DGAP-News: SKW Stahl-Metallurgie Holding AG / Key word(s): Final Results SKW Stahl-Metallurgie Holding AG: SKW Metallurgie reaches turning point in 2016 - first signs of a business recovery during the current year 27.03.2017 / 16:12 The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- SKW Metallurgie reaches turning point in 2016 - first signs of a business recovery during the current year - Development of steel market until autumn 2016 still below expectations - Improvement program ReMaKe yields approx. EUR 16 Mio. on earnings - Published business figures 2016 exceed forecast with revenue of EUR 249.0 Mio. and adjusted EBITDA of EUR 11.7 Mio. - Annual general meeting will be held on July 6, 2017 in Munich München (Germany), March 24, 2017. In 2016, the SKW Metallurgie Group, globally leading provider of primary and secondary metallurgy solutions for the steel industry, had to cope with a decline in the global steel industry, the extent of which has even exceeded the already low expectation until autumn of 2016. Concurrently, price erosion and pressure on margins have increased in all important market segments. Also, the negative development of prices of processed core materials, an important indicator for SKW Group, has continued. The company was able to compensate the gaps left by lacking revenue and declining margins by persistent improvement of the group-wide restructuring and efficiency improvement program ReMaKe with effects on earning of approx. EUR 16 Mio. until year end 2016. The consolidated EBITDA forecast 2016 of slightly above EUR 10 Mio. threshold was thus surpassed despite the worsened conditions of the steel crisis generating an operative EBITDA of EUR 11.9 Mio. (2015: EUR 13.2 Mio.). This result was achieved on sharply lower revenues-Guidance relevant revenue of EUR 249 Mio. compared to EUR 286 Mio. in 2015. This equals the reported revenue of EUR 228 Mio. (after adjustments, according to IFRS 5), as compared to EUR 264 Mio. in 2015. The corresponding operative EBITDA amounts to EUR 11.7 Mio., although the tonnage produced and sold was only about 4% less than the corresponding prior-year figure. Therefore, SKW's expectations for the future are still based on conservative scenarios for market development, based on which it is expected that revenues and adjusted operative EBITDA will remain stagnant in 2017; a resumption of modest growth can be expected until 2019, whereby the operative EBITDA should exceed the EUR 15 Mio. threshold. In addition, the Company would like to point out that the steel production is picking up again in its core markets, particularly as a positive trend of business in nearly all segments since the fourth quarter of last year is detectable, and this trend has continued in the early months of the current year. "Particularly in our key market of North America, the new political framework has fueled a clear upward trend of steel production" - explains Kay Michel, CEO of SKW Stahl-Metallurgie Holding AG, and adds: "However, it remains to be seen if these trends are sustainable - especially considering the complex situation of our company at the present time. If this will be the case, we could absolutely exceed our business forecast significantly." On this basis during the first two month of the current year 2017, triggered by the achievements of ReMaKe and more attractive parameters than projected, SKW Group shows a clear up-ward trend with respect to revenue and operative EBITDA compared to the previous-year period. As reported, SKW Metallurgie is striving to implement a comprehensive financial restructuring plan consisting of three main elements: - Debt redemption by selling assets, primarily of non-core activities, - The basic willingness of the financing banks to agree to a conditional haircut, - A substantial cash capital increase to which shareholders will be granted subscription rights. By means of these measures, SKW Metallurgie is striving to reduce its debt to an economically viable level in relation to its profitability, which is regarded as an indispensable prerequisite for the strategic and operational development of the company and for obtaining appropriate follow-on financing. In addition to the hitherto effected implementation of the operative repositioning of SKW Group, it is planned to strengthen the Group's capital and thus to financially support the Group's restructuring. Besides selling non-core activities, it is the company's clear preference to find a strategic partner, with which to develop its business and strengthen its competitive position by realizing synergy potential. "We will strive to actively participate in the coming market consolidation of the steel suppliers' industry as a relevant player, so that we can return to creating value for our shareholders after the lean period of operational consolidation", was added by Kay Michel. The management team of SKW is working hard to implement the measures aimed at debt reduction as far as possible, as well as to prepare supplementary capital measures. It is planned to make constructive proposals to the shareholders on a sustainable financial restructuring at the annual general meeting on July 6, 2017. At the end of last week (on March 24, 2017), SKW Stahl-Metallurgie has also published its complete financial report for the last fiscal year 2016. Further information can be found here. Contact SKW Stahl-Metallurgie Holding AG Prinzregentenstr. 68 81675 München Germany Phone: +49 89 5998923-0 Fax: +49 8634 62720-16 E-Mail: [email protected] Internet: www.skw-steel.com About SKW Stahl-Metallurgie Holding AG and the SKW Metallurgie Group The SKW Metallurgie Group is a global market leader for chemical additives for hot metal desulphurization and for cored wire and other products for secondary metallurgy. The Group's products enable steel-makers to efficiently manufacture high-quality steel products. Clients include the world's leading companies in the steel industry. The SKW Metallurgie Group has more than 50 years of metallurgical know how, and currently operates in more than 40 countries. What is more, the Group is a leading supplier of Quab specialty chemicals, which are mainly used in the global production of industrial starch for the paper industry. The SKW Metallurgie Group is headquartered in Germany with production facilities in France, the US, Canada, Mexico, Brazil, South Korea, Russia, the Peoples' Republic of China and India (joint venture). Shares of SKW Stahl-Metallurgie Holding AG have been listed in Frankfurt Stock Exchange's Prime Standard since December 1, 2006; since 2011 (conversion to name shares) with ISIN DE000SKWM021. Disclaimer This press release may include certain forward-looking statements which are based on currently available assumptions and predictions of the SKW Metallurgie Group's management as well as on other currently available information. Various identified as well as unidentified risks and uncertainties as well as other factors may result in a deviation of actual results, financial situation, development or achievement of the company compared to the assessments made herein. SKW Stahl-Metallurgie Holding AG does not intend and assumes no liability to update such forward-looking statements and to adjust them to future events and developments. Contact: SKW Stahl-Metallurgie Holding AG Dr. Stefan Strobl General Counsel Prinzregentenstr. 68 81675 München Germany Phone IR/Press: +49 89 5998923-26 Fax: +49 89 5998923-29 E-Mail: [email protected] --------------------------------------------------------------------------- 27.03.2017 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG. The issuer is solely responsible for the content of this announcement. The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Archive at www.dgap.de --------------------------------------------------------------------------- Language: English Company: SKW Stahl-Metallurgie Holding AG Prinzregentenstr. 68 81675 München Germany Phone: +49 (0)89 5998923-0 Fax: +49 (0)89 5998923-29 E-mail: [email protected] Internet: www.skw-steel.com ISIN: DE000SKWM021 WKN: SKWM02 Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange End of News DGAP News Service --------------------------------------------------------------------------- 558569 27.03.2017