REG - RHI Magnesita N.V. - 2025 Full Year Results
02/03/2026 07:00
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RNS Number : 8894U RHI Magnesita N.V. 02 March 2026
2 March 2026
RHI Magnesita N.V.
("RHI Magnesita" or the "Company" or "Group")
2025 Full Year Results
Strong H2 recovery driven by decisive self-help actions; margin momentum into
2026
RHI Magnesita, the leading global supplier of high-grade refractory products,
systems and solutions, today announces its results for the year ended 31
December 2025 ("2025" or the "Year" or the "Period").
The Group delivered a strong second half performance, driven by continued
execution of management-led self-help measures across pricing, cost control,
and plant network optimisation, supported by modestly improved industrial
demand. These actions resulted in a materially stronger H2 performance and
provide a strong foundation for rebuilding margins into 2026 and beyond.
Financial results 2025 2024 Change 2024 (constant currency) Change (constant currency)
(Adjusted, €m unless stated otherwise)(1)
Revenue 3,366 3,487 (3)% 3,390 (1)%
Adjusted EBITDA 504 543 (7)% 526 (4)%
Adjusted EBITA 373 407 (8)% 393 (5)%
Adjusted EBITA margin 11.1% 11.7% (60)bps 11.6% (50)bps
Adjusted EPS (€/per share) 4.18 5.32 (21)%
Adjusted Operating Cash Flow 391 419 (7)%
Net debt(2) 1,495 1,251 19%
Net debt to Pro Forma Adjusted 2.9 2.3
EBITDA(3)
(Reported, €m unless stated otherwise) 2025 2024
Revenue 3,366 3,487
Gross profit 772 859
EBITA 275 281
Profit before income tax 128 200
Profit after income tax 94 154
EPS (€/per share) 1.82 3.01
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. 2025 Net debt includes IFRS16 lease liabilities of €64 million. For
further details see Note 37.
3. 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.
4. Recommended final dividend of €1.20 per share, subject to AGM approval
on 13 May 2026. Full year dividend of €1.80 per share includes the interim
dividend of €0.60per share paid to shareholders on 25 September 2025.
Operational and strategic highlights
· Successful execution of sustainable self-help cost saving initiatives
across operations, SG&A, and plant network, combined with modest price
increases and slightly improved industrial demand, drove strong H2 performance
after a poor H1.
· Regionalisation is further strengthened to lower fixed costs and
drive agility in an increasingly fragmented and protectionist trade
environment. North America continues to perform well delivering 32% of the
Group's gross profit. India delivers 4% volume growth alongside growing
steel production, but very soft pricing environment currently caps earnings
growth. European demand remains poor but plant network optimisation and cost
savings turned around profitability in H2. Business performance in South
America and the newly defined region META (Middle East, Türkiye and Africa)
has been undermined by Chinese exports.
· The acquisition and integration of Resco (closed on 28 January 2025)
progressed well, delivering €184 million of revenue and €25 million of
Adjusted EBITA during the eleven months.
· Continued progress on sustainability initiatives - recycling rate at
a record of 15.9% (2024: 14.2%) and further potential through recent
acquisitions (BPI).
Financial highlights
· Persistent global demand weakness and sustained pressure from Chinese
steel and refractory exports resulted in a sales volume decline of 2% and a
revenue decline of 3% (1% on constant currency basis) to €3,366 million
(including Resco).
· Revenue decreases in several regions were largely offset by growth in
North America of €154 million (+22% y/y, including Resco). Europe recorded
the largest revenue decline of 12% primarily driven by lower sales volumes.
· Full year Adjusted EBITA is €373 million with a strong H2 weighting
driven by self-help actions. This result meets expectations despite external
pressure driving fixed cost underabsorption, weak pricing in H1 and foreign
exchange headwinds.
· Steel revenues were slightly ahead of the prior year at constant
currency at €2,328 million. The Resco acquisition offsets an organic volume
reduction in steel across several regions, which together with pricing
pressure, contributed to a reduced gross margin.
· The higher-margin Industrials project business (e.g., Non-ferrous
metals and Glass) was softer than guided particularly in H1 2025. Further
weakness in H2 2025 was largely offset by over-delivery on cost savings.
· Cash generation remains strong, with cash conversion of 105% (2024:
103%), supported by disciplined working capital management. Free cash flow of
€214 million was broadly in line with 2024 level.
· Despite strong cash generation the cash-out for the Resco acquisition
increased net debt to €1,495 million resulting in a leverage of 2.9x Net
Debt to Pro Forma Adjusted EBITDA, lower than guidance.
Outlook and guidance
Market conditions are expected to remain challenging. They continue to be
impacted by global uncertainty that depresses customer demand and investment.
Steel end-markets remain at cyclical lows globally, with no near-term demand
recovery reflected in the order book.
A number of regulatory developments in two of our key markets, the European
Union and Brazil, may provide medium-term support, but the timing and impact
of these measures remain uncertain and are not expected to materially affect
refractory demand before 2027.
Industrial project market visibility remains limited, with modest improvements
expected in non-ferrous metals and no recovery currently evident in the glass
segment. Overall visibility is expected to improve in the second half of 2026
at the earliest reflecting the planning lead time of industrial projects.
Adjusted EBITA for FY 2026 is expected to increase by approximately 17% to
€435 million on constant currency basis, which translates to around €400
million due to foreign exchange headwinds. This improvement is driven by
continued execution of self‑help and efficiency measures. Earnings are
expected to follow a more normalised H1:H2 split. With refractory raw material
pricing expected to remain at historically low levels, further cost and
portfolio optimisation measures are being implemented across raw material
assets to support a structural improvement in vertical integration
profitability over the coming years. Initial benefits from this are expected
in 2026 with an increase to a double digit run rate from 2027.
Strong cash generation is expected to continue, with cash conversion above 90%
and further deleveraging supported by disciplined working capital management.
Net debt is expected to reduce further, with leverage reducing to around 2.6x
at year end. M&A remains a core component of the strategy, but no closure
of a sizable deal with an associated cash out is anticipated in 2026.
Stefan Borgas, CEO said: "Our relentless self-help driven turnaround measures
delivered a strong and sustainable business performance increase in the second
half against a very challenging market backdrop. While management was focused
on the business performance turnaround, equally important strategic progress
has been made. The Resco integration and synergy realisation are on track,
recycling rates are up in almost all regions and our digital transformation is
progressing well. Despite not yet foreseeing a major market tailwind yet, we
expect our self-help measures and strategic progress to drive business
performance further operational and financial improvements in 2026.
I want to thank all employees, customers, partners, and shareholders for their
continued trust. With our enhanced global footprint, rigorous operational
discipline, and clear strategic focus, we believe RHI Magnesita is forging a
path for continued success despite persistent headwinds."
For further enquiries, please contact:
Investors: Alexander Ordosch, Head of Investor Relations, +43 699 1870 6162,
alexander.ordosch@rhimagnesita.com (mailto:alexander.ordosch@rhimagnesita.com)
Media: Hudson Sandler, +44 020 7796 4133, rhimagnesita@hudsonsandler.com
(mailto:rhimagnesita@hudsonsandler.com)
Conference call
A presentation for analysts will be held at 8:30am UK time (9:30 CET) on 2
March 2026 at the offices of Hudson Sandler, 25 Charterhouse Square, London
EC1M 6AE. The analyst presentation will be broadcast live via webcast and
conference call.
The webcast can be accessed using the following link:
https://www.investis-live.com/rhimagnesita/6978eea1b05b910017bae71c/lepp
(https://www.investis-live.com/rhimagnesita/6978eea1b05b910017bae71c/lepp)
A replay will be made available via the webcast link shortly after the event
finishes.
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 in 76 main production sites (including raw material sites), 16
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.
RHI Magnesita offers investors EBITDA and free cash flow comparable to FTSE
100 peers, the highest free cash flow yield in the UK industrials sector, a
compelling M&A growth story and high operational gearing to market
recovery. The Group seeks to allocate capital to maximise value generation for
shareholders. After maintenance capex and dividend, M&A, organic
investments and buybacks compete for capital. The global refractory industry
remains fragmented and the M&A pipeline presents an opportunity to
continue a value-accretive consolidation strategy. RHI Magnesita's resilient
margins and profitability support the use of debt financing to fund
acquisitions, anchored by a leverage target of 1.0 - 2.0x EBITDA through the
cycle and up to c.2.5x for compelling M&A opportunities.
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
2025 was a year of continued transformation for RHI Magnesita. Disciplined and
decisive action ensured we navigated the continued downturn while
strengthening our business for long-term outperformance.
In 2025, RHI Magnesita continued a Group-wide shift towards a deeply embedded
safety mindset by further driving our Safety Culture Transformation Programme.
Having kicked off this extensive program in 2024, we soon understood it was
necessary to increase both the depth and accuracy of our reporting, to enable
us to take much more meaningful steps to improve safety standards for our
colleagues. Tragically, the first half of 2025 was overshadowed by a
devastating incident, with a Brazilian colleague passing away from the effects
of a sepsis that occurred during long hospitalisation after a work-related
injury. With no Serious Injuries or Fatalities in H2/2025 we are working
tirelessly across our organisation towards a future where such incidents do
not occur again. We are committed to our long-term goal of "Zero-Harm - No
Injury".
Introduction & Financial Performance
In 2025, RHI Magnesita operated against a very challenging macroeconomic
backdrop, with subdued global industrial demand and continued pricing pressure
across end markets. Revenue for the year was impacted by weaker volumes,
particularly in Europe. Annual Adjusted EBITA of €373 million was delivered
with a very significant H2 weighting. H1 Adjusted EBITA was €141 million
(margin of 8.4%), reflecting margin pressure from an adverse product mix and
lower project activity. Management actions drove a clear improvement in
performance in the second half of the year, with Adjusted EBITA of €232
million, corresponding to a margin of 13.7% despite ongoing market headwinds.
These improvements were driven by cost efficiency programmes, network
optimisation and pricing discipline.
The acquisition of Resco, completed in January 2025, strengthened the Group's
North American position and contributed positively to earnings, while
integration progressed in line with expectations. Cash generation remained
resilient, with adjusted operating cash flow of €391 million, supporting a
resilient balance sheet development. Net debt stood at €1,495 million at
year-end, resulting in leverage of 2.9x Net Debt to Pro Forma Adjusted EBITDA
by year end. While 2025 was a demanding year, decisive operational and
financial actions enabled RHI Magnesita to exit the year with improved
profitability momentum, a more efficient cost base, and a stronger platform
for value creation in 2026 and 2027.
Industrial Downturn & Trading Environment
In 2025, the slowdown in global industrial activity reduced global refractory
demand. The continued high levels of global uncertainty caused subdued furnace
utilisation, delayed maintenance cycles, and deferred metal and industrial
project investments.
Within this backdrop, the Group experienced both a sharp reduction in order
intake and volumes as customers postponed or cancelled major rebuilds, as well
as pricing pressure arising from lower demand and elevated Chinese refractory
exports. Despite available refractory capacity exceeding demand in all regions
worldwide, short termism by undisciplined competitors results in further
capacity additions in regions like India and META.
Coupled with this downturn was an uncertainty regarding global tariffs. RHI
Magnesita navigated this by constantly reviewing supply chains, pricing and
operational footprint. Our flexible global network allowed us to act quickly
through multiple tariff iterations and maintain a strong and uninterrupted
supply to our customers. Our North American business delivered a strong
performance in 2025 despite headwinds, including unprecedented market
volatility, a ~13% USD/EUR devaluation and an ongoing industrial-sector
weakness. The region also successfully started to manage a major business
transformation with the integration of Resco and BPI and the rollout of our
digital transformation.
Despite the downturn and uncertainty in 2025, our diversified footprint,
integrated production capabilities, innovation and integration with our
customers provided reasonable stability in this context.
Management Measures Deliver Results
In response to a challenging demand and pricing environment in 2025, the
management took decisive actions to protect profitability, strengthen cash
generation and improve the structural efficiency of the Group. These measures
delivered tangible benefits in the second half of the year and positioned RHI
Magnesita for improved performance going forward. A comprehensive cost and
efficiency programme was implemented across operations, including plant
network optimisation and tighter cost control. These actions contributed to a
significant and sustainable improvement in profitability.
4PRO proved to stabilise the business performance and protect long-term value.
It combines process optimisation, vertical-integration, circular economy,
technology, and customer-centric services into a unique framework, delivering
customers performance-based solutions including design, installation,
maintenance, monitoring and lifecycle services. It positions RHIM as
specialist supplier of complex solutions, fully integrated with our customers,
and thereby significantly stabilises RHIM's margins in times of commodity
market volatility. We saw a significant strengthening of our 4PRO program in
2025 laying a solid framework for plans to execute an additional 30+ extensive
contracts in 2026.
We saw great successes from our integration of Resco, following completion of
the acquisition in January 2025. Organisational design and key health &
safety measures were implemented swiftly, ensuring the focus of the combined
team on delivering customer value while implementing higher safety standards
for all. We delivered SG&A synergies from the Resco integration well over
our target for 2025.
Sustainability
Our strong sustainability performance in 2025 was underpinned by further
innovation and the expansion of our sustainable product offering. This
continues to be an important commercial differentiator as our customers in
hard-to-abate industries seek solutions to help reduce their CO2 emissions.
We exceeded our global recycling target of 15%, driven primarily by the
outstanding performance in Europe. Across Europe, we reached an average
recycling rate of more than 22%, with several months even surpassing 24%
thanks to the collaboration with MIRECO and our European recycling team. Our
recycling capabilities in the United States were also enhanced by the joint
venture we agreed in June with BPI. The transaction will support our ability
to supply lower carbon recycled refractories to our expanded customer base in
North America under a tighter tariff regime.
Our constant focus on innovation delivers new sustainability gains, and we
deepen our partnership with MCi Carbon to develop the world's first CCU plant
in the refractory industry. This will be our Green Minerals Initiative, which
will open a new business area for RHIM while absorbing 50kt/year of CO2 of our
existing processes. To support this one-of-a-kind project, we secured a €30
million grant from the Austrian government to build the first industrial-scale
plant in our Hochfilzen operation in Austria. Additionally, we unveiled the
world's first RAPTOR multi sensor system, which sets new standards for
recycling. We have already reduced our CO2 intensity by 15% (scope 1,2 and 3
raw materials) since 2018 with new recycling initiatives and CCU technology
opening further room to reduce.
Summary
In this difficult market environment, RHIM has delivered solid results and
progressed strategically. The business is improving every year and the Company
is well positioned for long-term success and any market recovery.
I thank all employees, customers, partners, and shareholders for their
continued trust. With our enhanced global footprint, rigorous operational
discipline, and clear strategic focus, we believe RHI Magnesita is forging a
path for continued 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 assess 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 2024 numbers in this review are on a reported
basis, unless stated otherwise. All reported volume changes year-on-year are
excluding mineral sales.
Revenue
Group revenues for the year amounted to €3,366 million, representing a 1%
decrease on a constant currency basis (2024: €3,390 million). On a reported
basis, revenues declined by 3% (2024: €3,487 million), reflecting the
material impact of foreign exchange headwinds. Excluding M&A the Group
revenues amounted to €3,171 million. The depreciation of key currencies
against the euro, specifically the US dollar, Chinese yuan, and Indian rupee,
negatively impacted reported revenues by €97 million.
Cost of goods sold
Cost of goods sold decreased by 1% to €2,594 million (2024: €2,628
million), although this represented an increase of 2% on a constant currency
basis.
The cost of purchased raw materials declined by 5% to €1,009 million.
Plant-related labour costs decreased by 5% to €551 million, driven by
network optimisation and strict fixed-cost controls. Energy costs declined by
1% as supply conditions eased resulting in lower crude oil and natural gas
prices. Freight costs remained broadly flat year-on-year, supported by subdued
freight demand and global overcapacity following market disruptions linked to
US tariff announcements. Expenditure on general supplies, including pallets,
packaging, and spare parts, increased to €615 million, compared to €548
million in 2024.
Despite these overall input cost reductions, low production volumes resulted
in fixed-cost underabsorption, which weighed on unit costs.
Raw material prices
Average raw material prices softened in 2025 relative to 2024. Notably, the
price of high-grade dead burned magnesia (DBM) from China declined by 8%,
primarily driven by oversupply in China and reduced global refractory demand.
This pricing environment exerts downward pressure on finished goods pricing,
as production costs decrease for non-vertically integrated competitors.
Gross profit
Gross profit declined to €772 million (2024: €859 million), with the gross
margin contracting to 22.9% (2024:24.6%). This compression reflects pricing
pressure, an unfavourable shift in product mix and fixed-cost
under-absorption, particularly in the first half of the year.
(€m) 2025 2024(2) 2024 (constant currency) Change Change (constant currency)
Revenue 3,366 3,487 3,390 (3)% (1)%
Cost of goods sold (2,594) (2,628) (2,553) (1)% 2%
Gross profit 772 859 837 (10)% (8)%
SG&A (360) (408) (400) (12)% (10)%
R&D expenses (39) (45) (44) (13)% (12)%
OIE (98) (125) (126) (22)% (23)%
EBIT 223 242 229 (8)% (3)%
Amortisation (52) (39) (38) 32% 38%
EBITA 275 281 267 (2)% 3%
Adjusted items 98 125 126 (22)% (23)%
Adjusted EBITA(1) 373 407 393 (8)% (5)%
Refractory EBITA 336 379 - (11)% -
Vertical integration EBITA 37 28 - 32% -
1. Adjusted EBITA is an APM used by the Group. Refer to APMs for
definitions.
2. Restated due to an accounting policy change. See Note (1) from the
financial statements.
Selling, general and administrative expenses (SG&A), decreased by 12% to
€360 million (2024: €408 million), despite inflationary pressures on
labour costs across all regions. The reduction reflects focused efforts to
reduce SG&A costs in Europe, the continued migration of activities into
shared services and the India hub, realised synergies from the Resco
acquisition, and lower bonus provisions.
Depreciation decreased to €132 million (2024: €136 million), and
amortisation of intangible assets stood at €52 million in 2025 (2024: €39
million).
Adjusted EBITDA
The Group delivered Adjusted EBITDA of €504 million, representing a 7%
decrease compared to the prior year (2024: €543 million). The Adjusted
EBITDA margin declined to 15.0% (2024: 15.6%) primarily reflecting lower
gross profit, partially mitigated by reductions in SG&A and R&D
expenditure.
Adjusted EBITA
Adjusted EBITA decreased to €373 million (2024: €407 million), with a
margin of 11.1% (2024: 11.7%). Currency movements had an adverse impact of
€13 million. The weak first-half performance was partially offset by
management actions implemented during the year, which contributed €70
million of savings in the second half. Resco and BPI contributed a combined
€25 million to Adjusted EBITA in 2025.
The Group's refractory business delivered a resilient margin contribution of
10.0 ppts to the Adjusted EBITA margin of 11.1%. Vertical integration
contributed 1.1 ppts (2024: 0.8 ppts), remaining close to record lows due to
persistently low prices for refractory raw materials. Lower raw material
prices negatively impact the earnings contribution from the Group's raw
material assets, which is based on the difference between market prices and
cost of internal raw material production.
Items excluded from adjusted performance
In order to accurately assess the underlying performance of the business, the
Group excludes certain items from Adjusted EBITA related to other income and
expenses. In total, net adjustments to EBITA amounts to €98 million,
including:
· €(44) million in expenses for the ERP system upgrade and digital
architecture update
· €(27) million in network optimisation costs related to closure of
Mainzlar and Wetro plants
· €(10) million in permanent SG&A headcount reduction
· €(9) million in restructuring costs for outsourcing the Group's
shared service centre network and expanding its scope
· €(8) million in expenses related to M&A activities
Net finance expenses
Net finance expenses increased to €95 million (2024: €42 million). This
aggregate figure includes interest payable on borrowings, net of interest
income on cash balances, alongside the impact of foreign exchange movements,
pension-related charges, present value adjustments, factoring costs, and
expenses attributable to non-controlling interest.
