Publication of initial report on unaudited consolidated operating results for the SIJ Group in 2016

Ljubljana, Monday, 6 March 2017 – Publication of initial report on unaudited consolidated operating results for the SIJ Group in 2016


According to the initial report on the SIJ Group's unaudited consolidated operating results, the Group , achieved revenues of EUR 842.7 million in 2016 , which represented 26.8% growth compared to 2015. Profitability also increased significantly, as the EBITDA doubled, reaching EUR 127.1 million. The 15.1% EBITDA margin that was achieved places the SIJ Group among the most successful groups in Slovenia last year. Estimated at EUR 68.6 million, the operating profit (EBIT) almost doubled compared to 2015, while the net profit reached EUR 51.3 million, which was almost five times higher than in 2015.

Compared to the previous year, investments in purchasing new production equipment and modernizing the existing capacities increased by 24%, reaching EUR 70.3 million. Due to investments and acquisitions, the net financial debt increased slightly in recent years, but at the same time the NFD/EBITDA indicator decreased to 2.9 in 2016, thanks to the increase in EBITDA.

In metallurgy, revenues totaled EUR 631.9 million, the EBITDA was EUR 74.4 million (a growth of 17.2% compared to 2015) and the EBITDA margin was 11.8%, which is more than 4 percentage points higher than the global industry average. In this period, outflows for investments increased by 15.7%, reaching EUR 65.8 million. This was mainly due to the investment in a new line for the heat treatment of special quarto plates, which has already been launched, and the investment in a new AOD machine at SIJ Acroni. Both are essential to reinforce the position of our metallurgy companies as specialized producers of steel with high added value. The total value of the two investments exceeded EUR 60 million.

When it comes to the food industry, the Perutnina Ptuj Group has generated revenues of EUR 211.4 million, and an EBITDA of EUR 24.2 million (a growth of 25% on the annual level compared to 2015), in the ten months since it was first included in the SIJ Group operating results. Similarly to metallurgy, the high profitability achieved in the food industry reflects our focus on cost optimization for operations and the increase in the contribution made to sales by products with higher added value in key markets. Following a capital increase and financial restructuring, the Perutnina Ptuj Group’s debts decreased considerably, creating a firm foundation for successful development in the coming years. (The net debt as of 31 December 2016 was EUR 35 million and the NFD/EBITDA indicator was 1.4.)

Igor Malevanov, Member of the Management Board and Executive Director of Finance at SIJ d.d., commented: "As anticipated, the initial indications are that the operating results for last year reflected the good work done in all areas when it came to managing the Group. The traditional success of our metallurgy activities has been enhanced by the good results achieved in the food industry and the positive effects of mergers and acquisitions. Our operations were further improved by optimizing our production processes and lowering purchase costs, including by strengthening our combined negotiating power in the market, in both industries."

The SIJ Group's operations in 2016 were generally marked by relatively unfavorable external conditions: there was price pressure in both industries, metallurgy and food, while the Group's metallurgy companies also faced excess production capacities and unfair competition from third markets, which served to further increase price pressure.

Said Dr. Denis Mancevič, Member of the Management Board and CEO of SIJ d.d., reported: "Despite the difficult conditions in the metallurgy industry in the European Union, the SIJ Group continues to maintain a leading share in the market of stainless steel quarto plates and remains the third largest producer of tool steels. We maintain a competitive advantage by offering products made to order and short delivery times. By modifying our production programs and rationalizing costs, we have managed to preserve profitability. In 2016 we launched new metallurgy product brands, which serve as the basis for implementing our strategic decision to focus on the customers and their needs."

Export sales at SIJ Group level were valued at EUR 677.9 million in 2016, 80.4% of all revenues. The slightly lower contribution made to total revenues by exports reflects the specific nature of the food industry, in which the Perutnina Ptuj Group is the leading provider of poultry meat and poultry products in the Slovenian market and other key markets in the region. In the metallurgy industry, 85.5% of revenues are still generated in export markets. In the export structure, markets in the European Union remain the Group's key targets, although the proportion achieved in other markets is increasing. For instance, 9.9% of exports are now sold in the USA.


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