany (shareholders
of the Group, which are related to a director) are considered related
companies.
Related persons are persons having authority and responsibility for planning,
directing and controlling the activities of the Group (key management
personnel) and their close family members. Key management personnel comprise
members of the Board of Directors of RHI Magnesita N.V. and the Executive
Management Team (EMT).
Related companies
In 2024 and 2023, the Group conducted the following transaction with its
related companies:
Joint ventures
in € million 2024 2023
Revenue from the sale of goods and services 2 2
Purchase of raw materials 6 6
Trade liabilities 0 1
In 2024 and 2023, no transactions were carried out between the Group and MSP
Stiftung, FEWI Beteiligungs GmbH or Chestnut Beteiligungs GmbH, with the
exception of the dividend paid.
A service relationship with respect to the company pension scheme of the
employees of Stopinc AG exists between the personnel welfare foundation of
Stopinc AG and the fully consolidated subsidiary Stopinc AG. Stopinc AG makes
contribution payments to the plan assets of the foundation to cover pension
obligations. The pension plan is recognised as a defined benefit plan and is
included in Note (29). In the past reporting period, employer contributions
amounting to €1 million (2023: €1 million) were made to the personnel
welfare foundation. At 31 December 2024, a net asset from overfunded pension
plans of €1 million (2023: €2 million) is recognised.
Related persons
Remuneration of key management personnel of the Group comprises the
remuneration of the Board of Directors and the EMT.
in € million 2024 2023
Executive Directors and EMT
Short-term employee benefits 9 10
Share-based payments 4 6
Total 13 16
Non-Executive Directors(1)) 2 1
1) Compensation paid to Non-Executive Directors reflects fees for
services as Directors.
Employee representatives acting as Non-Executive Directors do not receive
additional compensation for these services and are not included in the above
table.
Share dealing reports of persons discharging managerial responsibilities are
published on the website of RHI Magnesita N.V. and announced via regulatory
news services. The Group maintains Directors' & Officers' liability
insurance for the Board of Directors and Company officers.
There is a non-remunerated consultancy agreement in place between RHI
Magnesita and a close relative of a Non-Executive Director to advise the Group
in respect of political and/or strategic analysis in countries outside the
European Union and Brazil.
42. Material events after the reporting date
In March 2024, the Group signed a share purchase agreement stipulating its
acquisition of 100% of the shares of Balmoral Refractories Holdings, Inc.,
USA, and its six wholly owned subsidiaries, together referred to as the Resco
Group. The acquisition was closed on 28 January 2025 which is the acquisition
date.
The Resco Group is a producer of shaped and unshaped refractories, including
products for use in the petrochemical, cement, aluminium, and steel making
industries. It operates seven plants and two raw material sites in the US and
two plants in the United Kingdom and Canada.
The acquisition of the Resco Group aims to increase RHI Magnesita's local
production in the US and Canada by transferring significant production volumes
from non-US plants to the Resco Group's production facilities in the US,
thereby improving supply chain security, reducing production lead times and
stabilising working capital. In addition, this acquisition continues the
Group's strategic growth trajectory in alumina-based refractories by providing
US customers with an enhanced product offering. Moreover, synergies are
expected to be generated through supply chain improvements, production network
optimisation, working capital reduction, logistics efficiencies, supply
integration, technology transfer, increased recycling opportunities and
procurement savings. Following the integration, the Resco Group will form part
of all reportable segments.
The preliminary cash consideration amounts to USD315 million (€300 million)
and is subject to post-closing adjustments in relation to Resco Group's
working capital and net debt. Additionally, the Group repaid borrowings and
liabilities for acquisition-related costs totalling USD100 million (€96
million) on behalf of the Resco Group and acquired cash amounting to USD6
million (€6 million) on closing of the acquisition resulting in a
preliminary net cash outflow related to the acquisition totalling USD409
million (€390 million). Of this amount, USD48 million (€44 million) was
paid before the reporting date, and the remainder was paid after the reporting
date.
The settlement of the deal contingent forward exchange contract disclosed in
Note (36) to hedge against the potential variability in the cash outflow due
to changes in the USD/EUR exchange rate resulted in a realised gain of €13
million. This gain reduces the EUR equivalent of the net preliminary cash
outflow related to the acquisition and goodwill, in accordance with the cash
flow hedge accounting requirements.