Net interest expenses amounted to €46 million (2024: €39 million),
reflecting reduced interest income on cash balances, and higher average
borrowings following the Resco acquisition.
Foreign exchange movements resulted in a net loss of €16 million in 2025
compared to a gain of €11 million in 2024. This net loss relates primarily
to the weakening of the Turkish lira, the Mexican peso and the US dollar, and
includes embedded US dollar-linked derivatives in sales contracts and currency
hedging costs.
Other net financial expenses totalled €33 million (2024: €14 million),
comprising factoring costs of €11 million (2024: €10 million), pension
charges of €11 million (2024: €12 million), and present value adjustments
related to onerous contracts from the 2017 EU remedies amounting to €(6)
million (2024: €(7) million). The increase in other net financial expenses
is primarily attributable to significantly higher revaluation of the Group's
obligation to purchase the remaining stakes it does not already own in Jinan
New Emei and Chongqing.
(€m) 2025 2024
Net interest expenses (46) (39)
Interest income 15 22
Interest expenses (61) (61)
FX effects (16) 11
Balance sheet translation (34) 29
Derivatives 18 (18)
Other net financial expenses (33) (14)
Present value adjustment (6) (7)
Factoring costs (11) (10)
Pension charges (11) (12)
Non-controlling interest expenses (1) -
Capitalization of borrowing costs - 3
Interest expense - Transaction costs (4) (1)
Other (1) 12
Total net finance expenses (95) (42)
Taxation
The reported tax charge for 2025 amounted to €34 million (2024: €46
million), resulting in a reported effective tax rate of 27% (2024: 23%).
Reported profit before tax was €128 million (2024: €200 million).
On an adjusted basis, profit before tax was €273 million (2024: €347
million), with a corresponding adjusted effective tax rate of 25% (2024: 24%).
The variance between the reported and adjusted tax metrics reflects the impact
of specific adjusting items, comprising non-taxable IFRS income associated
with put option valuations, non-capitalisable losses arising from
restructuring initiatives, and non-deductible expenses incurred through
M&A activity.
Profit after tax
On a reported basis, the Group generated profit after tax of €94 million
(2024: €154 million). Profit attributable to the shareholders of RHI
Magnesita N.V. stood at €86 million (2024: €142 million), resulting in
reported earnings per share of €1.82 (2024: €3.01). Profit attributable to
shareholders is derived after deducting non-controlling interests of €8
million (2024: €12 million). As the Group holds a 56% majority shareholding
in RHI Magnesita India Ltd., the substantial majority of these non-controlling
interests are attributable to the earnings consolidated from this subsidiary.
On an adjusted basis, profit after tax amounted to €206 million (2024:
€263 million), with Adjusted earnings per share at €4.18 (2024: €5.32).
A comprehensive reconciliation of EBITA to EPS and Adjusted EBITA to Adjusted
EPS is provided in the table within the Alternative Performance Measures
(APMs) section.
(€m) 2025 reported Items excluded from adjusted performance 2025 adjusted 2024 reported Items excluded from adjusted performance 2024 adjusted
EBITA 275 98 373 281 126 407
Amortisation (52) 52 - (39) 39 -
Net financial expenses (95) (5) (99) (42) (17) (60)
Profit before tax 128 145 273 200 147 347
Income tax (34) (33) (67) (46) (38) (84)
Profit after tax 94 112 206 154 109 263
Non-controlling interest 8 - 8 12 - 12
Profit attributable to shareholders 86 112 198 142 109 251
Shares outstanding 47 - 47 47 - 47
Earnings per share 1.82 2.36 4.18 3.01 2.31 5.32
Working capital
Excluding the impact of M&A, working capital decreased to €718 million
(2024: €865 million), primarily driven by reductions in inventory and
accounts receivable in response to lower business activity and currency
movements. Including the impact of M&A, total Group working capital
amounted to €769 million at year-end.
(€m) 2025 (Excl. M&A) 2025 (Group) 2024 (Group)
Working Capital 718 769 865
Inventories 879 932 962
Accounts Receivable 400 414 474
Accounts Payable 561 577 572
Working capital intensity measured as a percentage of annualised revenue over
the final three months of the year, decreased to 21.7% (2024: 23.4%).
Inventory intensity remained broadly flat at 26.3% (2024: 26.1%) and
accounts receivable intensity improved to 11.7% (2024:12.9%).
(in %) 2025 (Excl. M&A) 2025 (Group) 2024 (Group)
Working Capital Intensity 21.6% 21.7% 23.4%
Inventory Intensity 26.5% 26.3% 26.1%
Accounts Receivable Intensity 12.0% 11.7% 12.9%
Accounts Payable Intensity 16.9% 16.3% 15.5%
Cash flow
Adjusted operating cash flow decreased to €391 million (2024: €419
million), representing a cash flow conversion from Adjusted EBITA of 105%
(2024: 103%). The Adjusted operating cash flow decline primarily reflects a
€39 million reduction in Adjusted EBITDA compared to 2024 and lower cash
generation from working capital, partially offset by lower capital expenditure
of €111 million (2024: €145 million). Free cash flow decreased to €214
million (2024: €225 million).
Cash income tax payments decreased to €54 million (2024: €69 million),
while net interest paid amounted to €83 million (2024: €89 million).
Cash flow €m 2025 2024
Adjusted EBITDA 504 543
Share-based payments - gross non-cash 4 9
Working capital changes 84 105
Changes in other assets and liabilities (89) (93)
Investments in PPE, IA (111) (145)
Adjusted operating cash flow 391 419
Income taxes paid (54) (69)
Cash effects of other income/expenses and restructuring (69) (62)
Investments in financial assets (3) (19)
Cash inflows from the sale of PPE, IA 24 16
Cash inflows from the sale of financial assets - 11
Investment subsidies received - 2
Net interest paid/received (83) (89)
Net derivative cash inflow/outflow 4 18
Dividend payments to NCI (2) (3)
Other investing activities 4 -
Dividends received 1 1
Free cash flow 214 225
Investments in non-current receivables - (44)
Investment in subsidiaries net of cash (350) (7)
Investments in NCI (3) (6)
Dividend payments (85) (86)
Cash change in net debt (224) 80
Debt from acquisitions 8 -
New lease obligations 7 29
Exchange effects 4 (3)
Others - (1)
Actual change in net debt (204) 105
Financial position
Net debt increased to €1,495 million (31 December 2024: €1,251 million),
primarily reflecting the acquisition of Resco. Net debt comprises gross debt
of €1,786 million, IFRS 16 lease liabilities of €64 million and cash
equivalents of €355 million. Total leases of €64 million are included in
the Group's Net debt position as required by IFRS 16.
This results in a leverage ratio at 2.9x Net debt to Pro Forma Adjusted
EBITDA, compared to 2.3x as at 31 December 2024. Pro forma Adjusted EBITDA
includes a full-year contribution from businesses acquired during the year.
Available liquidity at 31 December 2025 was €955 million (31 December 2024:
€1,376 million), comprising undrawn committed facilities of €600 million
and cash and cash equivalents of €355 million (2024: €576 million).
The Group continues to target a Net debt to Pro Forma Adjusted EBITDA range of
1.0-2.0x, with temporary increases for compelling M&A opportunities.
Leverage is expected to reduce to around 2.6x by the end of 2026.
Return to shareholders
The Board has recommended a final dividend of €1.20 per share for the 2025
financial year, representing a cash outflow of €85 million for the full-year
dividend. Subject to approval at the Annual General Meeting scheduled for 13
May 2026, the final dividend will be payable on 11 June 2026 to shareholders
on the register at the close of trading on 29 May 2026. The ex-dividend date
will be 28 May 2026.
Together with the interim dividend of €0.60 per share paid on 25 September
2025, this results in a full year dividend of €1.80 per share. This
represents a dividend cover of 2.3x Adjusted earnings per share, in-line with
the Board's stated dividend policy.
The Board's dividend policy remains unchanged, targeting a dividend cover
below 3.0x adjusted earnings over the medium term. Dividends are paid on a
semi-annual basis, with one third of the prior year's full year dividend paid
at the interim.
OPERATIONAL REVIEW
Steel overview
Supplying refractory products and services to the steel industry accounted for
approximately 69% of Group revenues in 2025 (2024: 68%). Applications span
ironmaking, primary steelmaking, secondary metallurgy and casting, with
product lifecycles ranging from hours to several years depending on the
application. As a result, refractory consumption is typically classified as an
operating expense by steel producers and represents approximately 2-3% of
steelmaking operating costs.
Global steel markets remained weak throughout 2025. Demand softness across
construction, automotive, machinery and consumer goods was compounded by
elevated Chinese steel exports, which continued to exert pricing and volume
pressure on producers outside China. According to World Steel Association
data, global steel production declined by approximately 2% in 2025.
Steel 2025 2024 2024 (constant currency) Change Change (constant currency)
Revenue (€m) 2,328 2,367 2,293 (2)% 2%
Gross profit (€m) 523 553 535 (5)% (2)%
Gross margin 22.5% 23.4% 23.3% (90)bps (80)bps
Steel revenues declined by 2% to €2,328 million (2024: €2,367 million).
Excluding the impact of M&A activity, revenues decreased by approximately
6% to €2,218 million (2024 €2,367 million), reflecting a combination of
lower volumes and pricing pressure. Global steel demand declined across all
Group regions excluding North America, India and META. Shipped volumes of
steel refractories declined by 2% on an organic basis, partially offset by
strong momentum in India. The acquisition of Resco largely offset organic
volume declines, resulting in broadly flat reported volumes.
Gross profit declined to €523 million (2024: €553 million), with the gross
margin compressing to 22.5% (2024: 23.4%). This reflects pricing pressure in
competitive markets, particularly India and META, as well as fixed-cost
under-absorption during the first half of the year. Competitive dynamics were
exacerbated by elevated Chinese steel and refractory exports, particularly
into the Middle East, Africa and Latin America.
Industrial overview
RHI Magnesita is a leading supplier of refractory products and services to a
broad range of Industrial customers, including Cement & Lime, Non-ferrous
metals, Glass, Energy, Environmental, Industrial applications and Chemicals.
Industrial customers accounted for 28% of Group revenues in 2025. Refractories
in these markets are typically classified as capital expenditure and exhibit
longer replacement cycles, ranging from less than one year to over 20 years
depending on application.
Industrial markets were uneven in 2025. While certain Non-ferrous metals
segments showed resilience, overall demand was impacted by project deferrals,
tariff-related uncertainty and weak end markets, particularly in Glass.
Industrial 2025 2024 2024 (constant currency) Change Change (constant currency)
Revenue (€m) 958 1,055 1,034 (9)% (7)%
Gross profit (€m) 241 300 298 (20)% (19)%
Gross margin 25.1% 28.4% 28.8% (330)bps (370)bps
Industrial revenues contracted by 9% to €958 million (2024: €1,055
million), accompanied by a 6% decrease in overall shipped volumes. Industrial
revenues excluding the impact of M&A declined by 17% to €880 million
(2024: €1,055 million). This represents unusual underlying softness in
Glass, Non-ferrous metals, and Industrial applications sub-segments, resulting
in a 6% contraction in shipped volumes. The Year saw a cyclical low in
high-value project execution, with volumes from major projects tracking below
the comparative levels recorded in the prior year. Consequently, performance
was notably skewed to the second half of 2025. This significant second-half
weighting was primarily driven by two distinct dynamics: (i) the deferral of
orders into the latter part of the year amidst uncertainty generated by global
tariff tensions; and (ii) typical seasonal demand patterns during the peak
cement production period. The Group anticipates a normalisation of trading
patterns in 2026, with revenues weighting expected to return to a more
balanced profile consistent with historical trends.
Gross profit declined to €241 million (2024: €300 million), with the gross
margin compressing to 25.1% (2024: 28.4%).
Minerals
Raw materials not consumed internally are sold externally and reported under
Minerals. External mineral sales generated revenues of €80 million in 2025
(2024: €65 million), with revenue growth driven primarily by price recovery
against a weak prior-year comparative, while volumes remained broadly stable.
Regional business units
New definitions of regional business units
In 2025, the Group reassessed its operating segments, driven by significant
progress in its local-for-local strategy, the integration of the acquired
Resco Group and a comprehensive restructuring of profit centres. This
acquisition is considered a milestone in the development of the
local-for-local strategy, resulting in the reassignment of certain sales
markets to the regions.
The Group re-organised its regional business units to drive increased focus as
follows:
i. created a new 'Middle East, Türkiye and Africa'
("META") region, with the Middle East and Africa business having previously
been included within 'India, West Asia and Africa' and Türkiye previously
included in 'Europe, CIS and Türkiye';
ii. re-named 'India, West Asia and Africa' region to
'India', now focused solely on India;
iii. re-named 'South America' region to 'Latin America';
and
iv. moved Mexico out of the 'North America' region into
'Latin America'.
Although this section primarily focuses on customer industries the regional
financial information presented in this section for 2025 including the
comparative data for 2024 has been prepared according to the new regional
structure adopted in 2025.
Revenue 2025 2024 2024 (constant currency) % change (reported) % change (constant currency)
North America 863 709 685 22% 26%
Europe & CIS 727 829 832 (12)% (13)%
India 441 458 432 (4)% 2%
Latin America 536 617 590 (13)% (9)%
China & East Asia 377 425 411 (11)% (8)%
Middle East, Türkiye & Africa 342 384 377 (11)% (9)%
Minerals 80 65 63 22% 27%
Total 3,366 3,487 3,390 (3)% (1)%
North America
North America delivered a strong performance, with revenue increasing by 22%
to €863 million (2024: €709 million), or by 26% in constant currency
terms. Growth was primarily driven by the acquisition and successful
integration of Resco and BPI, which contributed €195 million in incremental
revenue. Excluding M&A, revenue remained broadly stable (down €16
million) despite significant market volatility, tariff uncertainty and a
weakening US dollar.
Revenue performance in North America was materially reshaped by the
acquisition of Resco, which structurally rebalanced exposure toward Industrial
end markets relative to the historical dominance of Steel. Consequently,
Industrial revenues increased by 20% to €180 million (2024: €150
million), while Steel revenues increased by 22% to €683 million (2024:
€559 million), both supported by the M&A.
Gross profit increased to €249 million (2024: €219 million), supported by
a 19% increase in shipped volumes following the acquisition. Gross margin
declined to 28.9% (2024:30.9%), as higher average revenue per tonne was offset
by increased production costs. North America contributed 32% of global gross
profit, and slightly more on EBITA level due to lean fixed cost structure.
In the Steel segment, volumes excluding M&A remained broadly flat,
compared to a 0.7% increase in regional steel production according to WSA
data. Performance was mixed, with Canadian steel production declining by 7.2%
following tariff-related mill shutdowns. Structurally, the North American
steel industry continues to transition toward electric arc furnaces. This
trend is expected to accelerate following Nippon Steel's acquisition of US
Steel, which includes a committed €11 billion investment in new or upgraded
capacity by 2028 that will likely displace legacy integrated steel production.
In the Industrial segment, North America made solid progress integrating
Resco's specific competencies in Foundry, Process Industries, and
Petrochemicals, successfully delivering the expected synergies across the
Group. However, tariff-related trade tensions during the first half of the
year led to uncertainty and the deferral of several industrial projects.
Sustainability metrics remained flat, with the recycling rate in North America
at 14.1% compared to 14.2% in 2024. This rate is projected to increase
significantly in the future following the agreement of a joint venture with
BPI Inc. in June 2025.
Trade policy uncertainty and currency volatility continue to drive
macroeconomic uncertainty. US tariffs announced in April 2025 increased input
costs, largely mitigated through pricing actions. While tariffs are expected
to support domestic steel production over time, the Group faces exposure to
tariffs on finished goods imports, including a 15% tariff on European products
and a potential 50% tariff on Brazilian imports. This exposure is mitigated by
the Group's strong local-for-local footprint, with production in-region
expected to increase to over 75% in 2026. Trade tensions also drove
considerable foreign exchange volatility, with the US dollar weakening to 1.16
against the euro (from 1.04 at year-end 2024), resulting in a €24 million
revenue headwind.
Europe & CIS
Revenues in Europe & CIS contracted by 12% to €727 million (2024: €829
million), driven primarily by a 14% reduction in shipped volumes against a
backdrop of stable pricing. The volume reduction, combined with an
unfavourable shift in product mix, weighed on profitability. Gross profit
decreased by 15% to €151 million (2024: €178 million), with the gross
margin declining to 20.8% (2024: 21.4%). This primarily reflects a temporary
but significant contraction in the Industrial business, where sales volumes
declined by 22%, outpacing the 10% decline in Steel, due to project deferrals
in Non-ferrous metals and persistent weakness in Glass.
Regional steel production contracted by 4.1%, with the most pronounced decline
in Germany, where steel output fell by 8.6% according to WSA data. Steel
demand was severely impacted by weakness in the automotive sector, with
European production in 2025 falling to levels last seen during the 2009 and
2020-2022 downturns. Trade policy volatility compounded these pressures, as
the US reintroduced 25% tariffs on EU steel and aluminium exports in March,
escalating to broader measures and a 50% tariff in June, materially
undermining the competitiveness of European exports and disrupting supply
chains. Although tariffs were partially reduced to 15% in the second half of
the year, the earlier disruption significantly weighed on the Steel and
Non-ferrous sectors. Despite these headwinds, the Group defended market share
through more economical grades and expanded its 4PRO offering into Cement
& Lime, Non-ferrous metals and Waste2Energy.
Industrial volumes declined, reflecting a lower number of projects during the
Period. The Cement segment was resilient, supported by volume growth from
infrastructure demand and disciplined pricing behaviour. The Glass market
remained under pressure, particularly within the packaging end markets,
leading glass makers to delay maintenance projects.
Low capacity utilisation and strategic alignment of the production footprint
led to the closure of the Mainzlar and Wetro plants in Germany in 2025.
Further network optimisation in the region and globally remains under
consideration.
Recycling performance improved materially, with the region achieving a
recycling rate of 22.3% (2024: 20.0%), as the MIRECO business model delivered
growth in both the internal use of recycled raw materials and the sale of
secondary raw materials to third parties. Operational efficiency and material
recovery rates were enhanced by the deployment of advanced laser sorting
technologies, specifically 'Maestro' and 'Raptor'.
Latin America
Revenues in Latin America decreased by 13% to €536 million (2024: €617
million), or by 9% on a constant currency basis. The average revenue per tonne
fell by 9%, reflecting lower prices and an unfavourable product mix as the
share of high-value industrial projects declined. Shipped volumes decreased by
4% as market conditions in the region remained challenging. The influx of
Chinese imports exerted pressure on the domestic steel and refractory sectors,
further compounded by US tariffs introduced in the second half of the year on
both raw materials and finished goods from Brazil.
Gross profit declined to €147 million (2024: €190 million), with the gross
margin contracting to 27.4% (2024: 30.8%). The impact of lower revenue was
partially mitigated by lower input costs and operational efficiencies.
Steel volumes declined by 3%, more than regional steel production, which
declined by 1.1% according to WSA data. The region delivered notable
commercial achievements, securing projects in flow control, coke ovens, and
reheat furnaces. While the Group successfully regained market share in Mexico,
the country continues to face pressure from Chinese imports. The strategic
focus in the region remains on driving adoption of the 4PRO model and renewing
long-term contracts with key customers.
Industrial business declined in volume by 6%, driven by project postponements,
particularly in Non-ferrous metals and an unfavourable shift toward
lower-value Cement sales.
Recycling performance improved, with the recycling rate increasing to 12.2%
(2024: 11.8%).
India
Revenues in India declined slightly to €441 million (2024: €458 million),
but increased by 2% on a constant currency basis. Shipped volumes increased by
4%, reflecting sustained structural demand across end markets, while average
revenue per tonne declined by 7% due to pricing pressure from imports and
domestic competition.
