Rhi Magnesita delivered a significant earnings improvement in the first half of 2026, with adjusted EBITA rising by 42% on a constant currency basis. This growth was primarily driven by the successful execution of management-led self-help measures and robust performance within the Steel segment, offsetting broader market weakness and foreign exchange headwinds.

Adjusted EBITA increased by €24 million, or 17%, to €165 million compared with €141 million in the same period last year. This reported figure included a material foreign exchange headwind of €24 million. Excluding currency effects, the underlying operational performance showed a much steeper trajectory, highlighting the effectiveness of cost-saving initiatives and pricing adaptations across the group.

Segment Performance and Operational Drivers

The Steel segment emerged as a key growth driver, benefiting from demand expansion in North America, Europe, and India. These gains were supported by ongoing self-help programmes focused on pricing adjustments, administrative cost reductions, and plant network optimisation. Conversely, the Industrial segment underperformed expectations due to customer caution and delays in higher-margin projects within Glass and Industrial Applications. However, the Cement and Non-Ferrous Metals divisions posted slight year-on-year improvements.

Working capital intensity temporarily rose to 24% as the company built up raw material inventories ahead of anticipated stronger order books in the second half and to mitigate tariff uncertainty. Despite this increase, cash conversion remained strong at 97%. Net debt climbed to €1,528 million, though leverage remained stable at 2.9x Net Debt to Adjusted EBITDA.

Full-Year Guidance and Outlook

RHI Magnesita has reaffirmed its full-year adjusted EBITA guidance of €400 million, which factors in an expected foreign exchange headwind of approximately €35 million. The company remains on track to deliver €45 million in adjusted EBITA improvements from price adaptations, network optimisation, and administrative savings. Additional benefits from raw material and plant network initiatives are projected for 2027.

Capital expenditure guidance was reduced from €130 million to €115 million. Management expects working capital intensity to decrease to 22% by year-end as temporary inventory builds unwind. Net debt is projected to fall to approximately €1,400 million by the end of 2026, with leverage reducing towards 2.6x Net Debt to Adjusted EBITDA.

What the Numbers Show

The divergence between reported EBITA growth (17%) and constant currency growth (42%) underscores the significant impact of foreign exchange volatility on RHI Magnesita’s financial reporting. While the headline numbers reflect currency headwinds, the underlying operational leverage is improving substantially through disciplined cost management and pricing power, particularly in the resilient Steel segment. This suggests that core profitability is strengthening even as macroeconomic factors create external pressures.

RHI Magnesita India Ltd has incorporated a joint venture, RHIM Khemka Minpro Private Limited, on 16 July 2026 to bundle industrial minerals and refractory recycling activities. The subsidiary has been established with RHI Magnesita India holding 100% of the shareholding at the incorporation stage. The Certificate of Incorporation was issued by the Ministry of Corporate Affairs, Government of India, on 16 July 2026.

The joint venture operates within the refractories industry. RHI Magnesita India subscribed to 10,000 equity shares of Re 1 each, paying the amount in cash. While the listed entity currently holds full ownership, the agreement stipulates that Khemka will subscribe to a 49% shareholding in a subsequent step, reducing RHI Magnesita India's stake.

Details of the Incorporated Entity

The filing submitted to BSE Limited and National Stock Exchange of India Limited provided specific details regarding the new subsidiary. No governmental or regulatory approvals were required for the incorporation.

The disclosure was made in accordance with Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. This follows an earlier intimation dated 25 June 2026 regarding the proposed joint venture.