At the time the Consolidated Financial Statements were authorised for issue,
the purchase price was not allocated to the assets acquired and liabilities
assumed since the Financial Statements of the Resco Group as of the
acquisition date were not available. Therefore, the amounts recognised for
each major class of assets acquired and liabilities assumed, the determination
of preliminary goodwill as well as information on the income tax deductibility
of goodwill and the composition of goodwill are not disclosed.
Company Financial Statements of RHI Magnesita N.V.
Company Balance Sheet as at 31 December 2024
(before appropriation of result)
in € million Note 31.12.2024 31.12.2023
ASSETS
Non-current assets
Non-current financial assets (A) 1,193 1,196
Securities 1 1
Deferred tax assets 11 7
Total non-current assets 1,205 1,204
Current assets
Receivables from group companies 1 9
Other current receivables 4 1
Cash and cash equivalents (B) 0 1
Total current assets 5 11
Total assets 1,210 1,215
EQUITY AND LIABILITIES
Equity
Share capital (C) 50 50
Treasury shares (D) (108) (111)
Additional paid-in capital (E) 361 361
Legal and mandatory reserves (F) 86 86
Other reserves 671 651
Result for the period (J) 142 165
Shareholders' Equity 1,202 1,202
Current liabilities
Current liabilities (G) 8 13
Total liabilities 8 13
Total equity and liabilities 1,210 1,215
Company Statement of Profit or Loss for the period 1 January 2024 to 31 December 2024
in € million Note 2024 2023
General and administrative expenses (H) (25) (30)
Result before taxation (25) (30)
Loss before income tax (25) (30)
Income tax 3 (3)
Net result from investments (I) 164 198
Net result for the period (J) 142 165
Movements in Shareholders' Equity
Legal and mandatory reserves Other reserves
in € million Share Treasury shares Additional Cash flow hedges Currency translation Mandatory reserve Retained earnings Net result Equity attributable to shareholders
capital
paid-in
capital
31.12.2023 50 (111) 361 6 (163) 289 605 165 1,202
Appropriation of prior year result - - - - - - 165 (165) -
Net result - - - - - - - 142 142
Share transfer / Vested LTIP - 3 - - - - (3) - -
Share-based expenses - - - - - - 9 - 9
Dividends - - - - - - (87) - (87)
Net income / (expense) recognised directly in equity - - - 6 (91) - 21 - (64)
31.12.2024 50 (108) 361 12 (254) 289 710 142 1,202
Legal and mandatory reserves Other reserves
in € million Share Treasury shares Additional Cash flow hedges Currency translation Mandatory reserve Retained earnings Net result Equity attributable to shareholders
capital
paid-in
capital
31.12.2022 50 (116) 361 32 (148) 289 378 156 1,002
Appropriation of prior year result - - - - - - 156 (156) -
Net result - - - - - - - 165 165
Share transfer / Vested LTIP - 5 - - - - (5) - -
Share-based expenses - - - - - - 9 - 9
Dividends - - - - - - (78) - (78)
Net income / (expense) recognised directly in equity - - - (26) (15) - 145 - 104
31.12.2023 50 (111) 361 6 (163) 289 605 165 1,202
Notes to the Company Financial Statements 2024
General
The Financial Statements of RHI Magnesita N.V. for the year ended 31 December
2024 were approved and authorised for issue by the Board of Directors on 26
February 2025. RHI Magnesita N.V. (the "Company"), is a public limited company
incorporated under the laws of the Netherlands (naamloze vennootschap), having
its official seat (statutaire zetel) in Arnhem, the Netherlands, and its
office at Kranichberggasse 6, 1120 Vienna, Austria, registered with the Dutch
Trade Register under number 68991665.
The shares of RHI Magnesita N.V. (ISIN code NL0012650360) are listed within
the Equity Shares (Commercial Companies) category of the Official List of the
London Stock Exchange (symbol: RHIM) and is a constituent of the FTSE 250
index. The Company holds a secondary listing on the Vienna Stock Exchange
(Wiener Börse).
Basis of preparation
The Company Financial Statements have been prepared in accordance with the
provisions of Part 9 of Book 2 of the Dutch Civil Code. The Company uses the
option of Section 362, subsection 8 of Part 9, Book 2, of the Dutch Civil Code
to prepare the Company Financial Statements on the basis of the same
accounting principles as those applied for the Consolidated Financial
Statements. Valuation is based on recognition and measurement requirements of
IFRS Accounting Standards as adopted by the EU and as explained further in the
Notes to the Consolidated Financial Statements.