Gross profit decreased by 18% to €64 million (2024: €78 million), with the
gross margin decreasing to 14.4% (2024: 16.9%).
Steel sales volumes grew by 4%, supported by a robust macroeconomic backdrop.
Steel production in India increased by 10.4% year-on-year, according to WSA
data. Elevated imports from China, driven by domestic oversupply, intensified
competition and pricing pressure from both multinational and local players. In
response, Indian mills prioritised strict cost optimisation, reducing spend on
refractories. Despite this challenging environment, the Group executed a
strategic recovery, recapturing market share temporarily lost in the fourth
quarter of 2024. RHI Magnesita strengthened its position in premium product
categories through technical differentiation and targeted price increases,
supported by the continued rollout of 4PRO, which secured significant
contracts with tier-one steel mills. Demand for iron-making and Direct Reduced
Iron (DRI) refractories also progressed well, generating a healthy pipeline of
new orders.
Industrial business performance was weak in the region, partially offset by a
3% increase in sales volumes. Pricing pressure in Cement was driven by
unseasonal monsoons and low capacity utilisation. The Group mitigated these
challenges through accelerated deployment of 4PRO, recipe optimisation and the
introduction of advanced global technologies to reinforce differentiation.
Sustainability initiatives continued to gain momentum, with the recycling rate
increasing to 18.8% (2024: 15.5%), supported by an expanded local vendor base,
closer collaboration with R&D and partnerships aimed at localising
operations and increasing the use of recycled refractories.
China & East Asia
Revenues in the China & East Asia region declined by 11% to €377 million
(2024: €425 million), reflecting a 3% decline in shipped volumes and an 8%
reduction in average revenue per tonne. The challenging pricing environment
weighed on profitability, with gross profit declining by 17% to €75 million
(2024: €90 million) and the gross margin decreasing to 19.8% (2024: 21.2%),
with the majority of the margin erosion concentrated in the Industrial
business.
Steel refractory volumes increased by 1%, while steel revenue declined due to
pricing pressure, representing a relative outperformance compared with WSA
data which indicates a 4.2% decline in steel output in China in 2025.
Within the refractory market, subdued demand and excess capacity eroded
pricing discipline across the industry. Despite these conditions, the Group
demonstrated commercial resilience, securing new ladle, ISO, and 4PRO
contracts in China, Japan, Indonesia, and Vietnam, partially offsetting softer
volumes elsewhere.
The Industrial segment faced headwinds, with sales volumes decreasing by 11%
and demand weakened across most end markets, with the Glass business
particularly affected by oversupply following a sharp contraction in
solar-related project pipelines. This downturn reflects a subdued construction
environment, prompting leading cement producers to rationalise capacity.
Customers adopted increasingly cost-focused procurement strategies, including
bundled bidding and tighter purchasing limits, intensifying competitive
pressure.
Despite the challenging market conditions, the Group continued to advance its
strategic initiatives, including a new collaboration in the Environment,
Energy & Chemicals product category, further expansion of 4PRO contracts
and diversification of the Industrial portfolio into adjacent product
categories. Sustainability initiatives also advanced, supported by
partnerships in Southeast Asia and Japan, with the regional recycling rate
increasing to 9.6% in 2025 (2024: 8.2%).
Middle East, Türkiye & Africa
Revenues in the Middle East, Türkiye and Africa region contracted by 11% to
€342 million (2024: €384 million), reflecting a 6% reduction in shipped
volumes and a 5% decline in average revenue per tonne. This translated into a
21% decrease in gross profit to €78 million (2024: €98 million), with the
gross margin compressing to 22.8% (2024: 25.6%).
Steel demand across the region remained weak, with intensified price
competition in the refractory market further pressuring performance. Steel
refractory volumes declined by 5%, diverging from regional steel production
growth of 3.3% reported by WSA, while average revenue per tonne fell due to
tender-driven dynamics and heightened competition from Chinese refractory
imports. Against this commoditised backdrop, the Group's 4PRO offering gained
traction, resonating with customers through its focus on operational
efficiency, extended campaign life and sustainability benefits.
The Industrial business revenues remained broadly stable, despite a 7% decline
in volumes. Gross margin weakened, primarily due to product mix effects and
softer demand in the Glass sector. Cement customers continue to be highly
price-sensitive but increasingly sought energy-efficient and decarbonisation
solutions integrated into their value chains. Aluminium and Hydrocarbon
Processing Industry customers seek technical partnerships and installation
support, creating opportunities for RHI Magnesita to differentiate through its
4PRO offering, which combines advanced materials with service and digital
tools. Following the Resco acquisition, the Group is actively promoting its
leading petrochemical product range in the Middle East and anticipates
stronger traction going forward.
Recycling initiatives continued to advance, particularly in Türkiye,
positioning circular solutions as a future growth lever. Recycling
capabilities are expected to become an increasingly important differentiator
in upcoming 4PRO contracts given the comparatively limited capabilities of
competitors in the region.
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 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 2025 2024
Adjusted operating cash flow (APM) 391 419
Capital expenditure(1) 111 145
Income Taxes paid(1) (54) (69)
Other income/expenses and restructuring items(1) (69) (62)
Net cash flow from operating activities(1) 379 433
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 2025 2024
Cash and cash equivalents(1) 355 576
Revolving credit facility 600 600
Syndicated term loan - 200
Liquidity (APM) 955 1,376
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 2025 2024
Cash changes in Net debt (223) 80
Proceeds from borrowings(1) 346 14
Repayment of borrowings(1) (287) (174)
Change in current borrowings(1) (25) (41)
Repayment of lease obligations(1) (17) (20)
Cash inflow from financial assets(1) - 11
Change in cash and cash equivalents(1) (207) (130)
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 2025 2024
Inventories (Note 21) 932 962
Trade receivables (Note 22) 445 530
Contract assets (Note 22) 6 3
Contract liabilities (Note 31) (36) (59)
Accounts receivable 414 474
Trade payables (Note 31) (577) (572)
Total working capital 769 865
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 2025 2024
Revenue(1) 3,366 3,487
Cost of sales(1) (2,594) (2,628)
Selling,General and administrative expenses(1) (360) (408)
Research and development expenses(1) (39) (45)
Amortisation(1) (52) (39)
Income taxes paid(2) (54) (69)
NOPAT 266 299
€m 2025 2024
Goodwill(3) 403 342
Intangible assets(3) 540 417
Property, plant and equipment(3) 1,246 1,285
Investments in joint ventures and associates(3) 6 7
Other non-current assets(3) 29 76
Deferred tax assets(3) 163 152
Inventories(3) 932 963
Trade and other receivables(3) 576 660
Income tax receivables(3) 49 40
Deferred tax liabilities(3) (91) (64)
Trade and other current liabilities(3) (757) (843)
Income tax liabilities(3) (29) (29)
Current provisions(3) (80) (43)
Adjustment(4) (184) (184)
Invested capital 2,802 2,781
Average invested capital 2,792 2,859
Return on invested capital(5) 9.5% 10.4%
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. Invested capital figures are excluding the €184million
non-cash share from the Dalmia acquisition in India (closed in 2023).
5. NOPAT divided by average invested capital of the year.
GLOSSARY
AGVs Automated Guided Vehicles
BPI BPI RHIM LLC - Joint Venture with BPI Inc.
CCM Caustic calcined magnesia
CCU Carbon Capture & Utilisation
CIS Commonwealth of Independent States
CO2 Carbon dioxide
CoGS Cost of Goods Sold
CSRD Corporate Sustainability Reporting Directive
DBM Dead Burned Magnesia
DRI Direct Reduced Iron
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
ERP Enterprise Resource Planning
EU European Union
FX Foreign Exchange
FY Full year
IAS International Accounting Standards
IASB International Accounting Standards Board
IFRS IFRS Accounting Standards
ISO International Organisation for Standardisation
KPMG KPMG Accountants N.V.
kt Kiloton
LATAM One of the RHI Magnesita strategic regions: South and Central America
LTIFR Lost-Time Injury Frequency Rate
LTIP Long-Term Incentive Plan
M&A Mergers & Acquisitions
META One of the RHI Magnesita strategic regions: Middle East, Türkiye and Africa
N.V. Naamloze Vennootschap (public limited liability company)
NAM North America
NFM Non-ferrous metals
NOA
Optimisation Americas
NOE Network Optimisation Europe
NOPAT Net Operating Profit After Tax
OCF Operating Cash Flow
OIE Other Income and Expenses
PPE Property, Plant & Equipment / Personal Protective Equipment
ppts Percentage points
Resco A group of companies carrying out the manufacturing and sale of refractory
products in the US, UK and Canada, previously owned by Balmoral Refractories
Holdings, Inc.
RFC Revolving Credit Facility
ROIC Return On Invested Capital
SG&A Selling, General and Administrative Expenses
TMS Transport management system
TRIF Total Recordable Injury Frequency
UK United Kingdom
US United States
Y/y Year on year
WSA World Steel Association
WUI World uncertainty index
Consolidated Financial Statements 2025
Consolidated Statement of Profit or Loss
for the year ended 31 December 2025
in € million Note 2025 2024(1))
Revenue (5) 3,366 3,487
Cost of sales(1)) (5) (2,594) (2,628)
Gross profit(1)) 772 859
Selling, general & administrative expenses(1)) (9) (360) (408)
Research & development expenses(1)) (9) (39) (45)
Amortisation of intangible assets(1)) (18) (52) (39)
Restructuring (6) (44) (24)
Other income (7) 24 38
Other expenses (8) (78) (139)
EBIT(2)) 223 242
Interest income (11) 15 22
Interest expenses on borrowings (61) (61)
Net (expense)/income on foreign exchange effects (12) (16) 11
Other net financial expenses (13) (33) (14)
Net finance costs (95) (42)
Profit before income tax 128 200
Income tax (14) (34) (46)
Profit after income tax 94 154
RHI Magnesita N.V. shareholders 86 142
Non-controlling interests (26) 8 12
in €
Earnings per share - basic (15) 1.82 3.01
Earnings per share - diluted (15) 1.77 2.94
1) Restated due to an accounting policy change (see Note (1)).
2) EBIT is a non-IFRS measure and is defined in Note (37).
Consolidated Statement of Comprehensive Income
for the year ended 31 December 2025
in € million Note 2025 2024
Profit after income tax 94 154
Currency translation differences
Unrealised results from currency translation (195) (94)
Deferred taxes thereon (14) 0 17
Reclassification to profit or loss 1 (8)
Cash flow hedges and costs of hedging
Unrealised fair value changes (35) (14) 27
Reclassification to profit or loss (4) (18)
Deferred taxes thereon (14) 3 (2)
Remeasurement of investments in debt instruments
Unrealised fair value changes 0 (5)
Reclassification to profit or loss 0 5
Items that may be reclassified to profit or loss in later periods (209) (78)
Remeasurement of defined benefit plans
Remeasurement of defined benefit plans (29) 13 24
Deferred taxes thereon (14) (2) (8)
Items that are not reclassified to profit or loss in later periods 11 16
Other comprehensive (loss)/income after income tax (198) (62)
Total comprehensive income (104) 92
RHI Magnesita N.V. shareholders (84) 74
Non-controlling interests (26) (20) 18
Consolidated Statement of Financial Position
as at 31 December 2025
in € million Note 31.12.2025 31.12.2024
ASSETS
Non-current assets
Goodwill (17) 403 342
Intangible assets (18) 540 417
Property, plant and equipment (19) 1,246 1,285
Investments in joint ventures and associates 6 7
Other financial assets (34) 36 42
Other assets (20) 29 76
Deferred tax assets (14) 163 152
2,423 2,321
Current assets
Inventories (21) 932 962
Trade and other receivables (22) 576 660
Income tax receivables (14) 49 40
Other financial assets (34) 9 17
Cash and cash equivalents (23) 355 576
Assets held for sale (19) 4 0
1,925 2,255
4,348 4,576
EQUITY AND LIABILITIES
Equity
Share capital (24) 50 50
Group reserves (25) 975 1,152
Equity attributable to shareholders of RHI Magnesita N.V. 1,025 1,202
Non-controlling interests (26) 145 170
1,170 1,372
Non-current liabilities
Borrowings (27) 1,362 1,474
Other financial liabilities (28) 100 112
Deferred tax liabilities (14) 91 64
Net employee defined benefit liabilities (29) 232 257
Provisions (30) 63 71
Other liabilities 7 8
1,855 1,986
Current liabilities
Borrowings (27) 424 276
Other financial liabilities (28) 33 27
Trade payables and other liabilities (31) 757 843
Income tax liabilities (14) 29 29
Provisions (30) 80 43
1,323 1,218
4,348 4,576
Consolidated Statement of Cash Flows
for the year ended 31 December 2025
in € million Note 2025 2024
Cash generated from operations (32) 433 502
Income tax paid less refunds (54) (69)
Net cash flow from operating activities 379 433
Investments in property, plant and equipment and intangible assets (111) (145)
Investments in subsidiaries net of cash acquired (363) (7)
Cash inflows from the sale of property, plant and equipment 24 16
(Cash outflows) from investments in financial assets (2) (27)
Cash inflows from the sale or settlement of financial assets 4 30
Cash inflow from matured derivative financial instruments 13 0
Dividends received from non-consolidated entities 1 1
Investment subsidies received 0 2
Prepayments related to the acquisition of Resco Group 0 (44)
Interest received 9 20
Net cash used in investing activities (425) (154)
Acquisition of non-controlling interests (3) (6)
Dividends paid to RHI Magnesita N.V. shareholders (85) (87)
Dividends paid to non-controlling interests (2) (3)
Proceeds from long-term financing 346 14
Repayments of long-term financing (287) (174)
Changes in current borrowings and financial liabilities to associates (25) (41)
Interest payments (89) (107)
Repayment of lease obligations (17) (20)
Interest payments from lease obligations (3) (3)
Cash inflow from matured derivative financial instruments 4 18
Net cash used in financing activities (33) (161) (409)
Change in cash and cash equivalents (207) (130)
Cash and cash equivalents at beginning of period 576 704
Foreign exchange impact (14) 2
Cash and cash equivalents at end of period (23) 355 576
Consolidated Statement of Changes in Equity
for the year ended 31 December 2025
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)
31.12.2024 50 (108) 361 289 938 12 (86) (254) 1,202 170 1,372
Profit after income tax - - - - 86 - - - 86 8 94
Currency translation differences - - - - - - - (166) (166) (28) (194)
Cash flow hedges and costs of hedging - - - - - (15) - - (15) - (15)
Defined benefit plans - - - - - - 11 - 11 - 11
Other comprehensive income after income tax - - - - - (15) 11 (166) (170) (28) (198)
Total comprehensive income - - - - 86 (15) 11 (166) (84) (20) (104)
Dividends - - - - (85) - - - (85) (3) (88)
Share transfer/vested LTIP - 5 - - (5) - - - - - -
Other changes(1)) - - - - (6) - - - (6) (2) (8)
Share-based payment expenses - - - - 4 - - - 4 - 4
Hedging gains and losses included in the initial cost of inventory purchased - - - - - 4 - - 4 - 4
in the reporting period
Hedging gains and losses included in goodwill net of taxes - - - - - (10) - - (10) - (10)
- 5 - - (92) (6) - - (93) (5) (98)
31.12.2025 50 (103) 361 289 932 (9) (75) (420) 1,025 145 1,170
1) This mainly relates to the recognition of the financial liability and
derecognition of the non-controlling interest related to the acquisition of
BPI RHIM LLC.
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.
Notes to the Consolidated Financial Statements 2025
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 2025 were approved and authorised for issue by the
Board of Directors on 1 March 2026 and will be submitted for adoption to the
Annual General Meeting ("AGM") in May 2026. 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 or Other Comprehensive Income and financial liabilities
measured at Fair Value through Profit or Loss, 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 changing the accounting policies with regards to
the composition of certain line items in the Consolidated Statement of Profit
or Loss. Management believes that the following changes provide more useful
information since the revised presentation has been aligned with the internal
presentation for performance monitoring purposes:
• Amortisation of intangible assets is presented in a separate line item in
the Consolidated Statement of Profit or Loss. Previously, amortisation was
included in three line items, being cost of sales, selling and marketing
expenses as well as general and administrative expenses, based on the internal
allocation of amortisation to the functional expense categories. As a result,
gross profit for the comparative period increased by €11 million, while
selling, general and administrative expenses and cost of sales for the
comparative period decreased by €28 million, respectively €11 million,
resulting in an amortisation of intangible assets of €39 million for the
comparative period.
• Presentation of selling, general and administrative expenses as a new line
item in the Consolidated Statement of Profit or Loss. This line item combines
the previous line items selling and marketing expenses as well as general and
administrative expenses.
• Research and development expenses are presented in a separate line item in
the Consolidated Statement of Profit or Loss. Previously, they were included
in the former line item general and administrative expenses.
In addition, the Group underwent a reassessment of its operating segments
which also led to changes in the composition and number of RHIM's cash
generating units for impairment testing of property, plant and equipment,
intangible assets and goodwill. These changes are described in more detail in
Notes (3), (5) and (17).
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 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. Furthermore, the exemption
pursuant to section 264b HGB has been applied for RHI Urmitz AG & Co. KG
(Mülheim-Kärlich).
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 Consolidated 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 shareholders of RHI Magnesita
N.V..
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 310 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 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 debt covenant of the Group's principal borrowing facilities.
Mitigating actions within management control which would be undertaken in the
downside and reverse scenarios, include but not limited to: reduce fixed costs
and selling, general and administrative expenses, reduction of working capital
and capital expenditure, seeking a debt covenant waiver and reducing or
cancelling the dividend, but these were not incorporated in the downside
modelling.
The Directors have also considered the Group's current liquidity, available
facilities and debt covenant coverage. As of 31 December 2025, the
Consolidated Statement of Financial Position reflects cash and cash
equivalents of €355 million (2024: €576 million). In addition, the Group
has access to a €600 million (2024: €600 million) Revolving Credit
Facility (RCF), which is currently undrawn and not relied upon for the purpose
of the going concern assessment. In 2025 and the previous reporting period,
the Group complied with the debt covenant of the Group's principal borrowing
facilities (refer to Notes (27) and (37)).
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 2025.
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 2025.
Management assessed that the application of these has not had a material
impact on the Consolidated Financial Statements for 2025.
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
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 items in the
primary financial statements as well as 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. The
European Commission has already endorsed IFRS 18 for use in the EU. Management
does not intend to early adopt IFRS 18.
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 and Consolidated Cash Flow Statement; these 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 new IFRS accounting standard will be determined once this review
has been completed. In particular, the classification of expenses and income
to the five categories and the introduction of (new) subtotals requires 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 the information to be disclosed for both profit or loss as
well as cash flow related MPMs can be obtained. 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. Whereas variable price call and put options
or variable price forward contracts, for which the price equals fair value and
where the legal owner of the outstanding shares retains voting and dividend
rights, the risks and rewards of ownership are assumed to remain with the
legal owner of the outstanding shares.
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 Fair Value through Profit or Loss. Fair value changes resulting
from the remeasurement of the financial liability are presented 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
presented 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.
Significant estimate: Measurement of assets acquired and liabilities assumed in business combinations
Estimates relating to the calculation of fair values of acquired assets,
liabilities and contingent liabilities are required within the context of
business combinations disclosed in Note (40). Where intangible assets are
identified, estimates are necessary for the determination of fair values by
means of discounted cash flows, including the duration, amount of future cash
flows, and discount rate. Fair values of physical assets are estimated with
reference to comparable assets in the market. When making estimates in the
context of purchase price allocations on major acquisitions, the Group
consults with independent experts who accompany the execution of the
discretionary decisions and record this in appraisal documents. The Group has
a period of one year from the date of control of the acquired businesses to
update initial fair value estimates.
