GICS Sector : Industrials
RHI Magnesita N.V., together with its subsidiaries, develops, produces, sells, installs, and maintains refractory products and systems used in industrial high-temperature processes worldwide.It offers magnesia spinel, dolomite, dolomite-magnesia, magnesia-chrome, alumina, alumina silicate, and mortars for the cement industry; shaped products based on silicon carbide, magnesia, zirconium, fireclay, and alumina; unshaped refractories; and high-temperature insulation, and ceramic and metallic anchoring systems.The company also provides induction and electric arc furnaces, AOD converters, dome and delta, ladles, isostatically pressed products, and slide gates.
RHI Magnesita's financial performance in 2025 was marked by a decline in revenues and a significant drop in EPS. The company's revenues decreased by 9% due to weak demand and price concessions, particularly in the Steel and Industrial businesses. The adjusted EBITA margin was 11.1%, with an EBITA of EUR 373 million. The EPS came out at EUR 0.14, significantly lower than the estimated EUR 1.57. The company's cash conversion was over 100%, with an operating cash flow of EUR 391 million, and leverage decreased to 2.9x net debt to EBITA.
Publication Date: Mar -06
The Steel business declined slightly, driven by weak demand and price concessions, while North America delivered a strong performance, benefiting from the green steel transition and the company's 4PRO offering. The Industrial business was exceptionally weak, with a 40% decline in industrial project volumes, although the nonferrous part of the industrial projects was more resilient.
RHI Magnesita expects a gradual improvement in the Industrial business, with project activity potentially increasing in the second half of 2026. The company is guiding to EUR 435 million adjusted EBITA on a constant currency basis, representing a 17% increase versus 2025, underpinned by four structural measures: a gradual improvement in the Industrial business, pricing discipline, network optimization programs, and structured SG&A reductions.
With a P/E Ratio of 16.43 and an EV/EBITDA of 6.51, the market is pricing in a certain level of growth and profitability. The company's ROE is 8.52%, and the ROIC is 6.11%, indicating a decent return on equity and invested capital. The Dividend Yield is 5.62%, providing a relatively attractive income stream.
The META region, with EUR 350 million in revenue, is expected to benefit from stronger industrial volumes and pricing, with a forecast for a 10% step-up in gross profit. However, the recent increase in oil prices poses a risk to the business in this region. The company has a hedging position in place, but is cautious about the impact of higher energy costs.
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RHI Magnesita N.V.'s 6% growth in Steel segment is driven by increasing demand from automotive and construction industries, coupled with rising steel production in Asia, particularly in China and India. Additionally, the company's focus on innovative and sustainable products, such as eco-friendly refractories, contributes to its growth momentum.
RHI Magnesita N.V.'s Industrial segment growth of 8% is driven by increasing demand for refractory products in the steel and cement industries, coupled with the company's expanding presence in emerging markets, particularly in Asia. Additionally, the company's focus on innovation and sustainability, as well as its strategic acquisitions, have contributed to its growth momentum.
RHI Magnesita's basic refractories are used in steel production, cement, lime, and other industries where high-temperature resistance is required.
Dolomite refractories are used in steel production, particularly in the production of stainless steel and other high-alloy steels.
Magnesia refractories are used in steel production, cement, and other industries where high-temperature resistance and corrosion resistance are required.
Chrome refractories are used in steel production, particularly in the production of stainless steel and other high-alloy steels.
Special refractories are used in various industries such as glass, ceramics, and petrochemicals where high-temperature resistance and corrosion resistance are required.
Refractory insulation is used to reduce heat loss and improve energy efficiency in various industries such as steel, cement, and glass.
RHI Magnesita provides maintenance and repair services for refractory linings and other equipment.
The threat of substitutes for RHI Magnesita N.V. is medium due to the availability of alternative materials and technologies that can replace refractory products in certain applications.
The bargaining power of customers is low due to the specialized nature of RHI Magnesita N.V.'s products and the lack of alternative suppliers.
The bargaining power of suppliers is medium due to the concentration of suppliers in the raw materials market and the company's dependence on certain critical raw materials.
The threat of new entrants is low due to the high barriers to entry in the refractory industry, including the need for significant capital investment and specialized expertise.
The intensity of rivalry is high due to the competitive nature of the refractory industry, with several established players competing for market share.
| Value | |
|---|---|
| Debt Weight | 62.48% |
| Debt Cost | 6.57% |
| Equity Weight | 37.52% |
| Equity Cost | 11.48% |
| WACC | 8.41% |
| Leverage | 166.53% |
Value: 8.4
Growth: 7.7
Quality: 5.8
Yield: 9.4
Momentum: 7.5
Volatility: 3.3
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Value: 6.7
Growth: 5.2
Quality: 7.1
Yield: 6.2
Momentum: 9.0
Volatility: 4.7
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Value: 5.3
Growth: 6.0
Quality: 5.5
Yield: 5.0
Momentum: 7.0
Volatility: 4.7
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Value: 6.4
Growth: 5.8
Quality: 2.5
Yield: 8.1
Momentum: 1.5
Volatility: 2.0
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Value: 8.3
Growth: 3.1
Quality: 2.5
Yield: 3.8
Momentum: 3.0
Volatility: 2.3
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Value: 9.4
Growth: 2.8
Quality: 1.8
Yield: 0.6
Momentum: 0.0
Volatility: 3.7
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