Fiscal Unity
For corporate income tax purposes, RHI Magnesita N.V., Vienna Branch, acts as
the head of a corporate tax group in Austria with the following companies:
· Lokalbahn Mixnitz-St. Erhard GmbH
· Radex Vertriebsgesellschaft m.b.H
· Refractory Intellectual Property GmbH
· RHI Refractories Raw Material GmbH
· Veitsch-Radex GmbH
· Veitsch-Radex Vertriebgesellschaft m.b.H
· Veitscher Vertriebsgesellschaft m.b.H
According to the Group and tax compensation agreement, which forms a legal
requirement for the Austrian corporate tax group, tax compensation payments
within the corporate tax group are calculated based on the stand-alone method,
without charging negative tax compensations. In case of a taxable profit, the
respective tax group member has to pay a tax compensation to RHI Magnesita
N.V. as the head of the corporate tax group amounting to the legally
applicable corporate tax rate (23.0% for 2024). In case of a taxable loss, the
respective tax group member does not receive a negative tax compensation by
RHI Magnesita N.V., but rather the taxable loss is carried forward internally
and reduces the calculation base for any future tax compensation payment by
the respective tax group member to RHI Magnesita N.V. (group internal carry
forward of losses). Any tax compensation payment by tax group members to RHI
Magnesita N.V. is reduced by withholding taxes paid by the respective group
member, which RHI Magnesita N.V. could credit against any corporate income tax
due in Austria. For cases of termination of the corporate tax group or cases
in which a tax group member leaves the corporate tax group, the group and tax
compensation agreement foresees a final tax compensation true-up.
The corporate income tax rate for the Company is 23.0% (2023: 24.0%). The
effective tax rate is negative 1.9% (2023: 1.9%) with an income tax income of
€3 million (2023: €3 million expense) on a profit before income tax of
€139 million (2023: €168 million). Overall, a taxable income of €5
million deriving from movement in deferred tax positions is offset by a tax
expense of €2 million which stems from the consolidation of the results of
subsidiaries which are part of the fiscal unity; RHI Magnesita N.V. is the
head of this fiscal unity. The low effective income tax rate is mainly
attributable to a substantial non-taxable income derived from investments in
subsidiaries (€164 million).
All income and expenses are settled through their intercompany (current)
accounts.
Significant accounting policies
Non-current financial assets
In the Company Financial Statements, investments in Group companies are stated
at net asset value, in accordance with the equity method, if the Company
effectively exercises influence of significance over the operational and
financial activities of these investments. The net asset value is determined
on the basis of the accounting principles applied by the Company. In case the
net asset value of an investment in a Group company is negative, any existing
loans to Group companies considered as net investment are impaired. A
provision for any remaining equity deficit is recognised when an outflow of
resources is probable and can be reliably estimated.
Receivables from Group companies
Accounts receivables are measured at fair value and are subsequently measured
at amortised cost, less allowance for credit losses. The carrying amount of
the accounts receivable approximates the fair value.
Net result from investments
The share in the result of investments comprises the share of the Company in
the result of these investments.