Significant judgement: Recognition of non-controlling interest of BPI RHIM LLC
The acquisition of BPI RHIM LLC includes a call and a put option over the
outstanding shares (49%), see Note (40). The Group has concluded, based on the
terms and pricing of the call and the put option, that the risks and rewards
of ownership associated with the outstanding shares have not been transferred
to the Group. Therefore, the financial liability was not considered as part of
the purchase consideration, and a non-controlling interest was recognised on
acquisition. The financial liability arising from the put option has been
recognised in accordance with the Group's accounting policy related to
fixed-term or puttable non-controlling interests. Being that the financial
liability was initially recognised against equity attributable to shareholders
of RHI Magnesita N.V., while the said non-controlling interests were
derecognised to zero - also against equity attributable to shareholders of RHI
Magnesita N.V..
Significant judgement: Control over Horn & Co Minerals Recovery and BPI RHIM LLC
At the end of the reporting period, the Group holds a 55.0% interest in Horn
& Co Minerals Recovery ("Mireco") and a 51.0% interest in BPI RHIM LLC.
The Group assessed its respective shareholding rights and power to control in
terms of the purchase agreements, founding documents of both businesses and
relevant corporate laws. Based on this assessment, the Group determined that
it controls Mireco as well as BPI RHIM LLC and consolidated them from the
respective date of control. The Group exercises control over Mireco and BPI
RHIM LLC as it has the power to steer the relevant activities of the
businesses and can use this power to affect the variable returns that it is
exposed to. In determining that the Group controls both businesses, judgement
is applied which takes into account the Group's voting rights, management
representation, the governance structure of both businesses as well as the
activities that can be unilaterally directed by RHIM without the consent of
the non-controlling shareholders. Control is achieved above all through the
Group's voting rights and the resulting influence on directing the relevant
activities of these businesses.
Goodwill and 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.
Intangible assets
Mining rights
Mining rights arise from business acquisitions and are generally 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. In exceptional cases, mining rights are amortised
on a straight-line basis over their expected useful lives.
Customer relationships
Customer relationships arise from business acquisitions 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.
Trade names
Trade names arise from business acquisitions 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.
Internally generated intangible assets
Research costs are expensed in the year incurred and presented within research
and development 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 new software or 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 presented in a separate
line item which includes amortisation of purchased intangible assets in
addition to amortisation of internally generated intangible assets.
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
Trade names 20 years
Internally generated intangible assets 4 to 10 years
Other intangible assets 3 to 65 years
The useful economic lives of intangible assets are reviewed regularly and
adjusted if necessary.
The carrying values of 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.
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 3.31% (2024: 2.95%) 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 and buildings 5 to 60 years
Technical equipment and machinery 3 to 63 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.
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 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.
Property, plant and equipment and intangible assets
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. In the
reporting period, the composition and number of RHIM's CGUs changed due to the
reassessment of its operating segments. The impact from transitioning from a
customer industry-based CGU structure to a regional CGU structure is described
in Note (17).
Significant judgement: Identification of impairment indicators related to individual items of property, plant and equipment or intangible assets
Management reviewed individual items of property, plant and equipment or
intangible assets 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 items of
property, plant and equipment or intangible 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 immaterial impairment losses at
the level of individual items of property, plant and equipment or intangible
assets. Refer to Notes (6), (8), (18) and (19) for details.
Significant judgement: Determination of CGUs
Management determines its cash generating units at operating segment level
whereby each CGU comprises a group of assets representing the capacity of
multiple production plants needed to meet the customer demand of the
respective operating segment. The combination of multiple production plants
to a single CGU per operating segment is mainly based on the possibilities of
producing similar types of refractory products in multiple production plants
facilitating revenue substitution between production plants, the similarities
in the production process of the different types of refractory products and
the fact that the closure of individual production plants does not lead to
customer 'leakage'.
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
2026 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
sales regions and expert assumptions, including forecasts about the regional
growth of steel production and the output of Industrial 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 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 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 value in use 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. Changes in
these key assumptions may change the headroom or result in impairment losses.
For further details on impairment tests for CGUs which include goodwill, refer
to Note (17).
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.
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 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 a forfaiting arrangement, an arrangement
with a payment service provider and reverse factoring arrangements. The
forfaiting and reverse factoring arrangements give suppliers the option to
receive early payment by selling either bills of exchange referring to
supplier invoices or trade receivables to a financial institution at a
discount. The Group then settles the liability to the financial institution at
a later date in accordance with the payment terms agreed with the financial
institution. Under the arrangement with a payment service provider, invoices
from suppliers are paid by the payment service provider on behalf of RHIM on
the original due date. The Group then settles the liability to the payment
service provider at a later date in accordance with the payment terms agreed
with the payment service provider. The liabilities subject to all supplier
finance arrangements continue to be presented within trade payables and other
liabilities. The settlement of these liabilities is classified as cash outflow
from operating activities, except for any interest paid, which is presented
within the cash flow from financing activities. This accounting policy is
based on an analysis of the terms and conditions of each supplier finance
arrangement and an assessment of whether the following criteria are met: the
payables subject to the respective supplier finance arrangement 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. Management has determined that these criteria are met for all
supplier finance arrangements.
Significant judgement: Supplier finance arrangements
In assessing to what extent supplier finance arrangements can be presented
within trade payables and other liabilities, the Group has to make certain
judgements as to whether the payables subject to supplier finance arrangements
are deemed to be part of the working capital used in the Group's normal
operating cycle. Also, the Group has in this context to assess the impact of
additional securities being provided and/or the significance of the
differences in payment terms between the trade payables that are or are not
part of the supplier finance arrangements within the Group.
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.
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
entering into forward purchase contracts for the delivery of CO(2) emission
certificates. Derivative financial instruments also include these contracts,
since the own use exemption is not applicable.
Significant judgement: Own use exemption on gas and power forward purchase contracts
The Group enters into fixed price and quantity forward gas and power contracts
to secure the 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 or power. 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 or power 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.
Purchased emission certificates 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 certificates based
on the tons of CO(2) emitted is recorded as expense in the cost of sales.
Those certificates 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 certificates, the Group recognises a
provision calculated based on the deficit of emission certificates and
measured at the market price of emission certificates 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.
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 positions
Management makes judgements in relation to the recognition of uncertain tax
positions concerning 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 judgement: Utilisation of tax losses and recognition of other deferred tax assets
The Group operates in many countries and is subject to taxes in numerous
jurisdictions. Management uses judgement to assess the recoverability of
deferred tax assets such as whether there will be sufficient future taxable
profits to utilise tax losses. 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.
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 with Steel customers 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 of
production equipment 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, general and administrative expenses
This line item includes personnel expenses for the sales staff as well as
depreciation and other operating expenses related to the market and sales
processes. In addition, it includes personnel expenses for the administrative
functions, legal, IT and other consulting costs.
Research and development expenses
This line item includes expenses for research and non-capitalisable
development costs.
Amortisation of intangible assets
This line item includes amortisation of purchased and internally generated
intangible assets.
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 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:
31.12.2025 31.12.2024
Price level 10,067.71 7,694.01
Index movement (in %) 31 118
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 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 € = 31.12.2025 31.12.2024 2025 2024
Brazilian Real BRL 6.56 6.46 6.29 5.79
Canadian Dollar CAD 1.61 1.50 1.57 1.48
Chinese Renminbi Yuan CNY 8.24 7.61 8.06 7.79
Indian Rupee INR 105.96 89.11 97.49 90.68
US Dollar USD 1.18 1.04 1.12 1.09
1) Arithmetic mean of the monthly closing rates.
4. Climate change and energy transition
In 2025 the Group announced its commitment to reduce Scope 1, 2 and 3 (raw
materials) CO(2) emissions intensity by 10% per ton of production by 2030,
compared to a 2024 baseline. The Group has published a theoretical
decarbonisation pathway which sets out a potential route to substantially
remove all CO(2) emissions by 2060. The decarbonisation pathway is not aligned
with a 1.5°C temperature goal of the Paris Agreement. Consequently, the Group
does not currently have a climate transition plan for mitigation that is
consistent with limiting global warming to 1.5°C. However, the Group has a
climate transition plan for climate mitigation that is aligned with the Paris
Agreement's objective of holding the increase in global average temperature to
well below 2°C, based on feasible and available technologies. 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
2025.
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 certificates is to be replaced by the
Carbon Border Adjustment Mechanism ('CBAM'), with all free CO(2) emission
certificates 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 per CGU
represents the long-term growth rate of the respective region.
The expected CO(2) emission costs are considered in the 2026 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 certificates is not included.
Management expects an adverse impact on the recoverability of the assets
included in the Europe & CIS CGU as soon as the CBAM regulation becomes
effective. This adverse impact comprises a production shift from Europe &
CIS to other sales regions in addition to a corresponding shift of customer
demand to other sales regions. As far as foreseeable, it is already considered
in the Long-Term Plan and value in use of the Europe & CIS CGU.
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 2030. 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 8 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 discounting period used to
determine the present value of measure asset restoration provisions is between
8-37 years, applying risk-free rates as discount 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.
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
€1,102 million (31.12.2024: €1,383 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
foreseen due to sufficient headroom.
5. Segment reporting
The Group's business activities are organised by region based on its sales
markets and the customer industries it serves. The regions comprise Europe
& CIS, North America, Latin America, China & East Asia, India and
Middle East, Türkiye and Africa (META). Customer industries are internally
grouped into two categories: Steel and Industrial. The latter category
aggregates multiple customer industries other than Steel, including Cement
& Lime, Non-Ferrous Metals, and Process Industries which comprises several
customer industries addressing industrial applications.
In 2025, RHIM reassessed its operating segments, driven by significant
progress in its local-for-local production strategy, the integration of the
acquired Resco Group and a comprehensive restructuring of profit centres. This
acquisition is considered a milestone in the development of the
local-for-local production strategy, resulting in the reassignment of certain
sales markets to the regions and the associated establishment of the new META
region. These events shifted the focus of internal reporting for the purpose
of resource allocation and performance monitoring to the regions. Resource
allocation decisions are taken both globally and at regional level but always
concern the entire region. Financial budgets are prepared at regional level
and budget variances are monitored at the same level. Each region has an
assigned segment manager, i.e. regional president, responsible for managing
the 'day-to-day' business, executing RHIM's strategy in the respective region
and meeting the budgeted targets. The segmentation of the business activities
by region reflects the internal control structure, the management structure
and the internal performance reporting to the Chief Operating Decision Maker
(CODM). Taking these factors into account, the reassessment resulted in the
establishment of the regions as RHIM's new operating segments. The six
regional operating segments and the business activities subsumed into the
organisational unit 'Minerals', which is designated as a reportable segment,
result in seven reportable segments.
Each regional segment provides shaped refractory products, including bricks in
various shapes and chemical compositions, as well as unshaped refractory
products, including mixes, mortars and castables, and functional refractory
products summarising specialised refractory products. Depending on the type of
refractory product, some types are used for lining customer industry specific
furnace types and aggregates, while other types are used in the final stages
of the steel production process. In addition to refractory products, the Group
provides 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 also offered to customers, including systems, sensors,
machinery and digital products.
In addition, the Group sells internally produced raw materials, such as
magnesite ore, dead-burned magnesia and fused magnesia 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 is responsible for the allocation of resources and
for evaluating the performance of each operating segment and is therefore the
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 measures are prepared using the
same accounting policies as the Consolidated Financial Statements and are
reported after elimination of any inter-segment transactions.
The reassessment of the operating segments resulted in a change of the Group's
segment reporting structure from customer industry-based segments to regional
segments. The comparative figures have been restated in accordance with IFRS 8
to reflect the new segment reporting structure.
The following tables present the financial information for the reportable
segments for the year 2025 and the previous year:
in € million Europe & CIS North America Latin America China & East Asia India Middle East, Türkiye and Africa Minerals Group 2025
Revenue 727 863 536 377 441 342 80 3,366
Cost of sales (576) (614) (389) (302) (377) (264) (72) (2,594)
Gross profit 151 249 147 75 64 78 8 772
EBIT 223
Net finance costs (95)
Profit before income tax 128
in € million Europe & CIS North America Latin America China & East Asia India Middle East, Türkiye and Africa Minerals Group 2024
Revenue 829 709 617 425 458 384 65 3,487
Cost of sales (651) (490) (427) (335) (380) (286) (59) (2,628)
Gross profit 178 219 190 90 78 98 6 859
EBIT 242
Net finance costs (42)
Profit before income tax 200
The following table shows the depreciation of property, plant and equipment
per reportable segment:
in € million 2025 2024
Europe & CIS (32) (33)
North America (29) (31)
Latin America (29) (33)
China & East Asia (17) (16)
India (8) (7)
Middle East, Türkiye and Africa (12) (12)
Minerals (4) (4)
Depreciation (131) (136)
The disaggregation of revenue by type of product or service is presented in
the below table:
in € million 2025 2024
Shaped refractory products 1,551 1,708
Unshaped refractory products 847 822
Functional refractory products 521 515
Services 137 158
Other products 310 284
Revenue 3,366 3,487
The revenue by customer sites for the year 2025 and the previous year is
classified as follows:
in € million 2025 2024
The Netherlands 10 15
USA 742 584
India 436 445
Brazil 328 353
China 229 260
Other countries 1,621 1,830
Revenue 3,366 3,487
No single customer contributed 10% or more to consolidated revenue in 2025 and
in 2024. Companies that are known to be part of a group are treated as one
customer.
The carrying amounts of goodwill, intangible assets and property, plant and
equipment are classified based on the location of the Group companies, as
follows:
in € million 31.12.2025 31.12.2024
USA 542 235
Brazil 386 407
Austria 329 343
India 324 392
Germany 199 205
China 162 188
Other countries 247 274
Goodwill, intangible assets and property, plant and equipment 2,189 2,044
6. Restructuring
The summary of net restructuring expenses recognised is as follows:
in € million 2025 2024
Restructuring (expenses) (45) (32)
Restructuring income 1 8
Restructuring (expenses) - net (44) (24)
2025
Restructuring expenses primarily relate to costs of €29 million associated
with the closure of the Wetro plant in Germany. These costs include €26
million of severance expenses and €2 million of impairment losses on
property, plant and equipment. In addition, €10 million relates to severance
costs incurred in connection with the Group's permanent SG&A headcount
reduction.
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 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.
7. Other income
in € million 2025 2024
Net amortisation of Oberhausen provision 10 14
Gains from the disposal of non-current assets 0 6
Miscellaneous income 14 18
Other income 24 38
The net amortisation of the Oberhausen provision includes a utilisation of
€9 million (2024: €10 million) for the performance against the onerous
contract, and €1 million (2024: €4 million) arising from updated
estimates. In 2025, miscellaneous income mainly includes €9 million related
to a lawsuit settlement outcome in Brazil. 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 2025 2024
Expenses for strategic projects (73) (75)
Impairment of property, plant and equipment and intangible assets 0 (37)
Losses from the disposal of non-current assets (1) (3)
Miscellaneous expenses (4) (24)
Other expenses (78) (139)
Expenses for strategic projects mainly comprise implementation costs of
Software-as-a-Service (SaaS) projects, which are expensed as incurred,
amounting to €41 million (2024: €45 million) and €3 million (2024: €6
million) of costs related to the development of an integrated supply chain
planning solution. Additionally, this category includes €16 million (2024:
€24 million) of legal and consulting fees associated with M&A activities
and integration costs for newly acquired businesses.
In 2024, 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 following the Resco Group acquisition. Additionally, an
impairment loss of €8 million was recognised for capitalised development
costs recognised as intangible assets.
In 2024, miscellaneous expenses mainly consist of €12 million relating to
investments in and losses on the disposal of special Argentinian government
bonds 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 2025 and the previous year:
in € million 2025 2024
Cost of materials (1,339) (1,352)
Personnel costs (791) (806)
Energy costs (215) (225)
Freight expenses (197) (201)
Depreciation and amortisation (183) (175)
External services (171) (173)
Write-down expenses (2) (42)
Changes in inventories, own work capitalised 1 (11)
Other income and expenses (246) (260)
Total expenses (3,143) (3,245)
Cost of materials includes expenses for raw materials and supplies and
purchased goods of €1,288 million (2024: €1,307 million) and expenses for
services received amounting to €51 million (2024: €45 million). Research
and development costs related to the development of new and improvement of
existing products and technologies amounted to €43 million (2024: €51
million), of which €4 million (2024: €5 million) in development costs were
capitalised. Amortisation and impairment of development costs recognised
within cost of materials was €5 million (2024: €10 million).
Other income of €34 million (2024: €53 million) mainly comprises gains on
disposal of non-current assets, income from research grants which amounted to
€4 million (2024: €4 million), insurance reimbursements and amortisation
of grants related to assets; it also includes €9 million associated with the
resolution of a lawsuit in Brazil. Other expenses of €280 million (2024:
€270 million) mainly consist of external consulting fees, IT costs, travel
expenses and repairs and maintenance expenditure. Payments associated with
short-term leases of equipment and vehicles, and all leases of low-value
assets are recognised also as other expenses. 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 2025 amount to €14 million (2024:
€7 million).
Selling and marketing expenses amounting to €113 million (2024: €131
million) primarily include distribution-related costs such as sales
commissions, sales personnel, as well as advertising and marketing activities.
General and administrative expenses amounting €246 million (2024: €278
million) comprise corporate overheads such as administrative personnel costs,
professional fees, office expenses, and other general support functions.
10. Personnel costs
Personnel costs consist of the following components:
in € million 2025 2024
Wages and salaries (604) (634)
Social security contribution (122) (121)
Fringe benefits (38) (32)
Pension and other post-employment benefits
Defined contribution plans (12) (12)
Defined benefit plans (4) (4)
Other expenses termination benefits (11) (3)
Personnel expenses (without interest expenses) (791) (806)
Average employee numbers
The average number of employees of the Group based on full time equivalents
amounts to:
2025 2024
Salaried employees 7,170 7,426
Waged workers 8,763 8,626
Number of employees on annual average 15,933 16,052
104 full time equivalents of salaried employees work in the Netherlands (2024:
108 employees).
In addition, the average number of employees is presented below by
geographical region:
2025 2024
Europe & CIS 4,569 5,000
North America 1,405 971
Latin America 4,795 5,054
China & East Asia 2,130 1,887
India 2,518 2,566
Middle East, Türkiye and Africa 516 575
Number of employees on annual average 15,933 16,052
11. Interest income
Includes interest income on cash at banks and similar income amounting to
€15 million (2024: €22 million).
12. Net (expense)/income on foreign exchange effects
The net expense 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 gain on the net monetary position
related to hyperinflation accounting (IAS 29) and can be detailed as follows:
in € million 2025 2024
Foreign exchange (losses)/gains (35) 30
Gains/(Losses) on forward exchange contracts and derivatives in open orders 18 (18)
Gain/(Loss) on net monetary position 1 (1)
Net (expense)/income on foreign exchange effects (16) 11
The foreign exchange losses in the current reporting period mainly result from
the appreciation of the functional currencies of subsidiaries with a net asset
foreign currency exposure against USD and the depreciation 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 2025 2024(1))
Net interest expense relating to net employee defined benefit liabilities (11) (12)
Costs related with the trade receivables factoring program (11) (10)
Unwinding of discount of provisions and payables (6) (7)
Interest (expense) on supplier finance arrangements and transaction costs (5) (1)
Interest (expense)/income on liabilities to fixed-term or puttable (2) 1
non-controlling interests
Interest expense on lease liabilities (3) (3)
Remeasurement gains on liabilities to fixed-term or puttable non-controlling 10 21
interests
Other interest and similar income and expenses (5) (3)
Other net financial expenses (33) (14)
1) Restated.
14. Taxation
Income tax
Income tax consists of the following items:
in € million 2025 2024
Current tax expense (45) (51)
Deferred tax (expense)/income relating to
temporary differences (6) (4)
tax loss carryforwards 17 9
11 5
Income tax (34) (46)
The current tax expense includes tax income for prior periods of €2 million
(2024: €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 arising from economic volatility and (iii) the
Group's latest forecasts and assumptions used for the goodwill impairment
testing and the viability statement assessment. The Group's forecast period is
four years, with the fifth year being the final year, consistent with the
approach applied for the goodwill impairment testing. In Brazil, a longer
forecast horizon is used due to the annual limitation for use of tax 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 €1 million (2024: €7 million tax income)
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 the holding
company RHI Magnesita N.V. is tax resident in Austria), and the income tax
reported is shown below:
in € million 2025 2024
Profit before income tax 128 200
Income tax expense calculated at 23% (2024: 23%) 29 46
Different foreign tax rates 12 8
Expenses not deductible and additions to tax base, non-creditable taxes 20 22
Non-taxable income and tax benefits (24) (30)
Tax losses and temporary differences of the financial year not recognised 4 5
Change in write-down of deferred tax assets 3 0
Utilisation of previously unrecognised loss carryforwards and temporary 0 (5)
differences
Deferred tax expense due to tax rate changes 0 1
Deferred income tax relating to previous periods (8) 4
Current income tax relating to prior periods (2) (5)
Recognised tax expense 34 46
Effective tax rate (in %) 26.6% 23.1%
Below is the summary of major effects on the effective tax rate
reconciliation:
In 2025, expenses not deductible and additions to the tax base include:
transfer pricing adjustments of €1 million (2024: transfer pricing
adjustments mainly related to Argentina of €4 million); taxable income that
was treated as part of the Goodwill of €3 million; non-creditable
withholding taxes in Austria of €1 million (2024: €2 million) and
non-deductible subsidiary-related expenses of €4 million (2024: €3
million).
In 2025, non-taxable income and tax benefits mainly include: tax incentives in
Brazil of €6 million (2024: €2 million); additional tax depreciation in
Austria of €7 million (2024: €7 million) relating to historical
acquisitions; inflationary adjustments in South America of €1 million (2024:
€6 million, including South America and Türkiye); gains on the measurement
of liabilities related to fixed-term or puttable non-controlling interests of
€4 million (2024: €6 million); income of €3 million related to the
settlement of a lawsuit in South America.
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
€2 million (2024: €4 million). The change in write-down due to
insufficient expectation of future taxable profits also relates to China in
the amount of €3 million.
Deferred taxes expense relating to prior periods based on information obtained
in the reporting period arises mainly from: a deferred tax income in Mexico of
€5 million (2024: deferred tax expense of €2 million), a deferred tax
income in Austria in the amount of €2 million (2024: deferred tax income of
€1million) and a deferred tax income in Germany in the amount of €2
million (2024: deferred tax expense of €1 million).
The current tax income relating to prior periods mainly relates to Germany in
an amount of €3 million, where tax loss carrybacks and return-to-provision
reconciliations affected the prior year's taxes. In 2024, it related to Peru
(€3 million) and Chile (€2 million) where there was a reversal of a tax
risk provision due to a court case judgement, respectively a
return-to-provision reconciliations.
Deferred taxes
Deferred taxes are related to the following significant balance sheet items
and tax loss carryforwards:
31.12.2025 2025 31.12.2024 2024
in € million Deferred tax assets Deferred tax liabilities (Expense)/Income Deferred tax assets Deferred tax liabilities (Expense)/Income
Property, plant and equipment, intangible assets 27 142 12 28 107 8
Inventories 28 8 3 26 10 4
Trade receivables, other assets 14 11 8 14 22 (10)
Net employee defined benefit liabilities 30 1 (3) 35 0 (1)
Other provisions 19 0 (4) 23 0 (2)
Trade payables, other liabilities 21 4 (22) 39 5 (3)
Tax loss carried forward 99 0 17 67 0 9
Offsetting (75) (75) 0 (80) (80) 0
Deferred taxes 163 91 11 152 64 5
For temporary differences and tax loss carryforwards of subsidiaries that have
generated tax losses either in the current or previous reporting period,
deferred tax assets amounting to €121 million (2024: €101 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 €517 million at 31
December 2025 (2024: €347 million). For tax loss carryforwards of €381
million (2024: €235 million), deferred tax assets are recognised; no
deferred tax assets are recognised for the remaining amount of €136 million
(2024: €112 million).
The following table shows the origin of tax loss carryforwards per country for
which no deferred tax assets are recognised:
in € million 31.12.2025 31.12.2024
Country
Brazil 51 51
China 52 37
UK 6 6
Dubai 3 4
Germany 19 6
France 5 5
Others 0 3
Total 136 112
The following table shows unrecognised tax loss carryforwards by year of
expiry:
in € million 31.12.2025 31.12.2024
Year of expiry
2025 0 1
2026 2 2
2027 9 10
2028 5 6
2029 27 19
2030 or later 9 0
Not subject to expiration 84 74
Total unrecognised tax losses 136 112
No deferred tax assets were recognised on temporary differences totalling
€93 million (2024: €123 million), which are expected to reverse by 2034.
These temporary differences mainly relate to Austria: €90 million (2024:
€120 million).
Taxable temporary differences of €1,592 million (2024: €1,477 million) and
temporary deductible differences of €104 million (2024: €96 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 the 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 in Austria (where the ultimate parent company is
resident), has led to a minor additional current tax expense of €0.5
million, related to the Group's operations in Guernsey and the UAE.
Income tax receivables
Income tax receivables amounting to €49 million (2024: €40 million) are
mainly related to tax prepayments and deductible withholding taxes.
Income tax liabilities
Income tax liabilities amounting to €29 million (2024: €29 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.
2025 2024
Profit after income tax attributable to RHI Magnesita N.V. shareholders (in 86 142
€ million)
Weighted average number of shares for basic EPS 47,271,556 47,170,570
Effects of dilution from share options 1,306,061 1,154,648
Weighted average number of shares for dilutive EPS 48,577,617 48,325,218
Earnings per share basic (in €) 1.82 3.01
Earnings per share diluted (in €) 1.77 2.94
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 2026
and was not recognised as a liability in these Consolidated Financial
Statements. The final proposed dividend for 2025 amounts to €1.20 per share
(2024: €1.20 per share).
In line with the Group's dividend policy, the Board paid out an interim
dividend in the second half of 2025 of €0.60 per share for the first half of
2025 amounting to €28 million. The total dividend for 2025, which includes
the proposed final dividend, yet to be approved by shareholders, amounts to
€1.80 per share (2024: €1.80 per share).
Based on a resolution adopted by the AGM in May 2025, the final dividend for
2024 amounted to €1.20 per share and was paid out in June 2025, amounting to
€57 million. The total dividend for 2024 amounted to €1.80 per share.
17. Goodwill
in € million 2025 2024
Carrying amount at beginning of year 342 339
Business combinations (see Note (40)) 103 3
Currency translation (43) (3)
Hyperinflation adjustment 1 3
Carrying amount at year-end 403 342
Impairment of CGUs with significant goodwill
In the reporting period, the composition and number of RHIM's CGUs changed due
to the reassessment of its operating segments (see Notes (3) and (5)). The new
regional CGUs are determined at operating segment level. The transition from a
customer industry-based CGU structure to a regional CGU structure made it
necessary to reallocate goodwill to the new regional CGUs. Except for goodwill
arising from business combinations that were completed in the reporting
period, goodwill was reallocated applying the relative value method. Under
this method, the relative contribution of each regional CGU to the value in
use of each former CGU determines the portion of goodwill of each former CGU
that is reallocated to each regional CGU. Moreover, on the transition date two
impairment tests were performed. The first one covered the former CGUs
considering the previous goodwill allocation and the second one covered the
new regional CGUs considering the results of goodwill reallocation. Neither of
the two impairment tests indicated impairment losses at CGU level.
The impairment test is based on the value in use. This 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 ranging from €42
to €45 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
2026 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 sales regions
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 2026 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 was undertaken to forecast
regional customer demand considering regional growth rates of the steel
production and output of Industrial 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 outflows 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
value in use only takes into account changes in working capital.
The following table shows the allocated goodwill, perpetual annuity growth
rates and discount rates before tax applied in the value in use determination
per CGU to which significant goodwill is allocated. Due to the change of the
CGU structure the tables are not comparable:
2025
Discount rate before Tax Perpetual annuity growth rate Goodwill
in € million
Europe & CIS 9.4% 0.5% 31
North America 10.0% 1.0% 240
Latin America 12.5% 0.0% 61
China & East Asia 9.8% 1.0% 8
India 10.5% 4.0% 29
Middle East, Türkiye and Africa 11.0% 1.0% 34
2024
Discount rate before Tax Perpetual annuity growth rate Goodwill
in € million
Steel - Linings 9.7% 0.9% 218
Steel - Flow Control 10.3% 0.9% 67
Industrial - Cement & Lime 10.7% 0.9% 56
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 5%
18. Intangible assets
in € million Mining rights Customer relationships Internally generated intangible assets Trade names Other intangible assets Prepayments made and intangible assets under construction Total
Cost at 31.12.2024 145 285 90 1 157 16 694
Currency translation (11) (48) 0 (3) (5) (1) (68)
Additions 0 0 4 0 3 0 7
Initial consolidation and PPA finalisation 12 183 0 23 7 0 225
Retirements and disposals (10) 0 0 0 (2) 0 (12)
Reclassifications 0 0 2 0 11 (3) 10
Cost at 31.12.2025 136 420 96 21 171 12 856
Accumulated amortisation 31.12.2024 18 84 63 0 112 0 277
Currency translation (1) (8) 0 0 (2) 0 (11)
Amortisation 2 32 5 1 12 0 52
Retirements and disposals 0 0 0 0 (2) 0 (2)
Accumulated amortisation 31.12.2025 19 108 68 1 120 0 316
Carrying amounts at 31.12.2025 117 312 28 20 51 12 540
in € million Mining rights Customer relationships 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 2 20 3 14 0 39
Impairment losses 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
Internally generated intangible assets comprise capitalised software and
product development costs. Other intangible assets include primarily acquired
patents, software and land-use rights.
The following table shows the individually material intangible assets acquired
and their remaining useful lives:
in € million Remaining 31.12.2025 31.12.2024
useful life
Net book value
Net book value
in years
Mining rights
Brazil 48 61 63
US 45 54 61
Customer relationships
Resco Group 10-12 149 0
RHI Magnesita India Refractories Ltd and RHI Magnesita Seven 7-17 70 91
Refractories Ltd
Former Magnesita Group 3-7 39 48
Seven Refractories Group 13 19 21
RHI Magnesita India 17 17 21
Land use rights 10-52 18 20
Trade names 19 20 0
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 31.12.2024 751 1,277 407 136 147 2,718
Currency translation (27) (43) (8) (3) (7) (88)
Additions 8 8 6 78 8 108
Initial consolidation and PPA finalisation 31 37 0 2 1 71
Retirements and disposals (31) (51) (16) (7) (26) (131)
Reclassifications 6 48 22 (90) 0 (14)
Cost at 31.12.2025 738 1,276 411 116 123 2,664
Accumulated depreciation 31.12.2024 295 789 259 26 64 1,433
Currency translation (5) (22) (5) 0 (1) (33)
Depreciation 22 59 31 0 19 131
Impairment losses 0 1 0 0 0 1
Retirements and disposals (25) (47) (15) (2) (25) (114)
Accumulated depreciation 31.12.2025 287 780 270 24 57 1,418
Carrying amounts at 31.12.2025 451 496 141 92 66 1,246
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 21 61 32 0 22 136
Impairment losses 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.
Prepayments made and plant under construction include €87 million (2024:
€106 million) mainly relating to the expansion and production optimisation
of the plants in Brazil and the expansion of a production plant in Austria.
The expenditure in 2025 mainly related to this Austrian plant and a magnesite
plant in Brazil.
In September 2025, the decision was made to sell the assets of a production
plant, based in the US (Huron), primarily comprising machinery and equipment,
a building and land. The sale is expected to be completed in 2026. Due to this
decision, the assets are classified as held for sale and presented separately
within current assets. They are part of the North America reportable
segment.
There are no 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 €4 million (2024: €6
million).
The Right-of-use assets per category developed as follows as of 31 December
2025:
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 31.12.2024 102 26 19 147
Currency translation (6) (1) 0 (7)
Additions 4 1 3 8
Initial consolidation and PPA finalisation 0 0 1 1
Retirements and disposals (8) (14) (4) (26)
Cost at 31.12.2025 92 12 19 123
Accumulated depreciation 31.12.2024 37 18 9 64
Currency translation (1) 0 0 (1)
Depreciation 11 3 5 19
Retirements and disposals (8) (14) (3) (25)
Accumulated depreciation 31.12.2025 39 7 11 57
Carrying amounts at 31.12.2025 53 5 8 66
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 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 average lease term is twelve years for land and buildings, four 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 31.12.2025 31.12.2024
Prepayments related to the acquisition of Resco Group 0 46
Deferred mine stripping costs 12 13
Tax receivables 10 11
Other non-current assets 7 6
Other assets 29 76
21. Inventories
in € million 31.12.2025 31.12.2024
Raw materials and supplies 255 264
Work in progress 208 215
Finished products and goods 460 464
Prepayments made 8 14
Emission rights 1 5
Inventories 932 962
Net write-down expenses amount to €1 million (2024: €0 million).
22. Trade and other receivables
in € million 31.12.2025 31.12.2024
Trade receivables 445 530
Contract assets 6 3
Other tax receivables 85 87
Prepaid expenses 11 9
Other current receivables 29 31
Trade and other current receivables 576 660
thereof financial assets 451 533
thereof non-financial assets 125 127
The Group enters into factoring agreements and sells trade receivables to
financial institutions. Trade receivables sold at the end of the year was
€254 million (2024: €237 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 31.12.2025 31.12.2024
Cash at banks and in hand 288 530
Money market funds 67 46
Cash and cash equivalents 355 576
Cash and cash equivalents include amounts not available for use by the Group
totalling €9 million at 31 December 2025 (2024: €3 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 2025, 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 47,304,527 (2024:
47,195,936) fully paid-in ordinary shares are issued. In addition, there are
2,173,178 (2024: 2,281,769) 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 2025, RHI Magnesita treasury shares amount to 2,173,178 (2024:
2,281,769). Own equity instruments that are reacquired (treasury shares) are
recognised at cost and deducted from equity. No gain or loss is recognised in
profit or loss on the purchase, sale, issue or cancellation of the Group's
treasury shares.
Additional paid-in capital
At 31 December 2025, as well as at 31 December 2024, 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 the former RHI Group
and the 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 include the result of the financial year, as well as results
earned by consolidated companies during prior periods, but which were not
distributed.
Accumulated other comprehensive income
Cash flow hedge reserves include gains and losses from the effective part of
cash flow hedges net of tax effects. The accumulated gain or loss from the
hedge allocated to reserves is only reclassified to the Consolidate 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 related tax effects. These amounts will not be reclassified to
the Consolidated Statement of Profit or Loss in future periods.
Currency translation reserves include 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.
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., Intermetal Engineers (India) Private Ltd
and Ashwath Technologies Private Limited, which together form the Subgroup
India. Ashwath Technologies Private Limited is an inconsiderable refractory
business which was acquired in 2025. The Subgroup India is included in the
India reportable segment of the Group, and the share of the non-controlling
interests amounts to 43.9% (2024: 43.9%). Aggregated financial information of
the Subgroup India is provided below:
in € million 31.12.2025 31.12.2024
Non-current assets 359 432
Current assets 248 260
Non-current liabilities (22) (24)
Current liabilities (114) (123)
Net assets before intragroup eliminations 471 545
Intragroup eliminations 0 (1)
Net assets 471 544
Carrying amount of non-controlling interests 139 162
The aggregated Statement of Profit or Loss and Statement of Comprehensive
Income of the Subgroup India are shown below:
in € million 2025 2024
Revenue 454 430
Operating expenses, net finance costs and income tax (437) (406)
Profit after income tax before intragroup eliminations 17 24
Intragroup eliminations 1 1
Profit after income tax 18 25
thereof attributable to non-controlling interests 8 11
in € million 2025 2024
Profit after income tax 18 24
Other comprehensive (expense)/income (117) 26
Total comprehensive income (99) 50
thereof attributable to non-controlling interests (43) 22
The following table shows the summarised Statement of Cash Flows of the
Subgroup India:
in € million 2025 2024
Net cash flow from operating activities 43 38
Net cash flow from investing activities (13) (13)
Net cash flow from financing activities (8) (26)
Total cash flow 22 (1)
Net cash flow from financing activities includes dividend payments to
non-controlling interests amounting to €2 million (2024: €2 million).
Change of non-controlling interests without a change of control
In June 2025, the Group acquired the remaining shares held by the
non-controlling shareholders in RHI Magnesita Czech Republic a.s. 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. This syndicated term loan was fully utilised
in January 2025 to fund the acquisition of the Resco Group.
In April and May 2025, the Group successfully completed the refinancing of a
€150 million bilateral term loan maturing in May 2025 and a €50 million
bilateral term loan maturing in 2026 with a €100 million bilateral term loan
maturing in 2029 and a $50 million bilateral term loan maturing in 2030
respectively, with €50 million being repaid with excess cash to optimise the
Group's capital structure and liquidity levels. These transactions strengthen
the Group's funding structure and maturity profile ahead of upcoming
maturities in 2026.
The Group intends to refinance its 2026 maturities in the second quarter of
2026 making use of the same type of funding instruments, with the objective of
maintaining a balanced maturity profile and prudent liquidity position.
RHI Magnesita continues to align parts of its funding structure with
sustainability objectives, including the use of ESG-linked loan instruments.
The Group's EcoVadis sustainability rating was updated in June 2025, achieving
an overall score of 79 out of 100, placing the Group in the 97th percentile of
all companies rated globally. At the reporting date, the Group's ESG-linked
drawn and undrawn borrowing facilities amounted to €1,702 million
(31.12.2024: €1,983 million).
The principal borrowing facilities, including the Syndicated & Term Loan
as well as the Bonded Loans ("Schuldscheindarlehen"), are subject to a debt
covenant, being the leverage ratio of net debt excluding lease liabilities to
Pro Forma Adjusted EBITDA of a maximum of 3.5 times. Compliance with the debt
covenant is measured on a semi-annual basis and its calculation is shown in
Note (37). If the debt covenant of the Syndicated & Term Loans is
breached, the lenders have the right to immediate loan repayment. If repayment
of the Syndicated & Term Loans is demanded, the Bonded Loans will also
become due. If the Syndicated & Term Loans' debt covenant is breached but
the full repayment is waived, the Bonded Loans interest margin payable will
increase. The Group complied with the debt covenant in 2025 and 2024. There
are no indications that the Group will have difficulties complying with the
debt covenant in the 12 months following the reporting date.
The breakdown of borrowings is presented in the following table:
Total
in € million 31.12.2025 Current Non-current
Syndicated & Term Loan 1,034 113 921
Bonded loans ("Schuldscheindarlehen") 721 285 436
Other credit lines and other loans 27 26 1
Total liabilities to financial institutions 1,782 424 1,358
Other financial liabilities 6 1 5
Capitalised transaction costs (2) (1) (1)
Borrowings 1,786 424 1,362
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
Considering the impact of floating-to-fixed interest rate swaps, 70% (2024:
73%) of the liabilities to financial institutions carry fixed interest and 30
% (2024: 27%) 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 31.12.2025 Interest terms fixed until Effective annual interest rate Currency 31.12.2024
Carrying amount
Carrying amount
in € million
in € million
2026 EURIBOR + margin EUR 485 2025 EURIBOR + margin EUR 444
4.02% EUR 264 0.50% EUR 150
Various - Variable rate Various 67 Various - Variable rate Various 35
2027 2.82% EUR 634 2026 3.61% EUR 264
2028 1.87% EUR 119 2027 2.41% EUR 715
2029 3.86% EUR 208 2028 1.87% EUR 119
2031 1.25% EUR 5 2029 1.52% EUR 8
2031 1.25% EUR 5
1,782 1,740
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 €10 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).