Non-current financial assets
(A) Non-current financial assets
The financial fixed assets comprise investments in:
31.12.2024 31.12.2023
Name and country of incorporation of the company Country of core activity Share in % Share in %
RHI Magnesita Deutschland AG, Wiesbaden, Germany Germany 12.5 12.5
RHI Refractories Raw Material GmbH, Vienna, Austria Austria 25.0 25.0
RHI Magnesita GmbH, Vienna, Austria Austria 100.0 100.0
The investments have developed as follows:
in € million 2024 2023
At beginning of year 1,196 943
Transactions with non-controlling interests without change of control 5 161
Changes from currency translation and cash flow hedges (84) (40)
Changes from defined benefit plans 16 (16)
Dividend distribution (104) (50)
Net result from investments 164 198
Balance at year-end 1,193 1,196
The following list, prepared in accordance with the relevant legal
requirements (Dutch Civil Code, Book 2, Sections 379), shows all companies in
which RHI Magnesita N.V. holds a direct or indirect share of at least 20%:
31.12.2024 31.12.2023
Ser. no. Name and country of incorporation of the company Share- Share in % Share- Share in %
holder
holder
1. RHI Magnesita N.V., Arnhem, Netherlands
2. Agellis Group AB, Lund, Sweden 32. 100.0 32. 100.0
3. Baker Refractories Holding Company, Delaware, USA 22. 100.0 22. 100.0
4. Baker Refractories I.C., Inc., Delaware, USA 3. 100.0 3. 100.0
5. Didier Société Industrielle de Production et de Construction - "D.S.I.P.C.", 47. 100.0 47. 100.0
Valenciennes, France
6. Dutch Brasil Holding B.V., Arnhem, Netherlands 90. 100.0 90. 100.0
7. Dutch MAS B.V., Arnhem, Netherlands 47. 100.0 47. 100.0
8. Dutch US Holding B.V., Arnhem, Netherlands 90. 100.0 90. 100.0
9. Foreign Enterprise "VERA", Dnepropetrovsk, Ukraine 32. 100.0 32. 100.0
10. GIX International Limited, Dinnington, United Kingdom 94. 100.0 94. 100.0
11. Horn & Co. RHIM Minerals Recovery GmbH, Siegen, Germany 48. 55.0 48. 51.0
12. Intermetal Engineers (India) Private Limited, Mumbai, India 49. 100.0 49. 100.0
13. Jinan New Emei Industries Co. Ltd., Jinan, China 43. 65.0 43. 65.0
14. Liaoning RHI Jinding Magnesia Co., Ltd, Dashiqiao, China1) 32. 100.0 32. 100.0
15. Lokalbahn Mixnitz-St. Erhard GmbH, Vienna, Austria 69. 100.0 69. 100.0
16. LWB Refractories Holding France S.A.S., Valenciennes, France 3) 33. 100.0 n/a 100.0
17. Magnesita Asia Refractory Holding, Limited, Hong Kong, Hong Kong 16. 100.0 16. 100.0
18. Magnesita Malta Finance Ltd., St. Julians, Malta 3) 19. 100.0 n/a 100.0
19. Magnesita Malta Holding Ltd., St. Julians, Malta 3) 48. 100.0 n/a 100.0
20. Magnesita Mineração S.A., Brumado, Brazil 28. 100.0 28. 100.0
21. Magnesita Refractories (Dalian) Co., Ltd., Dalian, China 3) 43. 100.0 n/a 100.0
22. Magnesita Refractories Company, York, USA 33. 100.0 33. 100.0
23. Magnesita Refractories Limited, Dinnington, United Kingdom 3. 100.0 3. 100.0
24. Magnesita Refractories México, S.A. de C.V., Monterrey, Mexico 3.,4. 100.0 3.,4. 100.0
25. Magnesita Refractories Middle East Free Zone Establishment, Dubai, United Arab 6. 100.0 n/a 100.0
Emirates 3)
26. Magnesita Refractories S.C.S., Valenciennes, France 3) 16.,33. 100.0 n/a 100.0
27. Magnesita Refractories S.R.L., Milano, Italy 3) 33. 100.0 n/a 100.0
28. Magnesita Refratários S.A., Contagem, Brazil 6. 100.0 6. 100.0
29. Magnesita Resource (Anhui) Company Ltd., Chizhou, China 43. 100.0 43. 100.0