31.12.2025 31.12.2024
in € million Current Non-current Total Current Non-current Total
Forward exchange contracts 1 0 1 1 0 1
Interest rate derivatives 0 2 2 0 4 4
Commodity swaps 10 6 16 2 3 5
Derivatives in open orders 1 0 1 0 0 0
Derivative financial liabilities 12 8 20 3 7 10
Lease liabilities 16 49 65 17 60 77
Fixed-term or puttable non-controlling interests 5 43 48 7 45 52
Other financial liabilities 33 100 133 27 112 139
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 31.12.2025 31.12.2024
Horn & Co. Minerals Recovery GmbH & Co.KG 45.00% 4 4
RHI Magnesita Czech Republic a.s. 0.00% 0 1
RHI Magnesita (Chongqing) Refractory Materials Co., Ltd. 49.00% 10 11
Jinan New Emei Industries Co. Ltd. 35.00% 4 21
Liaoning RHI Jinding Magnesia Co., Ltd. 16.67% 0 4
RHI Refractories Liaoning Co., Ltd. 34.00% 10 11
BPI RHIM LLC 49.00% 20 0
Liabilities to fixed-term or puttable non-controlling interests 48 52
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 31.12.2025 31.12.2024
Liabilities at beginning of the year 52 87
Currency translation(1)) (4) 2
Interest accrued(2)) 2 (1)
Remeasurement gains(2)) (10) (21)
Dividends paid (4) (6)
Additions 0 1
Additions from initial consolidation 20 0
Working capital adjustment related to Jinan New Emei Industries Co. Ltd.(3)) (6) 0
Other changes (2) (10)
Liabilities at year-end 48 52
1) Recognised in OCI.
2) Recognised in profit or loss as other net financial expenses.
3) The liability to the fixed-term or puttable non-controlling interest
in Jinan New Emei Industries Co. Ltd. is expected to be settled in 2026.
In August 2025, the Group recognised a financial liability related to
fixed-term or puttable non-controlling interests to acquire the remaining
shares in BPI RHIM LLC held by other shareholders (see Note (40)), amounting
to €20 million. The fair value is mainly based on the present value of BPI's
average EBITDA performance over a three-year period and the principal
valuation parameters are deemed to be non-observable (Level 3).
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% 7
Profit measure decreases by 15% 7
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 31.12.2025 31.12.2024
Present value of pension obligations 318 377
Fair value of plan assets (147) (182)
Deficit of funded plans 171 195
Asset ceiling and funding obligations 9 5
Net liability from pension obligations 180 200
Overfunded pension plans (1) (1)
Other pension plans 181 201
The present value of pension obligations by beneficiary groups is as follows:
in € million 31.12.2025 31.12.2024
Active beneficiaries 60 62
Vested terminated beneficiaries 20 41
Retirees 238 274
Present value of pension obligations 318 377
The pension obligations are measured using the following actuarial assumptions
for the key countries in which the Group operates:
in % 31.12.2025 31.12.2024
Interest rate
Austria and Germany 4.0% 3.4%
Brazil 11.8% 12.2%
USA 5.3% 5.5%
Future salary increase
Austria 2.1% 2.7%
Germany 2.5% 2.5%
Brazil 5.6% 5.8%
USA 3.3% 3.3%
Future pension increase
Austria 2.5% 3.3%
Germany 2.0% 2.0%
Brazil 4.0% 4.3%
USA 2.0% 2.0%
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 AA rating, 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 issued by 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 €57 million (2024: €68 million)
of the present value of pension obligations and for €7 million (2024: €8
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. The 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. Instead, 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 €101 million
(2024: €113 million) of the present value of pension obligations and for
€1 million (2024: €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 to 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 €64 million (2024: €71 million) of the present value of
pension obligations and for €64 million (2024: €69 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, accounted for €34 million (2024: €37 million)
of the present value of pension obligations and held €37 million (2024:
€42 million) of assets prior to its settlement in 2025. No plan assets were
recognised on the balance sheet in previous years due to the application of
IFRIC 14 (asset ceiling). The company had sponsored a funded defined benefit
pension plan for qualifying UK employees, administered by an independent Board
of Trustees composed of employer, employee and independent representatives,
who were responsible for the investment policy and the day‑to‑day
administration of benefits. Under the plan, employees were entitled to annual
pension benefits upon retirement at age 65. Following the buy‑in arrangement
concluded in 2022 - under which a third‑party insurer in the United Kingdom
assumed the plan's obligations and the plan assets were liquidated and
transferred at a value of approximatively €62 million - the plan was fully
settled in 2025. The settlement extinguished all remaining legal and
constructive obligations related to the defined benefit plan. On 1st December
2025, full responsibility for the payment of benefits was transferred to the
insurer under the buy-out portion of the transaction, at which point, the
Group legally ceased to have responsibility for the remaining liabilities. On
24th December 2025, the remaining assets surplus of €3 million was released
by the Trustees back to the Group, net of 25% tax. Final administrative
winding up of the Plan is expected during the first quarter of 2026.
The pension liabilities of the Brazilian group company Magnesita Refratários
S.A. account for €37 million (2024: €35 million) of the present value of
pension obligations and for €38 million (2024: €25 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 may 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. As of 31.12.2025, the Group is subject to a
minimum funding requirement in respect to this plan amounting to €8 million
(2024: €0 million).
The following table shows the development of net liability from pension
obligations:
in € million 2025 2024
Net liability from pension obligations at beginning of year 200 240
Currency translation 0 (5)
Additions initial consolidation 1 0
Pension cost 11 12
Remeasurement (gains) (10) (25)
Benefits paid (18) (19)
Employers' contributions to external funds (4) (3)
Net liability from pension obligations at year-end 180 200
The present value of pension obligations developed as follows:
in € million 2025 2024
Present value of pension obligations at beginning of year 377 421
Currency translation (10) (5)
Additions initial consolidation 10 0
Current service cost 1 2
Interest cost 18 18
Remeasurement (gains)
from changes in demographic assumptions 0 0
from changes in financial assumptions (9) (25)
due to experience adjustments (2) (3)
Benefits paid (33) (32)
Settlements (34) 0
Employee contributions to external funds 1 1
Plan amendments (1) 0
Present value of pension obligations at year-end 318 377
The movement in plan assets is shown in the table below:
in € million 2025 2024
Fair value of plan assets at beginning of year 182 186
Currency translation (10) 0
Additions initial consolidation 9 0
Interest income 9 9
Administrative costs (paid from plan assets) (1) 0
Gains/(losses) on plan assets less interest income 2 (3)
Benefits paid (15) (14)
Settlements (34) 0
Employers' contributions to external funds 4 3
Employee contributions to external funds 1 1
Fair value of plan assets at year-end 147 182
The changes in the asset ceiling are shown below:
in € million 2025 2024
Asset ceiling and funding obligations at beginning of year 5 5
(Gains)/losses from changes in asset ceiling less interest expense (4) 0
Additional liability arising from minimum funding requirement 8 0
Asset ceiling and funding obligations at year-end 9 5
At 31 December 2025, the weighted average duration of pension obligations
amounts to 9.8 years (2024: 10.3 years).
The following amounts were recorded in the Consolidated Statement of Profit or
Loss:
in € million 2025 2024
Current service cost 1 2
Interest cost 18 19
Interest income (9) (9)
Administrative costs (paid from plan assets) 1 0
Pension expense recognised in profit or loss 11 12
The remeasurement results recognised in OCI are shown in the table below:
in € million 2025 2024
Accumulated remeasurement losses at beginning of year 93 118
Remeasurement (gains) on present value of pension obligations (11) (28)
(Gains)/losses on plan assets less interest income (2) 3
Losses from changes in asset ceiling and funding obligations less interest 4 0
expense
Accumulated remeasurement losses at year-end 84 93
The present value of plan assets is distributed to the following classes of
investments:
31.12.2025 31.12.2024
in € million Active market No active market Total Active market No active market Total
Insurances 5 37 42 0 73 73
Equity instruments 46 0 46 46 0 46
Debt instruments 40 2 42 41 1 42
Cash and cash equivalents 7 0 7 12 0 12
Other assets 7 3 10 9 0 9
Fair value of plan assets 105 42 147 108 74 182
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 portion of the other assets is invested in pension reinsurance,
resulting in a low counterparty risk towards insurance companies. In addition,
the Group is exposed to interest risks and longevity risks resulting from its
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 2026, the Group expects employer
contributions to external plan assets to amount to €5 million and direct
payments to entitled beneficiaries to €16 million. Employer contributions of
€4 million and direct pension payments of €18 million had been expected
for the financial year 2025.
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).
31.12.2025 31.12.2024
in € million Change of assumption Pension plans Termination benefits Pension plans Termination benefits
in percentage points
or years
Present value of the obligations 318 33 377 39
Interest rate +0.25 (7) (1) (9) (1)
(0.25) 8 1 10 1
Salary increase +0.25 0 1 1 1
(0.25) 0 (1) (1) (1)
Pension increase +0.25 6 6
(0.25) (5) (7)
Life expectancy + 1 year 11 6
(1) year (10) (5)
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 31.12.2025 31.12.2024
Termination benefits 31 35
Service anniversary bonuses 18 20
Semi-retirements 3 4
Other personnel provisions 52 59
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 80.0%
of the balance (2024: 83.0%) were based on the following measurement
assumptions:
in % 31.12.2025 31.12.2024
Interest rate 4.0% 3.4%
Future salary increase 2.6% 3.4%
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 2025 2024
Provisions for termination benefits at beginning of year 35 34
Current service cost 2 1
Interest cost 1 1
Remeasurement (gains)/losses (4) 1
Benefits paid (3) (2)
Provisions for termination benefits at year-end 31 35
Payments for termination benefits are expected to amount to €1 million in
the year 2026. In the previous year, the payments for termination benefits
expected for 2025 amounted to €2 million.
The following remeasurement gains and losses were recognised in OCI:
in € million 2025 2024
Accumulated remeasurement losses at beginning of year 19 18
Remeasurement (gains)/losses (4) 1
Accumulated remeasurement losses at year-end 15 19
At 31 December 2025 the average duration of termination benefit obligations
amounted to 9.9 years (2024: 10.5 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 4.0% (2024:
3.4%) in Austria and 4.0% (2024: 3.4%) in Germany and considers salary
increases of 4.5% (2024: 5.1%) in Austria and 2.5% in Germany (2024: 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 31.12.2025 31.12.2024
Present value of semi-retirement obligations 4 5
Fair value of plan assets (1) (1)
Provisions for semi-retirement obligations 3 4
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 2025 and 2024:
in € million Onerous/unfavourable contracts Labour and civil contingencies Demolition/disposal costs, Restructuring costs Deficit of emission certificates Other Total
environmental damages
31.12.2024 46 8 33 20 0 7 114
Currency translation 0 0 (1) 0 0 0 (1)
Reversals (2) (2) (7) 0 0 (1) (12)
Additions 2 3 6 12 43 5 71
Unwinding of discount 4 1 1 0 0 0 6
Use (11) (3) (1) (16) 0 (4) (35)
Reclassifications 0 0 0 0 0 0 0
31.12.2025 39 7 31 16 43 7 143
non-current 27 7 29 0 0 0 63
current 12 0 2 16 43 7 80
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
Unwinding of discount 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 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 €24 million as of 31 December 2025 (2024:
€32 million) and the current portion to €10 million (2024: €9 million).
In addition, provisions for other unfavourable contracts amount to €5
million (2024: €5 million), mainly in Türkiye and Europe.
The provision for labour and civil contingencies primarily comprises labour
and civil litigation amounting to €7 million (2024: €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 €5 million (2024: €7
million), various sites in Europe amounting to €12 million (2024: €15
million) and in the USA amounting to €8 million (2024: €7 million).
Provisions for restructuring costs amounting to €16 million at 31 December
2025 (2024: €20 million) primarily consist of estimated benefit obligations
to employees due to termination of employment and dismantling costs. €8
million (2024: €0 million) relates to the remaining redundancy costs at
Wetro, Germany; €3 million (2024: €3 million) relates to the plant closure
in Trieben, Austria; €3 million (2024: €1 million) pertains to the
termination of employment as a result of the Group's permanent SG&A
headcount reduction; and €1 million (2024: €15 million) relates to the
remaining redundancy costs at Mainzlar, Germany.
The provision for emission certificates includes the EUR equivalent of the
expected deficit of emission certificates at the reporting date. The provision
is measured based on the spot price of the emission certificates at the
reporting date.
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 31.12.2025 31.12.2024
Trade payables 440 455
Payables subject to supplier finance arrangements 137 117
Contract liabilities 36 59
Liabilities to employees 57 111
Taxes other than income tax 30 31
Capital expenditure payable 18 22
Payables from commissions 7 10
Other current liabilities 32 38
Trade payables and other current liabilities 757 843
thereof financial liabilities 615 619
thereof non-financial liabilities 142 224
Payables subject to supplier finance arrangements comprise a forfaiting
liability of €38 million (31.12.2024: €53 million), a liability owed to a
payment service provider of €45 million and a liability related to reverse
factoring arrangements of €54 million (31.12.2024: €64 million). The
payment terms of the forfaiting liability amount to 360 days, as agreed with
the financial institution from the outset of the arrangement. Comparable
payment terms of trade payables without a forfaiting arrangement are not
available since the use of forfaiting arrangements is limited to sourcing raw
materials in a specific region and the Group generally procures these raw
materials by entering into forfaiting arrangements. The payment terms of
payables subject to supplier finance arrangements other than the forfaiting
arrangement lie within a range of 60 to 150 days while for comparable trade
payables without supplier finance arrangements the payment terms lie within a
range of 30 to 120 days. The carrying amount of payables subject to supplier
finance arrangements of which suppliers have received payment from financial
institutions or the payment service provider amounts to €120 million
(31.12.2024: €98 million). Interest expenses of €1 million related to
supplier finance arrangements were incurred in the reporting period which are
presented within other net financial expenses. For certain supplier finance
arrangements, the Group provides corporate parental guarantees as security to
third parties from which the suppliers receive payment. These are disclosed as
part of the Group's contingent liabilities (see Note 38)).
Contract liabilities mainly consist of prepayments received on orders. In 2025
€59 million (2024: €65 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 flexitime credits. The decrease in liabilities to
employees is primarily driven by the reduction in bonuses and vacation
accruals.
32. Cash generated from operations
in € million 2025 2024
Profit after income tax 94 154
Adjustments for
income tax 34 46
depreciation 131 136
amortisation 52 39
impairment of property, plant and equipment and intangible assets 2 42
expense from financial assets excluding trade and other receivables 0 3
gains from the disposal of property, plant and equipment 0 (5)
losses/(gains) from the disposal of subsidiaries / foreign operations 1 (8)
net interest expense, interest rate derivatives and remeasurement of 70 43
liabilities to fixed-term or puttable non-controlling interest
other non-cash changes 26 (10)
Changes in working capital
inventories 24 25
trade receivables 74 2
trade payables 7 83
contract liabilities (22) (5)
Changes in other assets and liabilities
other receivables and assets 3 7
provisions (3) (28)
other liabilities (60) (22)
Cash generated from operations 433 502
Income tax paid less refunds (54) (69)
Net cash flow from operating activities 379 433
Other non-cash changes include share-based payments of €3 million (2024:
€9 million), net interest expenses for defined benefit obligations amounting
to €11 million (2024: €12 million) and the unrealised portion of the net
expense on foreign exchange effects amounting to €13 million (2024: the
unrealised portion of the net income on foreign exchange effects of €31
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 31.12.2024 Changes in foreign exchange rates Interest and other fair value changes Reclassifications Additions from initial consolidation Additions and modifications of leases (IFRS 16) 31.12.2025
Borrowings (1,750) (34) 5 1 0 (8) 0 (1,786)
Lease liabilities (77) 17 4 0 0 0 (8) (64)
Cash and cash equivalents(1)) 576 (213) (14) 0 0 6 0 355
Net debt (1,251) (230) (5) 1 0 (2) (8) (1,495)
Liabilities to fixed-term or puttable non-controlling interests(2)) (52) 4 4 9 7 (20) 0 (48)
1) The column Cash changes excludes cash acquired in business combinations,
which is presented in column Additions from initial consolidation.
2) Refer to Note (28) for details.
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.
34. Additional disclosures on financial instruments
The following tables show the carrying amounts and fair values per class of
financial assets and liabilities as well as the allocation of the carrying
amounts to the relevant 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 31.12.2025 Fair value as of 31.12.2025
Financial assets
Trade and other receivables 0 0 20 431 125 576 576
Cash and cash equivalents 0 0 0 355 0 355 355
Other financial assets 7 26 8 4 0 45 45
7 26 28 790 125 976 976
Financial liabilities
Trade payables and other liabilities 0 0 0 615 142 757 757
Borrowings 0 0 0 1,786 0 1,786 1,778
Lease liabilities 0 0 0 65 0 65 65
Other financial liabilities (excl. lease liabilities) 18 40 0 10 0 68 68
18 40 0 2,476 142 2,676 2,668
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
Trade and other receivables 0 0 46 487 127 660 660
Cash and cash equivalents 0 0 0 576 0 576 576
Other financial assets 25 19 7 8 0 59 59
25 19 53 1,071 127 1,295 1,295
Financial liabilities
Trade payables and other liabilities 0 0 0 619 224 843 843
Borrowings 0 0 0 1,750 0 1,750 1,737
Lease liabilities 0 0 0 77 0 77 77
Other financial liabilities (excl. lease liabilities) 9 38 0 15 0 62 62
9 38 0 2,461 224 2,732 2,719
Other financial assets comprise marketable securities, derivative financial
assets, shares and other interests. Marketable securities, derivative
financial assets and shares are recognised at fair value.
Borrowings and lease liabilities are carried at amortised cost. Other
financial liabilities (excl. lease liabilities) comprise derivative financial
liabilities and liabilities to fixed-term or puttable non-controlling
interests. Derivative financial liabilities are recognised at fair value.
Liabilities 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 lease liabilities and other financial liabilities
(excl. lease liabilities) recognised at amortised cost approximate their fair
value at the reporting date. Trade and other 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 their
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:
31.12.2025 31.12.2024(1))
in € million Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Assets
Other financial assets 12 19 0 31 12 28 0 40
Liabilities
Borrowings 0 1,778 0 1,778 0 1,737 0 1,737
Other financial liabilities (excl. lease liabilities) 0 20 48 68 0 10 52 62
1) Restated.
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 2025 and 31 December 2024.
Net results by measurement category in accordance with IFRS 9
The effect of financial instruments on the income and expenses recognised in
2025 and 2024 is shown in the following table, classified according to the
measurement categories defined in IFRS 9:
in € million 2025 2024
Net gain from financial assets and liabilities measured at fair value through 29 5
profit or loss
Net (loss) from financial assets and liabilities measured at amortised cost 0 (1)
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 incurred on the
derecognition of financial assets.
Interest income resulting from financial assets measured at amortised cost
amounts to €15 million (2024: €22 million) and interest expenses incurred
on financial liabilities measured at amortised cost amounts to €87 million
(2024: €76 million),
Other financial assets
Other financial assets consist of the following items:
31.12.2025 31.12.2024
in € million Current Non-current Total Current Non-current Total
Marketable securities and shares 0 21 21 0 20 20
Derivative financial assets 9 9 18 17 12 29
Restricted cash 0 4 4 0 8 8
Other interests 0 2 2 0 2 2
Other financial assets 9 36 45 17 42 59
The marketable securities and shares include €8 million (2024: €7 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 €3 million at the
reporting date (2024: €6 million) and is shown in other non-current
financial assets (liabilities) in the Consolidated Statement of Financial
Position. For the reporting period of 2025, €2 million gain (2024: €6
million gain) has been recognised in OCI as fair value movements of the
hedging instrument and €4 million (2024: €18 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 2025 and 2024 is shown as follows:
in € million Carrying amount Statement of Financial Position Change in fair value recognised in Other Comprehensive Income Nominal amount
2025 3 Other non-current 2 EUR 1,172 million
financial assets (liabilities)
2024 6 Other non-current 6 EUR 1,052 million
financial assets (liabilities)
in € million Cash flow hedge reserve within Equity Balance net of deferred tax
2025 3 3
2024 6 5
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 €15 million at the
reporting date and is shown in other non-current and current financial assets
(liabilities) in the Consolidated Statement of Financial Position. For the
reporting period of 2025, a €16 million loss has been recognised in OCI as
fair value movements of the hedging instrument and €4 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 2025 is shown as follows:
in € million Carrying amount Statement of Financial Position Change in fair value recognised in Other Comprehensive Income Nominal amount
2025 (15) Other current and non-current (16) Gas 2,242 GWh
financial assets (liabilities)
Oil 447,930 bbl
Power 192 GWh
2024 (3) Other current and non-current 8 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
2025 (15) (11)
2024 (3) (2)
The average commodity prices hedged by the commodity swaps derivatives are as
follows:
31.12.2025
Hedging instrument up to 1 year 1 to 5 years
Commodity swaps - gas Notional amount (Gwh) 530 1,712
Average hedged price per MWh 41.66 28.35
Commodity swaps - oil Notional amount (bbl) 296,431 151,499
Average hedged price per bbl 73.07 65.81
Commodity swaps - power Notional amount (Gwh) 73 119
Average hedged price per MWh 85.23 68.64
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
CO(2) certificate forward purchase contracts
CO(2) certificate forward purchase contracts are entered into to reduce the
Group's cash flow exposure to fluctuations in price of CO(2) certificates.
They are accounted for as financial derivatives, as the requirements for the
own-use exemption were not met. Hedge accounting is not applied to these
economic hedges.
As of 31 December 2025, the nominal volume of CO(2) certificate forward
purchase contracts amounts to 874 thousand EUAs, with a positive fair value of
€11 million, which is presented in other non-current and current financial
assets in the Consolidated Statement of Financial Position.
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 2025 are shown in the table below:
31.12.2025
Purchase Sale Nominal in Nominal value Fair value
in million
in € million
BRL EUR EUR 8 0
CLP USD USD 27 0
USD INR USD 14 0
USD VND USD 18 0
GBP EUR GBP 21 0
MXN USD USD 15 0
CAD USD CAD 29 0
EUR ZAR EUR 10 0
CNY USD USD 22 0
EUR INR EUR 23 0
CZK EUR EUR 4 (1)
Forward exchange contracts (1)
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)
At the time of signing the share purchase agreement for the acquisition of the
Resco Group, RHI Magnesita entered into a deal contingent forward exchange
contract ('deal contingent forward') with a nominal value of $360 million to
hedge the EUR equivalent of the USD cash outflow related to this acquisition
against potential variability due to changes in the USD/EUR exchange rate. The
related hedge was accounted for as a 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 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 settlement of the deal contingent forward exchange contract at the
acquisition date resulted in a realised gain of €13 million (refer to Note
(40) for details).
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 €851
million (2024: €1,168 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 31.12.2025 31.12.2024
Trade receivables and contract assets - gross 451 533
Credit insurance and letters of credit (196) (258)
Trade receivables and contract assets - net 255 275
The movement in the valuation allowance in respect of trade receivables and
contract assets during the year and the previous year was as follows:
2025 2024
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 47 1 52 1
Currency translation (1) 0 (2) 0
Additions initial consolidation 0 0 0 0
Addition 1 0 3 0
Use (3) 0 (2) 0
Reversal (2) 0 (4) 0
Accumulated valuation allowance at year-end 42 1 47 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
31.12.2025 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 - 0.47% 0.08-1.07% 0.57 - 85.33%
Gross carrying amount invoiced 305 19 9 333 106 439
Lifetime expected credit loss (1) 0 0 (1) (1)
Valuation allowance - credit impaired (42) (42)
Carrying amount with either expected credit loss or incurred loss allowance 396
Carrying amount without expected credit loss or incurred loss allowance 55
Total trade receivables and contract assets 451
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 372 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
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
2025, the Group has a committed RCF of €600 million, which was unutilised
(2024: 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 debt 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 31.12.2025 Cash up to 1 year 1 to 5 years over 5 years
outflows
Borrowings
fixed interest 249 272 75 191 6
variable interest 1,533 1,649 410 1,237 2
Other financial liabilities 6 6 1 5 0
Lease liabilities 64 77 17 38 22
Liabilities to fixed-term or puttable non-controlling interests 48 95 5 7 83
Trade payables and other liabilities 615 615 615 0 0
Non-derivative financial liabilities 2,515 2,714 1,123 1,478 113
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 liabilities 619 619 619 0 0
Non-derivative financial liabilities 2,498 2,683 970 1,598 115
Derivative financial instruments
The remaining terms of derivative financial instruments as of 31 December 2025
and 31 December 2024 are shown in the tables below:
Remaining term
in € million Carrying amount 31.12.2025 Cash flows up to 1 year 1 to 5 years
Receivables from derivatives with net settlement
Interest rate swaps 6 6 3 3
Commodity swaps 1 1 0 1
CO(2) certificate forward purchase contracts 11 11 8 3
Liabilities from derivatives with net settlement
Commodity swaps 16 16 10 6
Derivatives in open orders 1 1 1 0
Interest rate derivatives 2 2 2 0
Forward exchange contracts 1 1 1 0
Remaining term
in € million Carrying amount 31.12.2024 Cash flows up to 1 year 1 to 5 years
Receivables from derivatives with net settlement
Interest rate swaps 10 10 0 10
Commodity swaps 2 2 0 2
Forward exchange contracts 14 14 14 0
Derivatives in open orders 3 3 3 0
Liabilities from derivatives with net settlement
Commodity swaps 5 5 2 3
Interest rate derivatives 4 4 0 4
Forward exchange contracts 1 1 1 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.
The following table shows the foreign currency positions in the Group's major
currencies as of 31 December 2025 and 31 December 2024:
31.12.2025 in € million USD EUR TRY ZAR GBP Other Total
Financial assets 494 59 18 12 3 14 600
Financial liabilities (463) (44) (5) 0 (29) (9) (550)
Net foreign currency position 31 15 13 12 (26) 5 50
31.12.2024 in € million USD EUR ZAR TRY Other Total
Financial assets 579 82 11 22 15 709
Financial liabilities (426) (44) 0 (6) (20) (496)
Net foreign currency position 153 38 11 16 (5) 213
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 2025 would have had the
following effect on profit or loss and equity (both excluding income tax):
Appreciation of 10% Devaluation of 10%
31.12.2025 in € million (Loss)/gain Equity Gain/(loss) Equity
USD (3) (2) 3 2
EUR (1) 4 1 (4)
TRY (1) (1) 1 1
ZAR (1) (1) (3) (3)
GBP 2 2 1 1
Other currencies (4) 1 5 (1)
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)
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 2025, one interest rate collar with a nominal
value of €180 million (2024: €180 million) and interest rate swaps with a
nominal value of €992 million (2024: €872 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 2025 had been 25 basis points higher or lower, equity
would have been €2 million (2024: €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
2025 had been 25 basis points higher or lower, the interest result would have
been €1 million (2024: €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
(2024: €12 million) in order to provide the legally required coverage of net
employee defined benefit liabilities 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.
31.12.2025 31.12.2024(1))
Net debt excluding lease liabilities (in € million)(2)) 1,431 1,174
Net gearing ratio (in %) 122.3% 85.6%
Net debt excluding lease liabilities to Pro Forma Adjusted EBITDA 2.81x 2.16x
1) Restated.
2) 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 excluding lease liabilities to
total equity.
The calculation of the leverage ratios (including the debt covenant) is
presented in the following table.
in € million 31.12.2025 31.12.2024(1))
EBIT 223 242
Amortisation 52 40
Depreciation 131 136
Restructuring expenses 44 24
Other income and expenses 54 101
Adjusted EBITDA 504 543
Pro forma full year contributions from business combinations 5 1
Pro Forma Adjusted EBITDA 509 544
Total debt 1,786 1,750
Lease liabilities 64 77
Less: Cash and cash equivalents 355 576
Net debt 1,495 1,251
Net debt excluding IFRS 16 lease liabilities 1,431 1,174
Net debt excluding lease liabilities to Pro Forma Adjusted EBITDA 2.81x 2.16x
Net debt to Pro Forma Adjusted EBITDA 2.94x 2.3x
1) Restated.
In both 2025 and the previous reporting period, the Group complied with the
debt 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. The APMs used in the Consolidated Financial Statements are
Adjusted EBITDA, Pro Forma Adjusted EBITDA and Adjusted EBITA. They are all
derived from EBIT, a non-IFRS measure that is presented as a subtotal in the
Consolidated Statement of Profit or Loss and consists of gross profit plus
other income and less selling, general & administrative expenses, research
& development expenses, amortisation of intangible assets, restructuring
expenses and other expenses, as presented in the Consolidated Statement of
Profit or Loss. The Executive Management Team and Directors use Adjusted
EBITDA and Adjusted EBITA internally to assess the underlying performance of
the Group. Adjusted EBITDA is defined as EBIT before amortisation of
intangible assets, depreciation of property, plant and equipment, and excluded
items. Excluded items are other income (see Note (7)), other expenses (see
Note (8)) and restructuring expenses (see Note (6)) as reflected in the
Consolidated Statement of Profit or Loss, which are non-recurring in nature
and not reflective of the underlying operational performance of the business.
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. Pro Forma
Adjusted EBITDA is a key input for the measurement of the debt covenant of the
Group's principal borrowing facilities and is determined consistently with
Adjusted EBITDA but includes the contribution to Adjusted EBITDA of refractory
businesses acquired in the twelve months period ended 31.12.2025 and
31.12.2024 before they were controlled by the Group. This contribution
represents the part that completes the Adjusted EBITDA of the acquired
business over twelve months.
38. Contingent liabilities
Contingent liabilities from warranties, performance guarantees and other
guarantees amounted to €72 million as of 31 December 2025 (31.12.2024: €78
million) and have a remaining term of between one and five years.
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
local finance authorities may interpret tax cases differently than management.
Different interpretations may affect the expected timing and amount of the tax
related contingent liabilities disclosed below.
The Group is continually adapting its global presence to improve customer
service and maintain its competitive advantage; accordingly, it leads to
discussions with tax authorities about, e.g., transfer of functions and
related profit between related parties and potentially exit taxation. In this
regard, disputes may arise, in cases where management's understanding differs
from the positions of the local authorities. In such cases, where an appeal
is available, management's judgements are based on a likely outcome approach,
taking into consideration advice from professional firms and previous
experience when assessing the risks.
The Group is party to several tax proceedings in Brazil which involve
estimated contingent liabilities amounting to €143 million (2024: €117
million) with a remaining term of at least five years. These tax proceedings
are as follows:
Income Tax relating to historical corporate transactions
There are 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. The Group is challenging the remaining amounts at the judicial courts
level. The proceedings are expected to last at least five years. The tax cash
exposure as of 31 December 2025 is €36 million (31.12.2024: €33 million).
Such exposure is limited to the fiscal tax years up to 2018, at which stage
all available goodwill tax deductions had been made.
Corporate income and other taxes
There are several tax assessments in Brazil mainly relating to: offsetting
federal tax payables and receivables, social security contributions, and
offsetting certain federal tax debts with corporate income tax credits. In
addition, the Company is subject to an administrative review by the Brazilian
Federal Revenue Service regarding the offsetting of PIS and COFINS (social
security contributions) credits related to prior periods; the assessment of
the maximum potential exposure is €16 million. The potential risks of these
tax assessments amount to €78 million (31.12.2024: €57 million).
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 ("CFEM"), which are mining
royalties payable by every mining company. The authorities 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 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 four to five
years. As of 31 December 2025, the potential risk amounts to €29 million
including interest and penalties (2024: €28 million).
39. Independent Auditor's remuneration
in € million 2025 2024
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 €2
million (2024: €1 million).
2) Other non-audit services mainly include Interim review fees of €0.3
million (2024: €0.3 million) and fees for limited assurance on
Sustainability Statement of €0.5 million (2024: €0.3 million).
40. Business Combinations
Acquisition of the Resco Group
In March 2024, the Group signed a share purchase agreement to acquire 100% of
the shares of Balmoral Refractories Holdings, Inc., USA, and its six wholly
owned subsidiaries, together "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 RHI
Magnesita'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. The Resco Group mainly forms part of the North America
reportable segment.
The cash consideration amounts to $283 million (€271 million). Additionally,
RHI Magnesita repaid borrowings and liabilities for acquisition-related costs
totalling $129 million (€122 million) on behalf of the Resco Group and
acquired cash amounting to $3 million (€3 million) on closing of the
acquisition. Thus, the net cash outflow related to the acquisition amounts to
$409 million (€390 million). Of this amount, $48 million (€44 million) was
paid in 2024, and the remainder of $361 million (€346 million) was paid in
2025.
At the time of signing the share purchase agreement, RHI Magnesita entered
into a deal contingent forward exchange contract ('deal contingent forward')
with a nominal value of $360 million to hedge the EUR equivalent of the USD
cash outflow related to this acquisition against potential variability due to
changes in the USD/EUR exchange rate. The related hedge was accounted for as a
cash flow hedge. The settlement of the deal contingent forward exchange
contract at the acquisition date resulted in a realised gain of €13 million
which reduces the consideration transferred to the seller and thus goodwill,
in accordance with the cash flow hedge accounting requirements.
The transaction costs incurred for this acquisition amounted to €16 million.
Of this amount, €14 million were expensed in 2024 and the remainder was
expensed in 2025.
The fair value adjustments of assets and liabilities based on the final
purchase price allocation as a result of the acquisition are the following:
in € million book value fair value adjustments (adjusted) value
Property, plant and equipment 64 (10) 54
Goodwill from previous acquisition 14 (14) 0
Intangible Assets: customer relationships 0 183 183
Intangible Assets: trade names 5 19 24
Intangible Assets: technology 1 5 6
Intangible Assets: mining rights 13 (1) 12
Inventories 48 (6) 42
Trade and other receivables 33 0 33
Cash and cash equivalents 3 0 3
Total assets acquired 181 176 357
Deferred tax liabilities 3 36 39
Borrowings 90 0 90
Other financial liabilities 4 (3) 1
Provisions and net defined benefit liabilities 4 3 7
Trade and other liabilities 60 1 61
Total liabilities assumed 161 37 198
Net identifiable assets acquired 20 139 159
Goodwill 99
Net consideration 258
Consideration transferred to seller 271
less: gain on deal contingent hedge (13)
Net consideration 258
The customer relationships were measured using the multi-period excess
earnings method. Under this method, the fair value of the customer
relationships is calculated by determining the present value of earnings after
tax attributable to the acquired companies' existing customers. The customer
relationships attributable to Steel customers are amortised over the estimated
useful life of 12 years, while the customer relationships attributable to
Industrial customers are amortised over the estimated useful life of 10 years.
The trade names were measured using the relief-from-royalty method. Under this
method, the fair value of the trade names corresponds to the present value of
the hypothetical royalty payments that a company would have to pay if it did
not own the trade names. The trade names are amortised over the estimated
average useful life of 20 years.
The negative fair value adjustment to property, plant and equipment shown in
the table above includes a loss of €7 million incurred by RHI Magnesita on
the sale of a plant of the Resco Group to a third-party at fair value shortly
after the acquisition date. The loss represents the difference between the
book value of the net assets attributable to this sold plant and the lower
sale proceeds. This loss, net of tax, effectively increased goodwill and
therefore did not affect profit after income tax of 2025.
The goodwill recognised as a result of this acquisition is attributable to the
synergies mentioned above and is not expected to be deductible for tax
purposes.
From the acquisition date to 31 December 2025, the Resco Group contributed
€184 million of revenue, €25 million of Adjusted EBITA and €0.1 million
of profit after income tax.
Acquisition of BPI RHIM LLC
In June 2025, the Group signed a share purchase agreement stipulating its
acquisition of 51% of the shares of BPI RHIM LLC, USA. The acquisition was
closed on 21 August 2025, which is the acquisition date.
BPI RHIM LLC is a US based company engaged in minerals processing recycling of
refractory products respectively, including refractory raw materials and
specialty products for steel, foundry, aluminum, cement, and other
high-temperature industries. The acquisition is expected to contribute to
reaching RHIM's target recycling rate of 20% by 2030. In addition, the
acquisition will further strengthen the local presence of RHIM in the US with
the expectation to unlock attractive potential synergies primarily through the
internal use and sale of recycled raw materials. BPI RHIM LLC forms part of
the North America reportable segment.
The preliminary cash consideration amounts to $21 million (€18 million)
subject to post-closing adjustments related to working capital and net debt.
Considering the acquired cash amounting to $3 million (€2 million) on
closing of the acquisition, the net cash outflow related to the acquisition
amounts to $18 million (€16 million).
At the time the Consolidated Financial Statements were authorised for issue,
the initial consolidation was incomplete because the measurement of assets and
liabilities in accordance with IFRS Accounting Standards has not yet started.
The assets acquired and liabilities assumed, both measured at book value, as
well as the preliminary purchase price allocation as a result of the
acquisition are presented in the following table:
in € million book value
Property, plant and equipment 16
Inventories 14
Trade and other receivables 5
Cash and cash equivalents 2
Total assets acquired 37
Borrowings 5
Trade and other liabilities 4
Total liabilities assumed 9
Net identifiable assets acquired 28
Less: Non-controlling interests (14)
Goodwill 4
Consideration transferred 18
The amounts recognised for the acquired assets and liabilities on the closing
date and the resulting goodwill are preliminary and subject to adjustment for
a period of one year from the closing date as allowed under the accounting
standards. On finalisation of the purchase price allocation, adjustments,
including tax impacts, if any, will be reflected against goodwill. The initial
accounting for this acquisition including the purchase price allocation is
expected to be finalised in the first half of 2026.
The preliminary goodwill recognised as a result of this acquisition is
attributable to the synergies mentioned above and is not expected to be
deductible for tax purposes.
The Group recognises non-controlling interests for this acquisition measured
at the present ownership instruments' proportionate share in the net assets of
BPI RHIM LLC. These were derecognised to zero in line with the Group's
accounting policy related to fixed-term or puttable non-controlling interests,
see Note (3).
From the acquisition date to 31 December 2025, BPI RHIM LLC contributed €11
million of revenue, €1 million of Adjusted EBITA and €0.5 million of
profit after income tax. Had BPI RHIM LLC been acquired on 1 January 2025, it
would have contributed €26 million of additional revenue, €2 million of
additional Adjusted EBITA and €1.3 million of additional profit after income
tax.
According to the collaboration agreement signed by the shareholders of BPI
RHIM LLC the Group has the right to purchase the remaining shares (49%) of BPI
RHIM LLC at a later date by exercising a call option in exchange for payment
of the redemption amount. Likewise, the minority shareholders have the right
to sell the remaining shares (49%) of BPI RHIM LLC to the Group at a later
date by exercising a put option in exchange for payment of the redemption
amount. Either option may be exercised no earlier than ten years after the
closing date, unless the shareholders mutually agree to the exercise of either
option before the ten years have passed. The redemption amount of either
option is calculated based on an agreed multiple of the average annual EBITDA
delivered by BPI RHIM LLC over the most recent three-year period that precedes
the exercise date of either option including certain adjustments related to
working capital and net debt.