30. P-D Refractories CZ a.s., Velké Opatovice, Czech Republic 48. 96.9 48. 86.8
31. Producción RHI México, S. de R.L. de C.V., Ramos Arizpe, Mexico 64.,94. 100.0 64.,94. 100.0
32. Radex Vertriebsgesellschaft m.b.H., Leoben, Austria 92. 100.0 92. 100.0
33. Rearden G Holdings Eins GmbH, Wiesbaden, Germany 3) 6. 100.0 n/a 100.0
34. Refractarios Argentinos S.A, Industrial Comercial Y Minera (I.C.M.), San 6.,8.,94. 100.0 6.,8.,94. 100.0
Nicolás, Argentina
35. Refractarios Magnesita Colombia S.A.S., Sogamoso, Colombia 6. 100.0 6. 100.0
36. Refractarios Magnesita Perú S.A.C., Lima, Peru 6. 100.0 6. 100.0
37. Refractory Intellectual Property GmbH, Vienna, Austria 48. 100.0 48. 100.0
38. Refractory Intellectual Property GmbH & Co KG, Vienna, Austria 37. 100.0 37. 100.0
39. Refrattari Trezzi S.r.l., Merlino, Italy 11. 100.0 - 0.0
40. RHI Canada Inc., Burlington, Canada 94. 100.0 94. 100.0
31.12.2024 31.12.2023
Ser. no. Name and country of incorporation of the company Share- Share in % Share- Share in %
holder
holder
41. RHI Chile S.A., Santiago, Chile 10.,34.,94. 100.0 10.,34.,94. 100.0
42. RHI Italia S.R.L., Brescia, Italy 48. 100.0 48. 100.0
43. RHI Magnesita (China) Co., Ltd., Shanghai, China 32. 100.0 32. 100.0
44. RHI Magnesita (Chongqing) Refractory Materials Co., Ltd., Chongqing, China 43. 51.0 43. 51.0
48. RHI Magnesita GmbH, Vienna, Austria 1. 100.0 1. 100.0
49. RHI Magnesita India Limited, New Delhi, India 6.,8.,94. 56.1 6.,8.,94. 56.1
50. RHI Magnesita India Refractories Limited, Rajgangpur, India 49. 100.0 49. 100.0
51. RHI Magnesita RE Limited, Guernsey, United Kingdom 32. 100.0 32. 100.0
52. RHI Magnesita Sales Germany GmbH, Wiesbaden, Germany 75. 100.0 75. 100.0
53. RHI Magnesita Seven Refractories Limited, Dseven, India 50. 100.0 50. 100.0
54. RHI Magnesita Switzerland AG, Hünenberg, Switzerland 32.,47. 100.0 32.,47. 100.0
55. RHI Magnesita Trading B.V., Rotterdam, Netherlands 48. 100.0 48. 100.0
56. RHI Magnesita Turkey Refrakter Ticaret Anonim Sirketi, Eskisehir, Türkiye(2)) 15.,32.,90. 100.0 15.,32.,90. 100.0
57. RHI Magnesita Vietnam Company Limited, Ho Chi Minh City, Vietnam 63. 100.0 63. 100.0
58. RHI Magnesita Wetro GmbH, Puschwitz, Germany 48. 100.0 48. 100.0
59. RHI Marvo S.R.L., Bucharest, Romania 32.,90. 100.0 32.,90. 100.0
60. RHI Refractories (Dalian) Co., Ltd., Dalian, China 43. 100.0 43. 100.0
61. RHI Refractories Africa (PTY) LTD, Sandton, South Africa 32. 100.0 32. 100.0
62. RHI Refractories Andino, C.A., Puerto Ordaz, Venezuela 94. 100.0 94. 100.0
63. RHI Refractories Asia Pacific Pte. Ltd, Singapore, Singapore 48. 100.0 48. 100.0
64. RHI Refractories España, S.L., Lugones, Spain 7.,47. 100.0 7.,47. 100.0
65. RHI Refractories France SA, Valenciennes, France 47.,52.,81. 100.0 47.,52.,81. 100.0
66. RHI Refractories Ibérica, S.L., Oviedo, Spain 81. 100.0 81. 100.0
67. RHI Refractories Liaoning Co., Ltd., Bayuquan, China(1)) 43. 100.0 43. 100.0
68. RHI Refractories Nord AB, Stockholm, Sweden 81. 100.0 81. 100.0
69. RHI Refractories Raw Material GmbH, Vienna, Austria 1.,32.,48. 100.0 1.,32.,48. 100.0
70. RHI Refractories Site Services GmbH, Wiesbaden, Germany 47. 100.0 47. 100.0
71. RHI Refractories UK Limited, Bonnybridge, United Kingdom 47. 100.0 47. 100.0
72. RHI Refratãrios Brasil Ltda., Contagem, Brazil 6.,28. 100.0 6.,28. 100.0
73. RHI Trading (Dalian) Co., Ltd, Dalian, China 43. 100.0 43. 100.0
74. RHI Ukraina LLC, Dnepropetrovsk, Ukraine 32.,90. 100.0 32.,90. 100.0
75. RHI Urmitz AG & Co. KG, Mülheim-Kärlich, Germany 47.,70. 100.0 47.,70. 100.0
76. RHI US Ltd., Delaware, USA 8. 100.0 8. 100.0
77. RHI Wostok Limited Liability Company, Moscow, Russia 32.,48. 100.0 32.,48. 100.0
78. RHI Wostok Service Limited Liability Company, Moscow, Russia 32.,48. 100.0 32.,48. 100.0
79. RHIM Mireco Mitterdorf GmbH, St.Barbara im Mürztal, Austria 11. 100.0 11. 100.0
80. RHI-Refmex, S.A. de C.V., Ramos Arizpe, Mexico 55.,64.,94. 100.0 64.,94. 100.0
81. Sapref AG für feuerfestes Material, Basel, Switzerland 94. 100.0 94. 100.0
82. Seven Refractories (UK) Ltd, Rotherham, United Kingdom 83. 100.0 83. 76.0
83. Seven Refractories d.o.o, Divača, Slovenia 48. 100.0 48. 100.0
84. Seven Refractories Deutschland GmbH, Düsseldorf, Germany 48. 100.0 48. 100.0
85. Seven Refractories Holding, Inc., Huron, USA 83. 100.0 83. 100.0
31.12.2024 31.12.2023
Ser. no. Name and country of incorporation of the company Share- Share in % Share- Share in %
holder
holder
86. Seven Refractories Limited, Nicosia, Cyprus 83. 100.0 83. 51.0
87. Seven Refractories S.r.l., Castellazzo Bormida, Italy 83. 100.0 83. 100.0
88. Sipra S.p.A., Bergamo, Italy 83. 52.0 83. 52.0
89. Sörmaş Söğüt Refrakter Malzemeleri Anonim Şirketi, Söğüt / Bilecik, 32. 91.3 32. 91.0
Türkiye
90. Veitscher Vertriebsgesellschaft m.b.H., Vienna, Austria 48. 100.0 48. 100.0
91. Veitsch-Radex GmbH, Vienna, Austria 48. 100.0 48. 100.0
92. Veitsch-Radex GmbH & Co OG, Vienna, Austria 48. 100.0 48. 100.0
93. Veitsch-Radex Vertriebsgesellschaft m.b.H., Vienna, Austria 48. 100.0 48. 100.0
94. VRD Americas B.V., Arnhem, Netherlands 32.,48. 100.0 32.,48. 100.0
95. Zimmermann & Jansen GmbH, Wiesbaden, Germany 47. 100.0 47. 100.0
96. Dr.-Ing. Petri & Co. Unterstützungs-Gesellschaft m.b.H., Wiesbaden, 47. 100.0 47. 100.0
Germany
97. Horn & Co Polska sp. z o.o., Chorzów, Poland 11. 100.0 11. 100.0
98. Magnesita Refractories Private Limited, Mumbai, India (3)) 33. 100.0 n/a 100.0
99. Minerals and Metals Recovering - Mireco Aktiebolag, Fagersta, Sweden 11. 100.0 11. 100.0
100. Mireco SARL, Entzheim, France 11. 100.0 11. 100.0
101. Mireco SH.P.K, Lebushe, Kosovo 11. 100.0 11. 100.0
102. Rudgruvans Industrier Aktiebolag, Fagersta, Sweden 11. 100.0 11. 100.0
Equity-accounted joint ventures and associated companies
103. Chongqing Boliang Refractory Materials Co., Ltd., Chongqing, China 43. 51.0 43. 51.0
104. Magnesita-Envoy Asia Ltd., Kaohsiung, Taiwan 3. 50.0 3. 50.0
105. P-D Kremen d.o.o., Šentjernej, Slovenia 30. 50.0 30. 50.0
1) In accordance with IAS 32, fixed-term or puttable non-controlling
interests are shown under liabilities.
2) Further shareholder is VRD Americas B.V., Arnhem, Netherlands.
3) 2023 Shareholder(s) have been merged and are consequently no longer
part of this list.
Current assets
(B) Cash and cash equivalents
Cash and cash equivalents are at RHI Magnesita N.V.'s free disposal.
Equity
(C) Share capital
The Company's authorised share capital amounts to €100,000,000, comprising
100,000,000 ordinary shares, each of €1 nominal value. As at 31 December
2024, RHI Magnesita N.V.'s issued and fully paid-in share capital consists of
47,195,936 ordinary shares (2023: 47,130,338 ordinary shares). For additional
information on treasury shares see (D).
(D) Treasury shares
As at 31 December 2024, RHI Magnesita treasury shares amount to 2,281,769
(2023: 2,347,367).