Due to the payment obligation resulting from the put option, the Group
recognised a financial liability related to fixed-term or puttable
non-controlling interests at the present value of the redemption amount of
€20 million, which is subsequently measured at fair value through profit or
loss. This financial liability was excluded from the purchase price allocation
and preliminary goodwill measurement based on the conclusion that the risks
and rewards of ownership associated with the remaining shares were not
transferred to the Group prior to the exercise of either option (refer to Note
(3)).
41. Transactions with related parties
Related companies include joint ventures and associates, as well as MSP
Stiftung (Liechtenstein) and Rhône Capital L.L.C. (United States) which are
shareholders of RHI Magnesita N.V., and are considered related parties because
they exercise significant influence through shareholdings exceeding 20%. 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 also 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 2025 and 2024, the Group conducted the following transaction with its
related companies:
Joint ventures
in € million 2025 2024
Revenue from the sale of goods and services 0 2
Purchase of raw materials 5 6
Trade liabilities 1 0
In 2025 and 2024, no transactions were carried out between the Group and MSP
Stiftung, FEWI Beteiligungs GmbH or Chestnut Beteiligungs GmbH or Rhône
Capital L.L.C, 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 (2024: €1 million) were made to the personnel
welfare foundation. At 31 December 2025, a net asset from overfunded pension
plans of €1 million (2024: €1 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 2025 2024
Executive Directors and EMT
Short-term employee benefits 6 9
Share-based payments 3 4
Total 9 13
Non-Executive Directors(1)) 2 2
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.
42. Material events after the reporting date
After the reporting date on 31 December 2025, there were no events of special
significance which may have a material effect on the financial position and
performance of the Group.
Company Financial Statements of RHI Magnesita N.V.
Company Balance Sheet as at 31 December 2025
(before appropriation of result)
in € million Note 31.12.2025 31.12.2024
ASSETS
Non-current assets
Non-current financial assets (A) 988 1,193
Securities 0 1
Deferred tax assets (B) 32 11
Total non-current assets 1,020 1,205
Current assets
Receivables from group companies 8 1
Other current receivables 4 4
Cash and cash equivalents (C) 0 0
Total current assets 12 5
Total assets 1,032 1,210
EQUITY AND LIABILITIES
Equity
Share capital (D) 50 50
Treasury shares (E) (103) (108)
Additional paid-in capital (F) 361 361
Legal and mandatory reserves (G) (140) 86
Other reserves 771 671
Result for the period (K) 86 142
Shareholders' Equity 1,025 1,202
Current liabilities
Current liabilities (H) 7 8
Total liabilities 7 8
Total equity and liabilities 1,032 1,210
Company Statement of Profit or Loss for the period 1 January 2025 to 31 December 2025
in € million Note 2025 2024
General and administrative expenses (I) (18) (25)
Result before taxation (18) (25)
Income tax 5 3
Net result from investments (J) 99 164
Net result for the period (K) 86 142
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
31.12.2024 50 (108) 361 12 (254) 289 710 142 1,202
Appropriation of prior year result - - - - - - 142 (142) -
Net result - - - - - - - 86 86
Share transfer / Vested LTIP - 5 - - - - (5) - -
Share-based expenses - - - - - - 4 - 4
Dividends - - - - - - (85) - (85)
Net income / (expense) recognised directly in equity - - - (21) (166) - 5 - (182)
31.12.2025 50 (103) 361 (9) (420) 289 771 86 1,025
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
Notes to the Company Financial Statements 2025
General
The Financial Statements of RHI Magnesita N.V. for the year ended 31 December
2025 were approved and authorised for issue by the Board of Directors on 1
March 2026. 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. via the Austrian 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.
· RHI Refractories Raw Material GmbH
· Veitsch-Radex GmbH
· Veitsch-Radex Vertriebgesellschaft 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 2025). 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% (2024: 23.0%). The
effective tax rate is negative 6.2% (2024: 1.9%) with a tax income of €5
million (2024: €3 million income) on a profit before income tax of €81
million (2024: €139 million). Overall, a taxable income of €20 million
deriving from movement in deferred tax positions is offset by a tax expense of
€15 million which stems from the consolidation of the results of
subsidiaries which are part of the fiscal unity; RHI Magnesita N.V. via the
Austrian branch 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 (€99 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. If the net
asset value of an investment in a Group company becomes negative, the Company
first reduces the carrying amount of any other long‑term interests that form
part of the net investment, such as long‑term receivables or loans. These
long‑term interests are impaired as part of the net investment. 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 assets
(A) Non-current financial assets
The financial fixed assets comprise investments in:
31.12.2025 31.12.2024
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 2025 2024
At beginning of year 1,193 1,196
Transactions with non-controlling interests without change of control (5) 5
Changes from currency translation and cash flow hedges (188) (84)
Changes from defined benefit plans 11 16
Dividend distribution (122) (104)
Net result from investments 99 164
Balance at year-end 988 1,193
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%:
31.12.2025 31.12.2024
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 30. 100 30. 100.0
3. Ashwath Technologies Private Limited, Vasai, India 13. 99 - 0.0
4. Baker Refractories Holding Company, Delaware, USA 21. 100 21. 100.0
5. BPI RHIM, LLC, Pittsburgh, USA(1)) 78. 51 - 0.0
6. Didier Société Industrielle de Production et de Construction - "D.S.I.P.C.", 49. 100 49. 100.0
Valenciennes, France
7. Dutch Brasil Holding B.V., Arnhem, Netherlands(2)) 50. 100 n/a 100.0
8. Dutch MAS B.V., Arnhem, Netherlands 49. 100 49. 100.0
9. Dutch US Holding B.V., Arnhem, Netherlands(2)) 50. 100 n/a 100.0
10. Foreign Enterprise "VERA", Dnepropetrovsk, Ukraine 30. 100 30. 100.0
11. GIX International Limited, Dinnington, United Kingdom 91. 100 91. 100.0
12. Horn & Co. RHIM Minerals Recovery GmbH, Siegen, Germany(1)) 50. 55.0 50. 55.0
13. Intermetal Engineers (India) Private Limited, Mumbai, India 51. 100 51. 100.0
14. Jinan New Emei Industries Co. Ltd., Jinan, PR China(1)) 43. 65 43. 65.0
15. Liaoning RHI Jinding Magnesia Co., Ltd, Dashiqiao, PR China(1)) 30. 100 30. 100.0
16. Lokalbahn Mixnitz-St. Erhard GmbH, Vienna, Austria 71. 100 71. 100.0
17. LWB Refractories Holding France S.A.S., Valenciennes, France 31. 100 31. 100.0
18. Magnesita Asia Refractory Holding, Limited, Hong Kong, Hong Kong 17. 100 17. 100.0
19. Magnesita Malta Holding Ltd., St. Julians, Malta 50. 100 50. 100.0
20. Magnesita Mineração S.A., Brumado, Brazil 26. 100 26. 100.0
21. Magnesita Refractories Company, York, USA 31. 100 31. 100.0
22. Magnesita Refractories Limited, Dinnington, United Kingdom 4. 100 4. 100.0
23. Magnesita Refractories Middle East Free Zone Establishment, Dubai, United Arab 7. 100 7. 100.0
Emirates
24. Magnesita Refractories S.C.S., Valenciennes, France 17.,31. 100 17.,31. 100.0
25. Magnesita Refractories S.R.L. - in Liquidazione, Milano, Italy 31. 100 31. 100.0
26. Magnesita Refratários S.A., Contagem, Brazil 7. 100 7. 100.0
27. Magnesita Resource (Anhui) Company Ltd., Chizhou, PR China 43. 100 43. 100.0
28. Minerals and Metals Recovering - Mireco Aktiebolag, Fagersta, Sweden 12. 100 12. 100.0
29. Producción RHI México, S. de R.L. de C.V., Ramos Arizpe, Mexico 66.,91. 100 66.,91. 100.0
30. Radex Vertriebsgesellschaft m.b.H., Leoben, Austria 89. 100 89. 100.0
31. Rearden G Holdings Eins GmbH, Wiesbaden, Germany 49. 100 7. 100.0
32. Refractarios Argentinos S.A, Industrial Comercial Y Minera (I.C.M.), San 7.,9.,91. 100 7.,9.,91. 100.0
Nicolás, Argentina
33. Refractarios Magnesita Colombia S.A.S., Sogamoso, Colombia 7. 100 7. 100.0
34. Refractarios Magnesita Perú S.A.C., Lima, Peru 7. 100 7. 100.0
35. Refractory Intellectual Property GmbH & Co KG, Vienna, Austria(2)) 71. 100 n/a 100.0
36. Refrattari Trezzi S.r.l., Merlino, Italy 12. 100 12. 100.0
37. Resco Canada, Inc. , Québec , Canada 39. 100 - 0.0
38. Resco Products (UK) Limited, London, United Kingdom 39. 100 - 0.0
39. Resco Products, Inc. , Hammond, USA 78. 100 - 0.0
40. RHI Canada Inc., Burlington, Canada 91. 100 91. 100.0
31.12.2025 31.12.2024
Ser. no. Name and country of incorporation of the company Share- Share in % Share- Share in %
holder
holder
41. RHI Chile S.A., Santiago, PR China 11.,32.,91. 100 11.,32.,91. 100.0
42. RHI Italia S.R.L., Brescia, Italy 50. 100 50. 100.0
43. RHI Magnesita (China) Co., Ltd., Shanghai, PR China 30. 100 30. 100.0
44. RHI Magnesita (Chongqing) Refractory Materials Co., Ltd. , Chongqing, PR 43. 51 43. 51.0
China(1))
45. RHI Magnesita Belgium NV, Evergem, Belgium 54.,77. 100 54.,77. 100.0
46. RHI Magnesita Bochum GmbH, Bochum, Germany 49. 100 49. 100.0
47. RHI Magnesita Czech Republic a.s., Velké Opatovice, Czech Republic 50. 100 50. 96.9
48. RHI Magnesita d.o.o., Divača, Slovenia 50. 100 50. 100.0
49. RHI Magnesita Deutschland AG, Wiesbaden, Germany 1.,30. 100.0 1.,30. 100.0
50. RHI Magnesita GmbH, Vienna, Austria 1. 100 1. 100.0
51. RHI Magnesita India Limited, New Delhi, India 7.,9.,91. 56.1 7.,9.,91. 56.1
52. RHI Magnesita India Refractories Limited, Rajgangpur, India 51. 100 51. 100.0
53. RHI Magnesita RE Limited, Guernsey, United Kingdom 30. 100 30. 100.0
54. RHI Magnesita Sales Germany GmbH, Wiesbaden, Germany 77. 100 77. 100.0
55. RHI Magnesita Seven Refractories Limited, New Delhi, India 52. 100 52. 100.0
56. RHI Magnesita Switzerland AG, Hünenberg, Switzerland 30.,49. 100 30.,49. 100.0
57. RHI Magnesita Trading B.V., Rotterdam, Netherlands 50. 100 50. 100.0
58. RHI Magnesita Turkey Refrakter Ticaret Anonim Sirketi, Eskisehir, Türkiye(3)) 16.,30.,50. 100 n/a 100.0
59. RHI Magnesita Vietnam Company Limited, Ho Chi Minh City, Vietnam 65. 100 65. 100.0
60. RHI Magnesita Wetro GmbH, Puschwitz, Germany 50. 100 50. 100.0
61. RHI Marvo S.R.L., Bucharest, Romania(2)) 30.,50. 100 n/a 100.0
62. RHI Refractories (Dalian) Co., Ltd., Dalian, PR China 43. 100 43. 100.0
63. RHI Refractories Africa (PTY) LTD, Sandton, South Africa 30. 100 30. 100.0
64. RHI Refractories Andino, C.A., Puerto Ordaz, Venezuela 91. 100 91. 100.0
65. RHI Refractories Asia Pacific Pte. Ltd, Singapore, Singapore 50. 100 50. 100.0
66. RHI Refractories España, S.L., Lugones, Spain 8.,49. 100 8.,49. 100.0
67. RHI Refractories France SA, Valenciennes, France 49.,50.,54. 100.0 49.,54.,83. 100.0
68. RHI Refractories Ibérica, S.L., Oviedo, Spain 66. 100 83. 100.0
69. RHI Refractories Liaoning Co., Ltd., Bayuquan, PR China(1)) 43. 100 43. 100.0
70. RHI Refractories Nord AB, Stockholm, Sweden 2. 100 83. 100.0
71. RHI Refractories Raw Material GmbH, Vienna, Austria 1.,30.,50. 100.0 1.,30.,50. 100.0
72. RHI Refractories Site Services GmbH, Wiesbaden, Germany 49. 100 49. 100.0
73. RHI Refractories UK Limited, Bonnybridge, United Kingdom 49. 100 49. 100.0
74. RHI Refratãrios Brasil Ltda., Contagem, Brazil 7.,26. 100.0 7.,26. 100.0
75. RHI Trading (Dalian) Co., Ltd, Dalian, PR China 43. 100 43. 100.0
76. RHI Ukraina LLC, Dnepropetrovsk, Ukraine(2)) 30.,50. 100 n/a 100.0
77. RHI Urmitz AG & Co. KG, Mülheim-Kärlich, Germany 49.,72. 100 49.,72. 100.0
78. RHI US Ltd., Delaware, USA 9. 100 9. 100.0
79. RHI Wostok Limited Liability Company, Moscow, Russia 30.,50. 100 30.,50. 100.0
80. RHI Wostok Service Limited Liability Company, Moscow, Russia 30.,50. 100 30.,50. 100.0
81. RHIM Mireco Mitterdorf GmbH, St.Barbara im Mürztal, Austria 12. 100 12. 100.0
82. RHI-Refmex, S.A. de C.V., Ramos Arizpe, Mexico 57.,66.,91. 100 57.,66.,91. 100.0
31.12.2025 31.12.2024
Ser. no. Name and country of incorporation of the company Share- Share in % Share- Share in %
holder
holder
83. Sapref AG für feuerfestes Material, Basel, Switzerland 91. 100.0 91. 100.0
84. Seven Refractories Deutschland GmbH, Düsseldorf, Germany 50. 100.0 50. 100.0
85. Seven Refractories Limited, Nicosia, Cyprus 48. 100.0 48. 100.0
86. Sipra S.p.A., Bergamo, Italy 48. 60.0 48. 52.0
87. Sörmaş Söğüt Refrakter Malzemeleri Anonim Şirketi, Söğüt / Bilecik, 30. 91.7 30. 91.3
Türkiye
88. Veitsch-Radex GmbH, Vienna, Austria 50. 100.0 50. 100.0
89. Veitsch-Radex GmbH & Co OG, Vienna, Austria 50. 100.0 50. 100.0
90. Veitsch-Radex Vertriebsgesellschaft m.b.H., Vienna, Austria 50. 100.0 50. 100.0
91. VRD Americas B.V., Arnhem, Netherlands 30.,50. 100.0 30.,50. 100.0
92. Horn & Co Polska sp. z o.o., Chorzów, Poland 11. 100.0 12. 100.0
93. Magnesita Refractories Private Limited, Mumbai, India 33. 100.0 31. 100.0
94. Mireco SARL, Entzheim, France 11. 100.0 12. 100.0
95. Mireco SH.P.K, Lebushe, Kosovo 11. 100.0 12. 100.0
96. Rudgruvans Industrier Aktiebolag, Fagersta, Sweden 11. 100.0 12. 100.0
Equity-accounted joint ventures and associated companies
97. Chongqing Boliang Refractory Materials Co., Ltd., Chongqing, China 43. 51.0 43. 51.0
98. Magnesita-Envoy Asia Ltd., Kaohsiung, Taiwan 3. 50.0 3. 50.0
99. 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) The shareholder(s) from 2024 have been merged during 2025, therefore
the respective shareholder(s) no longer appear on this list.
3) Further shareholder is VRD Americas B.V., Arnhem, Netherlands.
(B) Deferred tax assets
The deferred tax assets amounting to €32 million (2024: €11 million)
primarily relate to deferred tax assets arising from tax loss carryforwards
within the Austrian corporate tax group, for which RHI Magnesita N.V. via the
Austrian branch acts as the head. These tax loss carryforwards amount to €30
million (prior year: €10 million). A significant portion of the tax loss
carryforwards was generated in the current or previous reporting period and
has been recognised in the Company Balance Sheet, as sufficient taxable income
is expected to be realised in future periods.
In assessing the recoverability of deferred tax assets, the Company has
considered (i) the impacts of the global economic environment in which it
operates, (ii) uncertainties and potential adverse effects arising from
economic volatility and (iii) the Group's latest forecasts and assumptions
used for the goodwill impairment testing and the viability statement
assessment. The Group's forecasting horizon covers four years, with the fifth
year serving as the terminal period, consistent with the methodology applied
for goodwill impairment testing.
The tax loss carryforwards are not subject to expiration.
Current assets
(C) Cash and cash equivalents
Cash and cash equivalents are at RHI Magnesita N.V.'s free disposal.
Equity
(D) 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
2025, RHI Magnesita N.V.'s issued and fully paid-in share capital consists of
47,304,527 ordinary shares (2024: 47,195,936 ordinary shares). For additional
information on treasury shares see (E).
(E) Treasury shares
As at 31 December 2025, RHI Magnesita treasury shares amount to 2,173,178
(2024: 2,281,769).
(F) Additional paid-in capital
Additional paid-in capital comprises premiums on the issue of shares less
issue costs by RHI Magnesita N.V.
(G) 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 (€11 million).
Current liabilities
(H) Current liabilities
in € million 31.12.2025 31.12.2024
Trade payables 2 0
Payables to group companies 3 3
Accrued liabilities 2 5
Total current liabilities 7 8
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.
(I) General and administrative expenses
in € million 2025 2024
External services/consulting expenses (4) (2)
Cost for principal services for group companies 2 0
Personnel expenses (13) (21)
Other expenses (3) (2)
Total general and administrative expenses (18) (25)
in € million 2025 2024
Wages and salaries (12) (18)
Social security charges 0 (1)
Pension contributions 0 (1)
Other employee costs (1) (1)
Total wages and salaries (13) (21)
(J) Net results from investments
In 2025, the full year results of the investments amount to a profit of €99
million (2024: €164 million) and are recognised in the Company Statement of
Profit or Loss.
(K) Net result for the period
In 2025, 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 2025
Profit attributable to shareholders 86
In accordance with Article 27 clause 1 to be transferred to reserves 0
At the disposal of the General Meeting of Shareholders 86
For 2025, the Board of Directors will propose a final dividend of €1.20 per
share for the shareholders of RHI Magnesita N.V. The proposed dividend is
subject to approval by the AGM in May 2026.
Other notes
Number of employees
The average number of employees of RHI Magnesita N.V. during 2025 amounts to
10 (2024: 9), all of whom are employed in management functions. 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 €1,889 million (2024: €1,783 million) for the borrowings of
the Group. The Borrowings are as disclosed in Note (27) of the Consolidated
Financial Statements. Additionally, €38 million (2024: €44 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 Resource (Anhui) Company Ltd., ChangLong Gang Dolomite Quarry,
Chizhou, China;
• RHI Refractories Asia Pacific Pte Ltd Korea Branch, Gyeongsangbuk-do,
Republic of Korea;
• RHI Refractories Asia Pacific Ptd Ltd Taiwan Branch, Kaohsiung, Taiwan;
• RHI Refractories Site Services GmbH-Niederlassung Unterwellenborn,
Unterwellenborn, Germany;
• Sipra S.p.a. Branch office nr. BG-2, Filago, Italy;
• Veitsch-Radex Vertriebsgesellschaft m.b.H. (Spólka z ograniczona
odpowiedzialnoscia) Oddzial w Polsce, Zabrze, Poland;
• 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, 1 March 2026
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 Franz-Ferdinand Buerstedde
Janice Brown Karl Sevelda
Marie-Hélène Ametsreiter Wolfgang Ruttenstorfer
A. Katarina Lindström
Employee Representative Directors
Martin Kowatsch Yasmin-Sarah Solmazer
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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. END FR JBMBTMTBMTFF
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