(E) Additional paid-in capital
Additional paid-in capital comprises premiums on the issue of shares less
issue costs by RHI Magnesita N.V.
(F) Legal, mandatory and other reserves
Cash flow hedges
The item cash flow hedges include gains and losses from the effective part of
cash flow hedges less tax effects. Further information on hedge accounting is
included in Note (35) and Note (36) of the Consolidated Financial Statements.
Currency translation
Currency translation includes the accumulated currency translation differences
from translating the Financial Statements of foreign subsidiaries as well as
unrealised currency translation differences from monetary items which are part
of a net investment in a foreign operation, net of related income taxes. If
foreign companies are deconsolidated, the currency translation differences are
recognised in the Statement of Profit or Loss as part of the gain or loss from
the sale of shares in subsidiaries. In addition, when monetary items cease to
form part of a net investment in a foreign operation, the currency translation
differences of these monetary items previously recognised in OCI are
reclassified to profit or loss.
The cash flow hedge reserve and the currency translation reserve are legal
reserves and are restricted for distribution.
Legal and mandatory reserve
The Articles of Association stipulate a mandatory reserve of €288,699,231
which was created in connection with the merger of RHI Refractories and
Magnesita in 2017.
No distributions, allocations or additions may be made, and no losses of the
Company may be allocated to the mandatory reserve.
Legal and mandatory reserves represent legal and statutory reserves in line
with Chapter 7 'Decree on financial statements formats' of the Dutch Civil
Code.
Retained earnings
Retained earnings includes the result of the financial year and results that
were earned by consolidated companies during prior periods but not
distributed. The difference between the purchase consideration or sale
proceeds after tax and the relevant proportion of the non-controlling
interest, measured by reference to the carrying amount of the interest's net
assets at the date of acquisition or sale, is recognised in retained earnings
too.
Net income recognised directly in equity represents the change of
non-controlling interests without a change of control through the year (€5
million) and the defined benefit plans (€16 million).
Current liabilities
(G) Current liabilities
in € million 31.12.2024 31.12.2023
Trade payables 0 1
Payables to group companies 3 5
Accrued liabilities 5 7
Total current liabilities 8 13
The current liabilities are due in less than one year. The fair value of other
current liabilities approximates the book value, due to their short-term
character.
(H) General and administrative expenses
in € million 2024 2023
External services/consulting expenses (2) (6)
Personnel expenses (21) (21)
Other expenses (2) (3)
Total general and administrative expenses (25) (30)
in € million 2024 2023
Wages and salaries (18) (18)
Social security charges (1) (1)
Pension contributions (1) (1)
Other employee costs (1) (1)
Total wages and salaries (21) (21)
(I) Net results from investments
In 2024, the full year results of the investments amount to a profit of €164
million (2023: €198 million) and are recognised in the Company Statement of
Profit or Loss.
(J) Net result for the period
In 2024, there are no differences in the result between the Company Financial
Statements and the Consolidated Financial Statements.
Proposed appropriation of result
It is proposed that, pursuant to Article 27 clause 1 of the Articles of
Association of the Company, as approved in the AGM 2023, the result shown in
RHI Magnesita N.V. income statement is appropriated as follows:
in € million 2024
Profit attributable to shareholders 142
In accordance with Article 27 clause 1 to be transferred to reserves 0
At the disposal of the General Meeting of Shareholders 142
For 2024, the Board of Directors will propose a final dividend of €1.80 per
share for the shareholders of RHI Magnesita N.V. The proposed dividend is
subject to approval by the AGM in May 2025.
Other notes
Number of employees
The average number of employees of RHI Magnesita N.V. during 2024 amounts to 9
(2023: 9); all employees are working outside the Netherlands.
Off balance sheet commitments
RHI Magnesita N.V., as an ultimate parent company, provided a corporate
guarantee of €1,783 million (2023: €2,008 million) for the borrowings of
the Group. The Borrowings are as disclosed in Note (27) of the Consolidated
Financial Statements. Additionally, €44 million (2023: €20 million) of
corporate guarantees are issued in favour of customers and suppliers of the
Group.
The Company has issued a declaration of joint and several liability as
referred to in section 403, Book 2 of the Dutch Civil Code in respect of one
of its consolidated participations, namely RHI Magnesita Trading B.V., meaning
that the company is liable in case of default.
Other information
Information regarding independent auditor's fees, the number of employees of
RHI Magnesita Group and the remuneration of the Board of Directors is included
in Note (39), (10) and (41) of the Consolidated Financial Statements.
The Company opened a branch (RHI Magnesita N.V.) in Vienna, Austria and, as of
February 2020, started to employ staff in the branch office and undertake
services.
The following branches are part of subsidiaries which are directly or
indirectly controlled by RHI Magnesita N.V.: "Magnesita Asia Refractory
Holding Limited Company (Korea branch)", Gyeongsangbuk-do (Jidok-dong),
Republic of Korea; Sipra S.p.a. Branch office nr. BG-2, Filago, Italy;
Magnesita Resource (Anhui) Company Ltd., ChangLong Gang Dolomite Quarry,
Chizhou, China; RHI Refractories Asia Pacific Ptd Ltd Taiwan Branch,
Kaohsiung, Taiwan; RHI Refractories Asia Pacific Pte Ltd Korea Branch,
Gyeongsangbuk-do, Republic of Korea; RHI Refractories Site Services
GmbH-Niederlassung Unterwellenborn, Unterwellenborn, Germany; Veitsch-Radex
Vertriebsgesellschaft m.b.H. (Spólka z ograniczona odpowiedzialnoscia)
Oddzial w Polsce, Zabrze, Poland; Veitsch-Radex Vertriebsgesellschaft m.b.H.
Podružnica Jesenice, Jesenice, Slovenia; Veitsch-Radex Vertriebsgesellschaft
mbH - Oman Operations, Vienna, Austria; Veitsch-Radex VertriebsgmbH - branch
Morocco, Casablanca, Morrocco.
Material events after the reporting date
There were no material events after the reporting date other than those
disclosed in Note (42) of the Consolidated Financial Statements.
Vienna, 26 February 2025
Board of Directors
Executive Directors
Stefan Borgas Ian Botha
Non-Executive Directors
Herbert Cordt John Ramsay
Janet Ashdown David Schlaff
Stanislaus Prinz zu Sayn-Wittgenstein Berleburg Janice "Jann" Brown
Karl Sevelda Marie-Hélène Ametsreiter
Wolfgang Ruttenstorfer A. Katarina Lindström
Employee Representative Directors
Karin Garcia Martin Kowatsch
Michael Schwarz
Other information
Provisions of the articles of association on profit and distributions
The stipulations of Article 27 and 28 of the Articles of Association
concerning profit and distributions are:
27 Profit and distributions
27.1 The Board may resolve that the profits realised during a financial year
will fully or partially be appropriated to increase and/or form reserves. With
due regard to Article 26.2, a deficit may only be offset against the reserves
prescribed by law to the extent this is permitted by law.
27.2 The allocation of profits remaining after application of Article 27.1
shall be determined by the General Meeting. The Board shall make a proposal
for that purpose. A proposal to make a distribution of profits shall be dealt
with as a separate agenda item at the General Meeting.
27.3 Distribution of profits shall be made after adoption of the annual
accounts if permitted under the law given the contents of the annual accounts.
27.4 The Board may resolve to make interim distributions and/or to make
distributions at the expense of any reserve of the Company, other than the
Mandatory Reserve.
27.5 Distributions on shares may be made only up to an amount which does not
exceed the amount of the Distributable Equity. If it concerns an interim
distribution, the compliance with this requirement must be evidenced by an
interim statement of assets and liabilities as referred to in Section 2:105
paragraph 4 of the Dutch Civil Code. The Company shall deposit the statement
of assets and liabilities at the Dutch Trade Register within eight days after
the day on which the resolution to make the distribution is published.
27.6 Distributions on shares payable in cash shall be paid in Euro, unless the
Board determines that payment shall be made in another currency.
27.7 The Board is authorised to determine that a distribution on shares will
not be made in cash but in kind or in the form of shares, or to determine that
shareholders may choose to accept the distribution in cash and/or in the form
of shares, all this out of the profits and/or at the expense of reserves,
other than the Mandatory Reserve, and all this if and in so far the Board has
been designated by the General Meeting in accordance with Article 6.1. The
Board shall set the conditions under which such a choice may be made.
28 Release for payment
Distributions of profits and other distributions shall be made payable four
weeks after adoption of the relevant resolution, unless the Board or the
General Meeting at the proposal of the Board determine another date.
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